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Speaker 1: Right now though Nicola Willis is with us the Finance Minister,

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Speaker 1: Minister good eating, good evening, run good to have you

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Speaker 1: on the show as always. I noticed in the health

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Speaker 1: announcement today that the funding is going to be tied

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Speaker 1: to performance. For you know, there's going to be KPIs.

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Speaker 1: Can we expect to see more of this type of

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Speaker 1: funding in the budget that if you give money to

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Speaker 1: these departments, actually you'll have some expectations about how it's

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Speaker 1: going to be spent and what you expect from it.

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Speaker 2: Absolutely, So what we judge the health system by is

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Speaker 2: what do patient see as an improvement And of course

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Speaker 2: we want to ensure that GPS get the funding that

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Speaker 2: they need, but that needs to result in something that

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Speaker 2: you can actually appreciate. So are they seeing more patients,

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Speaker 2: is that you wait less time? Are they making sure

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Speaker 2: that immunizations are getting into the arms of our kids?

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Speaker 2: So we're having a clear direction of tying additional funding

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Speaker 2: to increased performance so that New Zealanders get a better.

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Speaker 1: Deal, because I imagine they will say turn round and say, well,

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Speaker 1: thank you, that sounds nice. I'd love to get the

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Speaker 1: extra money, but in order to get that money, I

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Speaker 1: need to hit the targets first, and how do you

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Speaker 1: hit the targets until you've got the people or the

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Speaker 1: extra resources to do it.

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Speaker 2: Well, what we're saying is, in addition to their annual

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Speaker 2: increases in funding that gps always get, we're also going

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Speaker 2: to put another two hundred and eighty five million of

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Speaker 2: this performance based funding in there. And that's for really

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Speaker 2: reasonable things to make sure New Zealanders can see their

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Speaker 2: GP faster. So it's incentives to offer enhanced access after

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Speaker 2: our keeping their books open to you, patients, achieving government

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Speaker 2: health targets, and doing some more minor planned care. So

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Speaker 2: I think that's utterly reasonable that, yes, we keep uplifting

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Speaker 2: your funding each year, but when we give you a

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Speaker 2: boost like this, New Zealanders get a boost as.

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Speaker 1: Well, so well we can expect see more of that

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Speaker 1: type of talk and performance incentives in the budget.

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Speaker 2: Yes, because what we want to see is improved results

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Speaker 2: for people, not just more money pouring in. We had

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Speaker 2: years of more money pouring into every facet of New

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Speaker 2: Zealand life under the last government, and many keywis will

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Speaker 2: tell you things didn't really improve much in many areas,

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Speaker 2: whether it was educational achievement, whether it was actually roads

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Speaker 2: being built. So our focuses value for every dollar of

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Speaker 2: yours that we spend.

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Speaker 1: Great piece by Thomas Coglan in the Herald this morning.

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Speaker 1: Well they always are from Thomas, but big deficit rising debt.

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Speaker 1: You know, he's spoken to all the rating agencies, and

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Speaker 1: I just found a really interesting part was from S

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Speaker 1: and P who said that after you know, because we're

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Speaker 1: paying now, what are we servicing debt? Servicing costs of

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Speaker 1: what nine billion dollars, which is double what they were

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Speaker 1: pre COVID.

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Speaker 2: That's right, and that's a huge amount of money. That's

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Speaker 2: money triple what we invest in the police every year.

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Speaker 2: So the debt comes with a price.

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Speaker 1: And double defense. Right. So what So one of the

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Speaker 1: things that they've talked about is during COVID, a lot

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Speaker 1: of governments around the world came out with policies and

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Speaker 1: programs and actually, we're just having a hard time pulling

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Speaker 1: them back. We've created an expectation. Have we done that

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Speaker 1: with school lunches?

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Speaker 2: Well, look, I'm going to be candid with you on

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Speaker 2: school lunches, which is this. I accept the argument that

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Speaker 2: says I don't want kids not learning at school because

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Speaker 2: they're so hungry they can't concentrate. That was the initial

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Speaker 2: reason for a school lunch program, but I think we

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Speaker 2: should always line that up with parental responsibility. So when

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Speaker 2: I see teachers and principle saying this food isn't very tasty,

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Speaker 2: I do expect the contractors to be delivering high service.

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Speaker 2: But I also think if mums and dads are really unhappy,

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Speaker 2: there's nothing to stop them putting a veggiemite sandwich and

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Speaker 2: a banana in their children's school bag. And actually, that's

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Speaker 2: why we have a welfare system in this country, so

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Speaker 2: that every family raising children has a minimum level of

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Speaker 2: income needed to deliver for their needs. So I think

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Speaker 2: we do need to get away from the idea that

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Speaker 2: the government does everything. We have chosen to continue the

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Speaker 2: school lunch program in an efficient way, and we should

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Speaker 2: keep driving performance from those contracts. But none of that

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Speaker 2: means the end of parental responsibility.

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Speaker 1: No, but aren't you by by doing that, by continuing

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Speaker 1: with the program, you are abdicating parental responsibility because the

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Speaker 1: state is inserting itself and saying we'll provide it. And

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Speaker 1: as soon as you do that, the end that you've

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Speaker 1: got kids saying, well, I had pit every day I mean,

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Speaker 1: for goodness sakes, I had lunch and sausage every day

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Speaker 1: when I was at school, and I said, you know,

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Speaker 1: you just ate it. I mean, you create an expectation

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Speaker 1: and once you've done that, it's very hard to undo,

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Speaker 1: isn't it.

