Latest / Best of Business / Nicola Willis: Finance Minister on the Government's upcoming announcement about the future of the supermarket sector

Transcript

Nicola Willis: Finance Minister on the Government's upcoming announcement about the future of the supermarket sector · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks EDB. Follow
• 0:12
  Speaker 1: this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: Right now, the Finance Minister, Nicola willis minister. Good evening,
• 0:20
  Speaker 2: Good evening, now the cook straight Fairies. We've got a
• 0:22
  Speaker 2: one week left on the countdown clock for Winston Peters.
• 0:25
  Speaker 2: Is there a solution in hand yet? Do you know?
• 0:28
  Speaker 3: Everything's progressing well? And announcements will be made shortly.
• 0:32
  Speaker 2: Which would indicate there's something to be.
• 0:33
  Speaker 3: Announced, There will be, there will indeed be.
• 0:37
  Speaker 2: Oh okay, so where he's actually managed to do a deal?
• 0:42
  Speaker 3: Well, Kebnutch will make decisions and when we've made them,
• 0:45
  Speaker 3: we will announce them. But I can report to you
• 0:47
  Speaker 3: that everything is progressing well.
• 0:49
  Speaker 2: Okay. Interesting, So the talks were for obviously fruitful and
• 0:54
  Speaker 2: can okay, let me put it this way, because I
• 0:56
  Speaker 2: know you'll be tied up in riddles. Is it is
• 1:00
  Speaker 2: it your option that you'll be going with no?
• 1:03
  Speaker 3: Well? What New Zealanders have always wanted to know is
• 1:05
  Speaker 3: can you deliver the fairies by twenty twenty nine with
• 1:09
  Speaker 3: a more affordable budget that is more deliverable than the
• 1:13
  Speaker 3: last government. And the answer to both of those questions
• 1:16
  Speaker 3: is yes, and we will be making announcements that demonstrate
• 1:19
  Speaker 3: that in a week when we make the announcements.
• 1:23
  Speaker 2: Run Okay, Hey, Local Government New Zealand pushing back at
• 1:26
  Speaker 2: this suggestion of a cap on rates, are you actually
• 1:29
  Speaker 2: proposing one?
• 1:31
  Speaker 3: Well, we are progressing work on that because we make
• 1:33
  Speaker 3: no apologies to the fact that we're on the side
• 1:36
  Speaker 3: of rate payers, and ratepayers have had a guts full
• 1:38
  Speaker 3: with massive rate increases, and we're not going to let
• 1:42
  Speaker 3: local government completely off the hook. We're going to continue
• 1:45
  Speaker 3: to demand that they show more discipline in their spending
• 1:49
  Speaker 3: and we are looking at options for getting them to
• 1:51
  Speaker 3: focus the spending they do on the basics, on infrastructure,
• 1:55
  Speaker 3: on waste management, on those things rather than some of
• 1:59
  Speaker 3: the things that they have been funding. I mean, here
• 2:01
  Speaker 3: in Wellington, our council has literally been funding stand up
• 2:05
  Speaker 3: comedy sessions, interpretive dance shows, pirate punk plays. That's not
• 2:10
  Speaker 3: what your rates should be spent on.
• 2:12
  Speaker 2: You won't find that. You won't find anyone listening who
• 2:14
  Speaker 2: doesn't agree with you on that. But Local Government New
• 2:17
  Speaker 2: Zealand says it'll have a perverse impact on them if
• 2:21
  Speaker 2: you limit their rates. If you put a cap on rates,
• 2:23
  Speaker 2: their borrowing costs will go up. It'll actually make servicing
• 2:27
  Speaker 2: the much needed infrastructure even harder.
• 2:30
  Speaker 3: Well, we do want to make sure that councils are
• 2:33
  Speaker 3: able to fund the infrastructure needed to support growth. Of course,
• 2:36
  Speaker 3: government funds a lot of that directly, whether it's roads
• 2:39
  Speaker 3: or the contribution we make to local roads, but we're
• 2:42
  Speaker 3: also expanding the council's funding options away from rates. So
• 2:46
  Speaker 3: that's both things like the development levy system which we've announced,
• 2:50
  Speaker 3: which is about growth in housing areas paying for the
• 2:53
  Speaker 3: growth in infrastructure costs. But it's also by looking at
• 2:57
  Speaker 3: the borrowing limits, ensuring that the local government funding authority
• 3:00
  Speaker 3: is able to extend good terms of lending to local
• 3:03
  Speaker 3: government authorities who are having to invest in infrastructure for
• 3:07
  Speaker 3: the future. So we're looking we get a number of
• 3:09
  Speaker 3: funding mechanisms. We don't think the full burden of all
• 3:12
  Speaker 3: costs should fall on ratepayers. There are a number of
• 3:15
  Speaker 3: other ways of funding some costs, like what like Levi's
• 3:19
  Speaker 3: on developers who are developing land for new housing that
• 3:23
  Speaker 3: they can help meet those costs and the eventual homeowners
• 3:26
  Speaker 3: can help meet those costs.
• 3:28
  Speaker 2: The Child Poverty Action Group, they've written your letter about
• 3:31
  Speaker 2: school lunch is when does the funding run out for that?
• 3:35
  Speaker 3: Not until the end of next year, So we are
• 3:37
  Speaker 3: in contracts that don't end until next year, and we
• 3:40
  Speaker 3: won't be leaving those contractors off the hook. We want
• 3:42
  Speaker 3: to see them deliver what they promised to the schools involved,
• 3:47
  Speaker 3: and we want to get value for that money. The
• 3:49
  Speaker 3: other thing that the Child Poverty Action Group have forgotten
• 3:52
  Speaker 3: is that by making the savings that we did, we
• 3:55
  Speaker 3: were able to extend a food lunch, a food program
• 3:59
  Speaker 3: to ten thousand children in early childhood centers who were
• 4:03
  Speaker 3: particularly in need of nutrition, and we were able to
• 4:07
  Speaker 3: deliver recent working for family support to many low income
• 4:12
  Speaker 3: family So every dollar has multiple uses, right.
