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Nicola Willis: Finance Minister on businesses and economic recovery · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks be follow
• 0:12
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  Speaker 2: So, as expected, the Reserve Bank has held the OCR
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  Speaker 2: at three point twenty five percent. They've suggested the next
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  Speaker 2: move is a cut that will happen in about six
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  Speaker 2: weeks time. But it's clear from what they're saying that
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  Speaker 2: the economy is far from roaring at the minute. Nicola
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  Speaker 2: Willis is the Finance Minisum with US Morning. Nikola, Good
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  Speaker 2: morning here. Why isn't the economy doing better?
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  Speaker 3: Well? We had two quarters of above expected growth, so
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  Speaker 3: that was in the last bit of last year, in
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  Speaker 3: the first three months of this year where the growth
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  Speaker 3: in the economy was faster than all of our forecasts.
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  Speaker 3: But since then, there's been quite a few global developments.
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  Speaker 3: We've had Donald Trump making announcements about tariffs, We've had
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  Speaker 3: global back and forth on trade. We've had global conflict
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  Speaker 3: and that's created uncertainty around the world and it certainly
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  Speaker 3: impacted business confidence and investment intentions here in New Zealand.
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  Speaker 3: Despite that, fundamentals remain good. There's every reason that we
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  Speaker 3: will have kept growing, but maybe not as fast as
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  Speaker 3: we would have liked okay.
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  Speaker 2: I mean it's fair to say that some of it
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  Speaker 2: has to do with what's going on globally, but a
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  Speaker 2: lot of it is actually just domestic spare capacity in
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  Speaker 2: the domestic economy. Why isn't it firing? I mean, the
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  Speaker 2: reason I'm asking you this question is because you said
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  Speaker 2: in twenty twenty three at the election that you guys
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  Speaker 2: would get the economy back on track. You've had more
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  Speaker 2: than eighteen months and it's far from that.
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  Speaker 3: Well, there is spare capacity in the economy. And if
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  Speaker 3: you go back to what I was saying earlier, what
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  Speaker 3: we saw at the end of last year, in the
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  Speaker 3: first three months of this year was we were literally
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  Speaker 3: twice as fast in terms of our growth as had
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  Speaker 3: been predicted, four times as fast as Australia was in
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  Speaker 3: the first three months of the year. Then in April,
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  Speaker 3: quite a major thing happened and you saw the same
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  Speaker 3: headlines as every business in New Zealand saw, which said
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  Speaker 3: that this is going to be very challenging to the world,
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  Speaker 3: that global growth is going to reduce, there are going
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  Speaker 3: to be all of these impacts, and like many countries
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  Speaker 3: around the world, the reaction and that in New Zealand
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  Speaker 3: has been well, actually we might have betten down the hatch.
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  Speaker 3: This is a bit now my viewers. Okay, that's the
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  Speaker 3: reaction that businesses have had, but actually all of the
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  Speaker 3: fundamentals for growth remain. We've got a business friendly government
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  Speaker 3: that is on the side of those wanting to invest
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  Speaker 3: and make money and create jobs and export overseas. We
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  Speaker 3: are getting rid of rules and the regulations that have
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  Speaker 3: in the past stood in the way and made things harder.
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  Speaker 3: We've been careful with the way that we are spending
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  Speaker 3: taxpayers money. All of those things are the right things
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  Speaker 3: to be doing and is every reason why New Zealand
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  Speaker 3: should be growing in the future.
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  Speaker 2: Nichola, can I talk to you about this Fonterra meeting?
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  Speaker 2: What are you hoping to get out of it?
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  Speaker 3: Well, I have had some interesting numbers put to me Heather,
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  Speaker 3: which is that if you buy some butter at Coal's
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  Speaker 3: and Willworth's right now, if you go online, you can
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  Speaker 3: get that for seven dollars Australia, which is ki we
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  Speaker 3: seven dollars sixty or so. If you buy it at
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  Speaker 3: Walworth's New Zealand right now, it's about eight dollars fifty,
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  Speaker 3: So is that.
