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Nicola Willis: Finance Minister on Reserve Bank cutting the OCR · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: So the OCI was cut twenty five, not fifty points
• 0:02
  Speaker 1: to three percent yesterday. A split decision means two of
• 0:05
  Speaker 1: the committee members wanted to go bigger and go hard
• 0:08
  Speaker 1: at four in club twenty five and this was the
• 0:11
  Speaker 1: big news yesterday. Really they've signaled down to two and
• 0:13
  Speaker 1: a half percent potentially by Christmas. We also found out
• 0:16
  Speaker 1: inflation expected to hit three percent for the September quarter.
• 0:19
  Speaker 1: Nikola Willis, as the Finance Minister, joins me this morning,
• 0:22
  Speaker 1: Good morning.
• 0:23
  Speaker 2: Good morning man.
• 0:24
  Speaker 1: So they didn't cut both fifty a third of them
• 0:27
  Speaker 1: think we needed to.
• 0:30
  Speaker 2: Do.
• 0:30
  Speaker 1: You are they doing the heavy lifting that you have
• 0:33
  Speaker 1: said that they need to do.
• 0:36
  Speaker 2: It's really important that monetary policy can stimulate the economy
• 0:41
  Speaker 2: and that's what the Reserve Bank made a very clear
• 0:44
  Speaker 2: decision to do tomorrow was ensure that interest rates can
• 0:48
  Speaker 2: fall further so that people are paying less for their debts,
• 0:52
  Speaker 2: so there's more money in people's pockets, so they can
• 0:54
  Speaker 2: be more money circulating in the economy, generating activity, jobs, growth,
• 1:00
  Speaker 2: all of the things we want to see.
• 1:02
  Speaker 1: We have businesses going to the wall, we have people
• 1:05
  Speaker 1: cutting back on groceries because they're so expensive. We know
• 1:08
  Speaker 1: that we've had a faulted recovery in quarter two, Does
• 1:11
  Speaker 1: the strengthen an argument for you to get involved and
• 1:15
  Speaker 1: do a bit of stimulus.
• 1:17
  Speaker 2: Well, we're very weare of all of those pressures, which
• 1:20
  Speaker 2: were exacerbated in the second three months of this year
• 1:24
  Speaker 2: following the Trump tariffs. What our Reserve Bank is very
• 1:27
  Speaker 2: clear about in their full statement which they released yesterday,
• 1:31
  Speaker 2: is that the government, by controlling its own spending, is
• 1:34
  Speaker 2: keeping pressure off inflation, allowing the Reserve Bank to deliver
• 1:38
  Speaker 2: these interesst rate reductions. It's my view that in the
• 1:41
  Speaker 2: absence of control government spending, it would be very difficult
• 1:45
  Speaker 2: for the Reserve Bank to keep reducing interrast rates, and
• 1:48
  Speaker 2: that would be a real constraint on some sectors that
• 1:50
  Speaker 2: I think we all are concerned about. You know, construction.
• 1:53
  Speaker 2: Construction projects get over the line where interest rates are
• 1:56
  Speaker 2: low enough that people are prepared to take on the
• 1:59
  Speaker 2: debt to find those projects. So totally agree to the future,
• 2:03
  Speaker 2: this is going to be now demand to the economy.
• 2:06
  Speaker 1: You need demand. You need people who are actually out
• 2:08
  Speaker 1: there going wanting to buy things, wanting to buy property.
• 2:11
  Speaker 1: We just talked about Fletcher's on the show. I mean,
• 2:13
  Speaker 1: so there's no, just for the absence of doubt, you're
• 2:16
  Speaker 1: ruling out any mid year mini sprinkle stimulus if even
• 2:19
  Speaker 1: reprioritize money doesn't have to be new money.
• 2:22
  Speaker 2: Oh, I'm absolutely not ruling that out. We will continue
• 2:25
  Speaker 2: to be taking additional actions to stimulate activity in the economy.
• 2:30
  Speaker 2: What I'm saying is that this is not a time
• 2:32
  Speaker 2: that we will be continuing to drive up additional debt. Well,
• 2:36
  Speaker 2: you've seen us continue to make announcements and deliver policy change,
• 2:41
  Speaker 2: but more than that, and that will continue. That will continue, right.
• 2:45
  Speaker 2: You will continue to see from the government actions which
• 2:48
  Speaker 2: we believe will stimulate activity, will give people confidence to invest,
• 2:53
  Speaker 2: will give people in nevi to take on your soon listen,
• 2:58
  Speaker 2: will continue to see that.
• 3:00
  Speaker 1: Why are you rewarding tantrums?
• 3:05
  Speaker 2: Whose tantrument I rewarded? That's not been my parenting approach.
• 3:08
  Speaker 1: Well, I wouldn't have thought it was. So the teachers.
