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Speaker 1: So the big story is inflation, and inflation has remained

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Speaker 1: stuck at two point two percent for the year to December.

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Speaker 1: Now that is roughly in line with economists expectations. So

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Speaker 1: lower petrol prices helped keep our inflation down. But the

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Speaker 1: thing is domestic inflation is sticky, like rents, for instance,

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Speaker 1: they're at four point two percent and local authority rates

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Speaker 1: who are up twelve point two percent. That's twelve point

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Speaker 1: two percent. That's all inflation. Meanwhile, economists say that the

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Speaker 1: lower New Zealand dollar we have at the moment and

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Speaker 1: the higher oil prices that are emerging could see a

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Speaker 1: return of higher inflation imported into this country late this year.

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Speaker 1: So Finance Minister Nikola Willis joins me. Now, Hella Nikoler, Hello,

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Speaker 1: how worried to you that this inflation rate that we've

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Speaker 1: battled to attain might re accelerate as a year goes on.

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Speaker 2: Well, I think there's some positive signs in this data

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Speaker 2: because what it shows is that domestic inflation overall, what

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Speaker 2: we call non tradeable inflation, has come down from four

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Speaker 2: point nine four point five. That's going in the right direction.

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Speaker 2: For the first time in a long time. We're seeing

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Speaker 2: some real progress there, so that's positive. As we look

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Speaker 2: to the future, Yes, of course, we can expect that

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Speaker 2: there will be other inflationary pressures that can emerge, whether

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Speaker 2: that's from offshore or other things outside our control. So

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Speaker 2: our job as a government is to make sure that

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Speaker 2: we're keeping that discipline around our own spending, not adding

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Speaker 2: fuel to the inflationary fire, and let the Reserve Bank

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Speaker 2: do their job of making sure interest rates are in

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Speaker 2: the right place. Look, I'm pleased because today's data, which

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Speaker 2: is the second quarter in a row that we've had

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Speaker 2: inflation back and target ban means that there's room for

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Speaker 2: the Reserve Bank to keep reducing interest rates, and that

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Speaker 2: flows through the mortgageholders, that flows through to our real economy.

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Speaker 2: That's where gross and recovery comes from.

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Speaker 1: Now. The thing about non tradable inflation, on what they

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Speaker 1: call domestic inflation, is that there's many different leavers that

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Speaker 1: you can use to control it in One of them

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Speaker 1: is regulatory, and that is completely the ball is completely

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Speaker 1: in your court. So what would be your message to

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Speaker 1: councils who keep putting rates up and contributing to our

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Speaker 1: interest rates? Can you can you? Can you keep their right?

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Speaker 2: My message would be that. My message would be the

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Speaker 2: same as the prime ministers, which is if you care

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Speaker 2: about your rate payers, then do everything you can control

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Speaker 2: your costs because when you go and do your nice

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Speaker 2: to have projects and add all of these extra costs,

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Speaker 2: it's rate payers for paying and they can't really afford

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Speaker 2: to in many cases right now. So it's time for

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Speaker 2: discipline and restraint in local government. And yes we've now

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Speaker 2: got a new local government minister, Simon Watts. He will

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Speaker 2: carry on the great work that Simeon Brown has been

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Speaker 2: progressing where we are looking at this concept putting some

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Speaker 2: limits on the level of rent, the rate increases that

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Speaker 2: councils can do because in too many cases they have

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Speaker 2: been pretty out of control.

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Speaker 1: Okay, so that's a rates capan. Can you do it

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Speaker 1: this year and can it take effect this year?

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Speaker 2: Well, as I say, there's a new minister with his

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Speaker 2: feet under the desk, but he thinks I've seen him today.

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Speaker 2: The message he is getting loud into here from New

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Speaker 2: Zealanders is help me with my rapelle and I know

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Speaker 2: that's top of mind for him.

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Speaker 1: Rents up four point two percent again, how can you

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Speaker 1: get those rent costs down?

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Speaker 2: Yeah? Well, those rent costs have been increasing dramatically in

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Speaker 2: recent years and we want to see that moderating. That's

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Speaker 2: why we're making it so much easier to build houses,

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Speaker 2: because we basically need a situation where landlords are competing

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Speaker 2: for tenants rather than the other way around. So that

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Speaker 2: fast tracked legislation which we've put through that includes more

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Speaker 2: than forty new housing developments up to fifty five thousand

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Speaker 2: more homes. New Zealand's basic problems we don't have enough

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Speaker 2: houses for the number of people who need to be housed.

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Speaker 2: Only when we really solve that underlying issue where we

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Speaker 2: get affordable rents. I want affordable rents. It's a major

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Speaker 2: cost for many families, for many young people, and we

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Speaker 2: don't want to see the great rent increases continuing into

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Speaker 2: the future.

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Speaker 1: Now, of course you've been in retreating, you've been talking

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Speaker 1: about growth, and the astrategy is to get growth, and

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Speaker 1: it's needed now and not in five years or ten

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Speaker 1: or fifteen years time. We need to go it now.

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Speaker 1: There has been some talk about changing visa processes, meaning

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Speaker 1: that Chinese princes don't have to apply for a visa.

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Speaker 1: Simon Bridges reckons that would be an instant boost to

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Speaker 1: the economy for of a billion dollars. So are you

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Speaker 1: thinking about making China visa free for visitors and could

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Speaker 1: we expect that maybe even tomorrow when the State of

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Speaker 1: the Nation's speech comes out.

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Speaker 2: You can't expect that one to be announced tomorrow. But

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Speaker 2: I'm on the same page that one of the immediate

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Speaker 2: things we can do is get more tourists into New Zealand.

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Speaker 2: When tourists come here, they spend money in our local businesses,

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Speaker 2: they spend money with our local hospitality providers, our restaurants

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Speaker 2: and our bars. It's good for the economy, it's good

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Speaker 2: for jobs, it's good for all of us. So I

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Speaker 2: do want to see us increasing those numbers. The tourism

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Speaker 2: numbers increased in December and January, up to five year high.

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Speaker 2: I've talked to Louis Upston today, the new Minister for Tourism.

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Speaker 2: I've said the let's look pretty quickly at the visa idea,

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Speaker 2: because if we can bring more Chinese tourists here and

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Speaker 2: they spend more money at local shops, that is good

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Speaker 2: for New Zealanders. So let's put that high on agenda,

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Speaker 2: and it suddenly its high off your agenda.

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Speaker 1: Well, we're all waiting with beate to breath to see

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Speaker 1: some of your growth strategies and we look forward to

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Speaker 1: it and I thank you so much for your time today.

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Speaker 1: That is Nicola Willis, the Finance Minister.

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