April 13, 2026 • 8 mins
There's growing concern about the impact of the Middle East conflict, and at least one major bank has forecasted increases to the OCR.
ANZ has revised its outlook, with forecasted increases to the OCR bringing rates up to 3 percent by October.
Associate Finance Minister Chris Bishop says skyrocketing fuel prices will have a flow-on effect on the New Zealand economy - and it's likely inflation will spike too.
"That's an unfortunate reality of global events...the forecast will properly come out with the Budget, that's the kind of next major event."
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Speaker 1 (00:00):
Chris Bishop, Associate Finance Minister and for Nikola willis this evening, high.
Speaker 2 (00:03):
Bish, Hello, how are we?
Speaker 1 (00:05):
I'm well? Thank you? Listen. Have you have you given
any thought to this business about the Wellington the Wellington
Water bosses doubling their pay at board level.
Speaker 3 (00:13):
I've literally just heard about that this afternoon. But goodness
may that that will go down like a cup of
warm circ with Valentinian. It's given the debarcle that is
there has been Wellington Water for a large number of years.
Speaker 2 (00:25):
Goodness me that will that will not go down? Well,
what do you reckon?
Speaker 1 (00:28):
I mean, I don't know that anybody can stop this
short of I'm guessing appealing to them way a remuneration authority. Also,
I don't even know who sets their pay. But do
you think public pressure would be sufficient for them to
back down on this?
Speaker 3 (00:43):
Well, ultimately it'll be the councils who actually set the pay,
because ultimately Wellington Water is now Kiaki wives they call it.
Wellington Water is as a wholly owned company of the
councils and they're off the you know, the assets have
been transferred into the entity. And look, the whole point
of it is to get frankly politicians away from deciding
(01:03):
where the investment goes because they've been absolutely useless over
twenty thirty years. That's the reason why we're dealing with
this mess and Wellington in the first place is because
successive politicians, you know, like Timmotha Paul and others have
diverted money into cycle ways and away from you know,
core infrastructure. So but you know, goodness me that that
won't go down well, particularly after the Male Point disaster,
(01:25):
which obviously we're still still wording for the inquiry.
Speaker 1 (01:27):
Imagine that. Yeah, Now, is it true that Treasury is
telling you worst case scenario for inflation as a result
of a run a seven point five percent?
Speaker 3 (01:36):
Treasury is doing a range of scenarios and forecasts, and look,
to be honest, it's a bit of a movable feast,
right because every day, you know, you'll probably be a
bit like me. You wake up and you open up
you know, Twitter or the news talks, there be Apple,
the Herald, Apple whatever, and you look at what's happened
overnight and you just your heart sinks a bit sometimes.
So it's a movable feast. What is undoubtedly true is
(01:58):
that inflation will increase and all of the forecasts are
showing that there's a bank said last week, you know,
four point two in the June quarters, what they expect
it to go up to.
Speaker 2 (02:09):
So it will increase.
Speaker 3 (02:10):
And the and the reason for that is, I think
people listening will know is that the price of petrol
and diesel was just fla skyrocket and has just flowing
through the economy and that will have flow on effects
for many goods. And you know, so inflation is going
to spike, and that's that's an unfortunate reality of global events.
Speaker 1 (02:27):
And what is the worst case scenario? What's the worst
case number?
Speaker 2 (02:31):
I don't have the worst case number two hand.
Speaker 1 (02:34):
And is it seven point five?
Speaker 2 (02:36):
It's a high number. Put it that one.
Speaker 1 (02:38):
Is it seven point five? Yes or no?
Speaker 2 (02:41):
It's a high number.
Speaker 3 (02:42):
But I think the point is that the forecast will
will properly come out with the budget. That's the kind
of next major.
Speaker 1 (02:48):
Okay, but why are you guys so Apparently I was
reading Vernon Smaun's article in the Sunday Star Times yesterday
and he says, everybody's been asking Nichola this question. Is
you won't answer the question I'm asking you the question.
You won't answer the question.
Speaker 3 (02:59):
Why, Well, the point is that it's it's a movable feast,
right like, it's a day by day proposition, and it's
very hard to forecast when you're not exactly sure what
you're forecasting.
