1 00:00:00,080 --> 00:00:02,720 Speaker 1: So as expected, the Reserve Bank has held the OCR 2 00:00:02,800 --> 00:00:05,240 Speaker 1: at three point twenty five percent. They've suggested the next 3 00:00:05,280 --> 00:00:07,080 Speaker 1: move is a cut that will happen in about six 4 00:00:07,120 --> 00:00:08,920 Speaker 1: weeks time. But it's clear from what they're saying that 5 00:00:08,960 --> 00:00:12,080 Speaker 1: the economy is far from roaring at the minute. Nicola 6 00:00:12,080 --> 00:00:15,600 Speaker 1: Willis is the Finance Minissum with US. Morning Niccola, Good morning, Heather. 7 00:00:15,680 --> 00:00:17,200 Speaker 1: Why isn't the economy doing better? 8 00:00:18,480 --> 00:00:21,720 Speaker 2: Well? We had two quarters of above expected growth, so 9 00:00:21,840 --> 00:00:23,959 Speaker 2: that was in the last bit of last year, in 10 00:00:23,960 --> 00:00:26,600 Speaker 2: the first three months of this year where the growth 11 00:00:26,600 --> 00:00:29,480 Speaker 2: in the economy was faster than all of our forecasts. 12 00:00:29,520 --> 00:00:32,280 Speaker 2: But since then, there's been quite a few global developments. 13 00:00:32,640 --> 00:00:36,600 Speaker 2: We've had Donald Trump making announcements about tariffs, We've had 14 00:00:36,800 --> 00:00:40,360 Speaker 2: global back and forth on trade. We've had global conflict 15 00:00:40,880 --> 00:00:43,440 Speaker 2: and that's created uncertainty around the world and it certainly 16 00:00:43,520 --> 00:00:47,000 Speaker 2: impacted business confidence and investment intensions here in New Zealand. 17 00:00:47,360 --> 00:00:50,960 Speaker 2: Despite that, fundamentals remain good. There's every reason that we 18 00:00:51,040 --> 00:00:53,559 Speaker 2: will have kept growing, but maybe not as fast as 19 00:00:53,560 --> 00:00:54,240 Speaker 2: we would have liked. 20 00:00:54,320 --> 00:00:55,800 Speaker 1: Okay, I mean, it's fair to say that some of 21 00:00:55,840 --> 00:00:57,600 Speaker 1: it has to do with what's going on globally, but 22 00:00:57,640 --> 00:01:00,280 Speaker 1: a lot of it is actually just domessed experience, spare 23 00:01:00,320 --> 00:01:03,680 Speaker 1: capacity in the domestic economy. Why isn't it firing? I mean, 24 00:01:03,800 --> 00:01:05,959 Speaker 1: the reason I'm asking you this question is because you 25 00:01:06,040 --> 00:01:08,480 Speaker 1: said in twenty twenty three at the election that you 26 00:01:08,480 --> 00:01:10,399 Speaker 1: guys would get the economy back on track. You've had 27 00:01:10,400 --> 00:01:12,319 Speaker 1: more than eighteen months and it's far from that. 28 00:01:13,160 --> 00:01:15,480 Speaker 2: Well, there is spare capacity in the economy. And if 29 00:01:15,520 --> 00:01:17,920 Speaker 2: you go back to what I was saying earlier, what 30 00:01:17,959 --> 00:01:20,000 Speaker 2: we saw at the end of last year and in 31 00:01:20,040 --> 00:01:22,000 Speaker 2: the first three months of this year was we were 32 00:01:22,000 --> 00:01:25,319 Speaker 2: literally twice as fast in terms of our growth as 33 00:01:25,360 --> 00:01:28,679 Speaker 2: had been predicted, four times as fast as Australia was 34 00:01:28,720 --> 00:01:30,760 Speaker 2: in the first three months of the year. Then in 35 00:01:30,800 --> 00:01:33,560 Speaker 2: April quite a major thing happened and you saw the 36 00:01:33,600 --> 00:01:36,679 Speaker 2: same headlines as every business in New Zealand saw, which 37 00:01:36,720 --> 00:01:39,120 Speaker 2: said that this is going to be very challenging to 38 00:01:39,160 --> 00:01:41,400 Speaker 2: the world, that global growth is going to reduce, there 39 00:01:41,400 --> 00:01:44,440 Speaker 2: are going to be all of these impacts, and like 40 00:01:44,680 --> 00:01:47,480 Speaker 2: many countries around the world, the reaction and that in 41 00:01:47,520 --> 00:01:51,160 Speaker 2: New Zealand has been well, actually we might not betten 42 00:01:51,160 --> 00:01:54,320 Speaker 2: down the hatches a bit now, My viewers Okay, that's 43 00:01:54,360 --> 00:01:57,440 Speaker 2: the reaction that businesses have had, but actually all of 44 00:01:57,480 --> 00:02:01,400 Speaker 2: the fundamentals for growth remain. We've got a business friendly 45 00:02:01,560 --> 00:02:03,800 Speaker 2: government that is on the side of those wanting to 46 00:02:03,840 --> 00:02:07,520 Speaker 2: invest and make money and create jobs and export overseas. 