1 00:00:00,120 --> 00:00:02,960 Speaker 1: Right now. Nikola Willis is the Finance Minister, issues with me. 2 00:00:03,000 --> 00:00:04,640 Speaker 1: Good evening, Good. 3 00:00:04,480 --> 00:00:05,080 Speaker 2: Evening, Ryan. 4 00:00:05,200 --> 00:00:06,040 Speaker 1: How are you today? 5 00:00:06,800 --> 00:00:09,440 Speaker 2: I'm very well, thank you. It's a beautiful sunny day 6 00:00:09,440 --> 00:00:11,559 Speaker 2: in Wellington, just gorgeous. 7 00:00:11,160 --> 00:00:14,600 Speaker 1: Great to hear. Are you feeling is the six pm 8 00:00:14,640 --> 00:00:16,279 Speaker 1: news is beautiful and sunny? Or are you a bit 9 00:00:16,360 --> 00:00:17,680 Speaker 1: upset about those poll numbers? 10 00:00:18,239 --> 00:00:20,919 Speaker 2: I haven't seen the six pm news, but look, my 11 00:00:21,079 --> 00:00:24,600 Speaker 2: focus is never on a poll. It's always on how 12 00:00:24,600 --> 00:00:28,280 Speaker 2: can we deliver for New Zealanders? And New Zealanders are 13 00:00:28,360 --> 00:00:30,600 Speaker 2: letting us know loud and clear that they want us 14 00:00:30,640 --> 00:00:34,600 Speaker 2: focused on reducing their cost of living, growing this economy, 15 00:00:34,760 --> 00:00:38,960 Speaker 2: delivering better education and health services, and that is exactly 16 00:00:39,000 --> 00:00:42,000 Speaker 2: what we are focused on. So between now and the 17 00:00:42,040 --> 00:00:44,680 Speaker 2: election there'll be a lot of polls. My focus is 18 00:00:44,720 --> 00:00:46,599 Speaker 2: on delivery and there. 19 00:00:46,400 --> 00:00:49,760 Speaker 1: Is absolutely no appetite from anyone within your party or 20 00:00:49,840 --> 00:00:52,880 Speaker 1: from you to get rid of lux into Rollin before 21 00:00:52,880 --> 00:00:55,760 Speaker 1: the election. You're one hundred percent confident he's the right 22 00:00:55,800 --> 00:00:59,040 Speaker 1: guy for the election. That's right, Okay, all right, let's 23 00:00:59,040 --> 00:01:01,360 Speaker 1: move on Adrian or why wasn't he the right guy 24 00:01:01,440 --> 00:01:02,520 Speaker 1: for the job? What happened? 25 00:01:03,640 --> 00:01:07,640 Speaker 2: Well, as you know last week he made the decision 26 00:01:07,760 --> 00:01:11,959 Speaker 2: to resign from his role as Reserve Bank Governor. That's 27 00:01:11,959 --> 00:01:14,800 Speaker 2: a matter he engaged with the Reserve Bank Board on 28 00:01:15,280 --> 00:01:18,760 Speaker 2: which was subsequently announced, and I've wished him well for 29 00:01:18,800 --> 00:01:19,240 Speaker 2: the future. 30 00:01:19,440 --> 00:01:21,440 Speaker 1: Did you ever find out what was going on? 31 00:01:23,120 --> 00:01:27,280 Speaker 2: Look, the Board had informed me via the Secretary for 32 00:01:27,319 --> 00:01:31,320 Speaker 2: the Treasury that there were discussions occurring with mister Orr, 33 00:01:31,959 --> 00:01:34,840 Speaker 2: and then they let me know that that final decision 34 00:01:34,880 --> 00:01:36,240 Speaker 2: to resign had been made. 35 00:01:36,560 --> 00:01:39,800 Speaker 1: Was there any discussion between you and Adrian or in 36 00:01:40,000 --> 00:01:46,959 Speaker 1: recent weeks about budgets, about you know, staff members, how 37 00:01:47,000 --> 00:01:49,960 Speaker 1: many staff they've got at the bank, about a potential 38 00:01:49,960 --> 00:01:51,480 Speaker 1: budget bid, that kind of stuff. 