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  Speaker 2: A supermarket problem though, or a Fonterra problem.
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  Speaker 3: That's my question and I don't have an answer for you,
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  Speaker 3: And I want to ask both the supermarkets and Fonterra
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  Speaker 3: for their perspective on what's building into that cost, what's
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  Speaker 3: in that price? Is there anything the government can be
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  Speaker 3: doing to reduce factors in that price? Because I accept
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  Speaker 3: that the global milk price sets the general price in
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  Speaker 3: fury products. I get that that's economics. But my question
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  Speaker 3: is why is it seemingly a bit cheaper in Australia
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  Speaker 3: than it is in New Zealand to get a block
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  Speaker 3: a better?
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  Speaker 2: Would it simply not be that Potentially Coals is using
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  Speaker 2: it as a loss leader.
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  Speaker 3: Well, that seems interesting because of course Coals and will Worths,
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  Speaker 3: you'd think would be facing similar incentives to do that
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  Speaker 3: sort of thing. Why wouldn't that be happening here? And
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  Speaker 3: Coals isn't offering it particularly cheaply in Australia. If you
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  Speaker 3: look at different places in Australia you can get similar
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  Speaker 3: prices to that. So I've just got the question. I've
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  Speaker 3: put that question, of course to supermarkets. Why is it
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  Speaker 3: so much cheaper seemingly at Australia and they've given me
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  Speaker 3: an answer. I'm going to put it to Fontierra and
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  Speaker 3: ask them about it. And I'm genuinely interested in their
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  Speaker 3: answers because I'm on side of every Kiwi shopper who goes, hey,
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  Speaker 3: there are Our price is fair and I think I
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  Speaker 3: have a job to do to explore it.
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  Speaker 2: Nicholasied families on two hundred and thirty thousand dollars beyond welfare.
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  Speaker 3: No, they shouldn't be. But I know where you're going
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  Speaker 3: with this.
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  Speaker 2: Yes, so why are they?
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  Speaker 3: They are not? Family is earning that kind of income
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  Speaker 3: in New Zealand. So that's across two earners. Mind you,
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  Speaker 3: that's not just one who are paying a lot of
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  Speaker 3: tax then have to if they have young children, pay
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  Speaker 3: a lot for their childcare in order to work. It's
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  Speaker 3: a cost that they have to take on in order
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  Speaker 3: to often have mum and dad both working full time.
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  Speaker 3: And what we've done with the Family Boost policy is
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  Speaker 3: recognized as taxpayers working hard at a difficult time in life.
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  Speaker 3: We want to make sure that you're well supported in
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  Speaker 3: that and we're going to give you some of your
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  Speaker 3: fees back forty percent fees back up to forty percent.
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  Speaker 2: That's still wealthif one that's still wealthy because you are
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  Speaker 2: giving money to families who are earning two hundred and
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  Speaker 2: thirty thousand dollars a year. I mean, are you sure
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  Speaker 2: that you just spoke about the fact that you're spending
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  Speaker 2: our money wisely? It doesn't look like.
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  Speaker 3: Well, well, it's a text rebate either. It's not wellfare,
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  Speaker 3: it's not a handout. It's actually something you get only
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  Speaker 3: if you are able to demonstrate that you've got those
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  Speaker 3: receipts for your early childhood education costs, and you will
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  Speaker 3: get less than you would if you were on a
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  Speaker 3: lower income. We have means tested it so once you're
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  Speaker 3: as a household earning more than one hundred and forty
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  Speaker 3: thousand dollars, the amount of rebate you get out of
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  Speaker 3: that scheme starts to reduce. But look, I stand by
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  Speaker 3: that family burst policy. It's all about saying, difficult time
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  Speaker 3: in life, high cost of living, let's make sure families
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  Speaker 3: with young kids are well support.
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  Speaker 2: All right, Nicola, thank you for your time. Enjoy your
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  Speaker 2: Day's Nichola Willi's Finance Minister.
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