October 6, 2025 • 7 mins
Former Reserve Bank Governor Adrian Orr is in for a significant payday.
He resigned in March, following a funding disagreement, with tensions between Treasury, the bank, and the Finance Minister.
The central bank's annual report shows Orr will receive a $416,000 restraint of trade payment this month.
Finance Minister Nicola Willis says she wasn't informed of this until today.
"I had been assured that they had done those negotiations in accordance with the terms and conditions in his contract, which had already been agreed when he was reappointed as Governor in 2022."
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
And as per usual, Nicola Willis the Finance ministers with us.
Hey Nikola, Hi, Heather, Now, when did you find out
that the Reserve Bank was paying Adrian all that money?
Speaker 2 (00:09):
Well? I knew that they had negotiated an exit agreement,
and then I learned about the Restraint of Trade provision
when the Bank released information about mister Or's departure under
the Official Information Act on the eleventh of June.
Speaker 1 (00:21):
So did you know on the eleventh of June that
he was being paid this much money? No?
Speaker 2 (00:25):
I learnt the amount today, just like everyone else.
Speaker 1 (00:28):
Should they have told you earlier?
Speaker 2 (00:31):
That wasn't my expectation because those arrangements were always a
negotiation between the Reserve Bank Board and Adrian war and
I had been assured that they had done those negotiations
in accordance with the terms and conditions in his contract,
which had already been agreed when he was reappointed as
governor in twenty twenty two.
Speaker 1 (00:50):
Okay, So I know that it was so. The restraint
of trade was in his contract signed yolks ago right, correct?
Was the amount that would be paid him in his contract?
Speaker 2 (01:02):
I don't know, but I have been advised by the
Bank that it was negotiated in accordance with his contract,
So I expect that the quantum reflects.
Speaker 1 (01:10):
That, but not necessarily. I mean they might have upped
it or whatever because they found Is this not a
question you should be asking them?
Speaker 2 (01:18):
Well, I have been given confidence that the Reserve Bank
have negotiated the exit agreement in accordance with their contractual obligations.
It's an employment matter. I am not privy to all
of the details of that negotiation, but what they had
was that he needed to have a restraine of trade
period for six months off set against any incumpnience. That
(01:39):
was in the terms because that was that's in the
terms and conditions of his appointment as governor. So the
amount does reflect that because that when in twenty twenty
two that was negotiated. Obviously I wasn't the minister. Then
that was under a previous minister. Those were the terms
of his contract, but we don't know.
Speaker 1 (01:55):
We know that the restrainer trade was in there, but
we don't know whether the restraint of trade meant that
he had to be paid this month, do.
Speaker 2 (02:00):
We Well, it does seem the right amount, given that
it was for a period of six months, so that
would be commensurate with the six months of US.
Speaker 1 (02:06):
Okay, are you comfortable with us?
Speaker 2 (02:09):
Well, obviously it's a very big number, and so I
think I probably had the same reaction to hearing that
number as many New Zealand as what. It's a big number,
it really is.
Speaker 1 (02:18):
Now, listen, what is the problem with the electricity market
that you guys are trying to fix with the announcement
last week. What's the problem.
Speaker 2 (02:26):
The problem is that when we have a dry year,
that is, there isn't enough rain in the hydro lakes,
then we run into electricity shortages on the days when
there isn't enough solo. It's the shorter to make part
for the lack of hydro, it is the lack of
firm in capacity in dry years. And how do we
motivate people to invest in the electricity generation that leans
(02:48):
on gas and oil? When and coal? When in the
past the past government said no, no, one hundred percent
renewables by twenty thirty. We don't want oil. We know bad?
How do we correct? Our job now is to make
it very clear to the market that they can have
confidence about investing in those assets because New Zealand needs them.
(03:08):
But when we have a dry year, we need there
to be enough backup gas or cold capacity that we
can keep the lights on.
Speaker 1 (03:15):
Okay, now, Nikola, if there's one thing we've learned about
the market in the thirty years since the Bradford Reforms,
it's that the market cannot be relied on to generate.
So why don't you guys just build the generation or
some well.
