Latest / The SME Stream / Nicola Willis: Finance Minister reveals whether the Government's books are on track for surplus in 2027-2028

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Nicola Willis: Finance Minister reveals whether the Government's books are on track for surplus in 2027-2028 · The SME Stream

• 0:00
  Speaker 1: And of course our finance minister is Nikola Willis Hi,
• 0:02
  Speaker 1: Nicola Hi.
• 0:04
  Speaker 2: How much are we putting into that climate finance fund?
• 0:07
  Speaker 3: Well, look, we haven't made a decision on that yet.
• 0:10
  Speaker 3: There's no set amount that we need to put in.
• 0:12
  Speaker 3: Each country decides its contribution. Our last current climate finance
• 0:16
  Speaker 3: commitment for twenty two to twenty five was one point
• 0:19
  Speaker 3: three billion. That obviously ends at the end of next
• 0:21
  Speaker 3: year and we'll then decide on our next commitment.
• 0:24
  Speaker 1: That's one point three billion over three years, right, So
• 0:26
  Speaker 1: that's right, yeah, yeah, or three or four years or something,
• 0:29
  Speaker 1: because it works out at two hundred and thirty five. Now,
• 0:31
  Speaker 1: if the total package to the total package from the
• 0:33
  Speaker 1: rich countries to the poor countries has gone from one
• 0:35
  Speaker 1: hundred billion to five hundred billion, so it's up five times.
• 0:38
  Speaker 1: Is our contribution not naturally therefore going to go up
• 0:40
  Speaker 1: five times?
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  Speaker 3: Well, look, we will always do our part to support
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  Speaker 3: global efforts on climate change and climate finance, but there
• 0:47
  Speaker 3: isn't a specific target or amount that each country must contribute.
• 0:50
  Speaker 3: So we as a cabinet need to weigh that contribution
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  Speaker 3: against all of the other contributions we make in terms
• 0:55
  Speaker 3: of aid, in terms of development in terms of what
• 0:59
  Speaker 3: we're doing with our own own technology, research and science
• 1:02
  Speaker 3: here at home.
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  Speaker 2: Is it definitely going to go up?
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  Speaker 3: There's nothing definite heither. This is something for us to
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  Speaker 3: assess as a cabinet and make choices about can we
• 1:10
  Speaker 3: make it go down? Well? As I said, look, our
• 1:13
  Speaker 3: last contribution was one point three over four. There are
• 1:16
  Speaker 3: questions for us to answer about do we want to
• 1:18
  Speaker 3: make an annual contribution, do we want to have that
• 1:22
  Speaker 3: multi year contribution and all of that things that were
• 1:25
  Speaker 3: yet to step through. I haven't even taken advice on
• 1:27
  Speaker 3: it yet.
• 1:28
  Speaker 2: What is this money being used for?
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  Speaker 3: Well, it goes towards those developing countries to help them
• 1:34
  Speaker 3: lower their emissions. So you think of the likes of
• 1:37
  Speaker 3: African countries that are still relying on coal power stations
• 1:42
  Speaker 3: helping them convert the basic argument being that some of
• 1:45
  Speaker 3: those countries haven't yet gone through the development that the
• 1:49
  Speaker 3: rest of the world has and being asked to make
• 1:51
  Speaker 3: the transition of.
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  Speaker 2: Keys exists the same. We're facing the same trouble.
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  Speaker 1: Right We've got a mountain of coal setting at Huntley
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  Speaker 1: because we're also struggling with the transition. How can we
• 2:00
  Speaker 1: justify giving money away to help other people convert when
• 2:04
  Speaker 1: we ourselves are struggling, we need the money.
• 2:07
  Speaker 3: Look, I'm sympathetic to the view that says we should
• 2:10
  Speaker 3: really make sure we're doing things right at home. But
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  Speaker 3: this is a bit similar to the aid argument in general,
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  Speaker 3: which is yes, in New Zealand, we still have challenges
• 2:18
  Speaker 3: in our own health system, our own education system. Yet
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  Speaker 3: as global citizens, we recognize our role in making contributions
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  Speaker 3: to countries that are far, far, far less well off
• 2:30
  Speaker 3: than we. We're just hard of being a global city.
