Latest / Best of Business / Nicola Willis: Finance Minister on the Government's plan to monitor fuel prices amid Middle East conflict

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Nicola Willis: Finance Minister on the Government's plan to monitor fuel prices amid Middle East conflict · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from NEWSTALKSB follow this and
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  Speaker 2: Even in coming up in the next hour, Shane Soley
• 0:19
  Speaker 2: is going to talk us through the oil price and
• 0:20
  Speaker 2: the implications of the spike. A law lecturer on why
• 0:23
  Speaker 2: we need rules for asteroid mining. Yep, it's a real thing.
• 0:26
  Speaker 2: And Gavin Gray is with us out of the UK
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  Speaker 2: at seven pass six and with us now as per
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  Speaker 2: usual on a Monday. Nikola willis the Finance Minister. High Nikola,
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  Speaker 2: good evening, Heather, how do you rate the possibility that
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  Speaker 2: we will have to ration fuel?
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  Speaker 3: Well? At the stage we have good fuel security. We
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  Speaker 3: have around twenty nine days worth a fuel stock in
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  Speaker 3: the country and a similar amount on the water on
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  Speaker 3: its way here, so there's no immediate threat to fuel security.
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  Speaker 3: We've stood up our response group to that, so we're
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  Speaker 3: working with industry to monitor that very closely. We're also
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  Speaker 3: members of the International Energy Agency that if there were
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  Speaker 3: to be a global shock to fuel security has a
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  Speaker 3: number of options without steps into act.
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  Speaker 2: Okay, So apart from apart from the fact that you
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  Speaker 2: guys have the powers to ration fuel if necessary, what
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  Speaker 2: else can you do.
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  Speaker 3: Well, right now we can assure New Zealand is that
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  Speaker 3: there's enough fuel for at least sixty days, and then
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  Speaker 3: beyond that, of course, fuel companies will be responsible for
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  Speaker 3: having their own audism and ensuring that that can come
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  Speaker 3: to New Zealand. And we are members of the International
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  Speaker 3: Energy Agency, which will have the options of increasing supply
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  Speaker 3: tickets for future supply to come in. And of course
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  Speaker 3: as part of our monitoring, there are always options down
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  Speaker 3: the line if there's not abundant fuel in the world,
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  Speaker 3: but we haven't given consideration to specific proposals there yet
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  Speaker 3: because there's no need to at this stage.
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  Speaker 2: Okay, what I'm trying to get to is because and
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  Speaker 2: I asked Shane Jones a similar thing and didn't get
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  Speaker 2: an adequate response. I mean, it sounds very cool that
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  Speaker 2: you guys have set up a ministerial oversight group, but
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  Speaker 2: what actually are you doing apart from just jobs.
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  Speaker 3: Well, we have an incident management group at the Ministry
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  Speaker 3: for Business and what they do is they work with
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  Speaker 3: the fuel importation companies that retailers, fuel users to understand
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  Speaker 3: what the picture is looking like. So if they were
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  Speaker 3: to say, look, we're actually having difficulties getting future orders
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  Speaker 3: of fuel. We would have very advanced warning of that
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  Speaker 3: and that would provide us time to respond.
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  Speaker 2: Well, isn't that basically just what happens with the energy
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  Speaker 2: ministry anyway, Like you didn't have to set up this group,
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  Speaker 2: this is just running a country.
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  Speaker 3: Well, the particular thing that happens is we work much
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  Speaker 3: more closely with industry fuel importers and retailers to be
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  Speaker 3: getting real time information about what they're seeing happening in markets,
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  Speaker 3: and then we engage with our international counterparts, so Australia,
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  Speaker 3: the US and others, to understand what their likely responses
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  Speaker 3: are to that. As you appreciate, they have options in
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  Speaker 3: terms of OPEC, in terms of which oil supplies they
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  Speaker 3: release into the global market and how they ensure that
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  Speaker 3: fuel is able to reach country around the world, because
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  Speaker 3: of course it's in everyone's interests that there aren't global
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  Speaker 3: fuel shortages.
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  Speaker 2: Are you going to I've got a surprise a number
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  Speaker 2: of texts that have actually surprised me at just how
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  Speaker 2: many techs I'm getting raising concerns about how fast the
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  Speaker 2: oil companies, that the petrol companies are moving to push
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  Speaker 2: up the price. Are you monitoring what's going on? There
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  Speaker 2: that they're not just going to gouge us.
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  Speaker 3: Yes we are, and overnight we've asked the Commerce Commission
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  Speaker 3: to step up it's monitoring of what's happening with fuel pricing.
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  Speaker 3: Of course, we do expect there will be market movements
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  Speaker 3: as those global prices increase, but this should not be
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  Speaker 3: an opportunity for fuel companies to gouge or to make
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  Speaker 3: unreasonable hikes in prices. So the Commerce Commission are watching
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  Speaker 3: that carefully and they stand ready to act if we
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  Speaker 3: do see perverse market behavior.
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  Speaker 2: Okay, now, have you actually decided that you will delay
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  Speaker 2: the tax the tax increase on the fuel price for
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  Speaker 2: next year or are you just considering this?
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  Speaker 3: Well, I've simply acknowledged that Cabinet has not yet considered
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  Speaker 3: the legislation that would be required to affect that tax increase,
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  Speaker 3: and when we do give consideration to that, we will
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  Speaker 3: need to be mindful of market conditions at the time.
