Latest / Best of Business / Nicola Willis: Finance Minister on the Government's planned cost relief measures for households impacted by fuel crisis

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Nicola Willis: Finance Minister on the Government's planned cost relief measures for households impacted by fuel crisis · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks Be follow
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  Speaker 2: With us now as Nikola willis the Finance Minister. High Nikola,
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  Speaker 2: good evening, Heather, Right, what are you going to do
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  Speaker 2: to avoid Fitch downgrading downgrading our credit rating?
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  Speaker 3: We're going to stick to our fiscal strategy, which has
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  Speaker 3: three core goals. They are getting the books back in balance,
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  Speaker 3: bending the debt curve down, and reducing government spending as
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  Speaker 3: a share of the overall economy. Those goals are really important.
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  Speaker 3: We're committed to them. Our opposition opponents less. So.
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  Speaker 2: Okay, Now, the point that Fittures made to us on
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  Speaker 2: the program today is pushing out the surplus every year
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  Speaker 2: by another year as part of the problem. Do you
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  Speaker 2: anticipate having to do that again?
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  Speaker 3: Well, I haven't had any advice that that will be
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  Speaker 3: the case at the stage, but we're living in a
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  Speaker 3: world of flux in which we have the Middle East
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  Speaker 3: on fire and a lot is changing. So until I've
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  Speaker 3: seen my final fiscal forecasts, I'm not in a position
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  Speaker 3: to make commitments. But our surplus objective remains the same.
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  Speaker 2: They've pointed to debt being the particular problem, what are
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  Speaker 2: the plans that we have to get that debt down.
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  Speaker 3: So our plan is you've got to get the books
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  Speaker 3: back in balance, because for so long as they're not
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  Speaker 3: in balance, you are having to borrow more on current forecasts.
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  Speaker 3: We get that debt curve bending down over the next
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  Speaker 3: few years. The only way we achieve that is through
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  Speaker 3: really tight spending decisions in every single budget, and that
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  Speaker 3: means delivering savings in every budget. So far, we've delivered
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  Speaker 3: forty three billion dollars worth of savings. You can expect
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  Speaker 3: us to keep doing that. And I think some people
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  Speaker 3: hear about making savings and they think, oh, this is
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  Speaker 3: so mean, Why are they doing that. That's the reality
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  Speaker 3: that we have to keep our debt under control, and
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  Speaker 3: that means to fund the things we really need, read
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  Speaker 3: hospital services, good education for our kids. That means we
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  Speaker 3: have to find savings elsewhere. That's what the Goverment's been doing.
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  Speaker 3: We're going to stick to that.
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  Speaker 2: Problems they say they're giving us eighteen to twenty four months,
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  Speaker 2: We're not getting debt down into eighteen to twenty four months,
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  Speaker 2: nor are we posting a surplus in eighteen to twenty
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  Speaker 2: four months.
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  Speaker 3: Are we Well, well, what they want to see is
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  Speaker 3: that we are continuing to deliver on our fiscal strategy,
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  Speaker 3: and they're concerned that with an election coming up, that
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  Speaker 3: there could be changes in the fiscal strategy. And I'd
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  Speaker 3: suggest to you that the biggest risk to the fiscal
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  Speaker 3: strategy for New Zealand right now, and therefore our credit
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  Speaker 3: rating down downgrade risk is with the Labor Party and
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  Speaker 3: their friends, because they're the ones who seem to think
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  Speaker 3: debt doesn't really matter, that any savings are bad, we
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  Speaker 3: are here, and that we're not spending enough.
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  Speaker 2: Okay, So listen, all this cost of living relief that
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  Speaker 2: you're going to be announcing tomorrow. How are you going
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  Speaker 2: to pay for it without taking on debt?
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  Speaker 3: Well, I'll outline that very clearly tomorrow and you will
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  Speaker 3: see that it is going to be completely consistent with
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  Speaker 3: the fiscal goals I've just outlined and our fiscal strategy.
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  Speaker 2: So if you're not going to take on debt, you
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  Speaker 2: must be cutting something.
