Latest / Best of Business / Nicola Willis: Finance Minister on the Government delaying increases to the fuel excise tax

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Nicola Willis: Finance Minister on the Government delaying increases to the fuel excise tax · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from Newstalk ZB. Follow this
• 0:13
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• 0:16
  Speaker 2: Now is Nicola Willis, the Finance Minister. Hi, Nicola.
• 0:19
  Speaker 3: Hi, Linda.
• 0:21
  Speaker 2: Your phone line's a bit funny there, so apologies for that. Oh,
• 0:24
  Speaker 2: is it? It is honestly not your fault. It's a
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  Speaker 2: bug in the WhatsApp. We'll see if we can fix it. Okay.
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  Speaker 2: It seems to have fixed itself. Listen, where are you
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  Speaker 2: going to find the money for the fuel excise delay today?
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  Speaker 3: Well, ultimately it will come from general taxation, general revenue.
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  Speaker 3: We will highlight at the pre-election fiscal update what that
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  Speaker 3: does to our debt track, our borrowing track, but ultimately...
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  Speaker 3: We've judged that we can fit it and also meet
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  Speaker 3: all of our budget responsibility rules in terms of maintaining
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  Speaker 3: that path to surplus, ensuring that we're still going to
• 1:01
  Speaker 3: get debt tracking down and ensuring that we're not boosting
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  Speaker 3: spending as a proportion of the economy over time. So, yep,
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  Speaker 3: it's real money. Yes, ultimately it comes from general taxation,
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  Speaker 3: but we've judged that this is the right thing to
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  Speaker 3: do at this juncture.
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  Speaker 2: Are you going to have to find something else to
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  Speaker 2: cut to pay for that billion dollar shortfall?
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  Speaker 3: That's not the proposal at this time, but of course
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  Speaker 3: all money comes with an opportunity cost. This is funding
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  Speaker 3: that would otherwise be available for other purposes.
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  Speaker 2: Okay, where are you going to find the money to
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  Speaker 2: pay for the change in the student loan policy that
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  Speaker 2: you announced yesterday?
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  Speaker 3: Okay. Well, in part by chasing the debt of those
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  Speaker 3: offshore who aren't paying it back, which is pretty startling
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  Speaker 3: in numbers, $ 2. 5 billion of overdue debt and only three
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  Speaker 3: out of 10 offshore borrowers actually paying their loans back
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  Speaker 3: on time. So we do need to chase that harder.
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  Speaker 3: And then beyond that, we will need to fund it
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  Speaker 3: from future operating allowances.
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  Speaker 2: Okay, because how much are you going to bring in
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  Speaker 2: from chasing these guys harder? It's about net $ 15 million,
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  Speaker 2: isn't it?
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  Speaker 3: That's right.
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  Speaker 2: And it's costing $ 438 million.
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  Speaker 3: That's right. But we've been really impressed, actually, when we've
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  Speaker 3: given additional funding to IRD. They've had a really good
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  Speaker 3: ratio of getting more dollars back than we invest in them.
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  Speaker 3: And we hope the same will be the case with
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  Speaker 3: this policy. We've costed it very conservatively. But you're right. Ultimately,
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  Speaker 3: the cost to the Crown winds down over time because
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  Speaker 3: we're just being repaid that money slower. We're still being
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  Speaker 3: repaid it by New Zealand borrowers. But because we don't
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  Speaker 3: have the money today, that, again, comes with an opportunity cost. Yes.
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  Speaker 2: But obviously, so you have to find about 420 odd million,
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  Speaker 2: 423 in the next few years. Is it worth it?
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  Speaker 2: I mean, because I don't know that these, I don't
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  Speaker 2: know anyone's going to stay in the country because they're
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  Speaker 2: paying 10 cents in the dollar instead of 12 cents
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  Speaker 2: in the dollar.
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  Speaker 3: Well, the way the cost happens is that the student
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  Speaker 3: loan book is currently seen as an asset on the
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  Speaker 3: Crown balance sheet. And essentially what happens in the first
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  Speaker 3: year of our policy, that asset is worth a bit
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  Speaker 3: less because the loans are being repaid a bit slower,
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  Speaker 3: but they still will be repaid. So the cost over
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  Speaker 3: time is actually very small and it thins out. It's
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  Speaker 3: just that upfront cost in terms of re-evaluating the student
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  Speaker 3: loan book. I think it is worth it because if
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  Speaker 3: you're a graduate... Actually, 40 bucks a fortnight is meaningful.
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  Speaker 3: And I really believe that letting people keep more of
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  Speaker 3: their own cash in their hand is one of the
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  Speaker 3: most powerful things the government can do. And this is
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  Speaker 3: a policy that delivers that.
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  Speaker 2: Yeah, out of interest, because it's an enormous number. It's
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  Speaker 2: like 93% of the debt is held by people who
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  Speaker 2: are overseas. This is the overdue debt. But do you
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  Speaker 2: know what proportion of that is the actual core debt,
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  Speaker 2: which is what we'd get paid back? And what proportion
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  Speaker 2: is just interest that we use to scare them and
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  Speaker 2: we're going to write it off anyway?
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  Speaker 3: I don't have that number with me, but what we
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  Speaker 3: do know is that it's really easy for someone overseas
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  Speaker 3: to set up a payment plan with IRD. No one
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  Speaker 3: going overseas is in any doubt that they have a
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  Speaker 3: student loan. They know that it needs to be repaid.