39 00:01:52,760 --> 00:01:56,320 Speaker 2: Yes, there was. Every five years, the government needs to 40 00:01:56,400 --> 00:02:00,720 Speaker 2: negotiate a funding agreement with the Reserve Bank, and I'd 41 00:02:00,720 --> 00:02:03,640 Speaker 2: made clear that I was uncomfortable with just how much 42 00:02:03,760 --> 00:02:07,000 Speaker 2: taxpayers money had been going into the Reserve Bank. It's 43 00:02:07,040 --> 00:02:10,040 Speaker 2: a negotiation between me and the Reserve Bank Board what 44 00:02:10,120 --> 00:02:13,240 Speaker 2: those ultimate funding figures for the future are, and i'd 45 00:02:13,280 --> 00:02:16,519 Speaker 2: express my desire to see real value for money for taxpayers, 46 00:02:16,520 --> 00:02:19,800 Speaker 2: a focus on the core deliverables, and that I wasn't 47 00:02:19,960 --> 00:02:22,680 Speaker 2: convinced that that had been the case in recent years. 48 00:02:23,080 --> 00:02:25,920 Speaker 2: That's exactly what you'd expect from me, Ryan, which is 49 00:02:25,960 --> 00:02:28,360 Speaker 2: it's my job to protect the public purse and to 50 00:02:28,440 --> 00:02:31,000 Speaker 2: ensure key weis are getting good value. And that applies 51 00:02:31,120 --> 00:02:33,960 Speaker 2: at any government agency, including the Reserve Bank. 52 00:02:34,440 --> 00:02:37,320 Speaker 1: Their annual budget was about one hundred and forty million old, 53 00:02:37,400 --> 00:02:40,320 Speaker 1: isn't it. Were you wanting to bring that down further? 54 00:02:41,840 --> 00:02:45,639 Speaker 2: Well, the increase over the past five years had been 55 00:02:45,760 --> 00:02:49,359 Speaker 2: dramatic and had outpaced that of just about every other 56 00:02:49,480 --> 00:02:53,440 Speaker 2: government agency. And so the negotiation that we're having with 57 00:02:53,480 --> 00:02:57,239 Speaker 2: the Reserve Bank is what's actually the minimal viable product here? 58 00:02:57,320 --> 00:02:59,440 Speaker 2: How much funding do you need to do to deliver 59 00:02:59,560 --> 00:03:02,799 Speaker 2: your key statutory functions? Because they've got an important job. 60 00:03:02,919 --> 00:03:04,919 Speaker 2: You know, they've got to keep inflation under control, they've 61 00:03:04,960 --> 00:03:07,600 Speaker 2: got to manage that official cash rate, they've got to 62 00:03:07,800 --> 00:03:10,480 Speaker 2: ensure we've got financial stability. What would it take to 63 00:03:10,520 --> 00:03:13,560 Speaker 2: fund that without all of the added extras tacked on 64 00:03:13,639 --> 00:03:14,720 Speaker 2: as well? 65 00:03:14,760 --> 00:03:17,399 Speaker 1: Their staff numbers went from two hundred and fifty five 66 00:03:17,440 --> 00:03:20,120 Speaker 1: in twenty eighteen to six hundred and forty one in 67 00:03:20,160 --> 00:03:23,560 Speaker 1: twenty twenty four. Are you also wanting that to come down? 68 00:03:24,680 --> 00:03:27,760 Speaker 2: Well, you'd expect that if they're just focused on their 69 00:03:27,800 --> 00:03:31,560 Speaker 2: core functions, they wouldn't require those significant numbers of staff 70 00:03:31,600 --> 00:03:34,520 Speaker 2: that they've had in recent years. And to my point, 71 00:03:34,840 --> 00:03:37,400 Speaker 2: I'm interested in how many people do we need to 72 00:03:37,440 --> 00:03:41,360 Speaker 2: deliver on the really important functions, not all of the 73 00:03:41,400 --> 00:03:44,000 Speaker 2: other stuff tacked on as well. I mean, the Reserve Bank, 74 00:03:44,480 --> 00:03:47,760 Speaker 2: in my mind, should not be a gilded palace with 75 00:03:48,080 --> 00:03:52,960 Speaker 2: un tapped resources that just keep flowing. Actually, it should 76 00:03:52,960 --> 00:03:56,200 Speaker 2: be like any other government agency. It's got some restraint, 77 00:03:56,240 --> 00:03:59,040 Speaker 2: it's got some discipline, it's ensuring value for money. And 78 00:03:59,080 --> 00:04:01,360 Speaker 2: that's the approach that I've taken to the negotiation. 