Speaker 2 (03:26):
Well, effectively, that's what we're doing by being majority shareholders,
but by being majority shareholders and three of the major
gen taylors. And what the Frontier report said is in
order for those Gen tailors to have access to the
capital needed to make these investments in the future, it
may require a call on the taxpayer to provide additional
(03:50):
investment to keep our equities.
Speaker 1 (03:51):
So I understand that. I'll tell you what I dos
up for that. Are you instructing the companies that you
majority own to build more generation?
Speaker 2 (04:02):
We are requesting that they bring forward proposals to provide
dry year Why are.
Speaker 1 (04:07):
Also because that's the idea behind thermal co is that
you just you ring And I think that thermal Co's
a nutty idea, but the general the idea behind it
is that you build your own generation so why don't
you just worry.
Speaker 2 (04:18):
Yes, this is in the boring detail part of the announcement,
but let me step it through for you, which is
that we are going to require in future transpower to
measure what they think then and lack of capacity for
the dry year looks like is at the moment we
don't really have reliable measurement of that. And then we've
said we will regulate to ensure that amount of capacity
(04:38):
is available. Now we're going to work with the sector
on what the detail of that regulation looks like. But
in the first instance, what the Frontier report said was
the first thing you've actually got to do is get
rid of this barrier, which is that they're not sure
that they can make those investments. What can we getting
rid of that barrier? And the Huntley Agreement, which the
Commerce Commission approved last week is really important. So that's
(05:00):
Huntley having a burg stockpile of coal and an agreement
that all of the gentailors will contribute to the cost
of keeping that going, and that Genesis will have to
sell hedging contracts to people outside of those main entities,
which keeps competition going in the market. So we're seeing
a response happening in real time, but we are correcting
(05:21):
for a massive signal failure by the last government.
Speaker 1 (05:25):
Have you had any protesters outside your house about Garza?
Speaker 2 (05:29):
I have not, thank goodness.
Speaker 1 (05:31):
I worry that.
Speaker 2 (05:31):
I don't see why my children should have to be
included in what is a political protest. There's nothing wrong
with coming to the front steps of Parliament. There's lots
of places to protest very loudly in New Zealand. You
don't need to go outside someone's home.
Speaker 1 (05:44):
How far how long before that legislation has done so
you can so these guys can be hustled off and
chucked in jail or whatever.
Speaker 2 (05:51):
Well, parliament's considering it at the moment, and it's on
the legislative agenda, we are progressing it.
Speaker 1 (05:56):
How far away do you reckon it is if it's
in submission phase at the moment.
Speaker 2 (06:01):
Look, I don't know where it sits on the agenda,
but obviously it's something that we intend to pass this term.
But here's the thing. Heither there shouldn't have to be
a law for people to know what decency and civility is.
And it's simply indecent and uncivil to protest in that way.
And it says more about the protesters than it does
about the issues they're trying to draw attention to.
Speaker 1 (06:19):
Couldn't agree more. Now, are you teaching you kids to cook?
Speaker 2 (06:24):
Well, the thing is there's going to be a lot
of people my mum's age. You're going to hear this
response and think I'm doing a bad job. But the
truth is not, really, we're still at the stage of
trying to teach them to pick their own towels up
and put their clothes away. I think they could probably
make a smoothie, a peanut butter sandwich. I know that
my twelve year old learned how to make Japanese omelets
in his cooking class, and he likes making those. I
(06:47):
think my fifteen year old could probably make himself a
bowl of pasta oppressed. But that's about it.
Speaker 1 (06:53):
It's not that bad that we're going to be fine, Nicola.
I'm like, the German is catastrophizing this, Nigola, and I'm
so to her. It's fine because we've got the Internet
and it can step you through it when you need
to write.
Speaker 2 (07:04):
Ah, Look, they'll be absolutely fine. In fact, one of
my close university friendships was formed with a man who
only knew how to make tune a pastor, and he's
so much better for having had his female flatmates teaching
a thing or two. And you can learn these things
in due courses. It's not rocket science, it's cooking. And yep,
my kids could survive on peanut butter sandwiches for a while,
(07:24):
I think, And look, Mum's probably taught them a few things.
