1 00:00:00,200 --> 00:00:03,239 Speaker 1: Tell you what, though, It was a pretty remarkable speech 2 00:00:03,800 --> 00:00:07,560 Speaker 1: from Treasury's Chief Economic Advisor Dominic Stevens last week in 3 00:00:07,560 --> 00:00:10,039 Speaker 1: which he said that quote, the speed and size of 4 00:00:10,080 --> 00:00:12,560 Speaker 1: the cuts to the per person level of government spending 5 00:00:12,600 --> 00:00:15,760 Speaker 1: over the next few years in order to return the 6 00:00:15,800 --> 00:00:18,119 Speaker 1: government to surplus in twenty seven to twenty eight will 7 00:00:18,160 --> 00:00:22,640 Speaker 1: be generally unprecedented in modern times. It's time for our 8 00:00:22,680 --> 00:00:25,400 Speaker 1: weekly catch up with Finance Minister Nichola Willis. Who's with us, 9 00:00:25,400 --> 00:00:28,760 Speaker 1: Ace Evening killder Cura Jack? Is he right? 10 00:00:30,000 --> 00:00:33,800 Speaker 2: Well, what the context here is is an extraordinary, unprecedented 11 00:00:33,880 --> 00:00:37,640 Speaker 2: increase in spending in recent times. And that's very important 12 00:00:37,680 --> 00:00:40,159 Speaker 2: to remember because if you look at the long run graph, 13 00:00:40,760 --> 00:00:43,800 Speaker 2: where we are looking to get spending back to is 14 00:00:43,840 --> 00:00:47,040 Speaker 2: actually a little bit above the long run average. But 15 00:00:47,159 --> 00:00:50,280 Speaker 2: what's happened in recent times is an extraordinary increase in 16 00:00:50,360 --> 00:00:53,920 Speaker 2: government spending up seventy six percent in just six years. 17 00:00:54,440 --> 00:00:56,320 Speaker 2: And now what we're doing is trying to bring it 18 00:00:56,400 --> 00:00:59,160 Speaker 2: back to a normal rate of around thirty percent of 19 00:00:59,160 --> 00:01:02,280 Speaker 2: our overall nomic size. So yeah, we went through some 20 00:01:02,360 --> 00:01:05,679 Speaker 2: crazy times after COVID. Then the government pumped up spending 21 00:01:05,720 --> 00:01:07,840 Speaker 2: and didn't take the effort needed to get it back 22 00:01:08,120 --> 00:01:11,840 Speaker 2: into normal levels. We're doing that work now, So is 23 00:01:11,880 --> 00:01:16,919 Speaker 2: he right? Well, I think the point that I'm making 24 00:01:17,160 --> 00:01:20,120 Speaker 2: is that when you have an extraordinary amount of increase 25 00:01:20,120 --> 00:01:22,680 Speaker 2: in spending, yes, you then need to bring it back down. 26 00:01:22,720 --> 00:01:24,360 Speaker 2: And yes, we're having to do that in a way 27 00:01:24,800 --> 00:01:27,199 Speaker 2: that you haven't seen on the grassy presenter. 28 00:01:27,319 --> 00:01:30,319 Speaker 1: So just I totally understand your point here. You're saying, 29 00:01:30,319 --> 00:01:32,640 Speaker 1: because of the increase in spending over time, you're going 30 00:01:32,680 --> 00:01:34,400 Speaker 1: to have to go through make some tough decisions that 31 00:01:34,640 --> 00:01:37,880 Speaker 1: are unprecedented. But the words he used, well, no, I 32 00:01:37,920 --> 00:01:38,320 Speaker 1: don't think. 33 00:01:38,600 --> 00:01:42,000 Speaker 2: I don't think the tough decisions are unprecedented. The point is, 34 00:01:42,080 --> 00:01:45,600 Speaker 2: when you have such extraordinary increase in spending to such 35 00:01:45,640 --> 00:01:49,080 Speaker 2: a high level of our economy, now bringing it back 36 00:01:49,600 --> 00:01:52,840 Speaker 2: to more of a normal level is a big change, 37 00:01:52,840 --> 00:01:54,400 Speaker 2: but only because there's been a big spike in the 38 00:01:54,400 --> 00:01:55,040 Speaker 2: first place. 