1 00:00:00,120 --> 00:00:02,639 Speaker 1: Still trying to work out whether what Nikola Willison announced 2 00:00:02,720 --> 00:00:05,160 Speaker 1: yesterday was braver and possible this is the budget, of 3 00:00:05,160 --> 00:00:07,760 Speaker 1: course coming later on next month, possibly both. I suppose 4 00:00:07,880 --> 00:00:10,280 Speaker 1: the operating allowance for the budget next month, which was 5 00:00:10,320 --> 00:00:12,760 Speaker 1: already tight at two point four billion, has been slashed 6 00:00:12,840 --> 00:00:15,240 Speaker 1: one point three paints a picture of a country in 7 00:00:15,280 --> 00:00:18,040 Speaker 1: a very tight fiscal spot politically is a hard seller. Well, 8 00:00:18,079 --> 00:00:20,200 Speaker 1: of course, Former Finance Minister Stephen Joyce, well, this. 9 00:00:20,200 --> 00:00:21,880 Speaker 2: Is a very good morning morning, Mike. How are you 10 00:00:22,000 --> 00:00:22,280 Speaker 2: very well? 11 00:00:22,280 --> 00:00:24,200 Speaker 1: Indeed the two point four to the one point three 12 00:00:24,400 --> 00:00:26,759 Speaker 1: double question, would you have done the same? And two 13 00:00:26,920 --> 00:00:27,960 Speaker 1: is it foolish or not? 14 00:00:29,200 --> 00:00:32,559 Speaker 2: No, it's not foolish, and I probably would have done 15 00:00:32,640 --> 00:00:38,839 Speaker 2: something similar because there is huge capacity to still reduce 16 00:00:39,520 --> 00:00:44,559 Speaker 2: the upwards trend of government spending. And I'm assuming in 17 00:00:44,600 --> 00:00:47,559 Speaker 2: that move that found quite a bit of waste and 18 00:00:47,680 --> 00:00:49,000 Speaker 2: they'll be able to do something with it. And I 19 00:00:49,000 --> 00:00:51,519 Speaker 2: think in the context of that, you've got to remember 20 00:00:51,560 --> 00:00:55,360 Speaker 2: that the government spending is pretty much doubled since twenty 21 00:00:55,680 --> 00:00:59,080 Speaker 2: seventeen in nominal terms, and inflation's only gone up to 22 00:00:59,080 --> 00:01:01,960 Speaker 2: thirty percent of the same time, so there's got to 23 00:01:02,000 --> 00:01:05,800 Speaker 2: be capacity there because I think most people would say 24 00:01:05,880 --> 00:01:10,280 Speaker 2: that putting out public services haven't improved that much in 25 00:01:10,600 --> 00:01:13,800 Speaker 2: seven years. It's definitely costs more because of inflation, but 26 00:01:13,840 --> 00:01:17,679 Speaker 2: nothing like, nothing like the sort of numbers that the 27 00:01:17,760 --> 00:01:21,000 Speaker 2: PAS government ramped it up to. So I think there'll 28 00:01:21,040 --> 00:01:23,840 Speaker 2: be capacity there. The trick is to find it. As 29 00:01:23,920 --> 00:01:27,080 Speaker 2: John Key used to say, there's a constituency for every 30 00:01:27,120 --> 00:01:31,000 Speaker 2: bit of existing government spending. So no matter what you do, 31 00:01:31,319 --> 00:01:35,040 Speaker 2: you're going to have challenges because there'll be somebody missing out, 32 00:01:35,360 --> 00:01:37,280 Speaker 2: but a lot of it. You know, they should be 33 00:01:37,319 --> 00:01:39,720 Speaker 2: able to find some good opportunities there. 34 00:01:39,800 --> 00:01:43,760 Speaker 1: When she says she's found billions, I guess most of 35 00:01:43,840 --> 00:01:46,600 Speaker 1: us thought they were found last time round. Do you 36 00:01:46,640 --> 00:01:49,040 Speaker 1: believe she's found billions? And we will go, oh, so 37 00:01:49,160 --> 00:01:49,960 Speaker 1: that's where it's been. 38 00:01:51,120 --> 00:01:53,960 Speaker 2: I'm encouraged by that because actually the last time around, 39 00:01:54,880 --> 00:01:57,160 Speaker 2: you know, you didn't have a lot of time. Government 40 00:01:57,200 --> 00:01:59,160 Speaker 2: came in at the end of the year. You know, 41 00:01:59,280 --> 00:02:02,480 Speaker 2: budget proposed was in February. Frankly, the public service is 42 00:02:02,520 --> 00:02:06,320 Speaker 2: still getting aligned with the new government. This is the 43 00:02:06,360 --> 00:02:08,079 Speaker 2: first year, would be the year they throw out what 44 00:02:08,120 --> 00:02:11,720 Speaker 2: we used to call the Washington Monuments, which is yes, 45 00:02:11,800 --> 00:02:14,320 Speaker 2: you could cut minister, but you know it would be 46 00:02:14,360 --> 00:02:16,880 Speaker 2: the police the police boat in Wellington, which of course 47 00:02:16,919 --> 00:02:20,120 Speaker 2: would be completely politically unsustainable. So they throw up the 48 00:02:20,160 --> 00:02:24,360 Speaker 2: things first that you that you know that you can't cut. 49 00:02:24,760 --> 00:02:27,640 Speaker 2: And then after a year of work, as will have 50 00:02:27,680 --> 00:02:31,639 Speaker 2: happened in the meantime, the ministers have got a lot 51 00:02:31,680 --> 00:02:35,040 Speaker 2: more familiar with their portfolios, a lot more familiar with 52 00:02:35,080 --> 00:02:38,120 Speaker 2: the spending buckets, and they'll be able to make some choices. 