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Speaker 2: Well, what we have done is reduced the amount of

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Speaker 2: expenditure on that program significantly, made it leaner and meaner.

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Speaker 2: We've done that on a time limited basis so that

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Speaker 2: we can evaluate it, see what effect it's having, and

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Speaker 2: then make decisions for the future.

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Speaker 1: So you could get you could cut it further in future.

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Speaker 2: That's not what I'm saying today. Kebine's made a decision

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Speaker 2: to the program as it is in a reduced form.

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Speaker 2: But as I say, I think that parental responsibility is

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Speaker 2: still very important. And before people complain that their kids

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Speaker 2: really don't like the lunch, let's remember mums and dads

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Speaker 2: can make lunch boxes for their kids, or you know,

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Speaker 2: get their kids to make their own lunch boxes.

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Speaker 1: True, Hey, terms of trade numbers are today good. This

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Speaker 1: for December quarter up three point one percent. It's largely

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Speaker 1: on the back of our you know, our primary industries.

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Speaker 1: It's dairy, it's red meat, those things are going up

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Speaker 1: and so we do better.

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Speaker 2: Yeah, that's right, go the farmers. And I tell you

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Speaker 2: I've spent a bit of time in rural New Zealand recently,

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Speaker 2: and that money is starting to flow through into those communities.

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Speaker 2: Because when farmers are making more money, they tend to

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Speaker 2: spend it at their local shops, they tend to buy equipment,

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Speaker 2: do more repairs on farms. And that's great news for

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Speaker 2: all of us. And this is a continuing story where

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Speaker 2: the prices we're getting for our exports are rising faster

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Speaker 2: than and so actually our terms of trade is now

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Speaker 2: thirteen point six percent higher than in December. That's a

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Speaker 2: really good thing. It basically means that New Zealand is

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Speaker 2: doing a better job of paying our way in the world.

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Speaker 1: There's a story out this morning about these three thousand

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Speaker 1: low income families. The government has decided not to adjust

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Speaker 1: this very little non tax credit threshold, which effectively has

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Speaker 1: frozen their incomes. A lot of them are single parent

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Speaker 1: households for the year. Do you are you aware of

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Speaker 1: that or do you have a problem with that?

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Speaker 2: You haven't characterized it quite right, Ryan. What we did

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Speaker 2: at the budget was we made the generous decision to

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Speaker 2: pass on a twenty five dollars increase in the inwork

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Speaker 2: tax credit as part of our tax package to this

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Speaker 2: group of families. So that went well above the increase

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Speaker 2: that they would normally increase in a year. And so

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Speaker 2: what that means is that we're not then doing another

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Speaker 2: increase at this point in the year, as is historically

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Speaker 2: the case, and families are still much better off than

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Speaker 2: they were prior to the tax pack. This payment is

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Speaker 2: all about ensuring that families are always better off in

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Speaker 2: work than not working, and that they face good incentives

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Speaker 2: to take on extra hours of work. I'd fully acknowledge

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Speaker 2: there are still issues in the working for Family system

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Speaker 2: which mean that sometimes those incentives to keep working extra

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Speaker 2: hours aren't as good as they should be. And that's

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Speaker 2: something I've got under active review and I think we

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Speaker 2: can do better on in the future.

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Speaker 1: All Right, it sounds like we might get something in

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Speaker 1: the budget. And what about ACC, because obviously Bailey's gone,

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Speaker 1: it's Scott Simpson noun charge seven point two billion dollar deficit.

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Speaker 1: Is the turnaround plan still on track? What's happening here?

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Speaker 2: Absolutely, there's two independent reviews underway. The first is on

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Speaker 2: ACC's operational performance. So that's basically saying if someone goes

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Speaker 2: on ACC, we want confidence that they are doing the

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Speaker 2: right things to get them back to work rehabilitated as

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Speaker 2: soon as possible. And their performance in that way has

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Speaker 2: really fallen off in recent years, and you and I

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Speaker 2: end up paying for it because that's why levees keep

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Speaker 2: increasing bar as much as they have, and we want

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Speaker 2: to see those levy increases moderate over time. So that

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Speaker 2: means ACC has to get better at buying the right

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Speaker 2: rehab getting people back to work sooner. And then the

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Speaker 2: second thing is we're also reviewing their investment strategy. They

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Speaker 2: manage nearly fifty billion dollars worth of investments, so we

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Speaker 2: need to make sure that they're managing them in the

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Speaker 2: best way possible.

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Speaker 1: All right, did you see the Oscars result? And have

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Speaker 1: you seen anor the movie that won?

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Speaker 2: Ah? Look, Ron, the truth is I don't get out much,

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Speaker 2: so I haven't seen that one. I haven't seen that one.

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Speaker 1: Even if you did, goodluck affording the movies. Absolutely outrageous

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Speaker 1: what you pay to go see a film these days, minister,

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Speaker 1: Thanks very much you time. Nicolai nicola Willis, says the

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Speaker 1: Finance minister For more from Heather Duplessy Allen Drive, Listen

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