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  Speaker 3: And so I actually think there needs to be an
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  Speaker 3: attitude shift that people think because they can get away
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  Speaker 3: with it, they should. Well, our message is actually you
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  Speaker 3: can try not to pay back New Zealand taxpayers, but
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  Speaker 3: there will be consequences and we're going to make those
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  Speaker 3: consequences more significant than they have been in the past.
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  Speaker 2: Listen, do you think you guys need to override Sir
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  Speaker 2: Brian Roach and fire Nick Blakely?
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  Speaker 3: No, look, the Privileges Committee report made clear that they
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  Speaker 3: did not think further sanction was necessary. I don't sit
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  Speaker 3: on that committee, but some very senior members of Parliament do.
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  Speaker 3: And the Public Service Commissioner is ultimately Nick Blakely's employer.
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  Speaker 3: It is a very serious matter. The conduct was unacceptable.
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  Speaker 3: Nick accepts that. He has apologised fully for it. I
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  Speaker 3: think he's been raked over the coals both by his
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  Speaker 3: employer and publicly and clearly the consequences for him are
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  Speaker 3: very public. But the bigger issue for us is is
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  Speaker 3: exactly what went on with this immigration project. There's an
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  Speaker 3: independent inquiry going on into that. And there are lots
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  Speaker 3: of questions that we have about the conduct of senior
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  Speaker 3: MB officials. And Nick Blakely is part of what that
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  Speaker 3: inquiry is looking at. So I'm not going to prejudge
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  Speaker 3: its conclusions, but I'm not going to say that everyone's
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  Speaker 3: completely off the hook yet either.
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  Speaker 2: Because, I mean, look... The fact that the Privileges Committee
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  Speaker 2: said there should be no further sanction is actually neither
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  Speaker 2: here nor there because they're probably actually used to people
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  Speaker 2: coming and sitting in that room and just lying to
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  Speaker 2: them from the public service. But it's weird, is it not,
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  Speaker 2: that Sir Brian Roach didn't fire him because he has
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  Speaker 2: to take into account the fact that we all now do.
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  Speaker 2: I mean, anybody who witnessed that has had to have
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  Speaker 2: their confidence in the public sector knocked. Isn't it weird
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  Speaker 2: that he didn't tell this guy to bugger off?
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  Speaker 3: Well, I think in this case, he accepted that this
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  Speaker 3: was a couple of minutes of a three-hour hearing when
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  Speaker 3: what Nick should have done is said, look, this is
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  Speaker 3: a commercially sensitive area. I want to be careful about
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  Speaker 3: what I say. Can we please make sure this briefing
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  Speaker 3: is done confidentially? That's what he should have done. He
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  Speaker 3: didn't do that. And so he was very vague in
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  Speaker 3: his statements because he knew that it was commercially sensitive.
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  Speaker 3: So the real error here is not being properly prepared
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  Speaker 3: for the committee. Brian Roche, I think, accepts that he
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  Speaker 3: was only six weeks in the job. Well, look, as
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  Speaker 3: I said, the conduct was ultimately unacceptable. Nick has fully
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  Speaker 3: acknowledged that. He has apologised for his actions. He's taken
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  Speaker 3: responsibility for them. It can never happen again, Heather. And
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  Speaker 3: that's very clear. And actually, that's a message for the
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  Speaker 3: entire public service. It's not okay to go to a
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  Speaker 3: select committee.
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  Speaker 2: Here's the problem, Nicola, we won't know. Because these people
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  Speaker 2: just make it a habit, apparently, of lying. And so
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  Speaker 2: when they go and lie, we won't know that they're lying.
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  Speaker 2: This is the one case where we knew they were lying.
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  Speaker 2: And there's no punishment.
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  Speaker 3: I don't actually think that's true. It's not my experience
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  Speaker 3: that public servants go to select committees and lie. I've
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  Speaker 3: sat on many select committees, both as an opposition MP
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  Speaker 3: and as a government MP, and I haven't seen that
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  Speaker 3: being a common behaviour. Yeah.
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  Speaker 2: Well, unless you had a minister like Erica Stanford who
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  Speaker 2: exposed it, you wouldn't know, would you? That's the problem. Listen,
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  Speaker 2: really quickly, ACT last week announced that they want to
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  Speaker 2: abolish the Climate Change Commission. Would you be okay with that?
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  Speaker 3: Well, the Climate Change Commission is referenced heavily throughout the
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  Speaker 3: Zero Carbon Act. It sort of was set up as
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  Speaker 3: the kind of independent referee within that act. Now, I
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  Speaker 3: think that the Climate Change Commission, like every government agency,
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  Speaker 3: could probably do well to tighten the belt. We should
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  Speaker 3: look at that. But if you were to completely abolish it,
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  Speaker 3: you'd have to do some significant redrafting of the Zero
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  Speaker 3: Carbon Act.
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  Speaker 2: So that's your job. You're in government. It's just paperwork.
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  Speaker 2: It would save us about $ 15 million a year's worth
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  Speaker 2: during the paperwork, isn't it?
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  Speaker 3: Well, look, National hasn't announced our policy on all of
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  Speaker 3: these issues yet. We will in due course, but what
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  Speaker 3: I'm highlighting is that it has consequences beyond the saving
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  Speaker 3: of $ 15 million.
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  Speaker 2: Okay, but you're not ruling it out?
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  Speaker 3: Well, it's not for me to rule it out. Who
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  Speaker 3: is it for? We've got coalition discussions to have in
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  Speaker 3: due course, and I'm not going to get ahead of
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  Speaker 3: those today.
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  Speaker 2: All right, Nicola, thank you. Appreciate it. Nicola Willis, Finance Minister.
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