1
00:00:00,200 --> 00:00:03,840
Speaker 1: With US now as Nicolaulus, the Finance Minister High Nicholer, Hi, Ever,

2
00:00:04,000 --> 00:00:05,760
Speaker 1: are we going to get an FTA with India in

3
00:00:05,800 --> 00:00:07,000
Speaker 1: the first half of next year?

4
00:00:08,160 --> 00:00:10,719
Speaker 2: I am not going to get cut across the trade

5
00:00:10,760 --> 00:00:14,800
Speaker 2: ministers negotiating timeline. But they are pushing very hard and

6
00:00:15,080 --> 00:00:17,279
Speaker 2: there has been a heck of a lot of work

7
00:00:17,280 --> 00:00:18,680
Speaker 2: happening and they're making good progress.

8
00:00:18,920 --> 00:00:21,840
Speaker 1: Okay, what are we going to do about these bank profits?

9
00:00:23,480 --> 00:00:25,759
Speaker 2: Well, look, as I've said in the past, there's no

10
00:00:25,880 --> 00:00:28,840
Speaker 2: silver bullet to this one. Actually, what you want is

11
00:00:28,880 --> 00:00:33,280
Speaker 2: a more competitive banking sector, so that the banks are

12
00:00:34,000 --> 00:00:37,880
Speaker 2: offering better products and services at better prices to New Zealanders.

13
00:00:38,320 --> 00:00:40,240
Speaker 2: Because I think actually a lot of people get it.

14
00:00:40,240 --> 00:00:44,000
Speaker 2: It's okay for business to make a profit, but normally,

15
00:00:44,040 --> 00:00:46,720
Speaker 2: if you're seeing profits of this level, you'd expect there

16
00:00:46,760 --> 00:00:50,080
Speaker 2: to have been a breakthrough new innovation, or an incredible

17
00:00:50,159 --> 00:00:52,400
Speaker 2: new technology that they're brought to the market, or a

18
00:00:52,479 --> 00:00:54,880
Speaker 2: huge number of new customers have come on board. But

19
00:00:55,400 --> 00:00:58,280
Speaker 2: none of that's the case here. And I found it

20
00:00:58,360 --> 00:01:01,240
Speaker 2: reassuring this morning to even hear Mike Hosking acknowledge that

21
00:01:01,360 --> 00:01:04,240
Speaker 2: maybe I've got a point that more competition is needed,

22
00:01:04,760 --> 00:01:08,520
Speaker 2: and so that's why we've been progressing these detailed regulatory

23
00:01:08,560 --> 00:01:11,679
Speaker 2: reforms that the Commerce Commission proposed. None of it is

24
00:01:11,720 --> 00:01:14,920
Speaker 2: going to fix it overnight, but it's really important that

25
00:01:14,959 --> 00:01:17,319
Speaker 2: we get the settings right so that people can come

26
00:01:17,319 --> 00:01:19,160
Speaker 2: and eat the lunch of the big guys. They can

27
00:01:19,160 --> 00:01:21,280
Speaker 2: come in and cut away at their business because they're

28
00:01:21,280 --> 00:01:22,120
Speaker 2: big profits.

29
00:01:22,200 --> 00:01:24,640
Speaker 1: Okay, so some of the problems, and you've identified this

30
00:01:24,840 --> 00:01:28,280
Speaker 1: yourself as the capital requirements in the proposals that you're

31
00:01:28,319 --> 00:01:31,800
Speaker 1: looking at the moment, do either of them reduce how

32
00:01:31,880 --> 00:01:33,600
Speaker 1: much capital they currently have to hold.

33
00:01:35,080 --> 00:01:37,679
Speaker 2: Well, at the moment, they are going to have to

34
00:01:37,880 --> 00:01:40,920
Speaker 2: ramp up how much capital they hold into the future.

35
00:01:41,200 --> 00:01:44,600
Speaker 2: So the proposals that the Reserve Bank is consulting on

36
00:01:45,040 --> 00:01:48,520
Speaker 2: would ease that ramp up. So they would do that

37
00:01:48,600 --> 00:01:51,120
Speaker 2: in different ways. They would change the nature of the

38
00:01:51,160 --> 00:01:54,880
Speaker 2: capital that they need to hold, and they would make

39
00:01:54,960 --> 00:01:57,560
Speaker 2: New Zealand more aligned with other countries. We like to

40
00:01:57,560 --> 00:01:58,680
Speaker 2: compare ourselves with.

