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Speaker 1: Right now we have the Finance Minister Nichola will say Nicola, Hi, Heather,

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Speaker 1: how can you ease the Reserve Bank's capital rules when

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Speaker 1: the Reserve Bank is independent of view.

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Speaker 2: Well, what we will have next week is the report

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Speaker 2: from the Commis Commission has been asked to look at

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Speaker 2: banking issues, competition issues in the banking sector. They've indicated

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Speaker 2: in their draft report that they think changes may need

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Speaker 2: to be made to the regulatory environment to make sure

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Speaker 2: that those rules support competition. So I'll await their final report.

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Speaker 2: But what I do have power over as Minister right

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Speaker 2: now is the Financial Policy Remit, which the Reserve Bank

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Speaker 2: has to have regard to when it's making its decisions.

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Speaker 2: And I've committed that I will be completely open minded

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Speaker 2: about what changes may be required to get good banking competition.

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Speaker 2: So we'll see what the Commist commissions right next.

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Speaker 1: So are you suggesting that if you needed to, you

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Speaker 1: could rewrite that remit so they would be forced to

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Speaker 1: comply to comply with that remit by dropping the capital

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Speaker 1: rules down.

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Speaker 2: Number of options? We could look at the Financial Policy

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Speaker 2: re Much and the guidelines et sept. So that there

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Speaker 2: Reserve Bank would have consideration of those in the future,

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Speaker 2: and we can look at the broader regulatory and legislative

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Speaker 2: requirement if needs be. But what I'm interested in is

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Speaker 2: not so much rewriting the entire book on the capital changes,

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Speaker 2: but what are the things we can do right now

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Speaker 2: to make it easier for disruptors to come in and

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Speaker 2: compete with those book.

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Speaker 1: You'd have to change the capital rules then, because this

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Speaker 1: is stopping the disruptors, isn't it.

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Speaker 2: Well, let's wait and see. Let's see what the Comments

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Speaker 2: Commission says. They've had time to consider the steeply they've

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Speaker 2: taken submissions from the Reserve Bank.

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Speaker 1: I mean, how much money do they have to hold

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Speaker 1: these banks in order to compete as a big bank.

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Speaker 2: Well, the rules depend on the which area of the

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Speaker 2: sector they're competing in, and it depends on how much

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Speaker 2: they want to lend. But also remember we're now in

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Speaker 2: a new modern world where you don't necessarily want to

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Speaker 2: provide all banking. Perhaps you might not be doing mortgages

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Speaker 2: and bank loans. You might just want to do our

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Speaker 2: current accounts, or you might just want to do our

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Speaker 2: cards for traveling overseas. And we want to make sure

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Speaker 2: that competitors are able to enter those niche areas and

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Speaker 2: that the capital requirements don't put them off. So we'll

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Speaker 2: be working through all of that, and don't you worry.

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Speaker 2: I've asked for advice on what our options might be.

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Speaker 1: Because are these the rules that require some of the

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Speaker 1: banks to hold as many as thirty million dollars? That's right,

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Speaker 1: I mean that's obviously stopping people getting into the market. Right.

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Speaker 2: Well, I will see what the Comments Commission says. But

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Speaker 2: there's a lot of money to get together, and I

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Speaker 2: say if we can have more people entering and disrupting

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Speaker 2: and making it a competitive space, that's good for New

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Speaker 2: Zealand and I'm up for it.

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Speaker 1: Has I mean this was in the paper on Saturdays.

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Speaker 1: Has Adrian sent you a letter about to get any

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Speaker 1: angry texts or emails?

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Speaker 2: No? In fact I saw him this morning and we

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Speaker 2: were all smart.

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Speaker 1: Did it come up?

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Speaker 2: No? It didn't.

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Speaker 1: Well that's all as well. So it was in the

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Speaker 1: paper on Saturday. You said it, he read about it,

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Speaker 1: and then he didn't even raise it with you when

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Speaker 1: he saw you.

