Latest / Best of Business / Nicola Willis: Finance Minister hints at upcoming update into procuring new ferries, potential corporate tax cuts

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Nicola Willis: Finance Minister hints at upcoming update into procuring new ferries, potential corporate tax cuts · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk SEDB. Follow
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• 0:16
  Speaker 2: Right now.
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  Speaker 3: Nicola Willis is here, the Finance minister. Minister, good evening,
• 0:20
  Speaker 3: good evening, Great to have you on the show. Let's
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  Speaker 3: talk growth because it's a big focus at the moment.
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  Speaker 3: There's been a lot of commentary about your government. Obviously
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  Speaker 3: you're moving on the foreign investment stuff. That's good. There's
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  Speaker 3: some tinkering to be done with immigration settings, with nomad
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  Speaker 3: visas etc. Are we going to see anything transformational from
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  Speaker 3: you in this role?
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  Speaker 2: Well, transformational is a word that Ja cinder Adn used
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  Speaker 2: to use a lot, so it's not one I repeat
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  Speaker 2: in my lexicon that much. But are you going to
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  Speaker 2: see bold initiatives that will make it easier for firms
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  Speaker 2: in New Zealand to invest, to hire people and to grow. Yes,
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  Speaker 2: will it be one silver bullet, No, because what we
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  Speaker 2: know from economies the world over is it's never just
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  Speaker 2: one thing. You actually have to do a lot of
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  Speaker 2: things right that are on the side of growth. You
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  Speaker 2: have to educate your people, you have to have not
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  Speaker 2: too much regulation, you have to have a tax system
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  Speaker 2: that works well, you have to have good trading relationships.
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  Speaker 2: You need to encourage people to come and invest in
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  Speaker 2: your country. So we've got a lot of work to
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  Speaker 2: do because, for I would say successive decades, governments in
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  Speaker 2: New Zealand have been complacent about growth. They've always been
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  Speaker 2: able to trade it off against other things, saying we've
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  Speaker 2: got to be careful about this, we've got to be
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  Speaker 2: careful about that, and all of that may be true,
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  Speaker 2: but right now New Zealanders are feeling poorer and if
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  Speaker 2: we want to feel wealthier, we have to prioritize growth,
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  Speaker 2: and that's what our government is going to do across
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  Speaker 2: a number of areas. So you will see a lot
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  Speaker 2: of initiatives from us. You know, people have said, oh, well, tourism,
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  Speaker 2: that's one small thing. If we got tourism just back
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  Speaker 2: to the levels it was a few years ago, that
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  Speaker 2: would be worth more than three and a half billion
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  Speaker 2: dollars for the wealth of our economy. That means more jobs,
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  Speaker 2: people being paid morel means hundreds of millions of dollars
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  Speaker 2: more going into the government accounts, which is then available
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  Speaker 2: to spend on schools and hospitals and the things we
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  Speaker 2: care about. So we have to do lots of things
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  Speaker 2: well run and that's what we're going to do.
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  Speaker 3: Have we got our company tax settings right?
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  Speaker 2: Well, if you compete Zealand with the rest of the world,
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  Speaker 2: we're not as competitive as we used to be, which
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  Speaker 2: is to say that our corporate tax level is reasonably
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  Speaker 2: high when you compare it to the rest of the
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  Speaker 2: developed world. So looking at that, our government says, okay, well,
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  Speaker 2: what could we do to make sure that the tax
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  Speaker 2: settings in New Zealand are supportive of businesses wanting to
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  Speaker 2: invest and grow, Realizing that on the other side of that,
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  Speaker 2: we have to pay for it, because if we're taking
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  Speaker 2: in less tax, then we have to find other ways
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  Speaker 2: of getting that money so we can invest in the
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  Speaker 2: things that really matter, our public services, and also ensure
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  Speaker 2: that we're still on track to get our budget back
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  Speaker 2: and balance and reduce debt over time. So as a government,
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  Speaker 2: we need to work through all of those questions on
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  Speaker 2: the question is we need to be more competitive in
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  Speaker 2: that area.
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  Speaker 3: So you are looking at changing the corporate.