Speaker 1 (07:27):
Long good on Granny, Nicola, Thanks very much, Nicola willis
the Finance Minister. Heather restraint of trade. Who would employ Adrian?
Very good question. For more from Heather Duplessy Allen Drive,
listen live to news talks. It'd be from four pm weekdays,
or follow the podcast on iHeartRadio
And as per usual, Nicola Willis the Finance ministers with us.
Hey Nikola, Hi, Heather, Now, when did you find out
that the Reserve Bank was paying Adrian all that money?
Speaker 2 (00:09):
Well? I knew that they had negotiated an exit agreement,
and then I learned about the Restraint of Trade provision
when the Bank released information about mister Or's departure under
the Official Information Act on the eleventh of June.
Speaker 1 (00:21):
So did you know on the eleventh of June that
he was being paid this much money? No?
Speaker 2 (00:25):
I learnt the amount today, just like everyone else.
Speaker 1 (00:28):
Should they have told you earlier?
Speaker 2 (00:31):
That wasn't my expectation because those arrangements were always a
negotiation between the Reserve Bank Board and Adrian war and
I had been assured that they had done those negotiations
in accordance with the terms and conditions in his contract,
which had already been agreed when he was reappointed as
governor in twenty twenty two.
Speaker 1 (00:50):
Okay, So I know that it was so. The restraint
of trade was in his contract signed yolks ago right, correct?
Was the amount that would be paid him in his contract?
Speaker 2 (01:02):
I don't know, but I have been advised by the
Bank that it was negotiated in accordance with his contract,
So I expect that the quantum reflects.
Speaker 1 (01:10):
That, but not necessarily. I mean they might have upped
it or whatever because they found Is this not a
question you should be asking them?
Speaker 2 (01:18):
Well, I have been given confidence that the Reserve Bank
have negotiated the exit agreement in accordance with their contractual obligations.
It's an employment matter. I am not privy to all
of the details of that negotiation, but what they had
was that he needed to have a restraine of trade
period for six months off set against any incumpnience. That
(01:39):
was in the terms because that was that's in the
terms and conditions of his appointment as governor. So the
amount does reflect that because that when in twenty twenty
two that was negotiated. Obviously I wasn't the minister. Then
that was under a previous minister. Those were the terms
of his contract, but we don't know.
Speaker 1 (01:55):
We know that the restrainer trade was in there, but
we don't know whether the restraint of trade meant that
he had to be paid this month, do.
Speaker 2 (02:00):
We Well, it does seem the right amount, given that
it was for a period of six months, so that
would be commensurate with the six months of US.
Speaker 1 (02:06):
Okay, are you comfortable with us?
Speaker 2 (02:09):
Well, obviously it's a very big number, and so I
think I probably had the same reaction to hearing that
number as many New Zealand as what. It's a big number,
it really is.
Speaker 1 (02:18):
Now, listen, what is the problem with the electricity market
that you guys are trying to fix with the announcement
last week. What's the problem.
Speaker 2 (02:26):
The problem is that when we have a dry year,
that is, there isn't enough rain in the hydro lakes,
then we run into electricity shortages on the days when
there isn't enough solo. It's the shorter to make part
for the lack of hydro, it is the lack of
firm in capacity in dry years. And how do we
motivate people to invest in the electricity generation that leans
(02:48):
on gas and oil? When and coal? When in the
past the past government said no, no, one hundred percent
renewables by twenty thirty. We don't want oil. We know bad?
How do we correct? Our job now is to make
it very clear to the market that they can have
confidence about investing in those assets because New Zealand needs them.
(03:08):
But when we have a dry year, we need there
to be enough backup gas or cold capacity that we
can keep the lights on.
Speaker 1 (03:15):
Okay, now, Nikola, if there's one thing we've learned about
the market in the thirty years since the Bradford Reforms,
it's that the market cannot be relied on to generate.
So why don't you guys just build the generation or
some well.
Speaker 2 (03:26):
Well, effectively, that's what we're doing by being majority shareholders,
but by being majority shareholders and three of the major
gen taylors. And what the Frontier report said is in
order for those Gen tailors to have access to the
capital needed to make these investments in the future, it
may require a call on the taxpayer to provide additional
(03:50):
investment to keep our equities.