39 00:01:55,160 --> 00:01:58,560 Speaker 1: Yes, yes, I understand that. I mean it was pretty 40 00:01:58,560 --> 00:02:02,480 Speaker 1: bleak to see it the Treasury Gief Economic Advisor. I 41 00:02:02,520 --> 00:02:05,040 Speaker 1: suppose that's the difference here. How you talk to us 42 00:02:05,040 --> 00:02:07,320 Speaker 1: about Dunedin. What was it like, I mean, did you 43 00:02:07,400 --> 00:02:10,600 Speaker 1: expect a response like we saw at the weekend thirty 44 00:02:10,639 --> 00:02:12,239 Speaker 1: five thousand people taken to the streets. 45 00:02:12,880 --> 00:02:15,320 Speaker 2: Oh look, I get it. The people of Dunedin want 46 00:02:15,320 --> 00:02:17,520 Speaker 2: the a new hospital and they are going to get 47 00:02:17,760 --> 00:02:21,680 Speaker 2: their new hospital. But look, the context here is that 48 00:02:22,160 --> 00:02:25,920 Speaker 2: any government that was elected this time would have been 49 00:02:25,960 --> 00:02:29,560 Speaker 2: having to make these difficult decisions because the project we 50 00:02:29,639 --> 00:02:34,440 Speaker 2: inherited was in a complete mess. We've already agreed to 51 00:02:34,480 --> 00:02:38,360 Speaker 2: contribute three hundred million dollars more in funding on top 52 00:02:38,440 --> 00:02:40,440 Speaker 2: of what already had been put to one side by 53 00:02:40,480 --> 00:02:43,160 Speaker 2: the last government. So we're committed to this project. We're 54 00:02:43,200 --> 00:02:44,960 Speaker 2: going to fund this project, but we have to keep 55 00:02:44,960 --> 00:02:47,760 Speaker 2: it within a budget, and its history over the past 56 00:02:47,760 --> 00:02:50,920 Speaker 2: several years is that it has never been kept to 57 00:02:50,960 --> 00:02:53,880 Speaker 2: a budget. There's been massive blowouts and we can't let 58 00:02:54,000 --> 00:02:57,520 Speaker 2: that keep going because we also have a responsibility to 59 00:02:57,560 --> 00:02:59,880 Speaker 2: the people of Funga, a of Nelson, of Toung, of 60 00:03:00,080 --> 00:03:02,600 Speaker 2: all the other centers around the country who also need 61 00:03:02,639 --> 00:03:05,000 Speaker 2: an upgrade to their hospital. So we have to get 62 00:03:05,040 --> 00:03:08,720 Speaker 2: better at delivering these projects with good value for money 63 00:03:09,360 --> 00:03:10,160 Speaker 2: and on budget. 64 00:03:10,560 --> 00:03:14,800 Speaker 1: Why does pairing back the plans in Dunedin in order 65 00:03:14,840 --> 00:03:20,200 Speaker 1: to meet the budget trey constraints? Why does that mean 66 00:03:20,240 --> 00:03:22,120 Speaker 1: that you'll be able to continue with plans and fung 67 00:03:22,200 --> 00:03:24,560 Speaker 1: at eight. You know why couldn't you do an and and. 68 00:03:25,280 --> 00:03:28,960 Speaker 2: Well, simply because every dollar that we spend extra on 69 00:03:29,040 --> 00:03:32,320 Speaker 2: DNED and above its budget is a dollar that's not 70 00:03:32,440 --> 00:03:35,760 Speaker 2: available for those other hospital projects around the country. And 71 00:03:35,840 --> 00:03:38,200 Speaker 2: money is finanite. Jack, I've been looking for that tree 72 00:03:38,200 --> 00:03:40,600 Speaker 2: down the end of the garden with the money growing 73 00:03:40,600 --> 00:03:44,040 Speaker 2: on it. It doesn't exist. We don't have the joy 74 00:03:44,080 --> 00:03:46,040 Speaker 2: that the Aussies do with digging it out of the 75 00:03:46,040 --> 00:03:49,640 Speaker 2: ground on the daily, and so we do need to 76 00:03:49,680 --> 00:03:51,920 Speaker 2: be careful about how we spend the money we do have. 77 00:03:52,200 --> 00:03:54,400 Speaker 2: Hospitals are a great thing to spend money on. We're 78 00:03:54,400 --> 00:03:56,840 Speaker 2: going to be spending a huge amount on hospitals, we 79 00:03:56,920 --> 00:03:59,040 Speaker 2: agree with that, but we also have to get good 80 00:03:59,080 --> 00:04:00,000 Speaker 2: at delivering them with ourue. 