41
00:01:58,640 --> 00:02:02,240
Speaker 1: Aligning ourselves the Australians, because apparently the Australian banks have

42
00:02:02,280 --> 00:02:04,680
Speaker 1: to hold less capital than we're requiring New Zealand banks

43
00:02:04,720 --> 00:02:05,040
Speaker 1: to hold.

44
00:02:06,080 --> 00:02:10,000
Speaker 2: That is correct and that's partly because when international observers

45
00:02:10,040 --> 00:02:12,240
Speaker 2: look at New Zealand versus Australia, they think that New

46
00:02:12,320 --> 00:02:16,600
Speaker 2: Zealand is a riskier banking market and therefore our banks

47
00:02:16,600 --> 00:02:19,320
Speaker 2: should be required to hold more capital so that the

48
00:02:19,360 --> 00:02:22,560
Speaker 2: tax pay doesn't end up having to fund a bailout. Now,

49
00:02:22,919 --> 00:02:25,960
Speaker 2: there are arguments around how close we should be to Australia,

50
00:02:26,240 --> 00:02:28,600
Speaker 2: and that's part of what the Reserve Bank is consulting on.

51
00:02:28,880 --> 00:02:31,440
Speaker 1: Do you think the Reserve Bank should consider dropping the

52
00:02:31,520 --> 00:02:33,679
Speaker 1: level because the only consideration at the moment from the

53
00:02:33,720 --> 00:02:34,880
Speaker 1: sounds of things, is increasing it.

54
00:02:36,480 --> 00:02:39,680
Speaker 2: Well, I think that the Reserve Bank should ensure that

55
00:02:39,760 --> 00:02:43,240
Speaker 2: banks are holding the minimum level of capital required for

56
00:02:43,320 --> 00:02:46,520
Speaker 2: the system to be stable. And that's a balance.

57
00:02:46,160 --> 00:02:48,360
Speaker 1: That's subjective, isn't it. I mean that is subjective because

58
00:02:48,400 --> 00:02:50,680
Speaker 1: Adrian wanted us to hold a whole lot more capital

59
00:02:50,680 --> 00:02:53,280
Speaker 1: than we are. So basically, if you're not prepared to

60
00:02:53,320 --> 00:02:55,639
Speaker 1: say yourself now, Nichola, if you're not prepared to say

61
00:02:55,639 --> 00:02:57,560
Speaker 1: that it should go backwards, then what you're accepting is

62
00:02:57,560 --> 00:03:00,600
Speaker 1: we will always play more in mortgages than Theustralians do.

63
00:03:01,919 --> 00:03:05,040
Speaker 2: I'm accepting my role, Heather, which is under the way

64
00:03:05,200 --> 00:03:10,440
Speaker 2: our legislation works. The Reserve Bank is responsible for prudential

65
00:03:10,480 --> 00:03:13,639
Speaker 2: regulation making and decision making about where these rules sit.

66
00:03:14,120 --> 00:03:16,480
Speaker 2: What our legislation requires and what I, as the Minister

67
00:03:16,600 --> 00:03:20,360
Speaker 2: require is that they do what's needed for financial stability.

68
00:03:20,400 --> 00:03:23,080
Speaker 2: What I changed was I said to them, I also

69
00:03:23,160 --> 00:03:27,120
Speaker 2: want you to actually think about competition. And my remit

70
00:03:27,280 --> 00:03:30,359
Speaker 2: to them is really specific in asking them to think

71
00:03:30,360 --> 00:03:33,239
Speaker 2: a lot more about that and efficiency, and I think

72
00:03:33,280 --> 00:03:36,200
Speaker 2: that's partly what prompted them to review this. In the

73
00:03:36,200 --> 00:03:39,440
Speaker 2: absence of me being minister, I'm pretty sure they wouldn't

74
00:03:39,440 --> 00:03:40,760
Speaker 2: be reviewing it at all.

75
00:03:41,000 --> 00:03:43,160
Speaker 1: Hey, do you know when the Maui gasfield is closing?

76
00:03:44,520 --> 00:03:45,480
Speaker 2: No? I do not.

77
00:03:46,400 --> 00:03:48,080
Speaker 1: Nobody's told you descend the next year.

