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Nicola Willis: Finance Minister on the cut to the Official Cash Rate, the economy · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: So the Reserve Bank cut the ocr for the final
• 0:02
  Speaker 1: time this year twenty five basis points two point two
• 0:05
  Speaker 1: five percent. We were expecting that. It says there was
• 0:08
  Speaker 1: a bit of regal room in the economy. Obviously, inflation
• 0:11
  Speaker 1: now projected to fall to around two percent by mid
• 0:13
  Speaker 1: twenty twenty sixth. Nikola Willis is the Finance Minister with
• 0:16
  Speaker 1: US Live this morning. Good morning minister, Good morning man.
• 0:19
  Speaker 1: Did the economy grow this year?
• 0:22
  Speaker 2: Well, in this first quarter of the year it grew
• 0:25
  Speaker 2: very strongly at about zero point nine percent. We had
• 0:28
  Speaker 2: a downturn in the second quarter. The Reserve Bank the
• 0:32
  Speaker 2: State of yesterday that they think that was statistically understated
• 0:35
  Speaker 2: and will be a readjusted at a further update. They
• 0:38
  Speaker 2: think that the economy is currently growing and that that
• 0:41
  Speaker 2: growth will strengthen into next year.
• 0:44
  Speaker 1: So how much do you think we grew this calendar year?
• 0:48
  Speaker 2: Well, it's too early to say that. We will get
• 0:51
  Speaker 2: the data for the third quarter in a couple of weeks,
• 0:54
  Speaker 2: and we'll get their data for the December quarter early
• 0:57
  Speaker 2: next year.
• 0:58
  Speaker 1: Is it annoying that data is so wrong?
• 1:02
  Speaker 2: Look, it is difficult that the data lags, and it
• 1:05
  Speaker 2: is the case that's in their data has had to
• 1:08
  Speaker 2: be updated fairly frequently and adjusted and look, that's the
• 1:14
  Speaker 2: reality of the sets process. We can't do much about it,
• 1:17
  Speaker 2: but we do get enough other information that we get
• 1:19
  Speaker 2: a sense of where the economy is, and that's allowed
• 1:22
  Speaker 2: the Reserve Bank to be very confident in their forecasts
• 1:26
  Speaker 2: that we're currently growing, that that growthal strength next year,
• 1:29
  Speaker 2: and that inflation will be coming down next year.
• 1:32
  Speaker 1: Which is good and that sounds great, but we have
• 1:35
  Speaker 1: heard this story before. Our big problems productivity, isn't it
• 1:38
  Speaker 1: That is going to be constraining whatever growth we might
• 1:41
  Speaker 1: be getting, and also we don't have immigration to prop
• 1:43
  Speaker 1: it up.
• 1:44
  Speaker 2: Well, Productivity is an issue, but fundamentally, if you haven't
• 1:49
  Speaker 2: got your inflation down in an economy, and you haven't
• 1:52
  Speaker 2: got your interest rates are coming down, then those fundamentals
• 1:56
  Speaker 2: mean that you won't get productivity growth. What we've now
• 2:00
  Speaker 2: got in the New Zealand economy is a situation where
• 2:03
  Speaker 2: inflation is back in target is set to come back
• 2:05
  Speaker 2: down to the middle of the band. That's great for growth.
• 2:08
  Speaker 2: We've got interest rates at a low rate, which means
• 2:11
  Speaker 2: that you do have more cash pumping through the economy.
• 2:13
  Speaker 2: That's great for growth and now we are in a
• 2:16
  Speaker 2: position to be building that future productivity growth and that's
• 2:19
  Speaker 2: where things like replacing the Resource Management Act, getting rid
• 2:23
  Speaker 2: of red tape in the Regional Council structures, ensuring that
• 2:27
  Speaker 2: we're delivering infrastructure faster, lifiting education standards. All of those
• 2:31
  Speaker 2: are about future productivity and that's why our government is
• 2:34
  Speaker 2: driving those reforms.
• 2:36
  Speaker 1: They said the Reserve Bank margins for the bank's a
• 2:38
  Speaker 1: healthy room to bring the rates down further. I'm speaking
• 2:41
  Speaker 1: to Antonio Watson later this morning. What's your message to her.
• 2:45
  Speaker 2: Well, my message to her would be pass it all on.
• 2:47
  Speaker 2: You are a member of the New Zealand economy and
• 2:50
  Speaker 2: the actions you take have a significant impact on how
• 2:54
  Speaker 2: New Zealanders are able to invest and growth.
• 2:56
  Speaker 1: Your comments on the Regulatory Standards Bill, was that just
• 2:58
  Speaker 1: on the fly or are you seriously thinking you might
• 3:01
  Speaker 1: campaign on repealing.
• 3:04
  Speaker 2: Well, it's just just to be clear that National has
• 3:07
  Speaker 2: its own positions on legislation. We don't just adopt act
• 3:10
  Speaker 2: positions as a coalition government. Yes, we do support the
• 3:16
  Speaker 2: commitments we've made which meant that we pass that legislation.
• 3:20
  Speaker 2: There's still a year at least until the next election
• 3:23
  Speaker 2: and so as good citizens, we need to monitor how
• 3:27
  Speaker 2: that legislation operates in practice, whether we think on balance
• 3:31
  Speaker 2: that the pros outweigh the cons and then the National
• 3:34
  Speaker 2: Party Caucus will take a position on whether we support
• 3:37
  Speaker 2: it going into the next election.
• 3:39
  Speaker 1: What's your personal view.
• 3:42
  Speaker 2: We'll look my personal viewers that we do need to
• 3:45
  Speaker 2: monitor it to see whether it adds process or whether
• 3:50
  Speaker 2: in fact it's advantageous. And I've got an open mind.
• 3:54
  Speaker 1: It looks like just another layer of bureaucracy and it
• 3:56
  Speaker 1: doesn't actually do any nothing meaningful.
• 4:00
  Speaker 2: The government decided to progress it because fundamentally we do
• 4:04
  Speaker 2: want good regulation and that's what the intent of the
• 4:06
  Speaker 2: legislation is. We've now got an opportunity of these next
• 4:09
  Speaker 2: few months to see what it adds in practice. We'll
• 4:12
  Speaker 2: be watching it here Flee and then the National Party
• 4:14
  Speaker 2: Caucus will discuss that will take a position going into
• 4:17
  Speaker 2: next year's.
• 4:17
  Speaker 1: Campaign making the Willis Finance Minister.
• 4:20
  Speaker 2: For more from Early Edition with Ryan Bridge.
• 4:22
  Speaker 1: Listen live to News Talks it be from five am weekdays,
• 4:26
  Speaker 1: or follow the podcast on iHeartRadio.