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Nicola Willis: Finance Minister on Moody's credit rating agency downgrading outlook for New Zealand · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks B Follow
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  Speaker 2: Now another international credit agency has downgraded New Zealand's outlook.
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  Speaker 2: This time it's Moody's which has moved us from stable
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  Speaker 2: to negative, and this follows the same move by Fitch
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  Speaker 2: last month. We still retain the triple A rating, which
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  Speaker 2: is the highest you can have, and Finance Minister Nicola
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  Speaker 2: Willis is with US high nicholerp Hi Heather, how do
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  Speaker 2: you rate the chances we do actually get downgraded next year?
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  Speaker 3: Well, what Moody's is saying is that the risks to
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  Speaker 3: New Zealand's fiscal trajectory have increased. That's obviously correct with
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  Speaker 3: the events in the Middle East, and that's why I'm
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  Speaker 3: so determined that our government will deliver a budget that
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  Speaker 3: sticks to the fiscal goals we've set of getting the
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  Speaker 3: books back and balance, getting the debt curve bending down,
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  Speaker 3: and New Zealanders will be able to see in that
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  Speaker 3: budget that we're sticking to that stuff, and with that
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  Speaker 3: on board, then I'm hopeful that a downgrade won't be necessary.
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  Speaker 3: But I can't control events in the Middle East. No
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  Speaker 3: the simple reality.
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  Speaker 2: So you can't control events in the Middle East, but
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  Speaker 2: you can control what's going on with our budget. And
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  Speaker 2: I know that you're talking about the fact that you're
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  Speaker 2: bending that, but that's not the urgency we need. Right
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  Speaker 2: Why aren't you doing something right now that's going to
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  Speaker 2: cut billions out of what we're spending every single year.
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  Speaker 3: I agree that we need urgency. I have set that
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  Speaker 3: very clear target of getting the books back into surplus
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  Speaker 3: by twenty eight twenty nine. If we achieve that, the
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  Speaker 3: ratings agencies are very happy. Their concern is that we
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  Speaker 3: might not achieve that. The most urgent thing I'm having
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  Speaker 3: to do pretty much every day at the moment is
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  Speaker 3: saying no to spending more. And you'll be aware, many
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  Speaker 3: New Zealanders are saying to me, cut the petrol tax,
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  Speaker 3: cut the petrol tech tax, do this for us, do
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  Speaker 3: that for us.
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  Speaker 1: I get it.
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  Speaker 3: They're experiencing massive cost of living pressure. The reason I'm
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  Speaker 3: saying no to that extra spending is we have to
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  Speaker 3: stick to very tight budgets to achieve those fiscal goals,
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  Speaker 3: and to me, that does feel quite dramatic. Heather, having
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  Speaker 3: to say no at a time when the pressure is
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  Speaker 3: really high. Is not comfortable at all?
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  Speaker 2: Is that dramatic though? Or is doing something dramatic actually
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  Speaker 2: doing something like what Brook van Walden found, which is
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  Speaker 2: billions of dollars that can be cut.
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  Speaker 3: Well, I did deliver that in my budget because she
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  Speaker 3: founded one saving Well, recollections may vary. We have delivered
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  Speaker 3: forty three billion dollars worth of savings so far. And yes,
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  Speaker 3: the changes to the pay equity regime are one part
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  Speaker 3: of that, but it's also involved reductions across the public
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  Speaker 3: service to a range of back office functions.
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  Speaker 2: It has been come on, you're employing public servants now
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  Speaker 2: than Jacinda and.
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  Speaker 3: Grind We're going to go back to this debate what
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  Speaker 3: we it?
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  Speaker 2: So I'm just correcting you.
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  Speaker 3: Okay, No, Well you're wrong and I'm right because actually,
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  Speaker 3: what we have done is we have increased the number
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  Speaker 3: of corrections offices that we employ to operate our prisons,
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  Speaker 3: and that is because we're locking more criminals up for longer.
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  Speaker 3: We've increased the number of biosecurity agents. We have increased
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  Speaker 3: people in frontline roles, but we have reduced the number
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  Speaker 3: of people in back office. Right.
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  Speaker 2: Yeah, but every time we ask you, every time we
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  Speaker 2: ask you for the numbers. Break it down back back
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  Speaker 2: at the frontline, back line, we never get them.
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  Speaker 3: Well, I'm very happy to give them to you, and
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  Speaker 3: you will be getting them after this interview from my team.
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  Speaker 3: Happy to resent that's the case. We have reduced the
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  Speaker 3: back office numbers, we've increased the numbers in frontline.
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  Speaker 2: Rod do you accept, I mean, look, you have to
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  Speaker 2: accept that there is that you are going to be
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  Speaker 2: blamed for what is going on with the ratings agencies
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  Speaker 2: because you've added costs of entitlements to this country. You
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  Speaker 2: haven't cut anything. And actually I just wondered, Nicola, if
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  Speaker 2: you can sheet back a lot of the pole, the
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  Speaker 2: pole drop that national is experiencing to your guys' failure
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  Speaker 2: to deliver on your promise to get the books back
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  Speaker 2: in order.