78
00:03:49,440 --> 00:03:52,600
Speaker 2: No, I haven't been advised of that. I actually don't

79
00:03:52,600 --> 00:03:56,200
Speaker 2: take part in cabinet decisions relating to that in adherence

80
00:03:56,240 --> 00:03:56,760
Speaker 2: with the case.

81
00:03:56,800 --> 00:03:59,400
Speaker 1: Oh, of course, because you've got some disclaimers there.

82
00:04:00,760 --> 00:04:03,560
Speaker 2: Under that. Yeah, we kept Cabinet office rules and I

83
00:04:03,600 --> 00:04:04,600
Speaker 2: apply them in this case.

84
00:04:04,760 --> 00:04:06,839
Speaker 1: I hadn't thought about that. Are you worried about this though?

85
00:04:07,200 --> 00:04:09,680
Speaker 1: If the Mali gas field closes and the method ex closes,

86
00:04:09,720 --> 00:04:10,760
Speaker 1: that's a big loss, isn't it.

87
00:04:11,040 --> 00:04:15,360
Speaker 2: Well, this was a huge motivator behind the government's energy reforms,

88
00:04:15,440 --> 00:04:17,919
Speaker 2: is that we're looking ahead to a future where we

89
00:04:18,000 --> 00:04:19,560
Speaker 2: need to make sure we can keep the lights on

90
00:04:19,920 --> 00:04:24,000
Speaker 2: and in the absence of being able to have gas

91
00:04:24,160 --> 00:04:27,320
Speaker 2: and coal, you've got a big problem. So that's why

92
00:04:27,800 --> 00:04:30,440
Speaker 2: Huntley now has a big coal mountain outside it, because

93
00:04:30,480 --> 00:04:33,640
Speaker 2: actually you need something to spark the lights on, and

94
00:04:33,640 --> 00:04:36,560
Speaker 2: you need to make sure that that electricity is increasingly affordable,

95
00:04:36,560 --> 00:04:37,400
Speaker 2: not unaffordable.

96
00:04:37,440 --> 00:04:39,760
Speaker 1: Hey listen on the Cox, the leader of the opposition

97
00:04:39,880 --> 00:04:42,479
Speaker 1: said there says this needs to basically be handled by

98
00:04:42,800 --> 00:04:45,000
Speaker 1: their prime minister and our prime ministers sitting down with

99
00:04:45,040 --> 00:04:46,240
Speaker 1: each other. We prepared to do that.

100
00:04:47,680 --> 00:04:50,680
Speaker 2: Well, those discussions are ongoing. I think there's been some

101
00:04:50,880 --> 00:04:53,560
Speaker 2: reporting sort of suggesting that they're on ice. That's not

102
00:04:53,640 --> 00:04:57,000
Speaker 2: the case that I understand. There's still constructive discussions happening

103
00:04:57,160 --> 00:05:02,080
Speaker 2: between the two governments, and we are still continuing a

104
00:05:02,080 --> 00:05:04,599
Speaker 2: lot of assistance to the Cook Islands, about thirty five

105
00:05:04,640 --> 00:05:07,359
Speaker 2: million in direct support for Cook Island projects. What's on

106
00:05:07,520 --> 00:05:11,480
Speaker 2: pause is the direct budget payments. It's a reluctant decision

107
00:05:12,080 --> 00:05:16,240
Speaker 2: and we are continuing to progress those discussions and we'll

108
00:05:16,240 --> 00:05:18,400
Speaker 2: obviously do that through all the appropriate channels.

109
00:05:18,440 --> 00:05:20,719
Speaker 1: Okay, and what about the Prime Minister, because it seems

110
00:05:20,720 --> 00:05:22,560
Speaker 1: like it's a Mark Brown v Winnie Pee thing.

111
00:05:23,960 --> 00:05:26,200
Speaker 2: Well, I don't see it that way. I actually think

112
00:05:26,240 --> 00:05:30,840
Speaker 2: it goes to the trust between the Cook Islands and New.

113
00:05:30,839 --> 00:05:34,320
Speaker 1: Zealand and Grinds and everybody in the year.