• 4:15
  Speaker 2: So that's basically though. No funding running out till the
• 4:18
  Speaker 2: end of next year, so no decisions about whether to
• 4:21
  Speaker 2: either cut or to extend or whatever would be made
• 4:24
  Speaker 2: anytime soon. You continue continuing.
• 4:27
  Speaker 3: Is yeah, continuing with the status quo about driving the
• 4:30
  Speaker 3: contractor to deliver. That should be our focus on. Behalf
• 4:34
  Speaker 3: of text path.
• 4:34
  Speaker 2: Very good as it should now. The Australian Supermarket inquirer,
• 4:37
  Speaker 2: I don't know whether you caught up with this, but
• 4:39
  Speaker 2: the a triple C if I got that round the
• 4:41
  Speaker 2: right way, or that's c triple A over the aguablecy.
• 4:45
  Speaker 2: So they basically came out and said things aren't as
• 4:48
  Speaker 2: great as we think they are. You know, we look
• 4:50
  Speaker 2: at Australia supermarket operation and think, oh, well, isn't that lovely?
• 4:54
  Speaker 2: Everything's so cheap over there. They came out and said, actually,
• 4:57
  Speaker 2: it's quite uncompetitive, it's overly profitable. It's not perfect over
• 5:01
  Speaker 2: there either.
• 5:03
  Speaker 3: No, it's not. And in particular, they've identified something we
• 5:07
  Speaker 3: have identified, which is that there are real barriers to
• 5:11
  Speaker 3: a large scale new entrant. And the point is that
• 5:15
  Speaker 3: it's good having a niche grocery provider open, but unless
• 5:19
  Speaker 3: you get someone who's opening up multiple stores, it's hard
• 5:22
  Speaker 3: to get that competition impact. So that's something I've been
• 5:26
  Speaker 3: engaging with a range of smaller players and that's something
• 5:28
  Speaker 3: I've identified, and it's clear to me that the government
• 5:32
  Speaker 3: will need to take further action in this space. Cabinet
• 5:35
  Speaker 3: has made some decisions here and we will be making
• 5:37
  Speaker 3: announcements in the next week.
• 5:40
  Speaker 2: About super So that's about land banking.
• 5:43
  Speaker 3: About our next steps to encourage more competition in the
• 5:46
  Speaker 3: supermarket sector.
• 5:47
  Speaker 2: Problem is the more I mean you will never make
• 5:51
  Speaker 2: more profit out of a supermarket in New Zealand than
• 5:54
  Speaker 2: you do right now.
• 5:55
  Speaker 3: So it's a super profitable sector and so we're coming
• 5:59
  Speaker 3: at the expense of consumers.
• 6:01
  Speaker 2: Yeah, I get it. But if we can't attract I
• 6:03
  Speaker 2: mean you're talking about more regulation. If we can't attract
• 6:08
  Speaker 2: an entrant with the most profit you'll ever make and
• 6:12
  Speaker 2: the lowest regulation, now, what hope do we have with
• 6:14
  Speaker 2: more regulation and less profit?
• 6:16
  Speaker 3: Your concern is precisely mine, I want to understand, and
• 6:21
  Speaker 3: the Government will have further announcements to make on this.
• 6:24
  Speaker 3: The structural market barriers that mean even a cashed up
• 6:29
  Speaker 3: investor looking to make profits goes, ooh, if you go
• 6:32
  Speaker 3: and invest in that sector in New Zealand, you're on
• 6:34
  Speaker 3: a hiding to nothing. And what the Australian report shows,
• 6:37
  Speaker 3: and what reports in New Zealand of Sean, is that
• 6:39
  Speaker 3: there is such significant market power in the existing dreopoly
• 6:43
  Speaker 3: that anyone wanting to enter our grocery sector goes that's
• 6:46
  Speaker 3: going to be a hard road and we need to
• 6:49
  Speaker 3: address that because if they're going to face predatory pricing,
• 6:52
  Speaker 3: if they're going to face problems that make them think
• 6:55
  Speaker 3: you just can't do it. I think we have an
• 6:57
  Speaker 3: obligation to New Zealand shoppers to do something about it.
• 7:00
  Speaker 2: All right, Minister, anything else you want to drop or
• 7:03
  Speaker 2: leak on this show. You have a habit of giving
• 7:07
  Speaker 2: us a little nugget every week. I don't feel we've
• 7:09
  Speaker 2: had sufficient nuggets yet.
• 7:11
  Speaker 3: This is a government with lots of nuggets. Today we've
• 7:14
  Speaker 3: announced Radical Resource Management Act reform that's going to make
• 7:17
  Speaker 3: it easier to build things in New Zealand. Very detailed
• 7:20
  Speaker 3: piece of work. And look that's been a massive head
• 7:22
  Speaker 3: one for our economy for many years and we're finally
• 7:25
  Speaker 3: the government who's going to fix it.
• 7:27
  Speaker 2: That's a no nugget nugget from Nikola Willis, the Finance Minister.
• 7:30
  Speaker 2: Thanks for coming on the show every Monday, as you do.
• 7:33
  Speaker 1: For more from News Talks B listen live on air
• 7:36
  Speaker 1: or online, and keep our shows with you wherever you
• 7:38
  Speaker 1: go with our podcasts on iHeartRadio.