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Chris Bishop: Associate Finance Minister on the prospect of the OCR going up · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk sed B.
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  Speaker 1: Follow this and our wide range of podcasts now on iHeartRadio.
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  Speaker 2: Chris Bishop, Associate Finance Minister and for Nikola willis this evening, high.
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  Speaker 3: Bish, Hello, how are we?
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  Speaker 1: I'm well?
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  Speaker 2: Thank you listen? Have you have you given any thought
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  Speaker 2: to this business about the Wellington the Wellington Water bosses
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  Speaker 2: doubling their pay at board level.
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  Speaker 3: I've literally just heard about that this afternoon. But goodness
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  Speaker 3: may that that will go down like a cup of
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  Speaker 3: warm circ with Valentinian's given the debarkle that is, there
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  Speaker 3: has been Wellington Water for a large number of years.
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  Speaker 3: Goodness me that will that will not go down?
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  Speaker 2: Well, what do you reckon? I mean, I don't know
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  Speaker 2: that anybody can stop this short of I'm guessing appealing
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  Speaker 2: to the remy way a remuneration authority. Also, I don't
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  Speaker 2: even know who sets their pay. But do you think
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  Speaker 2: public pressure would be sufficient for them to back down
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  Speaker 2: on this?
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  Speaker 3: Well, ultimately it'll be the council to actually set the
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  Speaker 3: pay because ultimately Wellington Water is now a kiaki wires.
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  Speaker 3: They call it Wellington Waters as a holy own company
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  Speaker 3: of the councils and they're off the you know, the
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  Speaker 3: assets have been transferred into the entity. And look, the
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  Speaker 3: whole point of it is to get frankly, politicians away
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  Speaker 3: from deciding where the investment goes because they've been absolutely
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  Speaker 3: useless over twenty thirty years. That's the reason why we're
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  Speaker 3: dealing with this mess and Wellington in the first place
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  Speaker 3: is because successive politicians, you know, like Tammotha Paul and others,
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  Speaker 3: have diverted money into cycle ways and away from you know,
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  Speaker 3: core infrastructure. So but you know, goodness me that that
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  Speaker 3: won't go down well, particularly after the Male Point disaster,
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  Speaker 3: which obviously we're still still wording for the inquiry.
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  Speaker 2: Imagine that. Yeah, Now, is it true that Treasury is
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  Speaker 2: telling you worst case scenario for inflation as a result
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  Speaker 2: of a run a seven point five percent?
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  Speaker 3: Treasury is doing a range of scenarios and forecasts. And look,
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  Speaker 3: to be honest, it's a bit of a movable feast,
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  Speaker 3: right because every day, you know you'll probably be a
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  Speaker 3: bit like me. You wake up and you open up
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  Speaker 3: you know Twitter or the Newstalks, be Apple, the Herald Apple, whatever,
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  Speaker 3: and you look at what's happened overnight, and you just
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  Speaker 3: your heart sinks a bit sometimes, so it's a moveable feast.
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  Speaker 3: What is undoubtedly true is that inflation will increase, and
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  Speaker 3: all of the forecasts are showing that. There's a bank
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  Speaker 3: said last week, you know, four point two in the
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  Speaker 3: June quarters what they expect it to go up to.
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  Speaker 3: So it will increase. And the and the reason for
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  Speaker 3: that is, I think people listening will know is that
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  Speaker 3: the price of petrol and diesel was just fla skyrocket
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  Speaker 3: and has just flowing through the economy and that will
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  Speaker 3: have flow on effects for many goods. And you know,
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  Speaker 3: so inflation is going to spike, and that's that's an
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  Speaker 3: unfortunate reality of global events.
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  Speaker 2: And what is the worst case scenario? What's the worst
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  Speaker 2: case number?
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  Speaker 3: I don't have the worst case number two hand.
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  Speaker 2: And is it seven point five?
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  Speaker 3: It's a it's a high number. Put it that one.
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  Speaker 2: Is it seven point five?
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  Speaker 3: Yes or no, it's a high number. But I think
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  Speaker 3: the point is that the forecast will will properly come
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  Speaker 3: out with the budget. That's the kind of next major.