81 00:04:00,200 --> 00:04:02,480 Speaker 1: Funny, do you think that if you hadn't made those 82 00:04:02,720 --> 00:04:07,440 Speaker 1: tax changes to landlords and interest deductibility, that three billion 83 00:04:07,480 --> 00:04:09,440 Speaker 1: dollars over four years that that could have gone to 84 00:04:09,520 --> 00:04:12,160 Speaker 1: pay for the full the Needing project plus all of 85 00:04:12,200 --> 00:04:13,920 Speaker 1: those other regional hospitals. 86 00:04:14,320 --> 00:04:17,400 Speaker 2: No, because those changes were made in the context of 87 00:04:17,440 --> 00:04:22,120 Speaker 2: a tax package that also took spending away from other 88 00:04:22,160 --> 00:04:25,080 Speaker 2: areas that it was also a tax package that delivered 89 00:04:25,160 --> 00:04:29,480 Speaker 2: significant tax relief to working people, and we. 90 00:04:29,440 --> 00:04:34,800 Speaker 1: Did a campaign, yeah, campaign, I look at it. 91 00:04:35,200 --> 00:04:37,720 Speaker 2: Yeah. The way I look at it is this, we 92 00:04:37,760 --> 00:04:42,160 Speaker 2: made a commitment that we would be restoring interest deductibility, 93 00:04:42,800 --> 00:04:46,840 Speaker 2: treating rental properties as we treat other assets, and we've 94 00:04:46,920 --> 00:04:48,800 Speaker 2: kept that commitment. It was also a commitment that was 95 00:04:48,839 --> 00:04:53,039 Speaker 2: pretty upfront in our coalition agreements, and we kept that commitment. 96 00:04:53,080 --> 00:04:55,680 Speaker 2: And look, I'm pleased to see that went are stabilizing 97 00:04:55,720 --> 00:04:57,920 Speaker 2: across the country. That's one of the things we set 98 00:04:57,960 --> 00:05:00,000 Speaker 2: out to have happened. 99 00:05:00,400 --> 00:05:02,400 Speaker 1: Do you think in the eyes of the people protesting 100 00:05:02,440 --> 00:05:04,720 Speaker 1: at the weekend, you also made a commitment to make 101 00:05:04,760 --> 00:05:06,520 Speaker 1: the Denedan Hospital as planned. 102 00:05:07,520 --> 00:05:10,080 Speaker 2: Well, yes we did, and as I say, not only 103 00:05:10,120 --> 00:05:13,359 Speaker 2: have we kept the funding for it, but when we 104 00:05:13,480 --> 00:05:15,800 Speaker 2: took the lid off the hood, When we took the 105 00:05:15,800 --> 00:05:18,760 Speaker 2: hood off, we found that it had completely blown out 106 00:05:18,760 --> 00:05:21,000 Speaker 2: in price, something we didn't know in opposition. In opposition 107 00:05:21,040 --> 00:05:23,000 Speaker 2: we said, look, we're prepared to spend up to thirty 108 00:05:23,040 --> 00:05:25,880 Speaker 2: million more on top of what labor is. Turns out 109 00:05:25,920 --> 00:05:28,760 Speaker 2: we're spending ten times more than that, three hundred million 110 00:05:28,839 --> 00:05:31,799 Speaker 2: more than Labor had been planning. So this is really 111 00:05:31,800 --> 00:05:34,760 Speaker 2: a case of you're an opposition, you think everything's going 112 00:05:34,760 --> 00:05:37,840 Speaker 2: along smoothly. We get into government, we open this project 113 00:05:37,920 --> 00:05:39,960 Speaker 2: up and we see problem after problem. And as I 114 00:05:39,960 --> 00:05:43,200 Speaker 2: said at the beginning, sincerely believe that if a Labor 115 00:05:43,240 --> 00:05:45,880 Speaker 2: government had been elected, they would have been faced with 116 00:05:46,000 --> 00:05:48,320 Speaker 2: the same choice we face, which is either front up 117 00:05:48,360 --> 00:05:52,080 Speaker 2: to the people of Dunedin and be honest, or continue 118 00:05:52,080 --> 00:05:54,159 Speaker 2: to let the budget blow out again and again and 119 00:05:54,200 --> 00:05:57,120 Speaker 2: again such that it eats up the entire health infrastructure 120 00:05:57,160 --> 00:05:59,880 Speaker 2: budget and robs from other regions