79 00:04:02,160 --> 00:04:06,200 Speaker 1: And clearly that's roughled a few feathers and they've flyn 80 00:04:06,240 --> 00:04:06,600 Speaker 1: the coup. 81 00:04:07,920 --> 00:04:11,360 Speaker 2: Well, Ultimately that negotiation occurs between me and the Reserve 82 00:04:11,400 --> 00:04:14,880 Speaker 2: Bank Board. The Reserve Bank Board will make their submission 83 00:04:14,920 --> 00:04:17,040 Speaker 2: on what they think is the appropriate level of funding 84 00:04:17,400 --> 00:04:20,440 Speaker 2: and the coming days and weeks, and then we negotiate 85 00:04:20,480 --> 00:04:22,560 Speaker 2: that and we hope to have it all sign up 86 00:04:22,600 --> 00:04:24,280 Speaker 2: and delivered before the budget. 87 00:04:24,440 --> 00:04:27,560 Speaker 1: This investment summit. Why is black Rock not going on? 88 00:04:27,760 --> 00:04:29,440 Speaker 1: Not on the guest list? What have you been told 89 00:04:29,440 --> 00:04:29,920 Speaker 1: about that? 90 00:04:31,160 --> 00:04:34,080 Speaker 2: I haven't actually been briefed on that. As you will 91 00:04:34,080 --> 00:04:37,240 Speaker 2: have seen there's a broad range of investors invited to 92 00:04:37,279 --> 00:04:40,960 Speaker 2: the summit, including some of the world's big infrastructure funds, 93 00:04:40,960 --> 00:04:46,200 Speaker 2: including New Zealand EE Investment funds. And there are also 94 00:04:46,279 --> 00:04:49,799 Speaker 2: infrastructure partners there, so people who deliver big infrastructure projects. 95 00:04:49,800 --> 00:04:52,760 Speaker 2: So there's a broad range of people and none of 96 00:04:52,920 --> 00:04:55,760 Speaker 2: this would preclude any entity in the future being involved 97 00:04:55,760 --> 00:04:58,520 Speaker 2: in investing. We just can't fit everyone in the room. 98 00:04:58,640 --> 00:05:00,719 Speaker 1: Yeah, but it's the big one, the big boy you 99 00:05:00,760 --> 00:05:01,400 Speaker 1: want in the room. 100 00:05:02,520 --> 00:05:04,520 Speaker 2: Well, it's one of the big boys. But there's plenty 101 00:05:04,560 --> 00:05:06,360 Speaker 2: of big boys and girls who will be in the room. 102 00:05:07,400 --> 00:05:09,560 Speaker 1: The banks. Just coming back to the Reserve Bank very briefly, 103 00:05:09,600 --> 00:05:12,680 Speaker 1: the capital rules you're looking at potentially trying to compel 104 00:05:12,800 --> 00:05:17,159 Speaker 1: or override the Reserve Bank the way that it regulates banks. 105 00:05:17,279 --> 00:05:19,600 Speaker 1: Is that something you're seriously considering doing soon? 106 00:05:20,520 --> 00:05:24,000 Speaker 2: Yeah, Look, what this goes back to is in twenty nineteen, 107 00:05:24,240 --> 00:05:27,279 Speaker 2: the Reserve Bank made a decision to require banks to 108 00:05:27,360 --> 00:05:30,440 Speaker 2: hold more capital against their lending, and at the time, 109 00:05:30,800 --> 00:05:33,880 Speaker 2: banks and others warned that that could have a couple 110 00:05:33,880 --> 00:05:37,920 Speaker 2: of impacts for New Zealanders, one higher interest rates and 111 00:05:38,080 --> 00:05:42,479 Speaker 2: two that it could stop the amount of lending going 112 00:05:42,520 --> 00:05:47,480 Speaker 2: into productive businesses that we've had historically, therefore leading to 113 00:05:47,600 --> 00:05:51,200 Speaker 2: a negative impact on the size of our economy. So 114 00:05:51,320 --> 00:05:54,520 Speaker 2: both of those two things concern me, and I think 115 00:05:54,560 --> 00:05:59,000 Speaker 2: it's important that I now review. Okay, has that happened? 