• 2:32
  Speaker 2: I take it the same principle.
• 2:33
  Speaker 1: But if you think about our aid budget versus this,
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  Speaker 1: how much is our aid budget versus what we're spending
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  Speaker 1: on climate aid?
• 2:40
  Speaker 3: Yeah, well this is obviously pretty big in proportion to
• 2:43
  Speaker 3: our aid budget. Our aid budget is still bigger. But
• 2:45
  Speaker 3: I and I in my mind do think of those
• 2:48
  Speaker 3: two buckets in a similar way. Both of them are
• 2:51
  Speaker 3: about our global contribution, and I think it's right. Your
• 2:54
  Speaker 3: point is right, we should be balancing up both of those.
• 2:56
  Speaker 3: How much are we giving an aid as a whole
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  Speaker 3: and what proportion of that is climate aid?
• 3:01
  Speaker 2: Jeez, okay, listen, when are you going to make a
• 3:02
  Speaker 2: decision on it.
• 3:05
  Speaker 3: Well, we will have advice on it obviously ahead of
• 3:07
  Speaker 3: the budget because, as I say, the current Climate Client
• 3:11
  Speaker 3: Climate Finance commitment ends at the end of next year,
• 3:13
  Speaker 3: so we'll need to make a decision ahead of the budget.
• 3:15
  Speaker 2: On the budget. Are you guys not going to hit
• 3:17
  Speaker 2: surplus in twenty seven to twenty eight.
• 3:19
  Speaker 3: Well, look, I'm going to make an announcement about the
• 3:22
  Speaker 3: forecasts on the seventeenth of December. But you will have
• 3:25
  Speaker 3: seen that Treasury's chief economist last week pointed out that
• 3:29
  Speaker 3: there are lots of challenges to that position. The biggest
• 3:33
  Speaker 3: challenge being that we depend on the forecasts of the
• 3:36
  Speaker 3: growth in the economy. When the economy is smaller, there's
• 3:39
  Speaker 3: less revenue, makes it harder to get a surplus. And
• 3:42
  Speaker 3: what Treasury have basically had to do is readjust all
• 3:44
  Speaker 3: of their forecasts over successive forecasts. They essentially overestimated how
• 3:50
  Speaker 3: enduring the balance back after COVID would be, and we're
• 3:53
  Speaker 3: now in a long hangover. So the numbers are reflecting
• 3:56
  Speaker 3: that I can't control Treasury's forecast assumptions. What I can
• 3:59
  Speaker 3: can control and will control, is our government's discretionary spending decisions.
• 4:04
  Speaker 1: Okay, but so it sounds to me like, so you're
• 4:07
  Speaker 1: going to make an announcement on December seventeen as to
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  Speaker 1: whether you're going to hit that surplus or not.
• 4:11
  Speaker 3: That's right. That's when I share the latest forecasts, which
• 4:14
  Speaker 3: will illustrate where that sits.
• 4:16
  Speaker 1: Sounds to me like you guys are softening us up
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  Speaker 1: for the fact that you're not going to hit it.
• 4:20
  Speaker 3: Well, look, I've always been clear. I'm not going to
• 4:22
  Speaker 3: chase a surplus at all costs. Forecasts move up and down.
• 4:26
  Speaker 3: What I've committed to New Zealander is is that we
• 4:28
  Speaker 3: will make sensible, prudent fiscal decisions to get the books
• 4:32
  Speaker 3: back in balance over time, and we remain on that course.
• 4:36
  Speaker 2: Which brings us to Robert McCulloch's column. Did you read
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  Speaker 2: that last week when you were away?