Speaker 1 (03:08):
At the other day she was telling this is Nikola
was telling us it was three point seven. So she's
happy to tell us that number, but now not this number.
Speaker 3 (03:16):
Well, the Reserve banks saying four point two percent in
the during quarter, and we'll get the official treasury forecasts
and the budget.
Speaker 2 (03:22):
But but there's no there's no kind of conspiracy here.
Speaker 3 (03:24):
The point is there is going to be higher inflation
as a result of the oil price that's flowing through
the economy.
Speaker 2 (03:30):
Exactly what that is?
Speaker 3 (03:32):
You know, will the best, the best estimate, the best
forecast will come.
Speaker 1 (03:35):
Out in the budget, which I'm so confused by this.
The only explanation I could possibly reach for you guys
not wanting to tell us now is that you want
to do some shock and all strategy in the budget
and save it for.
Speaker 3 (03:44):
Then, Well, what happens if I give you a number
now and then the actual forecast tends up to be
lower or vitally.
Speaker 1 (03:49):
Happens all the time that's not a big deal. The
Reserve Bank released forecasts all the time and they change,
nobody freaks out.
Speaker 3 (03:56):
Yeah, well, as I say, you'll get you'll get the
you'll get the full forecast in the budget.
Speaker 1 (04:00):
And yeah, Now do you think that the states of
emergency were maybe a bit of an overreaction.
Speaker 3 (04:08):
Well, that's a tricky one, right. We've in the past
as a country, frankly in regions, you know, probably not
been as prepared as we should have been because we've
sort of ignored the weather warnings and haven't you know,
got our ducks in a row and sort of things out,
and you know we've paid the price for that. On
the other hand, you know, when you have events like
(04:31):
on the weekend and you know, some parts of the
country quite badly hit, others sort of tended to avoid
the damage that was being forecast. People look back and say, oh,
well that was a bit of a demp squab literally
nothing to see here, nothing to worry about. So it
is one of those tricky balancing next, right, and which
you want to be prepared, but you also, you know,
I don't want to cry wolf all the time.
Speaker 2 (04:50):
Because don't see people as you start to ignore the warm.
Speaker 1 (04:53):
Exactly, And so for that reason, don't you declare a
state of emergency when you know you actually have an emergency,
not that there might be an emergency.
Speaker 3 (05:01):
Yeah, I'm not an expert on this, and I defer
to the Minister of Emergency Management on this and the
Associate plus of course the local civil defense.
Speaker 2 (05:10):
And emergency management controllers.
Speaker 3 (05:13):
I suppose I'm just making the point that it is
a tricky one to get right, Like, if you don't
declare one and then something terrible happens, people will say, well,
you guys, were you know, you were lax and you
were negligent and all the rest of it. But when
you do do something and it doesn't work out quite as.
Speaker 2 (05:26):
Bad, this is hard.
Speaker 1 (05:28):
There are people who literally, there are people who literally
are employed to do this all the time. It's literally
their job. Can't be that bloody hard, now, listen, moving on,
Have you got cold on the idea of councils of
mayors taking over from regional councils when you scrap them.
Speaker 2 (05:44):
We're working our way through the feedback.
Speaker 3 (05:46):
We haven't gone cold on the idea of local government
reform to reduce duplication and reduce costs and red tape.
It'd be fair to say there's been mixed feedback on
the proposal of putting the mayors in charge of regional plans.
Some are really up for it, others are a bit
more squeamish about it. But what has been really interesting
is people have actually responded really well to the idea
(06:08):
that there are the idea of seventy eight different territorial
authorities with regional councils, you know, over the top or
to the side or underneath.
Speaker 2 (06:14):
No one's actually really.
Speaker 3 (06:16):
Too clear about what they are.
Speaker 2 (06:18):
Everyone's up for sorting that mess out right.
Speaker 3 (06:21):
I've got too many territorial authorities, We've got too many
layers of bureaucracy, too many councils.
Speaker 1 (06:24):
I'm for it, but I'm worried about what you're going
to replace the regional councils with. If it's not councils
of meyts.
Speaker 2 (06:29):
So what is it.