116 00:05:59,120 --> 00:06:02,120 Speaker 2: Is that happening? Are we taking the right approach here? 117 00:06:02,279 --> 00:06:05,880 Speaker 2: Because my focus is anything I can do to make 118 00:06:05,920 --> 00:06:08,680 Speaker 2: sure that New Zealanders have incomes that are rising faster 119 00:06:08,839 --> 00:06:12,000 Speaker 2: and interest rates that are lower, I'm pretty interested in doing. 120 00:06:12,200 --> 00:06:14,120 Speaker 2: So let's get all the advice here at least have 121 00:06:14,240 --> 00:06:17,520 Speaker 2: that discussion and not just take it as set in stone. 122 00:06:17,839 --> 00:06:20,640 Speaker 1: You spoke to the conference back in February, this is 123 00:06:20,680 --> 00:06:24,000 Speaker 1: the New Zealand Economics Forum conference, and you told them 124 00:06:24,000 --> 00:06:26,920 Speaker 1: that you were taking advice on options for achieving higher 125 00:06:27,000 --> 00:06:30,640 Speaker 1: KEIW saver balances. I mean, if you look at our numbers, 126 00:06:30,800 --> 00:06:33,040 Speaker 1: they're not great. I mean they are good. Are key 127 00:06:33,040 --> 00:06:35,120 Speaker 1: we saver balance is collectively now worth more than one 128 00:06:35,160 --> 00:06:38,640 Speaker 1: hundred billion dollars. That's great. We're turning eighteen I think 129 00:06:38,640 --> 00:06:40,919 Speaker 1: in a month or so. But you look at the 130 00:06:40,920 --> 00:06:43,400 Speaker 1: Australians and they're like four trillion, right, So we've got 131 00:06:43,400 --> 00:06:45,600 Speaker 1: to get our rates up, no doubt about that. Are 132 00:06:45,640 --> 00:06:50,000 Speaker 1: you considering as the government considering increasing the minimum contribution 133 00:06:50,360 --> 00:06:51,440 Speaker 1: up from three percent. 134 00:06:52,720 --> 00:06:55,680 Speaker 2: Look, we're considering a range of options for increasing New 135 00:06:55,760 --> 00:06:59,120 Speaker 2: Zealander's key we saver balances. The important thing to remember 136 00:06:59,800 --> 00:07:03,800 Speaker 2: is New Zealand has universal superannuation for every Kiwi from 137 00:07:03,880 --> 00:07:07,039 Speaker 2: age sixty five. The Aussies don't have that, So that's 138 00:07:07,080 --> 00:07:10,680 Speaker 2: the main contribution the government makes to superannuation in New 139 00:07:10,760 --> 00:07:14,400 Speaker 2: Zealand is funding that universal superannuation. We then have kei 140 00:07:14,440 --> 00:07:16,840 Speaker 2: we Saver and I think key we save is becoming 141 00:07:16,920 --> 00:07:21,120 Speaker 2: increasingly important for two reasons. One it's the main tool 142 00:07:21,160 --> 00:07:23,320 Speaker 2: that heaps the key we's used to save for their 143 00:07:23,320 --> 00:07:26,960 Speaker 2: house deposit. And two we know that more New Zealanders 144 00:07:26,960 --> 00:07:29,600 Speaker 2: are going to want more financial security and retirement because 145 00:07:29,640 --> 00:07:31,920 Speaker 2: not everyone will own their own home at retirement. So 146 00:07:32,000 --> 00:07:35,440 Speaker 2: key we sab becomes a really important supplement to universal 147 00:07:35,520 --> 00:07:38,160 Speaker 2: super So I am taking advice on what we can 148 00:07:38,200 --> 00:07:41,560 Speaker 2: do to encourage New Zealanders to save more in their 149 00:07:41,640 --> 00:07:45,600 Speaker 2: key we saver accounts as an addition to not instead 150 00:07:45,640 --> 00:07:47,920 Speaker 2: of universal New Zealand superannuation. 