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  Speaker 3: I did hear that? And let me can I can
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  Speaker 3: I give a response to it, because my goodness. First
• 4:48
  Speaker 3: of all, he said that I do have another year
• 4:50
  Speaker 3: to prove myself. So that's good because no one promised
• 4:53
  Speaker 3: to solve the economy in year one. Then he said, look,
• 4:57
  Speaker 3: we're having low growth. Well look my view is you
• 5:00
  Speaker 3: we are, and that's my entire raison deetra What we
• 5:03
  Speaker 3: committed was first get inflation and under control, get interest
• 5:06
  Speaker 3: rates coming down, deliver neutral X relief. We've done those things.
• 5:10
  Speaker 3: We are very focused on driving growth forward. Then he said,
• 5:13
  Speaker 3: and this was the curious bit, he said, oh, look,
• 5:15
  Speaker 3: she's not doing enough to break up monopoly powers. Well,
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  Speaker 3: here is what I'd say to that I am different
• 5:21
  Speaker 3: from other finance ministers and that I have directly confronted
• 5:25
  Speaker 3: the major trading banks. I've said that I'm going to
• 5:28
  Speaker 3: do regulatory reform at the Reserve Bank. We have the
• 5:30
  Speaker 3: Parliamentary Select Committee inquiry going on. I am very determined
• 5:35
  Speaker 3: on that score, and I'd like to put this out
• 5:36
  Speaker 3: to Robert McCulloch. If he has more ideas on how
• 5:39
  Speaker 3: we can drive competition in the New Zealand economy to
• 5:42
  Speaker 3: break up some of these duopolies who are making too
• 5:45
  Speaker 3: much money out of New Zealanders, then I am up
• 5:48
  Speaker 3: for those ideas. I am a competition warrior. I love
• 5:52
  Speaker 3: markets that operate competitively and that is very much on
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  Speaker 3: my agenda as a finance minister. I could keep going
• 5:57
  Speaker 3: through his points here this, but I felt that I
• 6:00
  Speaker 3: had a response to each of them, and I basically thought, yep,
• 6:04
  Speaker 3: you ain't seen nothing yet. You one would to come.
• 6:06
  Speaker 1: Oh well please, because as point is simply which gets
• 6:09
  Speaker 1: us back to the surplus thing. His point are simply
• 6:11
  Speaker 1: big talk not delivering right. And before the election, in
• 6:14
  Speaker 1: the campaign you were sneering at Labour's surplus of two
• 6:17
  Speaker 1: point one that they had projected, and you said you
• 6:19
  Speaker 1: were going to deliver two point nine. But when it
• 6:21
  Speaker 1: comes to the crunch, actually we don't have. That's not happening.
• 6:25
  Speaker 3: Well, what we have done is dramatically reduced the rate
• 6:29
  Speaker 3: of expenditure growth. There's no question if labor were in
• 6:32
  Speaker 3: power now, the deficit would be a lot worse. Now.
• 6:36
  Speaker 3: I heard you talking on this point last week and
• 6:38
  Speaker 3: you said, look, she's actually still spending more than labor.
• 6:42
  Speaker 3: So I've gone back and I've looked at the records
• 6:44
  Speaker 3: going back to nineteen seventy two. So over more than
• 6:47
  Speaker 3: fifty years, there is only one ever example of government
• 6:50
  Speaker 3: spending going down in real dollar terms. Because of course,
• 6:54
  Speaker 3: each year population grows, there's inflation, there is wage growth,
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  Speaker 3: and so what we we have done is rapidly halt
• 7:02
  Speaker 3: the rate of increase. That's the right thing to do.
• 7:05
  Speaker 3: We will continue on that course, but If the argument
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  Speaker 3: is really that we should have slashed funding to below
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  Speaker 3: the levels it was even while the population grew, and
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  Speaker 3: even while it was still high inflation, then I'd put
• 7:16
  Speaker 3: to you, actually, I'm a bit more compassionate than that,
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  Speaker 3: because i do care about frontline service delivery.
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  Speaker 2: Okay, Nichola, thank you. I really appreciate your time. That's
• 7:23
  Speaker 2: Nicola Willis, the Finance min