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Nicola Willis: Finance Minister on the OCR cut's failure to sway interest rates · The SME Stream

• 0:00
  Speaker 1: And Nikola will as the finance ministers with US high Nicola, hi, Ever,
• 0:04
  Speaker 1: how are you feeling about the banks after they failed
• 0:06
  Speaker 1: to cut the fixed rates post ocr.
• 0:09
  Speaker 2: Well, my message to the banks is always the same,
• 0:12
  Speaker 2: which is pass on as much as you possibly can,
• 0:15
  Speaker 2: because it's good for the economy, and when the economy
• 0:18
  Speaker 2: does well, we all do well in your citizens in
• 0:20
  Speaker 2: this economy, and you should be doing your utmost to
• 0:22
  Speaker 2: support it.
• 0:23
  Speaker 1: Is this a bank's problem or is this the Reserve
• 0:25
  Speaker 1: Bank completely stuffing up their comms last week?
• 0:29
  Speaker 2: Well, I think that the banks always have a choice
• 0:32
  Speaker 2: about how much they pass on. Now. It is the
• 0:34
  Speaker 2: case that markets pricing some of these changes ahead of time,
• 0:38
  Speaker 2: and that was certainly the case ahead of last week's announcement,
• 0:41
  Speaker 2: that the markets had already priced in that there would
• 0:44
  Speaker 2: be a reduction, and many banks had already taken that
• 0:46
  Speaker 2: into account. But it is also the case that there
• 0:50
  Speaker 2: is a gap, often a lag between what the wholesale
• 0:53
  Speaker 2: rates are doing and then what commercial banks are passing
• 0:56
  Speaker 2: on a mortgage levels. I'd like to see them do
• 0:59
  Speaker 2: it faster and harder.
• 1:00
  Speaker 1: For example, Meghan has been texting for days now because
• 1:03
  Speaker 1: she's with A and Z and A and z's floating
• 1:05
  Speaker 1: range raid is coming down, A and Z's not dropping
• 1:08
  Speaker 1: its floating rates till Wednesday. Is that acceptable to you?
• 1:12
  Speaker 2: Well, they could do it sooner, couldn't they? And what
• 1:14
  Speaker 2: we typically see is there is this lag between the
• 1:17
  Speaker 2: wholesale rates coming down and the banks getting around to
• 1:20
  Speaker 2: pass it on to their mortgage holders. And I'd love
• 1:22
  Speaker 2: to see them pass it on faster.
• 1:23
  Speaker 1: Okay, Now, have you done everything that you plan to
• 1:25
  Speaker 1: do when it came to the banks or is there
• 1:27
  Speaker 1: have you got some more things up your sleeve?
• 1:30
  Speaker 2: Well, we are progressing a number of recommendations from the
• 1:34
  Speaker 2: Commerce Commission inquiry and now following up on the FEC inquiry.
• 1:39
  Speaker 2: So that's an ongoing work program.
• 1:41
  Speaker 1: Yeah, but you got to keep going.
• 1:44
  Speaker 2: No, not necessarily, because there's a number of actions there
• 1:46
  Speaker 2: which require ongoing monitoring and ongoing activity.
• 1:50
  Speaker 1: Okay, because I mean, how has this changed from the
• 1:53
  Speaker 1: cozy pillow fight? Feels like a cozy pillow fight.
• 1:56
  Speaker 2: Well, remember, some of the things that we're doing haven't
• 1:58
  Speaker 2: come to fruition yet. So for example, Quevy Bank, we
• 2:01
  Speaker 2: are still looking to raise capital for Kwibank so it
• 2:04
  Speaker 2: can grow bigger and faster. In the future, and we
• 2:07
  Speaker 2: are still doing things like changing who can access the
• 2:11
  Speaker 2: word bank, making sure that a lower deposit is required
• 2:15
  Speaker 2: in order to set up a new bank, easing some
• 2:17
  Speaker 2: of the regulations which have prevented competitor banking banks from
• 2:21
  Speaker 2: entering the market. So some of those things are yet
• 2:24
  Speaker 2: to happen, but the work is underway to change it.
• 2:26
  Speaker 1: The reason I'm asking Nikola is because I mean, it's
• 2:29
  Speaker 1: been reasonably disappointing what's happened in since the last OCR hike,
• 2:32
  Speaker 1: the one last week. But I'm just thinking that this
• 2:35
  Speaker 1: is it, right, this is our lot, this is what
• 2:36
  Speaker 1: we need to accept. We need to basically go hard
• 2:38
  Speaker 1: with the banks ourselves. You're not coming to save us,
• 2:40
  Speaker 1: No one's coming to save us.
• 2:42
  Speaker 2: Well, what I've been really pleased to see is that
• 2:45
  Speaker 2: your friend Mike Hosking has come around to a point
• 2:47
  Speaker 2: of view I've had for some time, which is actually
• 2:50
  Speaker 2: the banks in New Zealand are very profitable and diet
• 2:55
  Speaker 2: seem to be passing as much. Okay, well, he has
• 2:59
  Speaker 2: said that he thinks they may have a point here. Yeah,
• 3:02
  Speaker 2: And my point straight back at the banks is actually
• 3:06
  Speaker 2: you need to maintain social license and you haven't done
• 3:09
  Speaker 2: a very good job of convincing New Zealanders that you're
• 3:12
  Speaker 2: doing your utmost to pass on rate reductions, to ensure
• 3:15
  Speaker 2: that you're being competitive, to compete for customers, offer them
• 3:19
  Speaker 2: good rates, and lend into this economy, particularly to small
• 3:22
  Speaker 2: businesses and others who rely on that cash flow to grow.