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  Speaker 2: Okay, but why are you guys so Apparently I was
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  Speaker 2: reading Verna Smawn's article in the Sundaystar Times yesterday and
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  Speaker 2: he says. Everybody's been asking Nichola this question is she
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  Speaker 2: won't answer the question. I'm asking you the question. You
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  Speaker 2: won't answer the question.
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  Speaker 1: Why.
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  Speaker 3: Well, the point is that it's a movable feast, right like,
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  Speaker 3: it's a day by day proposition, and it's very hard
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  Speaker 3: to forecast when you're not exactly sure what you're forecasting
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  Speaker 3: at the eventual.
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  Speaker 2: The other day she was telling this is Nikola was
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  Speaker 2: telling us it was three point seven. So she's happy
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  Speaker 2: to tell us that number, but now not this number.
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  Speaker 3: Well, the Reserve banks saying four point two percent in
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  Speaker 3: the during quarter, and we'll get the official treasury forecasts
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  Speaker 3: in the budget. But there's no there's no quind of
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  Speaker 3: conspiracy here. The point is there is going to be
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  Speaker 3: higher inflation as a result of the oil price that's
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  Speaker 3: flowing through the economy. Exactly what that is? You know,
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  Speaker 3: will the best, the best estimate, the best forecast will
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  Speaker 3: come out in the budget, which.
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  Speaker 2: I'm so confused by this. The only explanation I could
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  Speaker 2: possibly reach for you guys not wanting to tell us
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  Speaker 2: now is that you want to do some shock and
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  Speaker 2: all strategy in the budget and save it for then.
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  Speaker 3: Well, what happens if I give you a number now
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  Speaker 3: and then the actual forecast turns out to be lower,
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  Speaker 3: or virtually.
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  Speaker 2: Happens all the time. That's not a big deal. The
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  Speaker 2: Reserve Bank released forecasts all the time and they change.
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  Speaker 2: Nobody freaks out.
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  Speaker 3: Yeah, well, as I say, you'll get you'll get the
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  Speaker 3: you'll get the full forecast in the budget.
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  Speaker 2: And yeah, Now, do you think that the states of
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  Speaker 2: emergency were maybe a bit of an overreaction.
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  Speaker 3: Well, that's a tricky one. Right, We've in the past
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  Speaker 3: as a country, frankly and regions, you know, probably not
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  Speaker 3: been as prepared as we should have been because we've
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  Speaker 3: sort of ignored the weather warnings and haven't you know,
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  Speaker 3: got our ducks in a row and sort of things out. Uh,
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  Speaker 3: And you know we've paid the price for that. On
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  Speaker 3: the other hand, you know, when you have events like
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  Speaker 3: on the weekend and you know, some parts of the
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  Speaker 3: country quite badly hit, others sort of tended to avoid
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  Speaker 3: the damage that was being forecast. People look back and say, oh,
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  Speaker 3: well that was a bit of a demp squab literally
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  Speaker 3: nothing to see here, nothing to worry about. So it
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  Speaker 3: is one of those tricky balancing next, right, and which
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  Speaker 3: you want to be prepared, but you also, you know,
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  Speaker 3: don't want to cry wolf all the time because I
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  Speaker 3: don't see as you start to ignore the warm exactly.
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  Speaker 2: And so for that reason, don't you declare a state
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  Speaker 2: of emergency when you know you actually have an emergency,
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  Speaker 2: not that there might be an emergency.
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  Speaker 3: Yeah, I'm not an expert on this, and I defer
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  Speaker 3: to the Minister of Emergency Management on this and the
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  Speaker 3: Associate plus of course the local civil defense and emergency
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  Speaker 3: management controllers. I suppose I'm just making the point that
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  Speaker 3: it is a tricky one to get, right, Like, if
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  Speaker 3: you don't declare one and then something terrible happens, people
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  Speaker 3: will say, well, you guys, were you know, you were lax,
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  Speaker 3: and you were negligent and all the rest of it.
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  Speaker 3: But when you do do something and it doesn't work
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  Speaker 3: out quite as.
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  Speaker 1: Bad, sound like this is hard.
