Latest / Early Edition with Ryan Bridge / Nicola Willis: Finance Minister on treasury report calculating the total cost of the pandemic at $66 billion

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Nicola Willis: Finance Minister on treasury report calculating the total cost of the pandemic at $66 billion · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: So Jasindra Doom was worn repeatedly along with Grant Robertson,
• 0:03
  Speaker 1: that his spending spree during COVID would have dire consequences,
• 0:06
  Speaker 1: and she was warned as early as twenty twenty. Newly
• 0:08
  Speaker 1: released documents, Showerdourn's own treasury advised that a blowout of
• 0:12
  Speaker 1: public debt would leave us vulnerable for any future crises,
• 0:16
  Speaker 1: and avoided advised her rather to better target the spending.
• 0:20
  Speaker 1: Nicola Witus is the Finance minister with me this morning. Minister,
• 0:23
  Speaker 1: good morning, good morning. First of all, does the government
• 0:27
  Speaker 1: have any response to what Netanya, who's just announced he
• 0:29
  Speaker 1: wants to fully take control.
• 0:31
  Speaker 2: Of Gaza looks forgive me? I have not been briefed
• 0:35
  Speaker 2: on that, and I know very well on matters of foreignacys,
• 0:38
  Speaker 2: one should be brief before one comments.
• 0:41
  Speaker 1: Fair Now this report from Treasury. Does this mean that
• 0:45
  Speaker 1: in future events you won't be doing what Labour did
• 0:48
  Speaker 1: and pulling the fiscal lever and leave it to the
• 0:51
  Speaker 1: Reserve Bank.
• 0:52
  Speaker 2: That's exactly what it means. This is officials who have
• 0:56
  Speaker 2: looked very keyfully at what went on. They are not
• 1:00
  Speaker 2: political and what they make very clear in this report
• 1:04
  Speaker 2: very politely, is that big mistakes were made in the
• 1:07
  Speaker 2: way that the last government used government spending to respond
• 1:11
  Speaker 2: to COVID, and they are urging future politicians not to
• 1:15
  Speaker 2: repeat those mistakes, and our government will not.
• 1:19
  Speaker 1: The vast bulk of that spending was on the wage subsidy.
• 1:21
  Speaker 1: Did you support that, Well.
• 1:24
  Speaker 2: That's not actually correct. The wage subsidy was around thirty
• 1:28
  Speaker 2: five percent of spending. Hundred percent was eighteen percent was
• 1:33
  Speaker 2: helf That's here's the kicker. Nearly half of a COVID
• 1:37
  Speaker 2: spending was on a range of things with a very
• 1:41
  Speaker 2: varied range of objectives, whether that was school lunches, increases
• 1:45
  Speaker 2: to welfare benefits, public housing. Now all good things that
• 1:49
  Speaker 2: we know that many people like. But actually what the
• 1:53
  Speaker 2: officials say is that didn't really make a difference to
• 1:56
  Speaker 2: the economy doing that stuff. Not a very LaGG defect,
• 2:00
  Speaker 2: and it racked up huge amounts of debt. It was
• 2:04
  Speaker 2: extremely inflationary, and we're now in the position as a
• 2:07
  Speaker 2: country where we are paying the price for that. And
• 2:10
  Speaker 2: so the point is, Yep, you've got to do some things.
• 2:12
  Speaker 2: You've got to do wage subsidies, you've got to increase
• 2:14
  Speaker 2: your spending on the health system, but be really careful
• 2:17
  Speaker 2: that you do the things you have to do and
• 2:20
  Speaker 2: don't rack up so much extra spending and debt that
• 2:23
  Speaker 2: we end up as an economy paying it off for
• 2:25
  Speaker 2: a very long time. That's what the last government did.
• 2:28
  Speaker 1: Yeah, but it's your continuing with it, aren't you. I mean,
• 2:30
  Speaker 1: the bureaucrat counts barely moved. You've still got massive government debt,
• 2:34
  Speaker 1: is still spending more than spending more than you are earning.
• 2:39
  Speaker 2: Well, I reject that. Across our first two budgets, we
• 2:42
  Speaker 2: have already delivered forty four billion dollars worth of savings.
• 2:46
  Speaker 2: Now it is correct that we have put a lot
• 2:47
  Speaker 2: of those savings back into the system into education.
• 2:53
  Speaker 1: Government's still just as big, right, No, it is not just.
• 2:57
  Speaker 2: As big, because what we have had, well, we have
• 3:02
  Speaker 2: constrained government spending significantly. We've had much smaller editions of
• 3:08
  Speaker 2: additional funding, and we have ensured that we're in a
• 3:11
  Speaker 2: position where over the next four years we can get
• 3:13
  Speaker 2: the books back in balance. We've put that track down
• 3:16
  Speaker 2: that we get them back in balance and we start
• 3:18
  Speaker 2: bending down the deck curve.
• 3:19
  Speaker 1: Yeah, but that's one the other. That's what Grant used
• 3:21
  Speaker 1: to tell us too. How much smaller is the government
• 3:24
  Speaker 1: now under your watch than it was under labor? I mean,
• 3:26
  Speaker 1: you keep saying they increased spending eighty four percent, blah
• 3:29
  Speaker 1: blah blah. How much smaller is government spending now than
• 3:31
  Speaker 1: it was?
• 3:33
  Speaker 2: Well, government spending is on track to come down to
• 3:36
  Speaker 2: thirty point nine percent for context, the last government drove
• 3:40
  Speaker 2: it up to thirty four percent of the overall size
• 3:44
  Speaker 2: of the economy. And most importantly, what we've done is
• 3:48
  Speaker 2: ensured that when we've been making investments, we're doing them
• 3:51
  Speaker 2: in a way that actually stimulates growth in the private
• 3:54
  Speaker 2: sector of the economy, things like making sure we're reducing taxes,
• 3:58
  Speaker 2: making sure we've got that investment those schemes for businesses,
• 4:01
  Speaker 2: because we know the countries don't get rich just by
• 4:04
  Speaker 2: growing the size of their government. They have to grow
• 4:06
  Speaker 2: the size of those who are making things, misting things.
• 4:10
  Speaker 1: Very doing things very quickly. We've got the tariffs coming
• 4:12
  Speaker 1: in today. Do we have when is Todd McClay going
• 4:15
  Speaker 1: to be over the Do we have any idea whether
• 4:17
  Speaker 1: they're going to give us a reprieve?
• 4:20
  Speaker 2: Well, look, I think that those who observe Trump and
• 4:24
  Speaker 2: look internationally can see that that seems very unlikely at
• 4:27
  Speaker 2: the stage. Now that means that New Zealand needs to
• 4:30
  Speaker 2: keep pressing our case. We need to keep making sure
• 4:33
  Speaker 2: the a US administration remembers what a good partner they
• 4:36
  Speaker 2: have been to them. But look, I look at Switzerland.
• 4:39
  Speaker 2: They went over and did a huge amount of negotiating.
• 4:41
  Speaker 2: They thought they were going to be on a low tariff.
• 4:43
  Speaker 2: They ended up on thirty nine tea.
• 4:45
  Speaker 1: Almost made careful, Almost made the situation where Nicola will
• 4:48
  Speaker 1: appreciate your time this morning Finance Mins.
• 4:51
  Speaker 2: For more from early edition with Ryan Bridge. Listen live
• 4:54
  Speaker 2: to News Talks it'd be from five am weekdays, or
• 4:57
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