Latest / The SME Stream / Nicola Willis: Finance Minister on the Government pushing out surplus expectations

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Nicola Willis: Finance Minister on the Government pushing out surplus expectations · The SME Stream

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  Speaker 1: So as predicted, Nikola Willis has pushed out surplus again,
• 0:02
  Speaker 1: which makes it the third year of delay in only
• 0:05
  Speaker 1: two years of this government being in office. The country's
• 0:07
  Speaker 1: now forecast to first be in the black and twenty
• 0:09
  Speaker 1: twenty nine, twenty thirty. So let's talk to the finance minister.
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  Speaker 1: High Nicola, Good morning, Heather. Just clear this up for me.
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  Speaker 1: Are we borrowing right now as a country just to
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  Speaker 1: pay our interest bill on the debt?
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  Speaker 2: We are paying in part to pay the interest bill
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  Speaker 2: on the debt, which is pretty big. It's more than
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  Speaker 2: nine billion dollars a year, thank you Labor. But as
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  Speaker 2: we look over the next few years, around eighty percent
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  Speaker 2: of our borrowing is for capital investments, so that's an
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  Speaker 2: infrastructure unlike hospitals, schools and roads, so assets that we
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  Speaker 2: will have for the future. Regardless, we need to get
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  Speaker 2: that borrowing down, which means we need to get the
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  Speaker 2: books back in balance, and that's what the government has
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  Speaker 2: a plan to do.
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  Speaker 1: Okay, So why not run a zero budget like Bill.
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  Speaker 2: English did, because we do have pressing needs, for example,
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  Speaker 2: to invest more in the health system to allow for
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  Speaker 2: a growing and aging population and the demands that people
• 0:59
  Speaker 2: have to double the capability of our defense force, as
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  Speaker 2: we have committed to our security partners to ensure that schools,
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  Speaker 2: teachers and the like have a little bit more funding
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  Speaker 2: to keep the lights on and keep doing their work.
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  Speaker 2: So those frontline services require more funding just to stand still.
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  Speaker 2: And we have committed as a government that we will
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  Speaker 2: be delivering effective frontline services and making the funding commitments
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  Speaker 2: needed to support that.
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  Speaker 1: I mean, he had the same pressing needs, didn't he,
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  Speaker 1: And he still managed to cut enough to run a
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  Speaker 1: zero budget a couple of times.
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  Speaker 2: That's right, and we are doing a similar thing to
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  Speaker 2: him in that in order to fund all of the
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  Speaker 2: commitments that we have made, we will need to keep
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  Speaker 2: finding ongoing savings and reprioritization. That's been our habit over
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  Speaker 2: our first two budgets, in which collectively we've delivered forty
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  Speaker 2: three billion dollars worth of savings. Now, of course, those
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  Speaker 2: savings have allowed us to deliver tax relief to working people,
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  Speaker 2: but also to increase funding to a number of services,
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  Speaker 2: doing things like increasing the number of frontline police offices.
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  Speaker 1: Do you think that you've cut everything that you can,
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  Speaker 1: Is all the fat gone?
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  Speaker 2: No? I think we have to be pressing for.
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  Speaker 1: On what ongoing fat can you see?
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  Speaker 2: Well, I still think that there's room for more efficiency
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  Speaker 2: in the public service. I have, together with ministers, identified
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  Speaker 2: other areas where we think, look, are we getting in
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  Speaker 2: our value for money to the taxpayer? There? Like what not?
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  Speaker 2: Convinced well, I will be taking a number of options
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  Speaker 2: to cabinet. I don't want to get ahead of my
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  Speaker 2: cabinet colleagues until we've made those choices. But the way
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  Speaker 2: I run a budget is I send letters out to
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  Speaker 2: my colleagues saying, here's some ideas for where I think
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  Speaker 2: you could make some savings. Come back to me with
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  Speaker 2: what that would look like. And by the way, in
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  Speaker 2: a few cases, here's an idea for where you might
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  Speaker 2: need some more before.
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  Speaker 1: I mean, for a start, why have you not cut nearly,
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  Speaker 1: not even a fraction really of what Jacinda and Grant
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  Speaker 1: piled in in terms of public servants.
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  Speaker 2: Well, we have cut both the absolute number of public
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  Speaker 2: side how many more than by more than two thousand
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  Speaker 2: from its peak. Let me out all that down.
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  Speaker 1: How many go exactly how many? It's important to say
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  Speaker 1: how many they added? They added more than fourteen thousand,
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  Speaker 1: and you've only cut.
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  Speaker 2: Two that's right. Our focus has been making sure that
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  Speaker 2: we reduce the number of people and back office roles.
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  Speaker 2: So the numbers there have come down quite a lot
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  Speaker 2: more dramatically, whether that's admin staff, managers, policy analysts. But
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  Speaker 2: we have increased, for example, the number of corrections officers,
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  Speaker 2: that is, the number of people in our prisons because
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  Speaker 2: we're locking up criminals for longer when they violently offend
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  Speaker 2: against people. So while some of those roles have increased
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  Speaker 2: on the front line, the back office has been shrunk
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  Speaker 2: pretty sick. To be fair, there's more work we can
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  Speaker 2: do there, to be fair.
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  Speaker 1: That when we look at these numbers that you talk
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  Speaker 1: about the front the front line does not increase by
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  Speaker 1: anything like fourteen or twelve thousand.
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  Speaker 2: Well, it didn't owe the time that labor were an offer.