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  Speaker 2: Tax rate, Well, there's many different ways we can approach
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  Speaker 2: the TEX system. One thing is the corporate tax rate,
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  Speaker 2: but there are all sort of tax rules that sit
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  Speaker 2: underneath that, and I'm actually interested in the detail of
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  Speaker 2: the way the whole system works, not just the headline rate, but.
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  Speaker 3: You're looking at the headline rate and the other things
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  Speaker 3: together to make it more competitive.
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  Speaker 2: My interest is how do we make sure that it's
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  Speaker 2: competitive in New Zealand, that a when our small businesses
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  Speaker 2: here are looking to grow or looking to invest, that
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  Speaker 2: the tax system doesn't stop them doing that. But also
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  Speaker 2: as we look to be a country that other people
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  Speaker 2: want to invest in and bring their businesses to, how
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  Speaker 2: can we make this a competitive business environment. Tax is
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  Speaker 2: one part of that, but it's also about red tape.
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  Speaker 2: It's about the rules in the Overseas Investment Act, it's
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  Speaker 2: about being able to get a resource consent, it's about
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  Speaker 2: employment law, all of those things. Firms will tell you
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  Speaker 2: they've got a list when they're looking at other countries.
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  Speaker 2: Tax is one pullet point on the list. It's not
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  Speaker 2: the only bullet point.
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  Speaker 3: Hugely important one, though. Would you look at you know,
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  Speaker 3: you mentioned international firms, multinationals, and you look at Ireland
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  Speaker 3: and what Island's done, and we know Lux and likes
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  Speaker 3: Ireland that you've got so much tax now they're putting
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  Speaker 3: it into a sovereign wealth fund. Are we going to
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  Speaker 3: do anything to be more competitive for that type of investment.
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  Speaker 2: Well, we have a sovereign wealth fund too, it's the
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  Speaker 2: New Zealand Super Fund. It's got more than seventy billion
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  Speaker 2: dollars worth of as sets as I talk to you today.
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  Speaker 2: But when we look at Ireland's story, you're right, there's
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  Speaker 2: a lot that we can take from it. They made
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  Speaker 2: a real active decision to look out to the world
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  Speaker 2: to attract investment, to be a trading nation, to vigorously
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  Speaker 2: improve their education system, to get smart about innovation, and
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  Speaker 2: they looked at tax. So we can't take tax off
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  Speaker 2: the table because it could make a difference to our competitiveness.
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  Speaker 2: We always have to be balance that against our other
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  Speaker 2: pressing needs, which include investing in frontline public services, ensuring
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  Speaker 2: we're getting our deficit down, and taking other steps across
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  Speaker 2: the board to make ourselves more competitive.
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  Speaker 3: And what about the fastest depreciation on manufacturing technology purchases.
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  Speaker 3: The Employees and Manufacturers Association has been on this program
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  Speaker 3: and told them that's doing that type of Yes, it
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  Speaker 3: will cost you something, but you will add to growth, productivity,
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  Speaker 3: wages will go up. Is that sort of stuff on
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  Speaker 3: your radar too.
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  Speaker 2: Oh look, that's on my radar. That's something that I
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  Speaker 2: have listened to both the employer and manufacturers, but other
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  Speaker 2: organizations have promoted that idea to me, and I'm keeping
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  Speaker 2: my mind open to it. Ultimately, Cabinet needs to make
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  Speaker 2: decisions about what our priorities are. We haven't made those
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  Speaker 2: deliberations yet, but I think it is right when we're
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  Speaker 2: saying we're a government going for growth, that we do
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  Speaker 2: keep all of the options on the table and we
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  Speaker 2: consider what we think will make the biggest impact. So
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  Speaker 2: if my mind's open.
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  Speaker 3: Okay, if you're going for growth and you're also trying
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  Speaker 3: to get back to surplus, some of these growth ideas
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  Speaker 3: will cost money. Are you willing to further push surplus
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  Speaker 3: date out if it means will you prioritize growth? If
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  Speaker 3: it means will you sacrifice surplus? If it means growth, We're.