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Speaker 2: No. I think there's a load of respect between the

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Speaker 2: two institutions. The Reserve Bank is independent from the government

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Speaker 2: of the day, it does its thing. The government is

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Speaker 2: accountable to the voters, and we set the legislation and

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Speaker 2: we set those policies. Each of us has a role

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Speaker 2: to play. They are independent in separate roles, and what

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Speaker 2: I'm signaling very clearly is that this government is very

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Speaker 2: interested in competition and an efficiency and we want to

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Speaker 2: make sure that the financial rules reflect those totally.

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Speaker 1: Has Kibi Ral told you yet why the Outer Teddy

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Speaker 1: crashed again last week?

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Speaker 2: I haven't had detailed brief on that as yet.

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Speaker 1: Okay. Is that because you don't expect to get a

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Speaker 1: detailed brief, or is that because they're playing this game

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Speaker 1: where they pretend that they don't know what happened until

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Speaker 1: they finished their investigation.

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Speaker 2: Well, it's because I don't really expect to get a

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Speaker 2: detailed brief, because the ultimate accountable to the maritime rules,

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Speaker 2: and that means that those independent investigations take place, and

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Speaker 2: I expect them to comply with those. As the shareholder,

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Speaker 2: I don't get to direct operations in any way. I

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Speaker 2: don't get to tell them what to do in their

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Speaker 2: day to day operations. But together with Paul Goldsmith, we've

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Speaker 2: said a very clear expectation. We want safe reliable fairy

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Speaker 2: services and the maintenance needed to deliver that.

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Speaker 1: Are they just crashing them now until you give them

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Speaker 1: a new one?

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Speaker 2: Oh, Heather, No one would want to put anyone at

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Speaker 2: risks like that.

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Speaker 1: Well, you know, I mean the alternative is absolute incompetence,

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Speaker 1: and that freaks me out slightly. But on that subject, listen,

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Speaker 1: the Maritime Union reckons that the break fee for the

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Speaker 1: boats that were being built over in koreas five hundred

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Speaker 1: million dollars. Are they right?

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Speaker 2: I'll tell you two things about the maritime Union. First

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Speaker 2: is we've got no credibility because actually, only three weeks

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Speaker 2: into me having the job they asked for my resignation.

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Speaker 2: So the fact they've got that on repeat isn't very interesting.

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Speaker 2: The second thing is I swear to you the negotiation

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Speaker 2: for the repudiation of that contract is ongoing. So what

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Speaker 2: that means is no one knows what the break fee is.

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Speaker 1: Does the contract have theakromritime union.

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Speaker 2: We are in a commercial negotiation, and what the commercial

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Speaker 2: settlement is is yet to be.

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Speaker 1: But when you sign a contract with somebody to do

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Speaker 1: something and it says and the break fee shall be,

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Speaker 1: what does it say?

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Speaker 2: Well, I can tell you heither. There are a number

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Speaker 2: of matters to be worked through, and they're being worked

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Speaker 2: through by k we Rail with the Kondo Dockyard.

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Speaker 1: Okay, are we any closer to figuring out how the

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Speaker 1: hell we're going to deal with this power crisis?

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Speaker 2: Yes, we are. Simian Brown and Shane Jones are working

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Speaker 2: on that at pace. The first thing is what we

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Speaker 2: can do in the short term, and of course, one

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Speaker 2: of the options on the table there is the importation

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Speaker 2: of liquefied natural gas, and the Gas Security Response Group

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Speaker 2: is working through the usibility of that. At the same time,

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Speaker 2: we're encouraging the electricity Authority to use all of its

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Speaker 2: muscle in making sure that pricing information is available to

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Speaker 2: consumers and that competition is working. Then in the medium term,

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Speaker 2: the biggest thing, of course, is we need more generation.