114
00:05:34,960 --> 00:05:40,200
Speaker 2: I don't. Well, no, obviously Cook Island does belong very well. No,

115
00:05:40,320 --> 00:05:45,279
Speaker 2: it's a Cook Island's government issue in which they broke

116
00:05:45,480 --> 00:05:47,760
Speaker 2: down the level of trust between the governments and that

117
00:05:47,839 --> 00:05:50,320
Speaker 2: has been damaged because of the way they behaved in

118
00:05:50,360 --> 00:05:53,680
Speaker 2: relations to their security agreement with China. And that is

119
00:05:53,720 --> 00:05:55,800
Speaker 2: a policy issue rather than a personal issue.

120
00:05:55,800 --> 00:05:59,479
Speaker 1: Okay, Hey, when are you going to announce what assets

121
00:05:59,480 --> 00:06:01,080
Speaker 1: you want to say after the next election.

122
00:06:02,360 --> 00:06:05,320
Speaker 2: Well, we've ruled out assets sales during this term of

123
00:06:05,360 --> 00:06:10,400
Speaker 2: government as a consequence of our coalition agreements. However, the

124
00:06:10,520 --> 00:06:13,800
Speaker 2: National Party will bring its own policies to the next

125
00:06:13,880 --> 00:06:15,200
Speaker 2: election Campaigny.

126
00:06:14,920 --> 00:06:16,800
Speaker 1: So is it just going to be announcing the election campaign,

127
00:06:16,920 --> 00:06:17,160
Speaker 1: is it?

128
00:06:18,520 --> 00:06:21,159
Speaker 2: Well, we continue to do the work that's necessary to

129
00:06:21,200 --> 00:06:24,280
Speaker 2: make sure we're managing our balance sheet of assets much

130
00:06:24,360 --> 00:06:26,440
Speaker 2: much better than has been the case in the past.

131
00:06:26,520 --> 00:06:29,080
Speaker 2: There tends to be a lot of focus on the

132
00:06:29,120 --> 00:06:32,279
Speaker 2: commercial assets, but let's remember we've also got hundreds of

133
00:06:32,279 --> 00:06:35,719
Speaker 2: billions of dollars worth of social assets, hospitals, schools, roads,

134
00:06:36,040 --> 00:06:39,000
Speaker 2: and our government and the National Party are very committed

135
00:06:39,040 --> 00:06:43,440
Speaker 2: to building more of those to allow for a growing population.

136
00:06:43,680 --> 00:06:46,760
Speaker 2: And so the question becomes, how do you fund those responsibly?

137
00:06:46,800 --> 00:06:48,360
Speaker 2: How do you make sure you can build the roads

138
00:06:48,360 --> 00:06:49,360
Speaker 2: and schools and the hospitals.

139
00:06:49,440 --> 00:06:53,080
Speaker 1: Such a simple question, Nicla, it was such a simple question.

140
00:06:53,960 --> 00:06:56,920
Speaker 1: You're talking, well, I'm friendly. I'm friendly on this. I

141
00:06:56,960 --> 00:06:58,800
Speaker 1: think we need to sell assets. Is you know you

142
00:06:58,839 --> 00:07:00,000
Speaker 1: can just answer the question.

143
00:07:00,760 --> 00:07:02,760
Speaker 2: Yeah, But you understand where I'm coming from, which is

144
00:07:02,800 --> 00:07:03,719
Speaker 2: I've got a carlos.

145
00:07:03,520 --> 00:07:05,000
Speaker 1: Agree, You've got your lines.

146
00:07:05,520 --> 00:07:08,200
Speaker 2: So that's pretty simple. And so when I'm talking to

147
00:07:08,240 --> 00:07:10,080
Speaker 2: you as the Finance minister, I have to abide by

148
00:07:10,120 --> 00:07:12,520
Speaker 2: my carlos agree. Otherwise I don't get the votes to

149
00:07:12,560 --> 00:07:13,360
Speaker 2: do what we need to do.

150
00:07:14,320 --> 00:07:16,320
Speaker 1: Thank you, Nicola, look after yourself. We're talk to you

151
00:07:16,320 --> 00:07:20,560
Speaker 1: again next week, Nicolai's Finance Minister. For more from Hither

152
00:07:20,680 --> 00:07:23,720
Speaker 1: Duplessy Allen Drive listen live to news talks. It'd be

153
00:07:23,840 --> 00:07:27,720
Speaker 1: from four pm weekdays or follow the podcast on iHeartRadio,