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  Speaker 3: Well, Heather, I'll give you an exclusive, which is that
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  Speaker 3: we will be funding it from this year's budget operating allowance. Okay,
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  Speaker 3: So what that means? What that means for your viewer
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  Speaker 3: for your listeners is that we are going to prioritize
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  Speaker 3: our budget in order to be able to fund this
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  Speaker 3: in a temporary, timely and targeted way. But it means that, yes,
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  Speaker 3: we'll have to prioritize carefully in order to provide that support.
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  Speaker 3: We think that's the right thing to do right now,
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  Speaker 3: given the massive imposition that fuel costs are putting, particularly
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  Speaker 3: on low income families. But yeah, we're going to do
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  Speaker 3: it in a way that means reprioritizing elsewhere.
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  Speaker 2: Forgive my forgive my ignorance here. But isn't the operating
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  Speaker 2: allowance also coming from debt?
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  Speaker 3: Yes, it is. But if we stick to our operating allowance,
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  Speaker 3: then we can stick to our fiscal strategy, which has
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  Speaker 3: debt bending down over the forecast period.
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  Speaker 2: Prime Minister see today that it would not. Whatever you're
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  Speaker 2: paying out tomorrow is not going to push debt higher.
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  Speaker 2: But it obviously is going to push debt higher because
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  Speaker 2: you're taking.
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  Speaker 3: On debt, but it's not going to go higher than
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  Speaker 3: what we've already forecast will be our budget approach, which
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  Speaker 3: is an operating allowance of a very very small nature,
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  Speaker 3: which is two point four billion maximum. That's what we've outlined,
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  Speaker 3: and that is far smaller than has been the case
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  Speaker 3: for the previous government. And so by funding it from
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  Speaker 3: the operating allowance, what we're not doing is giving ourselves
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  Speaker 3: the freedom and flexibility that for example, the last government did,
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  Speaker 3: where they just did a whole bunch of extra stew happen.
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  Speaker 2: Here, right, you can see what's going to happen here.
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  Speaker 2: The Prime Minister has just said it's not going to
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  Speaker 2: be debt funded. You've just confirmed it is going to
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  Speaker 2: be debt funded. So now you're going to have a
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  Speaker 2: big old fight tomorrow. It's going to be all over
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  Speaker 2: the news about which one of you two is actually right.
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  Speaker 3: Well, the Prime Minister is correct and I'm correct, which
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  Speaker 3: is we are not adding any more funding to you
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  Speaker 3: feel like.
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  Speaker 2: You guys make trouble yourselves, okay by.
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  Speaker 3: Trying, I think that you're I think you're being too clever,
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  Speaker 3: Which is it's pretty simple. We're not going to actually
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  Speaker 3: add more spending in the budd in order to prioritize
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  Speaker 3: some extra support for low income families. We're not doing that.
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  Speaker 3: We're not going to be adding to the debt in
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  Speaker 3: order to do this. We're doing it from within our
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  Speaker 3: existing budget constraints.
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  Speaker 2: Okay, so tell me how much is it costing the
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  Speaker 2: country to give free money to a profitable company being Meridian,
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  Speaker 2: to plant EV charges up and down this country? How
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  Speaker 2: much is it costing us?
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  Speaker 3: Well, what we're actually doing is accelerating the rollout of
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  Speaker 3: electrical vehicle charges two thousand and five hundred more. They're
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  Speaker 3: doing it much faster than they would otherwise do, and
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  Speaker 3: we've allocated fifty two million dollars to achieve that, and
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  Speaker 3: we're doing it at a much lower cost than the
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  Speaker 3: previous scheme which was in place, which had a cost
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  Speaker 3: of the tax payer of about forty thousand per charger.
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  Speaker 3: We've got that cost down to around ten thousand per charger.
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  Speaker 3: It's interest free. Loans will get the loans paid back.
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  Speaker 2: Okay, but what is it costing us because we are put.
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  Speaker 3: It that's going on two million dollars.
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  Speaker 2: Yeah, which they pay back, right, that's right.
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  Speaker 3: And sixty million dollars is what they've pledged to accelerate.