Speaker 1 (03:51):
So I understand that. I'll tell you what I dos
up for that. Are you instructing the companies that you
majority own to build more generation?
Speaker 2 (04:02):
We are requesting that they bring forward proposals to provide
dry year Why are.
Speaker 1 (04:07):
Also because that's the idea behind thermal co is that
you just you ring And I think that thermal Co's
a nutty idea, but the general the idea behind it
is that you build your own generation so why don't
you just worry.
Speaker 2 (04:18):
Yes, this is in the boring detail part of the announcement,
but let me step it through for you, which is
that we are going to require in future transpower to
measure what they think then and lack of capacity for
the dry year looks like is at the moment we
don't really have reliable measurement of that. And then we've
said we will regulate to ensure that amount of capacity
(04:38):
is available. Now we're going to work with the sector
on what the detail of that regulation looks like. But
in the first instance, what the Frontier report said was
the first thing you've actually got to do is get
rid of this barrier, which is that they're not sure
that they can make those investments. What can we getting
rid of that barrier? And the Huntley Agreement, which the
Commerce Commission approved last week is really important. So that's
(05:00):
Huntley having a burg stockpile of coal and an agreement
that all of the gentailors will contribute to the cost
of keeping that going, and that Genesis will have to
sell hedging contracts to people outside of those main entities,
which keeps competition going in the market. So we're seeing
a response happening in real time, but we are correcting
(05:21):
for a massive signal failure by the last government.
Speaker 1 (05:25):
Have you had any protesters outside your house about Garza?
Speaker 2 (05:29):
I have not, thank goodness.
Speaker 1 (05:31):
I worry that.
Speaker 2 (05:31):
I don't see why my children should have to be
included in what is a political protest. There's nothing wrong
with coming to the front steps of Parliament. There's lots
of places to protest very loudly in New Zealand. You
don't need to go outside someone's home.
Speaker 1 (05:44):
How far how long before that legislation has done so
you can so these guys can be hustled off and
chucked in jail or whatever.
Speaker 2 (05:51):
Well, parliament's considering it at the moment, and it's on
the legislative agenda, we are progressing it.
Speaker 1 (05:56):
How far away do you reckon it is if it's
in submission phase at the moment.
Speaker 2 (06:01):
Look, I don't know where it sits on the agenda,
but obviously it's something that we intend to pass this term.
But here's the thing. Heither there shouldn't have to be
a law for people to know what decency and civility is.
And it's simply indecent and uncivil to protest in that way.
And it says more about the protesters than it does
about the issues they're trying to draw attention to.
Speaker 1 (06:19):
Couldn't agree more. Now, are you teaching you kids to cook?
Speaker 2 (06:24):
Well, the thing is there's going to be a lot
of people my mum's age. You're going to hear this
response and think I'm doing a bad job. But the
truth is not, really, we're still at the stage of
trying to teach them to pick their own towels up
and put their clothes away. I think they could probably
make a smoothie, a peanut butter sandwich. I know that
my twelve year old learned how to make Japanese omelets
in his cooking class, and he likes making those. I
(06:47):
think my fifteen year old could probably make himself a
bowl of pasta oppressed. But that's about it.
Speaker 1 (06:53):
It's not that bad that we're going to be fine, Nicola.
I'm like, the German is catastrophizing this, Nigola, and I'm
so to her. It's fine because we've got the Internet
and it can step you through it when you need
to write.
Speaker 2 (07:04):
Ah, Look, they'll be absolutely fine. In fact, one of
my close university friendships was formed with a man who
only knew how to make tune a pastor, and he's
so much better for having had his female flatmates teaching
a thing or two. And you can learn these things
in due courses. It's not rocket science, it's cooking. And yep,
my kids could survive on peanut butter sandwiches for a while,
(07:24):
I think, And look, Mum's probably taught them a few things.
Speaker 1 (07:27):
Long good on Granny, Nicola, Thanks very much, Nicola willis
the Finance Minister. Heather restraint of trade. Who would employ Adrian?
Very good question. For more from Heather Duplessy Allen Drive,
listen live to news talks. It'd be from four pm weekdays,
or follow the podcast on iHeartRadio
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