• 3:12
  Speaker 1: We had Judith Collins come out and say the teachers
• 3:15
  Speaker 1: are throwing are wobbly throwing a tantrum? Yesterday Brian Roach
• 3:19
  Speaker 1: says we're now reviewing our offer. Oh.
• 3:23
  Speaker 2: Look, we've always said in order to get a deal
• 3:26
  Speaker 2: over the line with the teachers, which I think everyone wants.
• 3:29
  Speaker 2: They need to be at the bargaining table. Now, what
• 3:31
  Speaker 2: happens at the bargaining table is you negotiate in good
• 3:34
  Speaker 2: faith to get an outcome that can work for everyone.
• 3:37
  Speaker 2: How disappointment the tantrum which Judith Colins rightly referred to
• 3:40
  Speaker 2: was the PPTA walking away from negotiations after only six
• 3:45
  Speaker 2: days at the negotiating table.
• 3:46
  Speaker 1: And look what against a very good goes Look what
• 3:48
  Speaker 1: it gives them a reviewed offer.
• 3:51
  Speaker 2: Well, we have always been in a position that we
• 3:53
  Speaker 2: want to negotiate. Now, if the PPTA want to play
• 3:55
  Speaker 2: games and are more focused on their social media campaign
• 3:58
  Speaker 2: than actually representing their workers sitting at the table to
• 4:02
  Speaker 2: get a deal, that's on them, that's not on us.
• 4:05
  Speaker 1: Where does the money come from the extra money? Because
• 4:08
  Speaker 1: I think one point seven billion is what they were asking.
• 4:11
  Speaker 1: Do you have to borrow for that? Is that existing baselines?
• 4:14
  Speaker 1: Is it reprioritize this reviewed offer? Where does that money
• 4:17
  Speaker 1: come from? The extra money?
• 4:18
  Speaker 2: Well, well, Ryan, I think you're making an assumption about
• 4:20
  Speaker 2: what the components of the reviewed offer are and I
• 4:23
  Speaker 2: wouldn't do that. But of course, like every government before us,
• 4:26
  Speaker 2: we have set an envelope for this negotiation that some
• 4:30
  Speaker 2: is confidential, and we will be working within that envelope
• 4:34
  Speaker 2: because of course, I think people understand there are trade
• 4:37
  Speaker 2: offs here. In this year's budget, we delivered a record
• 4:41
  Speaker 2: package of learning support for children with additional needs that
• 4:44
  Speaker 2: will support additional teacher aides, supports and classrooms. Well as
• 4:48
  Speaker 2: we actually blow the negotiating budget on the teachers, those
• 4:51
  Speaker 2: things are going to be much much harder to fund
• 4:53
  Speaker 2: now and into the future. So this is all about
• 4:56
  Speaker 2: getting a deal that delivers for students, delivers for families,
• 4:59
  Speaker 2: and yes lothers for teachers who we value very much.
• 5:01
  Speaker 1: As people are listening to this this morning, they're hopefully
• 5:04
  Speaker 1: putting butter on their hosts. Many won't be. You have
• 5:07
  Speaker 1: congratulated night and day for selling butter at six dollars fifty.
• 5:10
  Speaker 1: That's apparently they're losing three bucks on every block. You've
• 5:14
  Speaker 1: said food stuffs and wool worse have the same option,
• 5:17
  Speaker 1: you'd encourage them to lower prices. I had food Stuffs
• 5:20
  Speaker 1: on my Herald Now show on Monday. They said they
• 5:23
  Speaker 1: are making a loss on the home brand butters that
• 5:26
  Speaker 1: they sell for eight dollars twenty nine. Did you realize that.
• 5:30
  Speaker 2: I listened to your show, Ryan, and this is the
• 5:32
  Speaker 2: kind of commercial behavior that you want to see. I
• 5:36
  Speaker 2: think all of us want to see retailers competing hard
• 5:39
  Speaker 2: against each how they which sometimes involve for having one
• 5:42
  Speaker 2: product or a whole range of products where they're selling
• 5:44
  Speaker 2: below costs because they know that they will recruit some
• 5:47
  Speaker 2: profits in other areas and other products that they are selling.
• 5:51
  Speaker 2: And my point's always been the more competitive the marketers,
• 5:54
  Speaker 2: the more you've got night and days and other entities
• 5:56
  Speaker 2: snapping at the heels of the big guys, more likely
• 5:59
  Speaker 2: you are to get those sorts of offers. All I
• 6:02
  Speaker 2: want is the best deal for Kiwi shoppers, and I
• 6:04
  Speaker 2: continue to believe more competition will support that.
• 6:07
  Speaker 1: All Right, Nicholas Willis appreciate your time this morning the
• 6:09
  Speaker 1: Finance Minister.
• 6:11
  Speaker 2: For more from earlier edition with Ryan Bridge.
• 6:13
  Speaker 1: Listen live to News Talks at b from five am weekdays,
• 6:17
  Speaker 1: or follow the podcast on iHeartRadio.