Latest / Best of Business / Thomas Coughlan: NZ Herald political editor on Nicola Willis reducing the Reserve Bank's funding

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Thomas Coughlan: NZ Herald political editor on Nicola Willis reducing the Reserve Bank's funding · Best of Business

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  Speaker 1: You're listening to a podcast from Newstalk zed B. Follow
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  Speaker 2: And with us. Now is The Herald's political editor, Thomas Cognane.
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  Speaker 2: Thomas Okay, So Nikola has reigned in the spending on
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  Speaker 2: the Reserve Bank, but has she actually.
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  Speaker 3: Very very very good question. So the Reserve Bank, the spending,
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  Speaker 3: I think inarguably has gone a wee bit nuts. For the
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  Speaker 3: last few years. It was about fifty million dollars a
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  Speaker 3: year in the agreement signed by the last National government
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  Speaker 3: labor up to that spending to about one to one
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  Speaker 3: hundred and twenty million dollars a year from twenty twenty onwards. Now,
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  Speaker 3: thing's got a wee bit weird. In twenty twenty three
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  Speaker 3: the Reserve Bank got some new responsibilities and got some
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  Speaker 3: additional money to compensate for those new responsibilities. So the
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  Speaker 3: funding goes up to about one hundred and sixty million
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  Speaker 3: and twenty three, one hundred and fifty million and twenty
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  Speaker 3: four to twenty five. But the bank has then it appears,
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  Speaker 3: spent an additional fifteen million dollars on top of that,
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  Speaker 3: taking this year spending to two hundred million dollars, So
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  Speaker 3: all of those numbers apologies for them. So if you
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  Speaker 3: take that two hundred million dollars as your baseline, then
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  Speaker 3: yes there's a funding cut, But if you look back
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  Speaker 3: over the last of five years, then actually spending is
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  Speaker 3: roughly level and might even be a wee bit a
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  Speaker 3: wee bit higher. So it really depends who you're asking.
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  Speaker 2: So the agreement for the last financial year was one
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  Speaker 2: hundred and fifty million and nicol and but they spent
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  Speaker 2: two hundred million because they blew their budget. But now
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  Speaker 2: Nichola is saying we've cut it back to one hundred
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  Speaker 2: and fifty million. That's not a cut. That's level.
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  Speaker 3: Yeah, that's and if that's if that's the way that
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  Speaker 3: you're which I think to be honest, is that's the
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  Speaker 3: way that I look at it. So I think I
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  Speaker 3: think you could say she's cut it from I mean,
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  Speaker 3: I've asked them Aserve bank, what on earth was going
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  Speaker 3: on was going on this year? They meant to get
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  Speaker 3: back to me by the end of the day, so
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  Speaker 3: I guess I'll hear back from them then. But I
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  Speaker 3: don't know what's going on with with us two hundred
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  Speaker 3: million dollars that they spent this year. It's I mean,
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  Speaker 3: when you think about it, you know, it wasn't two
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  Speaker 3: thousand and nineteen was not that long ago. And in
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  Speaker 3: twenty nineteen everyone at the bank was fine with fifty
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  Speaker 3: two million dollars. Fast forward to this year and and
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  Speaker 3: two hundred million dollars is what they're spending. It's it's
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  Speaker 3: it's it's incomprehensible. What what has happened here that the
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  Speaker 3: bank needs needs this much money? And to me, frankly,
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  Speaker 3: it's incredible that the bank doesn't sort of front up
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  Speaker 3: a little bit more and explain why it's spending all
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  Speaker 3: this money. That's some of it is necessary. I think
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  Speaker 3: with the deposit taker stuff that they're changing, there is
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  Speaker 3: some some reason behind it. But quadrupling the amount of spending,
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  Speaker 3: I don't know, ye.