Speaker 3 (06:30):
Well, we are working on a bit of a plan
you will have. I'll have more to say soon, and
I think you will like it. What is really interesting
is there's a bunch of regions North Holds a classic
actually where they have just gone, oh goodness, mate, this
is great you guys have ripped the scab off this
debarkle of local government.
Speaker 2 (06:48):
Let's get on with it.
Speaker 3 (06:49):
And you know, the North End guys are up there
are basically proposing, as I understand it, one unitary authority
collapse all the different territorial authorities into one. Make sense,
And they're saying, let's just get on with it. And
there's other people saying exactly the same thing. So we're
just sort of working out how we give effect to
what regions themselves actually want to do.
Speaker 1 (07:09):
Now, what have you done to Mill Road, which I'm
obsessed with. It's not a roads of national significance anymore
because it's not meaning all the criteria. Why do you
scale it back?
Speaker 2 (07:16):
Yeah? No, No, Mill Roads a road of national significance.
Speaker 3 (07:19):
In fact, it's even listed in the Auckland City deal
that we announced on Friday is one of the priority
projects for Auckland.
Speaker 1 (07:26):
Didn't I read that it has been scaled back, So
it's no longer all of the things that you're supposed
to have like the grade separation and four lanes and stuff.
Speaker 3 (07:33):
Like that on a few of them, and Mill Road
will be one of them. And there's others actually around
the country. It's not just Mill Road. N ZTA has
scaled some of the four lane hundred and ten grades separated,
you know, the kind of really big, you know, super roads.
Speaker 2 (07:48):
They've scaled it back a bit. And that's just on
cost grounds.
Speaker 1 (07:50):
Right, So is it going to be a stink called
two lane highway?
Speaker 2 (07:54):
It's going to be a great road and it's going
to be Is it going to be a two lane highway?
Speaker 3 (07:57):
Bish?
Speaker 2 (07:58):
It is going to be a great road and you're
killing me, mate. DTA are going through the details around
that right now. In fact, they can.
Speaker 3 (08:07):
I think they're I think they're in the middle of
processing the resource consent for that right now.
Speaker 2 (08:12):
They're sently not far away from.
Speaker 1 (08:14):
Okay, we'll keep an eye. Thank you very much, appreciate it.
It's Chris Bishop, Associate Finance Minister. For more from Hither
Duplessy Allen Drive. Listen live to news talks it'd be
from four pm weekdays, or follow the podcast on iHeartRadio.
Chris Bishop, Associate Finance Minister and for Nikola willis this evening, high.
Speaker 2 (00:03):
Bish, Hello, how are we?
Speaker 1 (00:05):
I'm well? Thank you? Listen. Have you have you given
any thought to this business about the Wellington the Wellington
Water bosses doubling their pay at board level.
Speaker 3 (00:13):
I've literally just heard about that this afternoon. But goodness
may that that will go down like a cup of
warm circ with Valentinian. It's given the debarcle that is
there has been Wellington Water for a large number of years.
Speaker 2 (00:25):
Goodness me that will that will not go down? Well,
what do you reckon?
Speaker 1 (00:28):
I mean, I don't know that anybody can stop this
short of I'm guessing appealing to them way a remuneration authority. Also,
I don't even know who sets their pay. But do
you think public pressure would be sufficient for them to
back down on this?
Speaker 3 (00:43):
Well, ultimately it'll be the councils who actually set the pay,
because ultimately Wellington Water is now Kiaki wives they call it.
Wellington Water is as a wholly owned company of the
councils and they're off the you know, the assets have
been transferred into the entity. And look, the whole point
of it is to get frankly politicians away from deciding
(01:03):
where the investment goes because they've been absolutely useless over
twenty thirty years. That's the reason why we're dealing with
this mess and Wellington in the first place is because
successive politicians, you know, like Timmotha Paul and others have
diverted money into cycle ways and away from you know,
core infrastructure. So but you know, goodness me that that
won't go down well, particularly after the Male Point disaster,
(01:25):
which obviously we're still still wording for the inquiry.
Speaker 1 (01:27):
Imagine that. Yeah, Now, is it true that Treasury is
telling you worst case scenario for inflation as a result
of a run a seven point five percent?