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  Speaker 3: So simply as part of being a responsible government, we
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  Speaker 3: would have to look at, well, what's happening with petrol
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  Speaker 3: prices across the economy and what does that mean. And
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  Speaker 3: I'm just being an adult and saying the consequences of
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  Speaker 3: not increasing petrol tax would be that there's less money
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  Speaker 3: available to maintain the roads, to rebuild roads after major
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  Speaker 3: weather events, are less money available to build the new
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  Speaker 3: roads that New Zealanders want to see. So we would
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  Speaker 3: have to weigh that up at the time based on
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  Speaker 3: the best information we have, and that's several months away
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  Speaker 3: that consideration.
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  Speaker 2: And is it a hard no to cutting the fuel
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  Speaker 2: excise tax or just a no for now?
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  Speaker 3: It's not something we're considering at this time. I'm mindful
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  Speaker 3: that petrol tax hasn't increased since twenty twenty and the
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  Speaker 3: last government when it did affect what was meant to
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  Speaker 3: be a short to reduction in the fuel price, ended
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  Speaker 3: up extending that it came with a big cost around
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  Speaker 3: a billion dollars. And again we're just being realistic about
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  Speaker 3: the fact that that would have an impact both either
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  Speaker 3: in terms of debt or it would have an impact
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  Speaker 3: in terms of road maintenance. So we need to weigh
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  Speaker 3: that up because short term gain could equal medium term
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  Speaker 3: pain and it is too early for us to have
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  Speaker 3: a knee jerk reaction to what has been a considerable
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  Speaker 3: spike in oil prices in recent days. We need to
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  Speaker 3: keep monitoring the situation we're not actively considering fuel subsidies
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  Speaker 3: at this time.
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  Speaker 2: Have you got to the stage yet where you are
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  Speaker 2: having to rethink anything in your budget, which is in
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  Speaker 2: a couple of months.
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  Speaker 1: No.
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  Speaker 3: What I did get late last week was the preliminary
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  Speaker 3: fiscal forecasts based on what we've seen since the December update,
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  Speaker 3: and that was painting a much rosier picture than I
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  Speaker 3: presented to you in December. It showed was that we
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  Speaker 3: were on track to have a better operating value.
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  Speaker 2: Yeah, I know, but what has happened in the run
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  Speaker 2: And that's fine and I'm aware of that, But what
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  Speaker 2: has happened in Iran has changed things potentially from here on.
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  Speaker 2: And have you had any indication you may have to
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  Speaker 2: rethink the budget? Was it too early?
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  Speaker 3: Well? I have absolutely had an indication that if this
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  Speaker 3: crisis is prolonged and continues, and these very high oil
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  Speaker 3: prices are sustained four months or even longer, that will
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  Speaker 3: have an effect on inflation here at home.
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  Speaker 2: When do you have to mean, You've got two months
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  Speaker 2: in the budgets happening, So when do you have to
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  Speaker 2: start thinking about whether you rework the budget?
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  Speaker 3: Well? I get my final economic forecasts on the first
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  Speaker 3: of April. So that's when I know what is the
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  Speaker 3: outlock for the New Zealand economy. And there will be
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  Speaker 3: time at that juncture to assess, for given that, what
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  Speaker 3: does that mean for the spending decisions that the government
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  Speaker 3: makes for this year's budget. So there will be time
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  Speaker 3: to react to that if need be.
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  Speaker 2: Okay, Nikolas, why didn't you fully back Chris Luxon on Friday?
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  Speaker 3: I did?
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  Speaker 2: You didn't? You were asked me I had the right guy.
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  Speaker 2: You were asked, is he the right guy? And you
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  Speaker 2: didn't say yes?
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  Speaker 3: I said he had the backing of the National Party caucus.
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  Speaker 2: I describe it.
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  Speaker 3: Yes.
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  Speaker 2: Do you want to try again there? Yes?
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  Speaker 3: And I heard you Fisk in the interview late last week,
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  Speaker 3: and I thought, actually that you were being quite an
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  Speaker 3: imaginary artist in terms of your reading between lines that
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  Speaker 3: simply weren't things that I said. I was very clear
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  Speaker 3: that not only does the Prime Minister have my backing,
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  Speaker 3: he has the backing of our entire National Party caucus,
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  Speaker 3: he has the backing of our government and he is
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  Speaker 3: doing an excellent job. And to try and read anything
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  Speaker 3: other than those precise statements into what I said, I
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  Speaker 3: think is just mischief making. Well.
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  Speaker 2: I mean, I've been around long enough to know exactly
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  Speaker 2: what you were doing by not answering that question directly.
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  Speaker 3: And I've been around long enough to see mischief making
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  Speaker 3: by the media for many, many years. And as much
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  Speaker 3: as you were accusing me of mischief, you were not
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  Speaker 3: immune from it.
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  Speaker 2: Are you accusing me right now? How?
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  Speaker 3: Yes? Because I beck the Prime Minister, I'm loyal to
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  Speaker 3: the Prime Minister, and that's exactly what I laid out
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  Speaker 3: on Friday.
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  Speaker 2: All right, is this coming up at caucus tomorrow?
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  Speaker 3: Well, we don't discuss what we discuss at caucus. Caucus
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  Speaker 3: as a private meeting where we discuss upcoming policy, legislation
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  Speaker 3: and other issues of the day.
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  Speaker 2: All right, look, and I thank you very much for
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  Speaker 2: the time. Appreciate It's called Nichola Willis, Finance Minister.
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