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Nicola Willis: Finance Minister hints changes to come for supermarket sector · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk SEDB. Follow
• 0:12
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  Speaker 2: With us as Nicola Willis the Finance Minister.
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  Speaker 3: Evening, Nicola, good evening.
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  Speaker 2: Here the research for us.
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  Speaker 3: I have been doing a bit of detective work. You'll
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  Speaker 3: recall you accuse me of being the MP in Ja
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  Speaker 3: Cinda's book who outrageously heckled her, and I've had it
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  Speaker 3: confirmed that it was in fact, Amy Adams. She has
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  Speaker 3: confirmed that herself, and I think it's fair to say
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  Speaker 3: she doesn't regret it at all. The only thing that
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  Speaker 3: she regrets is the fact that she was described as
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  Speaker 3: having a private school voice. She's very proud of having
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  Speaker 3: attended a large public co ed school.
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  Speaker 2: Oh okay, so, so Amy said, it's okay for you
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  Speaker 2: to out her.
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  Speaker 3: Absolutely. I said, wow, I think Heather would like to
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  Speaker 3: know this. Are you okay with me sharing with the public,
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  Speaker 3: And she said, no, I'm not ashamed at all. In fact,
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  Speaker 3: I think heckling someone on your first terms not to
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  Speaker 3: be ashamed of.
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  Speaker 2: No, totally, And I mean in the end, heckling j
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  Speaker 2: Cinda is actually about it of honor. But what do
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  Speaker 2: you think.
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  Speaker 3: That was the exact phrase she used.
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  Speaker 2: Amy is nothing if not hard as nails to this day.
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  Speaker 2: What do you think about her accent? I mean you're
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  Speaker 2: not a good judge because you don't think that you've
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  Speaker 2: got a private school accent. I think you do well.
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  Speaker 3: I think it's important in a job where you publicly
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  Speaker 3: are communicating that you make yourself well understood and you
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  Speaker 3: enunciate your words well. But then I also recall John
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  Speaker 3: Key was a brilliant Prime minister and man, oh man,
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  Speaker 3: did he mesh his words from time?
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  Speaker 2: He made a lot of them up, didn't he?
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  Speaker 1: He really did?
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  Speaker 3: Well.
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  Speaker 2: Thank you thanks for doing that, because if there's nothing,
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  Speaker 2: I love a fact and I love clarifying the fact.
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  Speaker 2: And I shall write that in the book that was
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  Speaker 2: Amy Adams. Now what is going on with the surcharge band,
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  Speaker 2: because I'll tell you what. I'm getting a lot of
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  Speaker 2: texts from small business owners who are pretty upset about it.
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  Speaker 3: Well, look there's two things. First, last week, the Commerce
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  Speaker 3: Commission came out with her ruling that said that they
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  Speaker 3: go regulate down the charges that retailers have to pay merchants.
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  Speaker 3: So these are the interchange fees to master Card and Visa.
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  Speaker 3: So that is worth about ninety million dollars worth of
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  Speaker 3: savings to retailers. It averages about five hundred dollars a
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  Speaker 3: week for a small business, so very significant. Then the
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  Speaker 3: second thing becomes, how do you make sure that that
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  Speaker 3: overall reduction and cost is actually passed through to the
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  Speaker 3: shopper and they're not just charged surcharges that no longer
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  Speaker 3: reflect the actual cost to retailers. So rather than coming
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  Speaker 3: up with a complicated formula, we've just said, look, no
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  Speaker 3: more charges like that for MasterCard and Visa. And if
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  Speaker 3: retailers do think they still have some costs, then they
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  Speaker 3: need to reflect those in the same way they do
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  Speaker 3: the cost of electricity. It's the cost of rent, the
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  Speaker 3: cost of rates, all of that stuff.
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  Speaker 2: So the charges that we're talking about, in total, the
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  Speaker 2: merchant fees, how much do you reckon retailers are getting
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  Speaker 2: charged in merchant fees every year?
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  Speaker 3: Well, I don't know that, and to the extent that
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  Speaker 3: I would, it's commercially sensitive.