53 00:02:39,200 --> 00:02:41,720 Speaker 2: I remember the example for me that came to mind 54 00:02:41,840 --> 00:02:45,880 Speaker 2: was the tertiary budget. When I was minister. We made 55 00:02:45,919 --> 00:02:49,239 Speaker 2: a large number of small changes to the student loan 56 00:02:49,320 --> 00:02:51,760 Speaker 2: scheme over a period of four or five years, and 57 00:02:51,800 --> 00:02:57,040 Speaker 2: we funded the increase in tertiary budgets across that time 58 00:02:57,440 --> 00:02:59,760 Speaker 2: out of that and gave some money back to the 59 00:03:00,000 --> 00:03:04,280 Speaker 2: Minister of Finance. And a few people were upset with 60 00:03:04,320 --> 00:03:07,640 Speaker 2: some of some of the changes that we made, but 61 00:03:07,720 --> 00:03:10,600 Speaker 2: none of them were reversed by the next government because 62 00:03:10,639 --> 00:03:13,280 Speaker 2: they were all sensible changes. So it just requires quite 63 00:03:13,320 --> 00:03:15,840 Speaker 2: a lot of work, and it requires ministers to have 64 00:03:15,880 --> 00:03:18,200 Speaker 2: good political radar and know what they can't shut in 65 00:03:18,240 --> 00:03:19,160 Speaker 2: what they can do. 66 00:03:19,240 --> 00:03:21,320 Speaker 1: You believe the twenty nine surplus thing or not. 67 00:03:23,120 --> 00:03:25,799 Speaker 2: Well. I think it's a good goal. Of course, it's 68 00:03:25,840 --> 00:03:28,679 Speaker 2: back from where it was, but it was found to be. Yeah, 69 00:03:28,720 --> 00:03:30,240 Speaker 2: I think you've got to have that as a target. 70 00:03:31,040 --> 00:03:32,480 Speaker 2: A lot of it will depend on the state of 71 00:03:32,480 --> 00:03:34,480 Speaker 2: the world economy over the next couple of years, but 72 00:03:34,639 --> 00:03:36,920 Speaker 2: you've got to set it. There are those already that 73 00:03:36,960 --> 00:03:38,760 Speaker 2: are saying, ah, it's the end of the world. We 74 00:03:38,760 --> 00:03:42,680 Speaker 2: should be spending more normal suspects. But that's not the 75 00:03:42,720 --> 00:03:44,560 Speaker 2: thing to be doing right now. You've got to get 76 00:03:44,800 --> 00:03:47,440 Speaker 2: our own books into shape. That's really really important. 77 00:03:47,640 --> 00:03:50,400 Speaker 1: See, that's the interesting thing. So it's economics versus politics. 78 00:03:50,480 --> 00:03:53,560 Speaker 1: Is she spending political capital here? Or are there are 79 00:03:53,640 --> 00:03:56,120 Speaker 1: enough New Zealanders who go, yeah, it's hard, but life 80 00:03:56,240 --> 00:03:57,720 Speaker 1: is hard and it's about time we did this. 81 00:03:59,280 --> 00:04:03,839 Speaker 2: I think the constituency for controlling government spending is if 82 00:04:03,880 --> 00:04:07,160 Speaker 2: anything increased in the last twelved months. I mean, obviously 83 00:04:07,200 --> 00:04:09,720 Speaker 2: there's things you can't touch and you shouldn't, like the 84 00:04:09,760 --> 00:04:13,960 Speaker 2: health sector and education, but in all the other areas, 85 00:04:14,000 --> 00:04:15,440 Speaker 2: I think there's a lot of things that people are 86 00:04:15,440 --> 00:04:17,520 Speaker 2: looking at actual I'll give you an example. The other day, 87 00:04:18,400 --> 00:04:21,760 Speaker 2: the Ministry of Education announced teachers registration costs have been 88 00:04:21,800 --> 00:04:26,240 Speaker 2: covered by the Crown as a pre budget announcement. I 89 00:04:26,279 --> 00:04:30,000 Speaker 2: don't think there was a massive constituency for that. More broadly, 90 00:04:30,000 --> 00:04:31,760 Speaker 2: I mean, it doesn't change much at the end of 91 00:04:31,800 --> 00:04:33,400 Speaker 2: the day, and I'm sure the teachers will be happy, 92 00:04:33,680 --> 00:04:37,080 Speaker 2: but it's not like there's a lot of constituency for 93 00:04:37,160 --> 00:04:40,279 Speaker 2: the government to announce a whole lot of extra spending 94 00:04:41,480 --> 00:04:44,200 Speaker 2: for one group or another, as there often would be 95 00:04:44,240 --> 00:04:47,560 Speaker 2: at the stage of the cycle. There's no great enthusiasm 96 00:04:47,640 --> 00:04:51,320 Speaker 2: for it, and that's because the public knows that our 97 00:04:51,560 --> 00:04:54,640 Speaker 2: finances are tight. The world is in a difficult place. 98 00:04:54,920 --> 00:04:55,840 Speaker 2: We've got to be careful. 99 00:04:56,600 --> 00:04:58,839 Speaker 1: We do and do appreciate your time, as I Stephen Joyce, 100 00:04:58,880 --> 00:05:02,520 Speaker 1: former Finance Minister. For more from the Mic Asking Breakfast, 101 00:05:02,680 --> 00:05:06,000 Speaker 1: listen live to News Talk SETB from six am weekdays, 102 00:05:06,240 --> 00:05:08,279 Speaker 1: or follow the podcast on iHeartRadio.