Latest / The SME Stream / The Country 03/12/25: Christopher Luxon talks to Jamie Mackay

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The Country 03/12/25: Christopher Luxon talks to Jamie Mackay · The SME Stream

• 0:00
  Speaker 1: Here's a busy man, as you'd expect with the bloke
• 0:02
  Speaker 1: running of the country. Krystpher Lux and PM kicks off
• 0:05
  Speaker 1: the show on a Wednesday. It is earlier on a
• 0:09
  Speaker 1: Wednesday as we pre record this because he's in a
• 0:11
  Speaker 1: car going to the airport. He's heading down to Napier
• 0:15
  Speaker 1: for a day out with the farmers and Wayne Langford
• 0:17
  Speaker 1: from Federated Farmers.
• 0:20
  Speaker 2: Hey, how are you Jamie? Good to be with you?
• 0:21
  Speaker 1: Are you grooming him for potential National Party candidacy Prime Minister.
• 0:27
  Speaker 3: Look, I think he's doing a great job actually leading seeds.
• 0:29
  Speaker 3: He's doing a brilliant job. And yeah, they're really good
• 0:33
  Speaker 3: because they are really straight up to deal with and
• 0:36
  Speaker 3: you know, they can play back very clearly what's going
• 0:38
  Speaker 3: on in the farming community. And I've got a government
• 0:40
  Speaker 3: that they know is backing them and we're all in
• 0:42
  Speaker 3: on the side of the farmers, which is great.
• 0:44
  Speaker 1: Well, the last president of Federated Farmer's, David Seymour, pinched
• 0:47
  Speaker 1: him you better be careful. Winston hasn't got his eye
• 0:50
  Speaker 1: on Yolo.
• 0:53
  Speaker 2: No.
• 0:53
  Speaker 3: Look, I think now they've done a great job and
• 0:56
  Speaker 3: it's actually always very constructive because they've got a lot
• 0:58
  Speaker 3: of good resource. They've got a good thinking on policy,
• 1:01
  Speaker 3: and when you actually think about what we did and
• 1:03
  Speaker 3: what we committed to pre election and what we've gone
• 1:05
  Speaker 3: off and delivered and getting rid of the red tape
• 1:07
  Speaker 3: and getting something sort of for people, I think we've
• 1:09
  Speaker 3: been working together.
• 1:10
  Speaker 1: Well, you had a US en Z business summit this morning.
• 1:14
  Speaker 1: We're doing great business with the US. But then I
• 1:17
  Speaker 1: look at our biggest export, not to the US by
• 1:20
  Speaker 1: the way, but around the world, dairy and another four
• 1:23
  Speaker 1: point three percent drop and the GDT auction overnight it
• 1:26
  Speaker 1: was signaled, and perhaps that number is not as bad
• 1:29
  Speaker 1: as it looks first up. But are you worried that
• 1:32
  Speaker 1: our biggest export income is calling it's jets big time
• 1:35
  Speaker 1: at the moment?
• 1:37
  Speaker 3: Well, no, I'm not, actually, and I think that's because
• 1:39
  Speaker 3: the long run sort of outlook for protein around the world,
• 1:42
  Speaker 3: whether it's through dairy, whether it's through red meat. Frankly,
• 1:46
  Speaker 3: you know, there's a global shortage and so there's more
• 1:47
  Speaker 3: demand and there is supply. I'm also, you know, have
• 1:51
  Speaker 3: been very impressed with the knowledge that has built in
• 1:54
  Speaker 3: Fonterra even over recent years, around the consumers that are
• 1:57
  Speaker 3: targeting and where they find and how much money they
• 2:00
  Speaker 3: make from selling to them. You know, it is a
• 2:03
  Speaker 3: big world, Jamie. Out there there is eight billion people
• 2:05
  Speaker 3: in one hundred and ninety five countries and there is
• 2:07
  Speaker 3: a world of massive opportunity for New Zealand. And so
• 2:11
  Speaker 3: what has been really good to see over the last
• 2:13
  Speaker 3: eighteen months is that as we've been opening up new
• 2:16
  Speaker 3: opportunities in the GCC or the UAA or what we're
• 2:19
  Speaker 3: you know what we're working hard on India and accelerating
• 2:22
  Speaker 3: the European FTA interaction earlier. You know, our our exporter
• 2:26
  Speaker 3: they're getting in Fonterra included getting very agile at moving
• 2:29
  Speaker 3: around those markets. Is that we had this morning at
• 2:32
  Speaker 3: seven we had our US New Zealand business somemit as
• 2:34
  Speaker 3: you're alluding to.
• 2:35
  Speaker 2: It's actually going on all day. But our trade to
• 2:37
  Speaker 2: the US is.