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  Speaker 1: What I'm saying to you is you're fudging it slightly
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  Speaker 1: by suggesting that you have cut really, really deep and
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  Speaker 1: then increased the front line by a lot, you haven't.
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  Speaker 2: Actually, Well, we have cut the number of back office
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  Speaker 2: roles while also reducing the bill for external consultants and
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  Speaker 2: contractors by around nine hundred million over the past couple
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  Speaker 2: of years. For the again for context, the last national government.
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  Speaker 2: All they did was cap the number of public servants.
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  Speaker 2: They certainly didn't reduce it in quite terms. What about
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  Speaker 2: what we've achieved so far?
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  Speaker 1: What about the free year of university to students, which
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  Speaker 1: which has been criticized. It's a flop, It doesn't encourage enrollment.
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  Speaker 1: Why don't you cut that?
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  Speaker 2: Well, we've done what we said we would in our
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  Speaker 2: coalition agreement with New Zealand first, which was we took
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  Speaker 2: the very ineffective first year at fees free and we
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  Speaker 2: made it final years fees free. So you only get
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  Speaker 2: those free fees if you actually.
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  Speaker 1: Have you asked to Winston? Have you asked Winston if
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  Speaker 1: he would be okay with you cutting it all together.
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  Speaker 2: I'm happy to put that question to him.
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  Speaker 1: Oh have you not put that question to him? Nikola?
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  Speaker 1: I've been asking you about this for two.
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  Speaker 2: Years because the way the coalition agreement works is the
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  Speaker 2: commitments as they are in writing, is the commitments as
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  Speaker 2: we deliver them, and so the commitment there in the
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  Speaker 2: coalition agreement.
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  Speaker 1: Now he wanted it move from the first to the
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  Speaker 1: third year because having it in the first year is stupid.
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  Speaker 1: But he might be open to cutting it all together.
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  Speaker 1: And if you did that, you would say about a
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  Speaker 1: billion dollars and four years.
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  Speaker 2: It's a question that I'm happy to put to him.
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  Speaker 1: Okay, why don't you end the national ticketing system?
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  Speaker 2: Right?
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  Speaker 1: Because Wellington's doing it itself now, it's spending five point
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  Speaker 1: five mil on it, but you're in line to spend
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  Speaker 1: one point four bill. Why not cut it?
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  Speaker 2: Well? I agree that that is an absolutely tormented project.
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  Speaker 2: It's another one of the hospital passes that we've inherited.
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  Speaker 2: That is something that Chris Bishop, as Transport Minister, is
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  Speaker 2: looking very carefully at because, like you, he can think
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  Speaker 2: of a few better uses for more than a billion dollars,
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  Speaker 2: and so he is examining keyfully whether that's a spend
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  Speaker 2: that we should be doing.
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  Speaker 1: Okay, have you thought about stopping the welfare that you're
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  Speaker 1: giving to parents who are earning combined more than two
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  Speaker 1: hundred thousand dollars a year.
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  Speaker 2: Well, primarily that comes through working for families for which
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  Speaker 2: support increases when people.
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  Speaker 1: Have this is your family boost, right?
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  Speaker 2: Well, no, family boost is, yes, a payment that is
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  Speaker 2: available to some people earning that amount in some circumstances,
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  Speaker 2: if they have particularly high early childhood education.
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  Speaker 1: Why not cut it. If you're on two hundred thousand,
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  Speaker 1: you've got enough.
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  Speaker 2: Money because we're actually investing around about exactly what we
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  Speaker 2: campaigned on investing. In that policy. We made a commitment
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  Speaker 2: to working parents who have very high early childhood education
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  Speaker 2: costs that we would refund a portion of those and
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  Speaker 2: we're keeping that commitment.
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  Speaker 1: Yeah, okay, have you thought about maybe income testing the
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  Speaker 1: winter energy payment because there are people who are getting
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  Speaker 1: getting using it to warm the pool.
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  Speaker 2: Well, the Prime Minister sent out a commitment card prior
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  Speaker 2: to the election and one of the commitments he made
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  Speaker 2: was not to reduce the winter winter Energy payment for superinuitance.
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  Speaker 2: You'll see a theme here, which is where we've made
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  Speaker 2: commitments to the New Zealand people, we think it's important
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  Speaker 2: we keep them. And that's relevant not just for this
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  Speaker 2: three years, it's actually relevant for the next.
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  Speaker 1: Sections changed change and the superlus has been pushed out
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  Speaker 1: by three years and maybe you need to start breaking
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  Speaker 1: some promises and not wasting so much cash.
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  Speaker 2: And we are forecasting a return to surplus and the
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  Speaker 2: biggest risk to that is the election of a labor
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  Speaker 2: government who have shown no inclination to do any ongoing
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  Speaker 2: efficiency or savings. And so what I need to do
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  Speaker 2: is ensure that our government is keeping its commitments to
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  Speaker 2: people that it made and its campaign pledges, while also
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  Speaker 2: doing an absolutely consistent drive for more savings. And there
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  Speaker 2: will be more opportunities at the next election for people
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  Speaker 2: to set out their store. And I tell you this,
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  Speaker 2: the stare of the National Party is going to be
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  Speaker 2: far more fiscally disciplined than Labor have ever dreamed of
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  Speaker 2: even pretending to be.
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  Speaker 1: All Right, Nichola, thank you very much for your time,
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  Speaker 1: Have a lovely day. Nichola will as Finance Minister. For
• 7:58
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• 8:01
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