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  Speaker 2: Going to prioritize growth. But it's not an either all scenario,
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  Speaker 2: because if we don't run good books, ie, we don't
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  Speaker 2: actually show the people who lend to us internationally that
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  Speaker 2: we are going to have sustainable finances, then the result
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  Speaker 2: of that can be that it becomes a lot more
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  Speaker 2: expensive for New Zealand as a whole, and New Zealander
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  Speaker 2: is individually to borrow and that's very bad for growth.
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  Speaker 2: So there's always a balancing that goes on here in
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  Speaker 2: terms of funding initiatives that support growth. That's why it's
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  Speaker 2: so important we keep looking all across government and so well,
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  Speaker 2: where are the areas that we're spending now that are
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  Speaker 2: lower value, because if we did some reprioritizing, then we
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  Speaker 2: could support the things that will drive growth faster. And
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  Speaker 2: that's our agenda. It's about saying, how do we get
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  Speaker 2: the growth that will allow us to have more choices
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  Speaker 2: in the future, about investing in more public services, and
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  Speaker 2: on the way through, getting rid of the things that
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  Speaker 2: aren't moving the dial, that aren't delivering good results for
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  Speaker 2: New Zealanders, the parts of government that have become slow, wasteful, bureaucratic.
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  Speaker 2: Let's get resource out of there so we can do
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  Speaker 2: the exciting things that will make this a more prosperous
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  Speaker 2: country where people can get ahead.
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  Speaker 3: The inter Island of Ferry to move on. Why the
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  Speaker 3: procuring company for the inter island is still not set
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  Speaker 3: up well?
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  Speaker 2: Obviously Winston Peters is now responsible for keep Rail and
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  Speaker 2: the Fury project, and I understand that he has the
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  Speaker 2: appointment process underway for that company and once directors are appointed,
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  Speaker 2: he will be incorporating it. I think he's got something
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  Speaker 2: to say about.
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  Speaker 3: That this week, OK, because it's still the March deadline,
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  Speaker 3: and if we don't get the ferry that he wants
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  Speaker 3: by March, then we're going with your two Toyota ones, right.
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  Speaker 2: Yeah, that's right. We made sure we had a fallback
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  Speaker 2: position so that if the Minister for Rail doesn't come
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  Speaker 2: up with a better option, then we've got something ready
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  Speaker 2: to go so that New Zealanders can be confident. So
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  Speaker 2: boats in twenty twenty nine.
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  Speaker 3: So is your package like good and ready to go?
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  Speaker 3: Because it might come down to the wire with him
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  Speaker 3: and we don't want to be waiting even more time.
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  Speaker 3: So is your have you got your little Toyota's ready
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  Speaker 3: to go?
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  Speaker 2: Yeah? So Cabinet has agreed to a funding envelope. We've
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  Speaker 2: agreed to a procurement plan. We've agreed that this ferry
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  Speaker 2: company that's been set up could do the purchasing of
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  Speaker 2: the ships. We know that there are ships available internationally.
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  Speaker 2: So that's ready to go. But the Minister for Rail's
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  Speaker 2: doing the right thing. He is comparing that option with
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  Speaker 2: what else might be out there, and he's running a
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  Speaker 2: process to do that right.
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  Speaker 3: Okay, hey, the waycuta medical school Treasury Advice says that
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  Speaker 3: they think it's a waste of money. You think otherwise,
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  Speaker 3: well do you?
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  Speaker 2: Well, well, we've taken it to the next stage, which
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  Speaker 2: is what they call a detailed business case. And I
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  Speaker 2: know that sounds like gobbledy girk, but the idea is,
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  Speaker 2: let's really dig into these numbers about what benefits it
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  Speaker 2: will bring. How many more graduates we'd expect, Will they
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  Speaker 2: be graduates who might not otherwise have studied medicine, will
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  Speaker 2: we get more people working in the areas of medicine
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  Speaker 2: where we have shortages, What are the real costs of this?
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  Speaker 2: And so that detailed business case is underway, it's been
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  Speaker 2: worked on, then Cabinet will consider it before making a
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  Speaker 2: final decision. We're dotting our eyes, we're crossing our t's,
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  Speaker 2: We're digging into the detail as you'd expect.
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  Speaker 3: Minister, Thank you very much for your time. Great thank you,
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  Speaker 3: Finance Minister Nicola Willison.
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