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Speaker 2: Now we regret that the last government was so reckless

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Speaker 2: and abandoning the ability for people to explore for gas,

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Speaker 2: because that has no doubt led to the situation we

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Speaker 2: are in today. But what we know for the long

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Speaker 2: term is we're going to need more wind, more solar,

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Speaker 2: more generation across the board, thermal, and we want to

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Speaker 2: make sure that the market is able to respond in

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Speaker 2: that way. We know there's been a huge uptick and

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Speaker 2: intended investment, but as a government, we're looking hard at

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Speaker 2: that to make sure we're going to have the generation

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Speaker 2: we need into the future.

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Speaker 1: Yeah, ALERNG might take this is important. ALNG might take

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Speaker 1: something like twelve months to eighteen months to be able

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Speaker 1: to get here, which means that we have to survive

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Speaker 1: this winter and then we also potentially have to I

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Speaker 1: have next winter, don't we.

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Speaker 2: Yeah, that's right. None of the stuff happens overnight, and

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Speaker 2: that's why that Gas Security Response Group has been working

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Speaker 2: through these issues in the meantime with the major gas

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Speaker 2: users to make sure that gas is going to its

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Speaker 2: most essential purposes. But look, these prices that are I

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Speaker 2: will throwing they are deeply problematic for industry, for New

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Speaker 2: Zealand's competitiveness, and we can't allow the situation to be

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Speaker 2: sustained shutdown. Look that that's a question for methodics rather

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Speaker 2: than for me.

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Speaker 1: What do you think?

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Speaker 2: Well, I know that methodics of operations have been curtailed

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Speaker 2: due to the high price of electricity that is a set.

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Speaker 1: And the gas shortage as well. I mean they're running

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Speaker 1: at half capacity and there's no indication that there will

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Speaker 1: be any more gas in the short term, So it

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Speaker 1: must be a real prospect. And if they shut down,

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Speaker 1: we free up a whole bunch of supply for the country.

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Speaker 1: It must be a real prospect that they shut down.

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Speaker 2: Well, look, you'd have to talk to methoenics about that.

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Speaker 2: But I tell you, when that last government went out

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Speaker 2: with their bumper sticker that they were banning the exploration

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Speaker 2: of gas and coal, did they at the same time

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Speaker 2: say we're going to make sure that New Zealand loses

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Speaker 2: thousands of jobs on the way through the electricity prices

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Speaker 2: spike and there are real concerns about energy security. No,

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Speaker 2: they didn't, And if they had, which New Zealander would

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Speaker 2: have thought it was a good.

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Speaker 1: Idea, right, Nichola, thank you, has always really appreciated look

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Speaker 1: after yourself. That's Nichola Willis, the Finance minister. It blows

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Speaker 1: my mind. It blows my mind. If you talk to

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Speaker 1: the guys in labor, they still think this is a

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Speaker 1: fantastic idea and they are committed to the oil and

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Speaker 1: Gas band because I was told last week they do

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Speaker 1: not want the gas guys to start looking for gas again.

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Speaker 1: They don't want them to look for gas again. How

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Speaker 1: crazy is that we find ourselves in this situation. Methodics

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Speaker 1: potentially shutting down people paying these prices, and they're like, no,

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Speaker 1: this is right, yeah, notice it's great. Do we need

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Speaker 1: to give them a pay cut and labor so they

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Speaker 1: know what it's like to have to struggle to pay

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Speaker 1: your bill? I think that the power bill might be

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Speaker 1: a good idea. Sorry, Heather, but two thirds of sixty

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Speaker 1: six point six percent as opposed to your arithmetic of

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Speaker 1: sixty seven percent. Therefore, your reporters mark try harder. Thank you,

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Speaker 1: Terry Swedish rounding mate seventeen past six. For more from

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Speaker 1: Heather Duplessy Allen Drive, listen live to News Talks 'd

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Speaker 1: B from four pm weekdays, or follow the podcast on

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Speaker 1: iHeartRadio