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Nicola Willis: Finance Minister says she's satisfied with the balance struck over Reserve Bank funding · Best of Business

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  Speaker 1: You're listening to a podcast from News talkst Be follow
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  Speaker 1: this and our wide range of podcasts now on iHeartRadio. Heather,
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  Speaker 1: do for see us.
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  Speaker 2: So, the Reserve Bank's getting a funding boost. Its five
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  Speaker 2: year budget is going to go from six hundred and
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  Speaker 2: forty million dollars to seven hundred and fifty million dollars. Now,
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  Speaker 2: this is interesting because this is the reason that Adrian
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  Speaker 2: Or apparently quit because he wanted more money. Finance Minister
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  Speaker 2: Nichola Willis is with us. Now, Hey, Nikola, Hi, why
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  Speaker 2: are you giving them more?
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  Speaker 3: Well, that's not quite right, Heather. You're basing that on
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  Speaker 3: our release from the Taxpayers Union and not for the
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  Speaker 3: first time. They haven't got their facts quite in a row.
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  Speaker 3: So the Reserve Bank requested initially a billion dollars for
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  Speaker 3: the coming five years. We've paired that back to seven
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  Speaker 3: hundred and fifty million. Now, when you compare their funding profile,
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  Speaker 3: what's been happening is it's been increasing every year, such
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  Speaker 3: that in the current year they were budgeting to spend
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  Speaker 3: two hundred million. We've said actually next year one hundred
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  Speaker 3: and fifty million, one hundred and fifty millions, twenty five
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  Speaker 3: percent less than two hundred million, it's fifty million less.
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  Speaker 3: And what's more, not just are we taking it back
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  Speaker 3: to that figure, but we're saying we want you to
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  Speaker 3: stop this pattern of the number escalating every year. We
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  Speaker 3: want that to hold steady, but having to require restraint.
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  Speaker 2: Wasn't the funding agreement for the twenty twenty four to
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  Speaker 2: twenty twenty five year just one hundred and forty nine
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  Speaker 2: million dollars. They just managed to save fifty million dollars
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  Speaker 2: across the previous twenty So it's actually you paed it
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  Speaker 2: back to exactly the same amount as the last financial year.
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  Speaker 3: Well, what you're omitting is the fact that the agreement
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  Speaker 3: was then increased in twenty twenty three. So in addition
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  Speaker 3: to what they agreed back in twenty twenty, they came
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  Speaker 3: back for seconds in twenty twenty three, added another forty
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  Speaker 3: eight million to the operating budget that year, and then
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  Speaker 3: another thirty million the following year.
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  Speaker 4: So those did that not take that to one hundred
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  Speaker 4: to fifty that I'm talking about, Well.
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  Speaker 3: That was additional to what they had previously agreed under
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  Speaker 3: the five year agreement. They came back for more in
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  Speaker 3: twenty twenty three, meaning by the time time they got
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  Speaker 3: to this year, the budgeted spending was two hundred million,
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  Speaker 3: taking the combination of the five year agreement and the
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  Speaker 3: increases that Robertson granted them. So we've said, okay, let's
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  Speaker 3: start again. Let's take that two hundred million figure that
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  Speaker 3: you've got yourselves, to peer it back to something more
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  Speaker 3: sensible one hundred and fifty million, and then let's hold
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  Speaker 3: that steady over time. Rather than continuing this slattin.
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  Speaker 4: Why not go harder?
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  Speaker 2: I mean, this is this is consistently the problem that
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  Speaker 2: I have with your government is that you guys, you'd
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  Speaker 2: tinker right, you could take I mean, these guys are
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  Speaker 2: spending three times what they spent in twenty fifteen. Ten
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  Speaker 2: years ago, they were spending fifty million. Now they're spending
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  Speaker 2: one hundred and fifty million. If you wanted to, you
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  Speaker 2: could slash properly.
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  Speaker 4: Why don't you?
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  Speaker 3: Well, because they do have very important statutory functions. They're
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  Speaker 3: there to deliver monetary policy, stable inflation.
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  Speaker 2: They've also had it, but they were making we're going
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  Speaker 2: to be fair financial They were doing it okay, with
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  Speaker 2: two hundred and twenty five employees only six years ago.
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  Speaker 4: Now they've got six hundred and sixty. That's bloated.
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  Speaker 3: That is bloated, and that is why I have delivered
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  Speaker 3: a twenty five percent. That is why, Heather, I've delivered
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  Speaker 3: a twenty five percent funding reduction. And to put this
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  Speaker 3: in context, when we negotiated this between the Treasury and
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  Speaker 3: the Reserve Bank Board, their starting position was they wanted
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  Speaker 3: a billion bucks. We've got them back to seven hundred
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  Speaker 3: and even point starting position.
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  Speaker 4: Ten billion doesn't mean you have to worry.
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  Speaker 3: Second, the second point that's very important here is that
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  Speaker 3: the Treasury's view was that the lowest number that they
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  Speaker 3: would have comfort with was seven hundred and twenty million.
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  Speaker 3: So we put that to the Bank and they said,
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  Speaker 3: we think that that would curtail our ability to deliver
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  Speaker 3: our very important core statutory functions around financial stability and
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  Speaker 3: monetary policy. I want to look everyone in the eye
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  Speaker 3: in New Zealand and in our international markets and say
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  Speaker 3: the Reserve Bank is getting enough funding to do its
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  Speaker 3: statutory functions. Well, that's an important undertaking for me to
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  Speaker 3: be able to make, and I'm satisfied that this figure
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  Speaker 3: puts me in the position to make that commitment. That's
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  Speaker 3: the balance that we've struck.
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  Speaker 4: Nicola as always, thank you so much for your time.
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  Speaker 4: That's Nicola Willis, Finance Minister.
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