• 3:25
  Speaker 1: Are you being serious about possibly repealing the Regulatory Standards Act?
• 3:30
  Speaker 2: Well, yes, I'm serious. That National has not yet got
• 3:33
  Speaker 2: our position going into the campaign, and we will be
• 3:36
  Speaker 2: monitoring how that act works in practice carefully as you'd
• 3:40
  Speaker 2: expect that we should.
• 3:41
  Speaker 1: This is outrageous flirting with Winston, isn't it.
• 3:45
  Speaker 2: No, it's not as simply saying, let's see how it works.
• 3:49
  Speaker 2: We shouldn't have a closed mind on it and just
• 3:51
  Speaker 2: say no matter what evidence is, will just say it's perfect,
• 3:54
  Speaker 2: and we'll maintain a position that it needs to be maintained.
• 3:56
  Speaker 2: Let's see how it works in practice, let's keep an
• 3:58
  Speaker 2: open mind. If it does work well and reaches all
• 4:02
  Speaker 2: of the government's aspirations for it, then great ticketyboo, big
• 4:06
  Speaker 2: tick will continue. But if actually it doesn't deliver those outcomes,
• 4:10
  Speaker 2: then the National Caucus may want to take a position
• 4:13
  Speaker 2: that that's not a regime we want to get the name.
• 4:16
  Speaker 1: Are the piece of legislation that you've passed in the
• 4:18
  Speaker 1: last two years that you're considering repelling.
• 4:22
  Speaker 2: Well, that's the one that's top of mind, and there
• 4:25
  Speaker 2: may be others. The flirting with it.
• 4:28
  Speaker 1: Hey, so what do you reckon? Because you will have
• 4:31
  Speaker 1: seen what Penny Henade said about how he's been having
• 4:33
  Speaker 1: chats with winnipe on the side.
• 4:35
  Speaker 2: Yeah, ah yeah, I saw that.
• 4:38
  Speaker 1: I was so are you prepared, like, are you bracing
• 4:41
  Speaker 1: yourself for the fact that Winston's going to play the
• 4:43
  Speaker 1: two of you off against each other as in Labor
• 4:45
  Speaker 1: v National after the next selection.
• 4:48
  Speaker 2: Look, I just focus on what National can do to
• 4:51
  Speaker 2: put forward the best proposals to the New Zealand public
• 4:53
  Speaker 2: so we can win their votes. My position is always
• 4:56
  Speaker 2: the same. A vote for National is a much more
• 4:59
  Speaker 2: effective vote than a vote for New Zealand. First, always
• 5:02
  Speaker 2: has been, always will be.
• 5:03
  Speaker 1: Do you fly on a Monday?
• 5:06
  Speaker 2: I have done from time to time. I didn't this Monday.
• 5:09
  Speaker 1: Are you flying next Monday with when the Air New
• 5:11
  Speaker 1: Zealand cabin strike is on?
• 5:13
  Speaker 2: No, because that's a cabinet day.
• 5:15
  Speaker 1: Oh thank god, lucky you how are you feeling about
• 5:18
  Speaker 1: Air New Zealand at the moment as the shareholding minister.
• 5:22
  Speaker 2: Well, I think, like most New Zealanders, I want to
• 5:25
  Speaker 2: see them improving their performance wherever they can. And for me,
• 5:29
  Speaker 2: there's three kind of things they need to balance. On
• 5:32
  Speaker 2: the one hand, they need to make sure that they're
• 5:34
  Speaker 2: offering affordable flights to New Zealanders so they can see
• 5:37
  Speaker 2: their friends and family and enjoy this country. Two, they
• 5:41
  Speaker 2: need to be making sure they're getting a return on
• 5:44
  Speaker 2: capital that taxpayers have a big share of and so
• 5:47
  Speaker 2: they're driving profitability and productivity. And three they need to
• 5:52
  Speaker 2: be really good corporate citizens and support our economy to grow.
• 5:56
  Speaker 2: And there's no secret they have struggled in recent years
• 6:00
  Speaker 2: when it comes to their commercial performance.
• 6:02
  Speaker 1: Yeah, I'm not loving them at the moment. Now what
• 6:04
  Speaker 1: do you think of Roger Gray and him saying that
• 6:06
  Speaker 1: we're called now Zealand.
• 6:09
  Speaker 2: Well, I think he is on to something. If you
• 6:12
  Speaker 2: look across many of the issues that have held our
• 6:14
  Speaker 2: country back, it has been giving too many people veto
• 6:19
  Speaker 2: power to say no to sensible things, whether that's eden
• 6:22
  Speaker 2: park concerts, whether that's consens for new housing, whether that's
• 6:26
  Speaker 2: permission to start a new mind. Those are the things
• 6:29
  Speaker 2: that actually drive an economy forward and create wealth, and
• 6:32
  Speaker 2: New Zealand needs to get much better at saying yes
• 6:35
  Speaker 2: to them. It's even stuff like the people who moan
• 6:37
  Speaker 2: about tourists coming to New Zealand. Guess what those tourists
• 6:41
  Speaker 2: bring passion, They create jobs, they create incomes. So we
• 6:44
  Speaker 2: need to say yes more often.
• 6:46
  Speaker 1: So love it.
• 6:46
  Speaker 2: I like what he had to say.
• 6:48
  Speaker 1: Brilliant. Hey, thank you, Nicole. I appreciate it. Nichola Willis,
• 6:50
  Speaker 1: Finance Minister.
• 6:51
  Speaker 2: For more from Heather duplessy Ellen Drive, listen live to
• 6:55
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• 6:58
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