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  Speaker 3: Well, no, because actually I have delivered forty three billion
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  Speaker 3: dollars worth of savings the budgets.
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  Speaker 2: Which you've gone on to spend on other things.
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  Speaker 3: That our budgets have been far far tighter than the
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  Speaker 3: last governments. We have made progress on the fiscal goals
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  Speaker 3: and at every juncture you have to judge this against
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  Speaker 3: the alternative, and the alternative clearly on offer is a
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  Speaker 3: labor government, and what they have said at every junction
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  Speaker 3: when I've made a saving is that they would not
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  Speaker 3: make it and they would spend more.
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  Speaker 1: You are.
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  Speaker 2: Grant, You're spending more than grant.
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  Speaker 3: Your debt is only only in nominal terms, Heather. And
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  Speaker 3: so actually, if you look at my budgets, my operating
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  Speaker 3: allowances are far smaller than his r He exceeded every
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  Speaker 3: operating allowance that he aceets, so every time he set
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  Speaker 3: a budget he then spent more than it. I have
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  Speaker 3: gone lower. In each of my two budgets so far,
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  Speaker 3: I've spent less than the operating allowance I set out,
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  Speaker 3: even though the operating allowances were fast more than his
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  Speaker 3: to begin with. So we have been disciplined as a government.
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  Speaker 3: We've delivered actually some pretty tough trade offs, some tough
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  Speaker 3: choices to get spending under control. But what you are
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  Speaker 3: arguing is that even while our population ages and grows
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  Speaker 3: and we have more kids in different parts of the
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  Speaker 3: country in school, change that much in three years if
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  Speaker 3: it has so, what you're saying is I should never
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  Speaker 3: increase the normal or spending for the health should just
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  Speaker 3: keep it the same.
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  Speaker 2: I think you and I are living on different planets.
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  Speaker 2: I think that you need to cut billions out of
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  Speaker 2: your budgets to save this country from the path we're around.
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  Speaker 3: We're from, look, Nikola from I.
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  Speaker 2: Tell you what I hate. No, I'm going to say yeah,
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  Speaker 2: I'm going to say it. I'm going to say it.
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  Speaker 2: I hate to say it, Nikola, because you know how
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  Speaker 2: I feel about this. But if you had the courage
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  Speaker 2: of your convictions, instead of campaigning in November on lifting
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  Speaker 2: the age of super you would tell the country it's
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  Speaker 2: urgent and it has to happen right now.
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  Speaker 3: This is very interesting from you because in the past
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  Speaker 3: you're one of the people who has argued against changes.
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  Speaker 2: I know, and sometimes we have to do things we
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  Speaker 2: don't want to do for the good of everybody.
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  Speaker 3: I think you're right that at the selection campaign, serious
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  Speaker 3: political parties will have to come forward with serious.
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  Speaker 2: But see again, what you guys are going to do
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  Speaker 2: is you're going to go, oh, we'm never never twenty
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  Speaker 2: forty eight, twenty thirty seven out that you've got to
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  Speaker 2: do it now. If you want to save the Bob.
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  Speaker 3: You don't know yet, goeah, because we haven't present to
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  Speaker 3: our plans yet. And I agree that at this election
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  Speaker 3: it will be a litmus test for parties of how
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  Speaker 3: serious they are about New Zealand's fiscal challenges. And I
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  Speaker 3: can tell you National Party is very serious about them.
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  Speaker 2: Okay, Now listen, has Chris Hopkins, as he said, apologize
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  Speaker 2: to you.
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  Speaker 3: Yes, he reached out to me personally and sent me
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  Speaker 3: a text message with a full apology.
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  Speaker 2: Okay, and have you accepted it?
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  Speaker 3: I have accepted his apology.
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  Speaker 2: Now, Nikola, he was obviously referred I mean, it's a
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  Speaker 2: distinct thing for him to do, and no one thinks
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  Speaker 2: it's cool. But he was obviously referring to your weight loss,
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  Speaker 2: which has been dramatic and has been I imagine a
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  Speaker 2: lot of people have noticed it. Do you want to
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  Speaker 2: address it?
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  Speaker 1: Well?
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  Speaker 3: My view is that we should have really robust political
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  Speaker 3: debate in parliament. I love a bit of banter, but
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  Speaker 3: what he did yesterday was say that I had issues
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  Speaker 3: and that I needed medical help. Now, that to me
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  Speaker 3: crosses a line. You don't bring people's mental or physical
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  Speaker 3: health into the political debate, and I think people should
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  Speaker 3: judge him by that decision.
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  Speaker 2: Masks slipped a little bit with him, didn't it.
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  Speaker 3: The mask did slip a little bit. It certainly wasn't kind.
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  Speaker 2: Fair point, Nicola, thank you very much appreciate the discussion
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  Speaker 2: that was Nicola will lists the Finance Minnestoga.
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