the. 121 00:06:00,120 --> 00:06:05,120 Speaker 1: Working from home slash working from the office instruction. I mean, 122 00:06:05,360 --> 00:06:08,040 Speaker 1: my read of it wasn't actually that every single person 123 00:06:08,160 --> 00:06:09,799 Speaker 1: in the public service has to be in the office 124 00:06:09,839 --> 00:06:12,080 Speaker 1: from nine to five every single day. That you just 125 00:06:12,120 --> 00:06:14,159 Speaker 1: have to come to an agreement with your employer and 126 00:06:14,160 --> 00:06:16,920 Speaker 1: that productivity shouldn't be affected. But it's interesting looking at 127 00:06:16,920 --> 00:06:18,640 Speaker 1: some of the response to that. Can you just be 128 00:06:18,680 --> 00:06:22,680 Speaker 1: clear with us, is your directive there one that's driven 129 00:06:22,680 --> 00:06:25,800 Speaker 1: through productivity or one that's driven through simply trying to 130 00:06:25,839 --> 00:06:28,920 Speaker 1: prop up some of those CBD businesses all. 131 00:06:28,800 --> 00:06:31,960 Speaker 2: About productivity and performance, And as you say, this isn't 132 00:06:32,000 --> 00:06:34,880 Speaker 2: an absolute position. It's just about a pendulum that's swung 133 00:06:34,920 --> 00:06:37,120 Speaker 2: a long way one way and bringing a bit back 134 00:06:37,120 --> 00:06:40,800 Speaker 2: into the middle. By law, every employee you will continue 135 00:06:40,800 --> 00:06:43,360 Speaker 2: to have the right to ask for a flexible working 136 00:06:43,480 --> 00:06:48,279 Speaker 2: arrangement and government sector employers will be required to consider 137 00:06:48,279 --> 00:06:52,000 Speaker 2: that arrangement. The point we're simply making is let's be 138 00:06:52,080 --> 00:06:55,279 Speaker 2: a bit more purposeful about these arrangements, ensuring that we've 139 00:06:55,279 --> 00:06:58,039 Speaker 2: properly weighed up the impact they can have on the 140 00:06:58,080 --> 00:07:01,200 Speaker 2: team and making sure that we're getting balance right. And 141 00:07:01,240 --> 00:07:04,440 Speaker 2: that's actually what employers across the private sector and non 142 00:07:04,440 --> 00:07:07,279 Speaker 2: government sector have been doing, and we just think the 143 00:07:07,320 --> 00:07:09,240 Speaker 2: public sector should take the same approach. 144 00:07:09,680 --> 00:07:12,440 Speaker 1: And finally, what do you think Antonio Watson doesn't understand 145 00:07:12,480 --> 00:07:13,240 Speaker 1: about a CGT. 146 00:07:14,680 --> 00:07:16,880 Speaker 2: Well, look I haven't talked to her about a CGT, 147 00:07:17,080 --> 00:07:19,280 Speaker 2: so she could, but Footbatch, she could have a very 148 00:07:19,280 --> 00:07:22,080 Speaker 2: good understanding of it. For all I know, New Zealand 149 00:07:22,120 --> 00:07:25,880 Speaker 2: has choices about how it proceeds economically, and the view 150 00:07:25,920 --> 00:07:28,480 Speaker 2: our government has taken as our focus needs to be 151 00:07:28,600 --> 00:07:34,520 Speaker 2: on encouraging investment and productivity, enhancing assets, encouraging firms and 152 00:07:34,560 --> 00:07:38,960 Speaker 2: small businesses to innovate, to employ people, to grow, and 153 00:07:39,040 --> 00:07:40,800 Speaker 2: we don't think the way to get out of a 154 00:07:40,840 --> 00:07:43,239 Speaker 2: recession is to threaten people with a new tax. 155 00:07:43,680 --> 00:07:46,320 Speaker 1: Hey, thanks for your tome, We appreciate it. That's fun. 156 00:07:46,480 --> 00:07:50,000 Speaker 1: Minister Nicola willis with us this evening. For more from 157 00:07:50,080 --> 00:07:53,320 Speaker 1: Heather Duplessy Allen Drive. Listen live to news Talks the'd 158 00:07:53,360 --> 00:07:57,400 Speaker 1: be from four pm weekdays, or follow the podcast on iHeartRadio.