Speaker 3 (01:36):
Treasury is doing a range of scenarios and forecasts, and look,
to be honest, it's a bit of a movable feast,
right because every day, you know, you'll probably be a
bit like me. You wake up and you open up
you know, Twitter or the news talks, there be Apple,
the Herald, Apple whatever, and you look at what's happened
overnight and you just your heart sinks a bit sometimes.
So it's a movable feast. What is undoubtedly true is
(01:58):
that inflation will increase and all of the forecasts are
showing that there's a bank said last week, you know,
four point two in the June quarters, what they expect
it to go up to.
Speaker 2 (02:09):
So it will increase.
Speaker 3 (02:10):
And the and the reason for that is, I think
people listening will know is that the price of petrol
and diesel was just fla skyrocket and has just flowing
through the economy and that will have flow on effects
for many goods. And you know, so inflation is going
to spike, and that's that's an unfortunate reality of global events.
Speaker 1 (02:27):
And what is the worst case scenario? What's the worst
case number?
Speaker 2 (02:31):
I don't have the worst case number two hand.
Speaker 1 (02:34):
And is it seven point five?
Speaker 2 (02:36):
It's a high number. Put it that one.
Speaker 1 (02:38):
Is it seven point five? Yes or no?
Speaker 2 (02:41):
It's a high number.
Speaker 3 (02:42):
But I think the point is that the forecast will
will properly come out with the budget. That's the kind
of next major.
Speaker 1 (02:48):
Okay, but why are you guys so Apparently I was
reading Vernon Smaun's article in the Sunday Star Times yesterday
and he says, everybody's been asking Nichola this question. Is
you won't answer the question I'm asking you the question.
You won't answer the question.
Speaker 3 (02:59):
Why, Well, the point is that it's it's a movable feast,
right like, it's a day by day proposition, and it's
very hard to forecast when you're not exactly sure what
you're forecasting.
Speaker 1 (03:08):
At the other day she was telling this is Nikola
was telling us it was three point seven. So she's
happy to tell us that number, but now not this number.
Speaker 3 (03:16):
Well, the Reserve banks saying four point two percent in
the during quarter, and we'll get the official treasury forecasts
and the budget.
Speaker 2 (03:22):
But but there's no there's no kind of conspiracy here.
Speaker 3 (03:24):
The point is there is going to be higher inflation
as a result of the oil price that's flowing through
the economy.
Speaker 2 (03:30):
Exactly what that is?
Speaker 3 (03:32):
You know, will the best, the best estimate, the best
forecast will come.
Speaker 1 (03:35):
Out in the budget, which I'm so confused by this.
The only explanation I could possibly reach for you guys
not wanting to tell us now is that you want
to do some shock and all strategy in the budget
and save it for.
Speaker 3 (03:44):
Then, Well, what happens if I give you a number
now and then the actual forecast tends up to be
lower or vitally.
Speaker 1 (03:49):
Happens all the time that's not a big deal. The
Reserve Bank released forecasts all the time and they change,
nobody freaks out.
Speaker 3 (03:56):
Yeah, well, as I say, you'll get you'll get the
you'll get the full forecast in the budget.
Speaker 1 (04:00):
And yeah, Now do you think that the states of
emergency were maybe a bit of an overreaction.
Speaker 3 (04:08):
Well, that's a tricky one, right. We've in the past
as a country, frankly in regions, you know, probably not
been as prepared as we should have been because we've
sort of ignored the weather warnings and haven't you know,
got our ducks in a row and sort of things out,
and you know we've paid the price for that. On
the other hand, you know, when you have events like
(04:31):
on the weekend and you know, some parts of the
country quite badly hit, others sort of tended to avoid
the damage that was being forecast. People look back and say, oh,
well that was a bit of a demp squab literally
nothing to see here, nothing to worry about. So it
is one of those tricky balancing next, right, and which
you want to be prepared, but you also, you know,
I don't want to cry wolf all the time.
Speaker 2 (04:50):
Because don't see people as you start to ignore the warm.
Speaker 1 (04:53):
Exactly, And so for that reason, don't you declare a
state of emergency when you know you actually have an emergency,
not that there might be an emergency.