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  Speaker 2: But what so the fifty two million, just because I've
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  Speaker 2: want to I want to understand this. The fifty two
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  Speaker 2: million is the loan. They will pay that back in
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  Speaker 2: its entirety but that is take We are paying for
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  Speaker 2: that with debts, right, so we have to pay for
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  Speaker 2: that money. How much does that cost us? Because it
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  Speaker 2: is not cost neutral to New Zealand.
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  Speaker 3: No, that is funding that we allocated in previous budgets
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  Speaker 3: and so we've already allocated that funding. That is the
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  Speaker 3: fifty two million that we're we're borrowing it.
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  Speaker 2: It's borrowed money. How much does it cost us to
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  Speaker 2: borrow fifty two million dollars?
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  Speaker 3: Look, it is the case that across the last two budgets,
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  Speaker 3: when we've been committing funding to new things, whether that's
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  Speaker 3: frontline police or whether that's increased support for teachers to
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  Speaker 3: teach our kids how to read, write and do maths,
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  Speaker 3: that we have been in a position where the country
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  Speaker 3: is borrowing.
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  Speaker 2: But we're case we're borrowing so people can teach our kids.
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  Speaker 2: That's why are we borrowing money to give it to
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  Speaker 2: a profitable power company to do something that they would
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  Speaker 2: otherwise not be doing. That's silly, isn't it.
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  Speaker 3: Well, much like a previous national government recognize that if
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  Speaker 3: you want people to have ultra fast broadband in their
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  Speaker 3: homes and deliver all of the economic benefits that brings
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  Speaker 3: you actually have to work alongside the private sector to
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  Speaker 3: accelerate that infrastructure roll out. And you'll remember that government
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  Speaker 3: committed funds to work with others to roll out that infrastructure.
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  Speaker 3: We think there is a case for the government working
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  Speaker 3: with the private sector to fast track the rollout of
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  Speaker 3: EV charging infrastructure, because without that infrastructure, it's going to
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  Speaker 3: be much harder for many kiwis to buy an EV.
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  Speaker 3: We're not subsidizing Tesla's. Instead, what we're saying is there's
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  Speaker 3: a role for government and making sure the infrastructure of
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  Speaker 3: a charging network is available, so if people want to
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  Speaker 3: buy an EV, they can do so knowing they can
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  Speaker 3: get it charged.
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  Speaker 2: Okay, is Chris Bishop going to defer or cancel some
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  Speaker 2: of the roads of national significance.
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  Speaker 3: Well, what he has said is we are looking at
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  Speaker 3: our whole transport program at the moment because a lot
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  Speaker 3: of that is predicated on proposals to increase the fuel
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  Speaker 3: tax in the future. Given what's happening with fuel prices,
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  Speaker 3: it is appropriate that we consider, well, are we actually
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  Speaker 3: going to be able to do that, or are there
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  Speaker 3: other measures that we could take within the transport program.
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  Speaker 3: We haven't made decisions. Cabinet hasn't considered any changes to
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  Speaker 3: the program. We remain committed to the Roads of National significance.
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  Speaker 3: We remain committed to a long term infrastructure pipeline that
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  Speaker 3: sees state highways being expanded, that maintenance to the roads.
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  Speaker 3: But how we sequence and phase that program is a
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  Speaker 3: question we're asking because, as you'd expect, a good government
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  Speaker 3: looking at massive fuel price increases and a hit to
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  Speaker 3: the economy has to look does this makes sense now? Look,
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  Speaker 3: we'll be having those discussions as a cabinet over the
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  Speaker 3: coming weeks and months.
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  Speaker 2: Before it would it be before the election.
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  Speaker 3: Uh, well, we'll certainly have more to say about our
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  Speaker 3: transport program. He did the election.
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  Speaker 2: Absolutely, thank you, Nicol appreciated this. Nikolauless the Finance min
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  Speaker 2: it's the sixteen part or by if you haven't caught
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  Speaker 2: up on this Roads of National Significance thing, it's probably
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  Speaker 2: potentially significant. So I'll run you through that short
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