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  Speaker 2: Know, I don't know either. And why did Adriaan all
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  Speaker 2: quit over this? I mean, this is hard. If he's
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  Speaker 2: maintaining the extraordinary level of funding that the Reserve Bank
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  Speaker 2: has got, whydey pack a tanty and pack off?
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  Speaker 3: Well, I mean the other the other, I mean the
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  Speaker 3: interesting the other interesting thing with this, this agreement today
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  Speaker 3: is that the bank wanted a billion dollars over a
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  Speaker 3: billion dollars over five years, and Nicola Willis paied them
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  Speaker 3: back to about seven hundred and fifty million dollars, so
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  Speaker 3: the bank wanted even more money. It's it is, there is,
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  Speaker 3: of course. The irony here is is that there is
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  Speaker 3: an institution in New Zealand which is me to ensure
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  Speaker 3: that there is price stability and that you don't need
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  Speaker 3: more and more money every year just to stand still.
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  Speaker 3: And that institution.
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  Speaker 2: Is the Reserve Bank.
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  Speaker 3: Wow, that's the reserve Bank.
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  Speaker 2: Okay, this is the this is the thing I don't understand.
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  Speaker 2: So the Marty Party comes up with its latest cooked idea,
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  Speaker 2: which is that Mary people should be able to take
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  Speaker 2: the pension and therefore retire ten years before everybody else.
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  Speaker 2: The question is asked of labor, what do you make
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  Speaker 2: of it? And labor goes, I'm not saying yet, why
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  Speaker 2: don't they just kill it, kill.
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  Speaker 3: The old Yeah, it's terrible, it is, it is, it
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  Speaker 3: is an I think this. This idea is also difficult
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  Speaker 3: to get your head around. I mean Willie Jackson was
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  Speaker 3: actually asked it a few weeks ago by by Order
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  Speaker 3: Young and he said it would cause division. Was and
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  Speaker 3: wasn't a good idea and he didn't want to go
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  Speaker 3: down that route. So so one one Labor person has
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  Speaker 3: actually said they don't want to do it. Barbara Edmonds,
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  Speaker 3: I think today was in that in that story saying.
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  Speaker 2: That she's not making policy upright, she's not.
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  Speaker 3: Making policy up right now, which I'm not sure how
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  Speaker 3: tenable that is. I mean, Barbariamans as well last week
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  Speaker 3: in the House was asking Nikola Willis, will she rule
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  Speaker 3: out and come testing the best start payment? Will she
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  Speaker 3: rule out and come testing the winter energy payment? So
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  Speaker 3: you know, Barbara Edmonds is starting to play the rule
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  Speaker 3: out game with Nicola Willis, the Finance Minister, but she's
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  Speaker 3: not so keen on playing it when people start to
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  Speaker 3: ask you to rule out coalition partner promises and this
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  Speaker 3: one is, as you say, this one's an easy one
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  Speaker 3: to rule out. Labor can't find four billion dollars to
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  Speaker 3: do this idea. Regardless of whether whether or not you
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  Speaker 3: think it's fair, there is not four billion dollars lying
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  Speaker 3: around to spend, you know, not just this year but
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  Speaker 3: every year going forward to the future. Four billion dollars
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  Speaker 3: that is that is an enormous amount of money. It's
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  Speaker 3: it's it's it's huge. I think, I think it's it
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  Speaker 3: would be roughly comparable. I think to our justice spending
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  Speaker 3: at the moment, law and order spending. It's it's it's
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  Speaker 3: it's money that you cannot find down the back of
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  Speaker 3: the couch. So I I really don't know why why labors,
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  Speaker 3: why I was opted to be ambiguous on that one.
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  Speaker 3: Because it's not going to happen, I can tell you
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  Speaker 3: right now totally. That's election time. Much is just ruled out.
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  Speaker 3: It won't happen.
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  Speaker 2: Thank you, Thomas. We'll talk to you again tomorrow. Look
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  Speaker 2: after yourself. That's Thomas Coglin. The Herald's political leaders.
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