Latest / The SME Stream / Nicola Willis: Finance Minister hopeful surplus will be achieved by 2029 following half-year update

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Nicola Willis: Finance Minister hopeful surplus will be achieved by 2029 following half-year update · The SME Stream

• 0:00
  Speaker 1: First, the government's going to stay in debt longer than
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  Speaker 1: it thought it would back in May. This is the
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  Speaker 1: hayfer that's come out today. The surplus delayed again for
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  Speaker 1: another year out to twenty thirty. We won't start paying
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  Speaker 1: down our debt in this country until then. Growth is
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  Speaker 1: coming on but slower than expected. So back points six
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  Speaker 1: percent four twenty four to twenty five, Ford, three point
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  Speaker 1: three for twenty five twenty six, and three percent for
• 0:25
  Speaker 1: twenty six twenty seven, Tariffs, inflation, tourism, numbers, population, all
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  Speaker 1: contributing factors. Nicola Willis is the Finance Minister. Good evening,
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  Speaker 1: Good evening, Do you take responsibility for our lackluster growth?
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  Speaker 2: I take responsibility for turning it around, and what we
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  Speaker 2: have shared in today's forecasts is accelerating growth next year,
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  Speaker 2: low inflation growth throughout the forecast period, two hundred and
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  Speaker 2: seventy thousand jobs being created, low interest rates in all
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  Speaker 2: the conditions for New Zealanders to get ahead.
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  Speaker 1: Labour wants you to take responsibility for the fact that
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  Speaker 1: we haven't had significant or meaningful growth in the last year.
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  Speaker 1: You've been the Minister of growth all that time. Do
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  Speaker 1: you take accountability well?
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  Speaker 2: In Treasury's assessment the effect of Donald Trump's tariff announcement
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  Speaker 2: in April on our economy was significant, and of course
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  Speaker 2: it came off the back of what was already a
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  Speaker 2: difficult recovery following Labour's period of sky high inflation and
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  Speaker 2: the very high interest rates that were used to arrest that.
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  Speaker 2: It's significant that even in the midst of that, the
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  Speaker 2: government has taken pro growth measures, including, for example, the
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  Speaker 2: Investment boost tax policy to encourage business investment, moves to
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  Speaker 2: replace the Resource Management Act, to cap rates, to ensure
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  Speaker 2: that we can deliver more housing, to boost tourism. We've
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  Speaker 2: been at it as a government taking pro growth measures
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  Speaker 2: and maintaining fiscal discipline, which is something that you won't
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  Speaker 2: hear Labour talking about.
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  Speaker 1: So when it comes to pushing the surplus out and
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  Speaker 1: this says basically, you won't achieve it when you have
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  Speaker 1: the fiscal tension that you want to achieve it. But
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  Speaker 1: you're saying you will stick to twenty twenty nine not
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  Speaker 1: twenty thirty. How do you do that when the books
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  Speaker 1: say you can't.
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  Speaker 2: Well, a forecasts do show us reaching a surplus over
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  Speaker 2: this period, and the question is whether we get there
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  Speaker 2: in twenty nine or twenty thirty. The twenty nine deficit
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  Speaker 2: that's being forecast relative is very small, and so I
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  Speaker 2: remain confident that we can get there. What that will
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  Speaker 2: take is just a small revision to the growth upwards,
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  Speaker 2: combined with fiscal discipline, and those are two things that
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  Speaker 2: our government has committed to. So we're sticking to our
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  Speaker 2: surplus target.
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  Speaker 1: You've committed to keeping new borrowing to two point four
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  Speaker 1: billion dollars next year. Given we're not bringing in as
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  Speaker 1: much cash as we had hoped, would it not be
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  Speaker 1: prudent to cut that figure further?
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  Speaker 2: No, because that is what is required to ensure we
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  Speaker 2: can make the investments needed to increase health service delivery,
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  Speaker 2: to ensure our schools have the resources they need to
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  Speaker 2: pay their teachers and deliver learning, that our police have
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  Speaker 2: the resources they need on the front line, and to
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  Speaker 2: continue our build and defense force capability. It's a very
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  Speaker 2: small number, though, relative to recent budgets ran to give
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  Speaker 2: you a sense of context, in the twenty twenty two
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  Speaker 2: budget under the previous government, new operating spending was nine
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  Speaker 2: point seven billion a year. We're proposing two point four,
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  Speaker 2: So this is a much more modest level of spending
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  Speaker 2: than was the case under the previous government, and we
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  Speaker 2: can achieve it by continuing our rigor around, constantly finding
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  Speaker 2: savings and efficiency.
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  Speaker 1: There's a vicious cycle thing that happens here, isn't there
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  Speaker 1: When the economy does bad, people leave. When people leave,
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  Speaker 1: we can't tax some fifty thousand fewer taxpayers in the
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  Speaker 1: country than expect it. How do you turn that? How
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  Speaker 1: long does it take to turn that around?
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  Speaker 2: Well, I was really pleased to see the most recent
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  Speaker 2: update from Stats which showed the number of people leaving
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  Speaker 2: is actually the lowest in three years, and so that
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  Speaker 2: is starting to turn around. On the latest stats, the
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  Speaker 2: census starter updated the underlying assumptions on popular and yes
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  Speaker 2: that is slightly lower. But I'm confident that as our
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  Speaker 2: economy recovers, as there are more jobs available which is
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  Speaker 2: being forecast, as there's more growth and comes arising, that
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  Speaker 2: more New Zealanders will see they can have a great
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  Speaker 2: future here and they will choose to stay.
• 4:15
  Speaker 1: You've said in your speech today, there are a lot
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  Speaker 1: of things the government can't control. Do you as a
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  Speaker 1: party and labor both need to be a little more
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  Speaker 1: honest with New Zealanders about what it is you actually
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  Speaker 1: can fix and what you can't, because I feel like
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  Speaker 1: we're getting taken for a ride. One of you says
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  Speaker 1: we will get we will fix this, the other says
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  Speaker 1: we will fix that, and actually then you turn around
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  Speaker 1: when the books come out and say it's not fixable,
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  Speaker 1: it's not in our hands.
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  Speaker 2: Well, I disagree with that. I do think there is
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  Speaker 2: a lot that we can control. We can control our
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  Speaker 2: discretionary spending decisions and the impact that has on inflation
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  Speaker 2: and therefore interest rates. I stand by our track record
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  Speaker 2: in that regard. We can control whether the policies we
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  Speaker 2: deliver a pro growth or anti growth. And in that sense,
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  Speaker 2: we've said yes to replacing the Resource Management Act. We've
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  Speaker 2: said yes to tax relief, we've said yes to backing businesses,
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  Speaker 2: which are all the things consistent with supporting growth in
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  Speaker 2: this economy. On the other hand, my opponents on the
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  Speaker 2: other side consistently say no to those things, and so
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  Speaker 2: they have to take responsibility for those positions.
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  Speaker 1: Minister, appreciate your time. That's Nicola Willis, Finance Minister. For
• 5:25
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