47 00:02:07,560 --> 00:02:09,840 Speaker 2: We are getting rid of rules and the regulations that 48 00:02:09,880 --> 00:02:11,760 Speaker 2: have in the past stood in the way and made 49 00:02:11,880 --> 00:02:14,680 Speaker 2: things harder. We've been careful with the way that we 50 00:02:14,720 --> 00:02:17,679 Speaker 2: are spending taxpayers money. All of those things are the 51 00:02:17,760 --> 00:02:20,560 Speaker 2: right things to be doing and is every reason why 52 00:02:20,600 --> 00:02:22,560 Speaker 2: New Zealand should be growing in the future. 53 00:02:23,080 --> 00:02:25,280 Speaker 1: Nichola, can I talk to you about this Fonterra meeting? 54 00:02:25,280 --> 00:02:26,880 Speaker 1: What are you hoping to get out of it? 55 00:02:27,880 --> 00:02:32,440 Speaker 2: Well, I have had some interesting numbers put to me either, 56 00:02:33,040 --> 00:02:36,480 Speaker 2: which is that if you buy some butter at Coal's 57 00:02:36,680 --> 00:02:39,320 Speaker 2: and Willworth's right now, if you go online, you can 58 00:02:39,360 --> 00:02:42,120 Speaker 2: get that for seven dollars Australia, which is ki we 59 00:02:42,240 --> 00:02:44,440 Speaker 2: seven dollars sixty or so. If you buy it at 60 00:02:44,440 --> 00:02:47,160 Speaker 2: Walworth's in New Zealand right now, it's about eight dollars fifty. 61 00:02:47,360 --> 00:02:50,359 Speaker 1: So is that a supermarket problem though, or a Fonterra problem. 62 00:02:50,800 --> 00:02:53,120 Speaker 2: That's my question and I don't have an answer for you, 63 00:02:53,480 --> 00:02:56,120 Speaker 2: and I want to ask both the supermarkets and Fonterra 64 00:02:56,200 --> 00:02:59,480 Speaker 2: for their perspective on what's building into that cost, what's 65 00:02:59,480 --> 00:03:01,920 Speaker 2: in that Is there anything the government can be doing 66 00:03:02,200 --> 00:03:04,880 Speaker 2: to reduce factors in that price? Because I accept that 67 00:03:04,919 --> 00:03:08,840 Speaker 2: the global milk price sets the general price in fairy products. 68 00:03:08,919 --> 00:03:12,280 Speaker 2: I get that that's economics. But my question is why 69 00:03:12,400 --> 00:03:16,200 Speaker 2: is it seemingly a bit cheaper in Australia than it 70 00:03:16,240 --> 00:03:18,320 Speaker 2: is in New Zealand to get a block a better? 71 00:03:18,320 --> 00:03:21,079 Speaker 1: Would it simply not be that? Potentially Coals is using 72 00:03:21,120 --> 00:03:22,040 Speaker 1: it as a loss leader. 73 00:03:23,320 --> 00:03:27,200 Speaker 2: Well that seems interesting because of course Coals and will Worths, 74 00:03:27,520 --> 00:03:30,760 Speaker 2: you'd think would be facing similar incentives to do that 75 00:03:30,800 --> 00:03:32,720 Speaker 2: sort of thing. Why wouldn't that be happening here? And 76 00:03:32,720 --> 00:03:35,480 Speaker 2: Coals isn't offering it particularly cheaply in Australia. If you 77 00:03:35,520 --> 00:03:39,160 Speaker 2: look at different places in Australia you can get similar 78 00:03:39,200 --> 00:03:43,000 Speaker 2: prices to that. So I've just got the question. I've 79 00:03:43,000 --> 00:03:45,400 Speaker 2: put that question, of course to supermarkets why is it 80 00:03:45,800 --> 00:03:49,520 Speaker 2: so much cheaper seemingly at Australia And they've given me 81 00:03:49,560 --> 00:03:51,160 Speaker 2: an answer. I'm going to put it to Fontier and 82 00:03:51,200 --> 00:03:54,560 Speaker 2: ask them about it and I'm genuinely interested in their 83 00:03:54,600 --> 00:03:57,480 Speaker 2: answers because I'm on side of every Kiva shopper who goes, hey, 84 00:03:58,040 --> 00:04:00,480 Speaker 2: there are our price is fair. I think I have 85 00:04:00,480 --> 00:04:01,560 Speaker 2: a job to do to explore it. 86 00:04:01,600 --> 00:04:04,800 Speaker 1: Nicholaied families on two hundred and thirty thousand dollars beyond welfare. 