Speaker 3 (05:01):
Yeah, I'm not an expert on this, and I defer
to the Minister of Emergency Management on this and the
Associate plus of course the local civil defense.
Speaker 2 (05:10):
And emergency management controllers.
Speaker 3 (05:13):
I suppose I'm just making the point that it is
a tricky one to get right, Like, if you don't
declare one and then something terrible happens, people will say, well,
you guys, were you know, you were lax and you
were negligent and all the rest of it. But when
you do do something and it doesn't work out quite as.
Speaker 2 (05:26):
Bad, this is hard.
Speaker 1 (05:28):
There are people who literally, there are people who literally
are employed to do this all the time. It's literally
their job. Can't be that bloody hard, now, listen, moving on,
Have you got cold on the idea of councils of
mayors taking over from regional councils when you scrap them.
Speaker 2 (05:44):
We're working our way through the feedback.
Speaker 3 (05:46):
We haven't gone cold on the idea of local government
reform to reduce duplication and reduce costs and red tape.
It'd be fair to say there's been mixed feedback on
the proposal of putting the mayors in charge of regional plans.
Some are really up for it, others are a bit
more squeamish about it. But what has been really interesting
is people have actually responded really well to the idea
(06:08):
that there are the idea of seventy eight different territorial
authorities with regional councils, you know, over the top or
to the side or underneath.
Speaker 2 (06:14):
No one's actually really.
Speaker 3 (06:16):
Too clear about what they are.
Speaker 2 (06:18):
Everyone's up for sorting that mess out right.
Speaker 3 (06:21):
I've got too many territorial authorities, We've got too many
layers of bureaucracy, too many councils.
Speaker 1 (06:24):
I'm for it, but I'm worried about what you're going
to replace the regional councils with. If it's not councils
of meyts.
Speaker 2 (06:29):
So what is it.
Speaker 3 (06:30):
Well, we are working on a bit of a plan
you will have. I'll have more to say soon, and
I think you will like it. What is really interesting
is there's a bunch of regions North Holds a classic
actually where they have just gone, oh goodness, mate, this
is great you guys have ripped the scab off this
debarkle of local government.
Speaker 2 (06:48):
Let's get on with it.
Speaker 3 (06:49):
And you know, the North End guys are up there
are basically proposing, as I understand it, one unitary authority
collapse all the different territorial authorities into one. Make sense,
And they're saying, let's just get on with it. And
there's other people saying exactly the same thing. So we're
just sort of working out how we give effect to
what regions themselves actually want to do.
Speaker 1 (07:09):
Now, what have you done to Mill Road, which I'm
obsessed with. It's not a roads of national significance anymore
because it's not meaning all the criteria. Why do you
scale it back?
Speaker 2 (07:16):
Yeah? No, No, Mill Roads a road of national significance.
Speaker 3 (07:19):
In fact, it's even listed in the Auckland City deal
that we announced on Friday is one of the priority
projects for Auckland.
Speaker 1 (07:26):
Didn't I read that it has been scaled back, So
it's no longer all of the things that you're supposed
to have like the grade separation and four lanes and stuff.
Speaker 3 (07:33):
Like that on a few of them, and Mill Road
will be one of them. And there's others actually around
the country. It's not just Mill Road. N ZTA has
scaled some of the four lane hundred and ten grades separated,
you know, the kind of really big, you know, super roads.
Speaker 2 (07:48):
They've scaled it back a bit. And that's just on
cost grounds.
Speaker 1 (07:50):
Right, So is it going to be a stink called
two lane highway?
Speaker 2 (07:54):
It's going to be a great road and it's going
to be Is it going to be a two lane highway?
Speaker 3 (07:57):
Bish?
Speaker 2 (07:58):
It is going to be a great road and you're
killing me, mate. DTA are going through the details around
that right now. In fact, they can.
Speaker 3 (08:07):
I think they're I think they're in the middle of
processing the resource consent for that right now.
Speaker 2 (08:12):
They're sently not far away from.
Speaker 1 (08:14):
Okay, we'll keep an eye. Thank you very much, appreciate it.
It's Chris Bishop, Associate Finance Minister. For more from Hither
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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