151 00:07:48,200 --> 00:07:50,120 Speaker 1: Does that mean yeah, I totally get that you're not 152 00:07:50,160 --> 00:07:53,400 Speaker 1: going to get rid of super universal super But does 153 00:07:53,440 --> 00:07:56,160 Speaker 1: that mean you're you're looking at sweetness like tax and 154 00:07:56,240 --> 00:07:58,800 Speaker 1: centers to get people to pay more, or would you 155 00:07:58,920 --> 00:08:01,560 Speaker 1: actually say put a line in the stand and say 156 00:08:01,600 --> 00:08:03,800 Speaker 1: we need to get your minimum to five percent over 157 00:08:03,840 --> 00:08:05,720 Speaker 1: this period of time or whatever it might be. 158 00:08:06,840 --> 00:08:11,000 Speaker 2: Look, the main financial contribution that the government makes and 159 00:08:11,040 --> 00:08:14,360 Speaker 2: in my mind, should make to superannuation is that increasing 160 00:08:14,400 --> 00:08:17,400 Speaker 2: costs for New Zealand superannuation that's growing by literally billions 161 00:08:17,400 --> 00:08:20,080 Speaker 2: even over the next few years. So that's the core 162 00:08:20,160 --> 00:08:23,640 Speaker 2: way in which the government funds superannuation costs. But as 163 00:08:23,680 --> 00:08:25,920 Speaker 2: you allude, there are a range of other ways in 164 00:08:25,960 --> 00:08:29,960 Speaker 2: which we could help QE savers improve their balances, including 165 00:08:30,000 --> 00:08:32,680 Speaker 2: the rates of contributions and other things. So we're working 166 00:08:32,760 --> 00:08:35,439 Speaker 2: through that. I haven't taken advice to Cabinet yet, but 167 00:08:35,520 --> 00:08:37,760 Speaker 2: I think it's really important that more Kiwis have more 168 00:08:37,800 --> 00:08:41,000 Speaker 2: financial security in their retirement and I'm prepared to make 169 00:08:41,320 --> 00:08:42,439 Speaker 2: changes to deliver. 170 00:08:42,240 --> 00:08:44,840 Speaker 1: That, all right, and very quickly. There's are two things 171 00:08:44,840 --> 00:08:47,240 Speaker 1: we've spoken about before, but any update on the foreign 172 00:08:47,280 --> 00:08:49,080 Speaker 1: bias thing. I think last time you said it was 173 00:08:49,080 --> 00:08:50,640 Speaker 1: that leader to leader stage. 174 00:08:51,440 --> 00:08:53,640 Speaker 2: Do you know I've got to the point where if 175 00:08:53,679 --> 00:08:55,520 Speaker 2: there's change in this area. I think you should be 176 00:08:55,559 --> 00:08:57,600 Speaker 2: the first to know because you've asked me the most 177 00:08:57,640 --> 00:09:01,000 Speaker 2: questions about it, and your interest is very much appreciated. Right. 178 00:09:01,040 --> 00:09:03,200 Speaker 1: So that didn't answer the question. They did it is 179 00:09:03,200 --> 00:09:04,120 Speaker 1: there an update or not. 180 00:09:04,840 --> 00:09:06,559 Speaker 2: I don't have an update for you today, but when 181 00:09:06,559 --> 00:09:08,280 Speaker 2: I've got an update, you're going to get it, my friend. 182 00:09:08,559 --> 00:09:11,240 Speaker 1: Okay, thanks for your time, minister, really appreciate it. Nicola Willis, 183 00:09:11,240 --> 00:09:14,120 Speaker 1: who's the finance minister who says that Lackson's job is 184 00:09:14,160 --> 00:09:18,520 Speaker 1: safe till the next election sixteen after six markets next. 185 00:09:19,400 --> 00:09:22,559 Speaker 1: For more from Hither Duplessy Allen Drive, listen live to 186 00:09:22,679 --> 00:09:25,720 Speaker 1: news talks it'd be from four pm weekdays, or follow 187 00:09:25,760 --> 00:09:27,520 Speaker 1: the podcast on iHeartRadio.