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  Speaker 2: It's billions overall. It's billions and billions, right, because the
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  Speaker 2: interchange fee, which is just a component, is one billion,
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  Speaker 2: so it's multiple billions. So what do you think, Nicley
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  Speaker 2: you know how this works. What do you think is
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  Speaker 2: going to happen? The retailers can't pass it on to
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  Speaker 2: us now transparently in a search charge. They're going to
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  Speaker 2: build it into their prices. We're all going to pay
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  Speaker 2: this now, aren't we?
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  Speaker 3: Well I would reverse it and say, actually, it is
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  Speaker 3: now going to be transparent because instead of it giving
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  Speaker 3: you a little spike when you get to the counter
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  Speaker 3: and you went factoring that in when you don't have
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  Speaker 3: wanted to buy them.
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  Speaker 2: Could you have a post card?
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  Speaker 3: Well not everyone has that choice, and it's actually a
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  Speaker 3: bit of a.
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  Speaker 2: Time postcard that has a credit card.
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  Speaker 3: Well, there are a range of different rates that are
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  Speaker 3: charged from store to store, and I would love to
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  Speaker 3: meet the New Zealander who's never got stick a shock
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  Speaker 3: when they went to pay and ended up with a
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  Speaker 3: big surcharge when they did that. This is about transparent
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  Speaker 3: fear pricing. So the price that you see on the
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  Speaker 3: tag is the price you pay.
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  Speaker 2: If it truly is, then why didn't you guys deal
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  Speaker 2: to Air New z and the ticket master, who are
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  Speaker 2: frankly the most egregious.
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  Speaker 3: Well are you talking about online payment?
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  Speaker 2: So when you go and book yourself? Yeah, I tried
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  Speaker 2: today to see what is the New Zealand charging If
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  Speaker 2: I book a couple of flights and it was a
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  Speaker 2: six dollar fee, Laura the producer went to go look
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  Speaker 2: at the bank's here, and she got charged eight dollars
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  Speaker 2: by ticket Master. Almost she didn't go through with it
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  Speaker 2: in the end because of that. She was going to
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  Speaker 2: get charged eight dollars by ticket Master. So why didn't
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  Speaker 2: you guys sort that out?
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  Speaker 3: Well? I understand that the fees for that that retailers
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  Speaker 3: pay or sellers of services in this Casey and New
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  Speaker 3: Zealand are a lot higher because it's a much more
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  Speaker 3: complicated system, because they need to be able to do refunds,
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  Speaker 3: they need to protect against fraud, online scams and the like.
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  Speaker 3: So there is a genuinely much higher cost that they
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  Speaker 3: have to bear for those online transactions.
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  Speaker 2: You know that and show you guys that stuff.
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  Speaker 3: Well, that was that was reflected in the commersular decisions last.
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  Speaker 2: But if you force a dairy to absorb all of
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  Speaker 2: those merchant fees, and why can't you force you know,
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  Speaker 2: ticket mass which is a global company, to absorb the
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  Speaker 2: handling fee.
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  Speaker 3: Well, a couple of things there. First, it's because it
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  Speaker 3: is genuinely a lot more expensive for them to do
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  Speaker 3: those online transactions. The second thing is we remain quite
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  Speaker 3: hopeful that fintech companies will be coming up with better
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  Speaker 3: solutions in that online space, and there's now going to
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  Speaker 3: be room for them to compete there.
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  Speaker 2: Hey listen, Okay, So we have got some debate in
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  Speaker 2: the numbers at the moment about how many public servants
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  Speaker 2: you've actually managed to cut since coming into government. What
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  Speaker 2: is it? Is it added one hundred and twenty one
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  Speaker 2: or is it cut nine hundred and thirty four.
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  Speaker 3: Cut about two thousand?
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  Speaker 2: Nikolai three?
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  Speaker 3: Serious?
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  Speaker 2: I saw, No, that's only from the peak. That's the
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  Speaker 2: peak that you reached when you guys were in there.
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  Speaker 2: If you go from September just before the election, which
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  Speaker 2: is about sixty four thousand, you've only managed to cut
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  Speaker 2: nine hundred and thirty four. Why what's going on?
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  Speaker 1: Well?