87 00:04:06,400 --> 00:04:08,240 Speaker 2: No, they shouldn't be. But I know where you're going 88 00:04:08,280 --> 00:04:08,480 Speaker 2: with this. 89 00:04:08,760 --> 00:04:09,760 Speaker 1: Yeah, so why are they? 90 00:04:10,680 --> 00:04:13,680 Speaker 2: They are not families earning that kind of income in 91 00:04:13,720 --> 00:04:16,320 Speaker 2: New Zealand. So that's across two earners. Mind you, that's 92 00:04:16,360 --> 00:04:19,960 Speaker 2: not just one. You know who are paying a lot 93 00:04:20,000 --> 00:04:24,320 Speaker 2: of tax then have to if they have young children, 94 00:04:24,440 --> 00:04:27,640 Speaker 2: pay a lot for their childcare in order to work. 95 00:04:27,839 --> 00:04:30,320 Speaker 2: It's a cost that they have to take on in 96 00:04:30,400 --> 00:04:33,840 Speaker 2: order to often have mum and dad both working full time. 97 00:04:33,920 --> 00:04:36,080 Speaker 2: And what we've done with the Family Boost policy is 98 00:04:36,080 --> 00:04:39,919 Speaker 2: recognized is taxpayers working hard at a difficult time in life. 99 00:04:40,640 --> 00:04:43,000 Speaker 2: We want to make sure that you're well supported in that, 100 00:04:43,120 --> 00:04:45,360 Speaker 2: and we're going to give you some of your fees 101 00:04:45,400 --> 00:04:48,200 Speaker 2: back forty feeds back up to forty percent. 102 00:04:48,560 --> 00:04:51,400 Speaker 1: That's still wealthie, that's still wealthy because you are giving 103 00:04:51,480 --> 00:04:54,239 Speaker 1: money to families who are earning two hundred and thirty 104 00:04:54,279 --> 00:04:56,520 Speaker 1: thousand dollars a year. I mean, are you sure that 105 00:04:56,960 --> 00:04:58,640 Speaker 1: you just spoke about the fact that you're spending our 106 00:04:58,640 --> 00:04:59,240 Speaker 1: money wisely? 107 00:04:59,560 --> 00:05:03,159 Speaker 2: It doesn't well, well, it's a text rebate either. It's 108 00:05:03,160 --> 00:05:06,040 Speaker 2: not wellfare, it's not a hand out. It's actually something 109 00:05:06,080 --> 00:05:10,800 Speaker 2: you get only if you are able to demonstrate that 110 00:05:10,839 --> 00:05:13,719 Speaker 2: you've got those receipts for your early childhood education costs, 111 00:05:13,720 --> 00:05:16,159 Speaker 2: and you will get less than you would if you 112 00:05:16,200 --> 00:05:18,400 Speaker 2: were on a lower income. We have means tested it, 113 00:05:18,440 --> 00:05:21,160 Speaker 2: so once you're as a household earning more than one 114 00:05:21,200 --> 00:05:24,359 Speaker 2: hundred and forty thousand dollars, the amount of rebate you 115 00:05:24,400 --> 00:05:27,960 Speaker 2: get out of that scheme starts to reduce. But look, 116 00:05:28,440 --> 00:05:31,080 Speaker 2: I stand by that family boost policy. It's all about saying, 117 00:05:31,120 --> 00:05:33,920 Speaker 2: difficult time in life, high cost of living, Let's make 118 00:05:33,960 --> 00:05:35,760 Speaker 2: sure families with young kids are well supported. 119 00:05:35,760 --> 00:05:38,520 Speaker 1: All right, Nicola, thank you for your time. Enjoy your day. 120 00:05:38,520 --> 00:05:41,440 Speaker 1: That's Nicolo Willi's finance minister. For more from the Mic 121 00:05:41,560 --> 00:05:44,640 Speaker 1: Asking Breakfast, listen live to news talks that'd be from 122 00:05:44,760 --> 00:05:48,160 Speaker 1: six am weekdays, or follow the podcast on iHeartRadio.