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Steven Joyce: Former Finance Minister on the government's deficit growing by $3.4 billion · The SME Stream

• 0:00
  Speaker 1: So to the state of the old economy, and despite
• 0:01
  Speaker 1: the so called green shoots and brighter days ahead, yesterday's
• 0:04
  Speaker 1: Crown Account numbers remind us it's all still a mess.
• 0:06
  Speaker 1: The deficit blew out to twelve point nine billion. They
• 0:08
  Speaker 1: thought it was going to be eleven. This is the
• 0:10
  Speaker 1: year to June, Health New Zealand and a see your
• 0:12
  Speaker 1: major issues. Former Finance Minister Stephen Joyce's with us.
• 0:14
  Speaker 2: Good morning morning, Mike. How are you very well?
• 0:17
  Speaker 1: Thank you? Revenues up, but then so are expenses. Is
• 0:20
  Speaker 1: that a reputational issue potentially for a conservative government.
• 0:24
  Speaker 2: Nah, I don't think so at the stage. It would
• 0:27
  Speaker 2: be if it continued for a long time, you know,
• 0:29
  Speaker 2: for a couple another couple of years. We just got
• 0:33
  Speaker 2: to be thankful. I think that the revenue did go
• 0:35
  Speaker 2: up because I think the expectation is that the revenue
• 0:38
  Speaker 2: would drop, and indeed the tax take around companies and
• 0:42
  Speaker 2: individuals dropped. The quirk of it was with interest rates
• 0:47
  Speaker 2: going up, the people that paid tax on their interest
• 0:51
  Speaker 2: paid more, obviously, and so that pushed the revenue up
• 0:55
  Speaker 2: on that side. But it's still a pretty pretty bleak
• 0:58
  Speaker 2: picture and the challenge for the government will be is
• 1:01
  Speaker 2: that won't continue. The interest won't keep rising now because
• 1:04
  Speaker 2: interest rates have now turned, so that contribution to revenue
• 1:10
  Speaker 2: increases won't happen. So once again it comes back to
• 1:13
  Speaker 2: a story of needing growth to boost that tax take.
• 1:16
  Speaker 2: Otherwise we'll be chasing our tail downwards for a while yet,
• 1:19
  Speaker 2: which is the normal method. By the way, you come
• 1:21
  Speaker 2: out of a recession. Everybody else will feel better before
• 1:25
  Speaker 2: the government books look better, and we had that. We
• 1:27
  Speaker 2: had that in twenty nine to twelve. You know, pol
• 1:30
  Speaker 2: Bill was constantly reporting back that despite improvements in the
• 1:36
  Speaker 2: general economy, that it was taking time to turn the
• 1:38
  Speaker 2: fiscal books around. And that's just the white works.
• 1:40
  Speaker 1: The surplus by twenty eight is that still real?
• 1:44
  Speaker 2: Well, it could be, but it's going to depend. It's
• 1:46
  Speaker 2: going to depend a lot on gruct I mean, people
• 1:49
  Speaker 2: forget we've paid a massive price. I mean, congratulations. My
• 1:52
  Speaker 2: conflation has been beaten and in the period post COVID,
• 1:57
  Speaker 2: we've doubled the country's net debt, we've flattened the economy.
• 2:01
  Speaker 2: But by god, we've got inflation under control. So you know,
• 2:05
  Speaker 2: we should celebrate ironically that. But it's a it's a
• 2:09
  Speaker 2: big drive back.
• 2:10
  Speaker 1: From here and the ACC questions and the health questions,
• 2:13
  Speaker 1: are they answerable questions or an ACC in particular, have
• 2:15
  Speaker 1: we got something to be worried about.
• 2:18
  Speaker 2: A CC's it's sort of classic problem. I think that
• 2:23
  Speaker 2: the that the entitlements if you like, or the or
• 2:27
  Speaker 2: the payouts increased during the labor government, they soften the
• 2:30
  Speaker 2: criteria that always puts a acc ACC's footing worse. And
• 2:38
  Speaker 2: what generally comes in and we had to do the
• 2:40
  Speaker 2: same things. Your government comes in and has to tighten
• 2:42
  Speaker 2: the criteria and put up the ACC levies to get
• 2:45
  Speaker 2: the books back and balance. Unfortunately, that's the cycle that
• 2:48
  Speaker 2: occurs on the health side. Well with you begin, it's
• 2:54
  Speaker 2: it's a proof that health New Zealanders is not a solution.
• 2:57
  Speaker 2: It's just another way of counting the beans and and
• 3:04
  Speaker 2: it's a it's a new bureaucracy over the other bureaucracy,
• 3:08
  Speaker 2: and there's some real work to be done to improve productivity.
• 3:12
  Speaker 2: It's not about reducing health spending, which you know some
• 3:15
  Speaker 2: of the political critics get into. No government reduces health spending.
• 3:19
  Speaker 2: It's just about how effective that spending is going to be.
• 3:22
  Speaker 2: And we yet to see anything out of this new system,
• 3:24
  Speaker 2: which will deliver that productivity.
• 3:27
  Speaker 1: Before that, Nicholas sheckled herself with does she asked for
• 3:29
  Speaker 1: trouble on that? Given it's already spent and we're not
• 3:31
  Speaker 1: even into next year.
• 3:34
  Speaker 2: It's going to be very tough. And that's why you're
• 3:36
  Speaker 2: seeing the sorts of decisions we're seeing. And I heard
• 3:39
  Speaker 2: the CTU guys saying that it's terrible. You know, we
• 3:42
  Speaker 2: shouldn't have cut the fairies. I shouldn't cut you know,
• 3:45
  Speaker 2: it shouldn't have recalculated to Needen Hospital and everything like that.
• 3:50
  Speaker 2: But there's a reason for that, and that's because you've
• 3:52
  Speaker 2: doubled debt in six years and now you're running a
• 3:56
  Speaker 2: deficit of twelve point nine billion. The answer to his
• 3:59
  Speaker 2: questquestion is well, you should have got your mate Grant
• 4:02
  Speaker 2: to be under much greater control three or four years ago,
• 4:05
  Speaker 2: and maybe we wouldn't be having to make these sorts
• 4:07
  Speaker 2: of decisions now. If the country is having to make,
• 4:09
  Speaker 2: that's tough, and I think it's going to be hard
• 4:11
  Speaker 2: for it to do that number next year. But actually
• 4:14
  Speaker 2: what's the alternative?
• 4:15
  Speaker 1: Good question? Well, I might nice to catch up with you.
• 4:17
  Speaker 1: Stephen Joyce, former Finance Minister