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  Speaker 2: There are people who literally, there are people who literally
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  Speaker 2: are employed to do this all the time. It's literally
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  Speaker 2: their job. Can't be that bloody hard, now, listen, moving on,
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  Speaker 2: Have you got cold on the idea of councils of
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  Speaker 2: mayors taking over from regional councils when you scrap.
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  Speaker 3: Them we're working our way through the feedback. We haven't
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  Speaker 3: gone cold on the idea of local government reform to
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  Speaker 3: reduce duplication and reduce costs and red tar It'd be
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  Speaker 3: fair to say there's been mixed feedback on the proposal
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  Speaker 3: of putting the mayors in charge of regional plans. Some
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  Speaker 3: are really up for it, others are a bit more
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  Speaker 3: squeamish about it. But what has been really interesting is
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  Speaker 3: people have actually responded really well to the idea that
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  Speaker 3: there are the idea of seventy eight different territorial authorities
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  Speaker 3: with regional councils, you know, over the top or to
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  Speaker 3: the side or underneath. No one's actually really too clear
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  Speaker 3: about what they are. Everyone's up for sorting that mess
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  Speaker 3: out right. We have got too many territorial authorities, We've
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  Speaker 3: got too many layers of bureaucracy, too many councils for it.
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  Speaker 2: But I'm worried about what you're going to replace the
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  Speaker 2: regional councils with if it's not councils of mayors.
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  Speaker 3: So what is it. Well, we are working on a
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  Speaker 3: bit of a plan. You will have. I'll have more
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  Speaker 3: to say soon, and I think you will like it.
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  Speaker 3: What is really interesting is there's a bunch of regions.
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  Speaker 3: Northends are classic actually where they have just gone, oh goodness, mate,
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  Speaker 3: this is great. You guys have ripped the scab off
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  Speaker 3: this debarkle of local government. Let's get on with it.
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  Speaker 3: And the you know, the North End guys there are
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  Speaker 3: basically proposing, as I understand, that one unitary authority collapse
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  Speaker 3: all the different territorial authorities into one make sense, and
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  Speaker 3: they're saying let's just get on with it. And there's
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  Speaker 3: other people saying exactly the same thing. So we're just
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  Speaker 3: sort of working out how we give effect to what
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  Speaker 3: regions themselves actually want to do.
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  Speaker 2: Now, what have you done to Mill Road, which I'm
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  Speaker 2: obsessed with. It's not a roads of national significance anymore
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  Speaker 2: because it's not meaning all the criteria. Why do you
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  Speaker 2: scale it back?
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  Speaker 1: Yeah?
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  Speaker 3: No, no, Mill Roads a road of national significance. In fact,
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  Speaker 3: it's even listed in the Auckland City deal that we
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  Speaker 3: announced on Friday is one of the priority projects for Auckland.
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  Speaker 2: An didn't I read that it has been scaled back,
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  Speaker 2: So it's no longer all of the things that you're
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  Speaker 2: supposed to have, like the grade separation and four lanes
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  Speaker 2: and stuff.
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  Speaker 3: Like that on a few of them, and Mill Road
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  Speaker 3: will be one of them, and there's others actually around
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  Speaker 3: the country. It's not just Mill Road. NZTA has scaled
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  Speaker 3: some of the four lane one hundred and ten grades separated,
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  Speaker 3: you know, the kind of really big, you know, super roads.
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  Speaker 3: They've scaled it back a bit. And that's just on
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  Speaker 3: cost grounds. Right.
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  Speaker 2: So is it going to be a called two lane highway?
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  Speaker 3: It's going to be a great road and it's going
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  Speaker 3: to be.
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  Speaker 2: Is it going to be a two lane highway?
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  Speaker 3: Bish? It is going to be a great road.
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  Speaker 2: And in killing me mate, and are going.
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  Speaker 3: Through the details around that right now. In fact that
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  Speaker 3: I think they're I think they're in the middle of
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  Speaker 3: processing the resource consent for that right now. They sent
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  Speaker 3: me not far away from.
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  Speaker 2: Okay, we'll keep an eye. Thank you very much, appreciate it.
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  Speaker 2: It's Chris Bishop, Associate Finance Minister.
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