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  Speaker 3: Two things. The first is that this is the first
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  Speaker 3: year since twenty sixteen that the number of policy, clerical
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  Speaker 3: and admin staff has actually dropped, so we're very much
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  Speaker 3: focused on those roles. At the same time, the number
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  Speaker 3: of people hired by Corrections to lock up criminals has
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  Speaker 3: increased by how many by hundreds many by hundreds hundreds. Well,
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  Speaker 3: I'm advised that there are six hundred and forty five
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  Speaker 3: more inspectors and regulators, that there are hundreds more working
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  Speaker 3: in our contact centers, around seven hundred and seventy seven.
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  Speaker 3: So that's direct service delivery to New Zealanders. So what
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  Speaker 3: you're seeing is those numbers are increasing to make sure
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  Speaker 3: that we're delivering good public services to people the same time,
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  Speaker 3: we have made actual cuts to those back office roles
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  Speaker 3: as we said we would. And at the same time,
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  Speaker 3: either let's not forget the last government was spending hundreds
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  Speaker 3: of millions on consultants as well as having all of
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  Speaker 3: those policy advisors, and we've reduced that bill significantly. In fact,
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  Speaker 3: we've overshot our own target.
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  Speaker 2: But I mean, this is a government that promised us
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  Speaker 2: cuts of maybe as many as fifteen thousand public servants.
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  Speaker 2: Can you see why people might be a bit disappoint.
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  Speaker 3: Well, I certainly never made that promise, but you know
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  Speaker 3: I am. I am kind of amused on one level,
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  Speaker 3: which is that you get labor out there saying that
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  Speaker 3: I've cut thousands and thousands of public servants, which just
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  Speaker 3: sort of makes you think, well, if they get away
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  Speaker 3: with that line, and it's repeated at infinite and what
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  Speaker 3: else are they telling you that mightially exaggerated. At the
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  Speaker 3: same time, what we are doing is focusing that we're
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  Speaker 3: hiring more police, we're hiring more teachers, more corrections officers,
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  Speaker 3: all of those frontline roles, as we said we would.
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  Speaker 3: But at the same time, as I said, first time
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  Speaker 3: since twenty sixteen that a government has reduced the number
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  Speaker 3: of policy advisors, Colin Must.
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  Speaker 2: Strikes me that this is the problem that you guys
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  Speaker 2: have got, and this is becoming very much a pattern,
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  Speaker 2: right that you you you go so hard on the
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  Speaker 2: rhetoric and then cop all of the blowback for it,
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  Speaker 2: and then in fact nothing really changes. So you're wearing
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  Speaker 2: all of the stuff for not changing anything, and you're
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  Speaker 2: disappointing the people who think you're changing things, and then
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  Speaker 2: you're disappointing the people when they find out they haven't changed.
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  Speaker 2: You haven't changed.
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  Speaker 3: Well, from our perspective, sitting there and looking at budget,
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  Speaker 3: it's changed pretty fundamentally because the last government every budget
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  Speaker 3: was having to fork out hundreds of millions of dollars
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  Speaker 3: more for a ballooning public sector. We have started from
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  Speaker 3: a very different position. We started by reducing its spend
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  Speaker 3: and then each budget rather than them coming to us
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  Speaker 3: with all of their ideas, they only even get invited
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  Speaker 3: into the budget process at our requests. So it's a
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  Speaker 3: very different environment.
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  Speaker 1: I know.
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  Speaker 2: But you know, you might be impressed, but it's really
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  Speaker 2: hard to be impressed on the other side of the
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  Speaker 2: say like this is incredibly disappointing. I think there's a
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  Speaker 2: lot of disappointment over and over again.
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  Speaker 3: Well, we have to make sure that we have the
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  Speaker 3: resources in place to deliver our jobs, deliver our services,
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  Speaker 3: deliver deliver to New Zealanders, and we're ensuring that we
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  Speaker 3: do while also continuing to put the hammer down put
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  Speaker 3: the pressure down on those back officels really quickly.
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  Speaker 2: Barry Soper reckons You've got the big supermarket announcement in
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  Speaker 2: about a couple of weeks, Is.
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  Speaker 3: That right, Well, the Prime Minister is confirmed, we'll be
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  Speaker 3: making an announcement this quarter, so that this quarter ends
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  Speaker 3: at the end of August.
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  Speaker 2: Okay, so six weeks all right, Hey, well five, thank
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  Speaker 2: you very much, nicol I appreciate it. This Nichola Willis
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  Speaker 2: the Finance Minister.
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