• 2:38
  Speaker 3: Up eight percent and that's despite having had a fifteen
• 2:41
  Speaker 3: percent tariff applied.
• 2:43
  Speaker 2: But the good news, of course is that thirty percent.
• 2:45
  Speaker 3: Of our trades now the tariff's been removed, which helps
• 2:47
  Speaker 3: beef and kiwi fruit. So yeah, so I think there's
• 2:50
  Speaker 3: I think a different way of thinking about it is
• 2:52
  Speaker 3: that we're a small country, we have huge opportunity out
• 2:55
  Speaker 3: there in the world, and there's massive amounts of consumers
• 2:57
  Speaker 3: moving from poverty into the middle classes and they want
• 2:59
  Speaker 3: be quality food and that's good for us.
• 3:01
  Speaker 1: Is Palmu on the chopping block. You've talked openly about
• 3:04
  Speaker 1: asset sales, But it's all very well to say or
• 3:08
  Speaker 1: sell Parmu off because it's not performing that well, even
• 3:10
  Speaker 1: though it's performing a wee bit better now, but practically
• 3:13
  Speaker 1: it would be very difficult to sell it or even
• 3:15
  Speaker 1: divest yourself from it.
• 3:18
  Speaker 3: Yeah, the point I was just trying to make a
• 3:19
  Speaker 3: couple of weeks back was just sort of this idea
• 3:22
  Speaker 3: of what's called asset recycling. If you think about it,
• 3:24
  Speaker 3: the New Zealand government has money tied up in a
• 3:26
  Speaker 3: bunch of assets, and the question you've got to ask yourself,
• 3:29
  Speaker 3: a bit like Singapore and other places do, is well,
• 3:31
  Speaker 3: is that the best possible return and benefit that I
• 3:34
  Speaker 3: can create for the people of New Zealand. And so
• 3:37
  Speaker 3: all I was trying to say is when I'd quickly
• 3:38
  Speaker 3: locked at the Palmu stuff, you know a while ago,
• 3:41
  Speaker 3: it's about.
• 3:41
  Speaker 2: Two point four billion.
• 3:42
  Speaker 3: I think it's one hundred and thirty farms there, but
• 3:45
  Speaker 3: they were getting a two to three percent kind of
• 3:47
  Speaker 3: return on that money. And the question is, well, actually,
• 3:50
  Speaker 3: is that a good amount of capital and cash tied
• 3:54
  Speaker 3: up in an asset that actually could be recycled into
• 3:57
  Speaker 3: another asset that could actually generate a seven percent return
• 4:00
  Speaker 3: from New Zealand, you know. And so that was the
• 4:02
  Speaker 3: conversation I was trying to have rather than get out
• 4:04
  Speaker 3: of this sort of simplistic conversation that has taken place
• 4:07
  Speaker 3: around in New Zealand and the past around a ssets sales.
• 4:09
  Speaker 1: But if you sold Palmeo off hole a spall as
• 4:11
  Speaker 1: surely you would crash the rural market, the property market.
• 4:15
  Speaker 3: Well no, but what I mean, I haven't thought about that.
• 4:18
  Speaker 3: All I was just highlighting was as an example where
• 4:21
  Speaker 3: you've got two point four billion dollars of New Zealand's money,
• 4:24
  Speaker 3: new Zealand taxpayers money, tied up in a seat of assets.
• 4:27
  Speaker 3: And the question you should be reasonably able to ask
• 4:29
  Speaker 3: is is that the best use of that fund or
• 4:31
  Speaker 3: those funds or those moneyes is that getting the best return?
• 4:35
  Speaker 3: Is it working as hard as possible. It's a bit
• 4:37
  Speaker 3: like you know, when you chuck money into an investment
• 4:39
  Speaker 3: that's a standard two percent return and you could be
• 4:42
  Speaker 3: getting a twelve percent return investing it somewhere else. My
• 4:46
  Speaker 3: job is to make sure that that balance sheet a
• 4:48
  Speaker 3: little bit like your farmers have their own balance sheets.
• 4:50
  Speaker 2: They don't. They want to make sure that the every
• 4:52
  Speaker 2: dollar is working hard for them.
• 4:54
  Speaker 3: And that's what that's the that's the bigger question I
• 4:56
  Speaker 3: was trying to play into, was you know, we should
• 4:58
  Speaker 3: make sure every dollar is working for New Zealanders.
• 5:01
  Speaker 1: Finally, while I applaud your attempt to keep local body
• 5:04
  Speaker 1: rates to four percent, I mean they've got completely out
• 5:08
  Speaker 1: of control. Is that realistic? Because basically central government's abdicated
• 5:12
  Speaker 1: a lot of the fiscal responsibility to local governments. And
• 5:16
  Speaker 1: how the hell are you expecting local body authorities to
• 5:20
  Speaker 1: keep their rates to two point four percent when they've
• 5:22
  Speaker 1: got millions or billions I'm sounding like gold member there
• 5:28
  Speaker 1: to spend on water infrastructure.
