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Nicola Willis: Finance Minister hopeful surplus will be achieved by 2029 following half-year update · Best of Business

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  Speaker 1: You're listening to a podcast from newstalk ZEDB. Follow this
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  Speaker 2: First, the government's going to stay in debt longer than
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  Speaker 2: it thought it would back in May. This is the
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  Speaker 2: hayfer that's come out today. The surplus delayed again for
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  Speaker 2: another year out twenty thirty. We won't start paying down
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  Speaker 2: our debt in this country until then. Growth is coming on,
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  Speaker 2: but slower than expected. So point back points six percent
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  Speaker 2: four twenty four to twenty five, Ford three point three
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  Speaker 2: for twenty five twenty six and three percent for twenty
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  Speaker 2: six twenty seven, Tariffs, inflation, tourism, numbers, population, all contributing factors.
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  Speaker 2: Nicola Willis is the Finance Minister.
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  Speaker 3: Good evening, Good evening.
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  Speaker 2: Do you take responsibility for our lackluster growth?
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  Speaker 3: I take responsibility for turning it around, And what we
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  Speaker 3: have shared in today's forecasts is accelerating growth next year,
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  Speaker 3: low inflation growth throughout the forecast period, two hundred and
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  Speaker 3: seventy thousand jobs being created, low interest rates, in all
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  Speaker 3: the conditions for New Zealanders to get ahead.
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  Speaker 2: Labour wants you to take responsibility for the fact that
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  Speaker 2: we haven't had significant or meaningful growth in the last year.
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  Speaker 2: You've been the Minister of Growth all that time. Do
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  Speaker 2: you take accountability well?
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  Speaker 3: In Treasury's assessment, the effect of Donald Trump's tariff announcement
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  Speaker 3: in April on our economy was significant, and of course
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  Speaker 3: it came off the back of what was already a
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  Speaker 3: difficult recovery following Labour's period of sky high inflation and
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  Speaker 3: the very high interest rates that were used to arrest that.
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  Speaker 3: It's significant that even in the midst of that, the
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  Speaker 3: government has taken pro growth measures, including, for example, the
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  Speaker 3: investment boost tax policy to encourage business investment, moves to
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  Speaker 3: replace the Resource Management Act, to cap rates, to ensure
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  Speaker 3: that we can deliver more housing, to boost tourism. We've
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  Speaker 3: been at it as a government taking pro growth measures
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  Speaker 3: and maintaining fiscal discipline, which is something that you want
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  Speaker 3: here Labor talking about.
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  Speaker 2: So when it comes to pushing the surplus out and
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  Speaker 2: you know this says basically you won't achieve it when
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  Speaker 2: that you have the fiscal intention that you want to
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  Speaker 2: achieve it, but you're saying you will stick to twenty
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  Speaker 2: twenty nine not twenty thirty. How do you do that
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  Speaker 2: when the books say you can't.
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  Speaker 3: Well, A forecasts do show us reaching a surplus over
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  Speaker 3: this period, and the question is whether we get there
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  Speaker 3: in twenty nine or twenty thirty. The twenty nine deficit
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  Speaker 3: that's being forecast relative is very small, and so I
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  Speaker 3: remain confident that we can get there. What that will
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  Speaker 3: take is just a small revision to the growth upwards
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  Speaker 3: combined with fiscal discipline, and those are two things that
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  Speaker 3: our government has committed to. So we're sticking to our
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  Speaker 3: surplus target.
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  Speaker 2: You've committed to keeping new borrowing to two point four
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  Speaker 2: billion dollars next year. Given we're not bringing in as
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  Speaker 2: much cash as we had hoped, would it not be
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  Speaker 2: prudent to cut that figure further?
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  Speaker 3: No, because that is what is required to ensure we
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  Speaker 3: can make the investment months needed to increase health service delivery,
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  Speaker 3: to ensure our schools have the resources they need to
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  Speaker 3: pay their teachers and deliver learning, that our police have
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  Speaker 3: the resources they need on the front line, and to
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  Speaker 3: continue our build and defense force capability. It's a very
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  Speaker 3: small number, though relative to recent budgets. Ran to give
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  Speaker 3: you a sense of context, in the twenty twenty two budget,
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  Speaker 3: under the previous government, New operating spending was nine point
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  Speaker 3: seven billion a year. We're proposing two point four. So
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  Speaker 3: this is a much more modest level of spending than
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  Speaker 3: was the case under the previous government. And we can
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  Speaker 3: achieve it by continuing our rigor around, constantly finding savings
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  Speaker 3: and efficiency.
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  Speaker 2: There's a vicious cycle thing that happens here, isn't there
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  Speaker 2: When the economy does bad, people leave. When people leave,
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  Speaker 2: we can't tax them. Fifty thousand fewer taxpayers in the
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  Speaker 2: country than expect it. How do you turn that? How
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  Speaker 2: long does it take to turn that around?
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  Speaker 3: Well, I was really pleased to see the most recent
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  Speaker 3: update from Stats which showed the number of people leaving
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  Speaker 3: is actually the lowest in three years, and so that
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  Speaker 3: is starting to turn around. On the latest stats, the
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  Speaker 3: census data updated the underlying assumptions on population, and yes
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  Speaker 3: that is slightly lower. But I'm confident that as our
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  Speaker 3: economy recovers, as there are more jobs available which is
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  Speaker 3: being forecast, as there's more growth and comes arising, that
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  Speaker 3: more new Zealanders will see they can have a great
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  Speaker 3: future here and they will choose to stay.
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  Speaker 2: You've said in your speech today, there are a lot
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  Speaker 2: of things the government can't control.
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  Speaker 3: Do you?
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  Speaker 2: As a party and labor both need to be a
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  Speaker 2: little more honest with New Zealanders about what it is
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  Speaker 2: you actually can fix in what you can't, because I
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  Speaker 2: feel like we're getting taken for a ride. One of
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  Speaker 2: you says we will get we will fix this, the
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  Speaker 2: other says we will fix that, and actually then you
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  Speaker 2: turn around when the books come out and say it's
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  Speaker 2: not fixable, it's not in our hands.
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  Speaker 3: Well, I disagree with that. I do think there is
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  Speaker 3: a lot that we can control. We can control our
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  Speaker 3: discretionary spending decisions and the impact that has on inflation
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  Speaker 3: therefore interest rates. I stand by our track record in
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  Speaker 3: that regard. We can control whether the policies we deliver
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  Speaker 3: a pro growth or anti growth. And in that sense,
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  Speaker 3: we've said yes to replacing the Resource Management Act. We've
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  Speaker 3: said yes to tax relief, we've said yes to backing businesses,
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  Speaker 3: which are all the things consistent with supporting growth in
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  Speaker 3: this economy. On the other hand, my opponents on the
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  Speaker 3: other side consistently say no to those things, and so
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  Speaker 3: they have to take responsibility for those positions.
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  Speaker 2: Minister, appreciate your time. That's Nicola Willis's Finance Minister.
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