• 5:31
  Speaker 2: Yeah, So a couple of things going on.
• 5:33
  Speaker 3: One is, if you say a step back, you know,
• 5:35
  Speaker 3: this RMA is just making it impossible to get anything
• 5:37
  Speaker 3: done in this country. So that's why you're going to
• 5:39
  Speaker 3: see a new RMA. We think there should be a
• 5:41
  Speaker 3: forty six percent reduction in people even needing consents and
• 5:46
  Speaker 3: we think, yes, we've got to do a better job
• 5:47
  Speaker 3: in central government of setting some standards that actually doesn't
• 5:51
  Speaker 3: just chuck a whole bunch of complexity on to local government.
• 5:54
  Speaker 2: But as part of.
• 5:55
  Speaker 3: The RMA reform, then you got to ask the question
• 5:57
  Speaker 3: when actually local government isn't working, if we're really honest
• 5:59
  Speaker 3: with ourselves, and that's why we're getting rid of regional counselors.
• 6:03
  Speaker 3: But also while we're saying, you've got to have a
• 6:04
  Speaker 3: rates cap and so if you look at long run
• 6:06
  Speaker 3: infrastructure like three Waters as you just identified, that is
• 6:10
  Speaker 3: outside of this because there's different structures of long term
• 6:13
  Speaker 3: debt financing you've put in place around those assets. But realistically,
• 6:17
  Speaker 3: if inflation's running at three percent, you know, at the
• 6:19
  Speaker 3: moment the last year, council rates are up nine and
• 6:22
  Speaker 3: a half percent, almost three times. If you're you know,
• 6:26
  Speaker 3: a senior who's on a fixed income, or you're a
• 6:28
  Speaker 3: young couple that have stretched into a house and then
• 6:30
  Speaker 3: you can't afford the rates and there's some dumb stuff
• 6:33
  Speaker 3: going on, Jamie. I mean, like in Wellington they built
• 6:36
  Speaker 3: a two million dollar public toilet block that has a
• 6:38
  Speaker 3: light show on it for Goden's sake. I mean, like
• 6:41
  Speaker 3: you know, it's just dumb, silly, But.
• 6:43
  Speaker 1: Wellington does dumb stuff all the time. Well not only
• 6:47
  Speaker 1: at a local body level.
• 6:48
  Speaker 3: Oh come on, you're just being mean now, you're just
• 6:51
  Speaker 3: being mean.
• 6:51
  Speaker 1: Oh no, I agree with you. I think it was
• 6:53
  Speaker 1: your local government minister Simon Watts who said stop doing
• 6:56
  Speaker 1: dumb stuff. And I'll tell you a really good example
• 6:59
  Speaker 1: next time you're in Dunedin, Prime Minister. The Otaga Regional
• 7:02
  Speaker 1: Council has built a monument a palace to its own greatness.
• 7:06
  Speaker 1: I've got three hundred and sixty something people employed there
• 7:09
  Speaker 1: and they're going to be disbanded. I mean, why would
• 7:12
  Speaker 1: they do that?
• 7:13
  Speaker 3: Well, that's that's been the frustration, right, and you think
• 7:16
  Speaker 3: about some of the issues that your farmer's listening. Well,
• 7:19
  Speaker 3: I've had issues around consenting and just the rules they
• 7:21
  Speaker 3: provide district council and then regional council in central government
• 7:25
  Speaker 3: and we've just got way too much bureaucracy in the joints.
• 7:28
  Speaker 3: So we've got to get rid of it. And that's
• 7:29
  Speaker 3: partly why we're taking out regional councils. It's also what
• 7:32
  Speaker 3: we're saying to all counsels, look the households, businesses, farmers,
• 7:37
  Speaker 3: central government. Frankly, we've all had to manage within our
• 7:40
  Speaker 3: means and we expect you to do the same thing.
• 7:42
  Speaker 3: And when we see silly stuff going on and balance
• 7:45
  Speaker 3: sheets not being used appropriately, then actually I think putting
• 7:48
  Speaker 3: the cap.
• 7:48
  Speaker 2: In place in the band that we've talked about two
• 7:50
  Speaker 2: to four percent. Let you know we're going to give
• 7:52
  Speaker 2: a good go.
• 7:54
  Speaker 1: Stop doing dumb stuff. We will leave it at that.
• 7:56
  Speaker 1: Prime Minister, thanks for your time, good luck in Napier today
• 7:59
  Speaker 1: with Wine Langford.
• 8:00
  Speaker 2: Thanks Jammy, you have a great week.