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Speaker 1: So to the state of the old economy, and despite

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Speaker 1: the so called green shoots and brighter days ahead, yesterday's

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Speaker 1: Crown Account numbers remind us it's all still a mess.

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Speaker 1: The deficit blew out to twelve point nine billion. They

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Speaker 1: thought it was going to be eleven. This is the

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Speaker 1: year to June, Health, New Zealand and a se see

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Speaker 1: your major issues. Former Finance Minister Stephen Joyce's with us.

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Speaker 2: Good morning, Wanning Mike, how are you very well? Thank you?

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Speaker 1: Revenues up, but then so are expenses. Is that a

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Speaker 1: reputational issue potentially for a conservative government.

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Speaker 2: Nah, I don't think so at the stage. It would

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Speaker 2: be if it continued for a long time, you know,

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Speaker 2: for a couple another couple of years. We just got

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Speaker 2: to be thankful. I think that the revenue did go

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Speaker 2: up because I think the expectation is that the revenue

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Speaker 2: would drop, and indeed the tax take around companies and

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Speaker 2: individuals dropped. The quirk of it was with interest rates

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Speaker 2: going up, the people that paid tax on their interest

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Speaker 2: paid more, obviously, and so that pushed the revenue up

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Speaker 2: on that side. But it's still a pretty pretty bleak

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Speaker 2: picture and the challenge for the government will be is

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Speaker 2: that won't continue. The interest won't keep rising now because

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Speaker 2: interest rates have now turned, so that contribution to revenue

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Speaker 2: increases won't happen. So once again it comes back to

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Speaker 2: a story of needing growth to boost that tax take.

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Speaker 2: Otherwise we'll be chasing our tail downwards for a while yet,

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Speaker 2: which is the normal method. By the way, you come

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Speaker 2: out of a recession. Everybody else will feel better before

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Speaker 2: the government books look better, and we had that, and

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Speaker 2: we had that in twenty nine to twelve. You know,

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Speaker 2: poor Bill was constantly reporting back that despite improvements in

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Speaker 2: the general economy, that it was taking time to turn

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Speaker 2: the fiscal books around. And that's just the white works.

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Speaker 1: The surplus by twenty eight is that still real?

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Speaker 2: Well, it could be, but it's going to depend. It's

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Speaker 2: going to depend a lot on growth. I mean, people

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Speaker 2: forget we've paid a massive price. I mean, congratulations, My

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Speaker 2: conflation has been beaten and in the period post COVID,

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Speaker 2: we've doubled the country's net debt, We've flattened the economy.

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Speaker 2: But by god, we've got inflation under control. So you know,

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Speaker 2: we should celebrate ironically that. But it's a it's a

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Speaker 2: big drive back from here and.

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Speaker 1: The ACC questions and the health questions are they answerable

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Speaker 1: questions or an ACC in particular, have we got something

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Speaker 1: to be worried about.

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Speaker 2: A CC's it's a sort of classic problem. I think

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Speaker 2: that the that the entitlements if you like, or the

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Speaker 2: or the payouts increased during the labor government, they soften

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Speaker 2: the criteria that always puts a acc ACC's footing worse.

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Speaker 2: And what generally comes in and we had to do

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Speaker 2: the same thing as your government comes in and has

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Speaker 2: to tighten the criteria and put up the ACC levies

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Speaker 2: to get the books back and balance. Unfortunately, that's the

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Speaker 2: cycle that occurs on the health side. Well with you

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Speaker 2: begin it's it's a proof that health New Zealanders is

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Speaker 2: not a solution. It's just another way of counting the beans.

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Speaker 2: And it's a new bureaucracy over the other bureaucracy, and

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Speaker 2: there's some real work to be done to improve productivity.

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Speaker 2: It's not about reducing health spending, which some of the

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Speaker 2: political critics get into. No government reduces health spending. It's

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Speaker 2: just about how effective that spending is going to be.

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Speaker 2: And we yet to see anything out of this new

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Speaker 2: system which will deliver that productivity.

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Speaker 1: Saw that Nicholas shekeled herself with does she asked for

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Speaker 1: trouble on that. Given it's already spent and we're not

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Speaker 1: even into next year.

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Speaker 2: It's going to be very tough. And that's why you're

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Speaker 2: seeing the sorts of decisions we're seeing. And I heard

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Speaker 2: the CTU guys saying that it's terrible. You know, we

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Speaker 2: shouldn't have cut ferries. I shouldn't cut you know, it

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Speaker 2: shouldn't have recalculated the needn hospital and everything like that.

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Speaker 2: But there's a reason for that, and that's because you've

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Speaker 2: doubled debt in six years and now you're running a

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Speaker 2: deficit of twelve point nine billion. The answer to his

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Speaker 2: questquestion as well, you should have got your mate Grant

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Speaker 2: to be under much greater control three or four years ago,

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Speaker 2: and maybe we wouldn't be having to make these sorts

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Speaker 2: of decisions now. If the country is having to make,

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Speaker 2: that's tough, and I think it's going to be hard

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Speaker 2: for it to do that number next year. But actually

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Speaker 2: what's the alternative?

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Speaker 1: Good question? Well, the nice to catch up with your

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Speaker 1: Stephen Joyce, former Finance Ministry.

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Speaker 2: For more from the mic, asking Breakfast.

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Speaker 1: Listen live to news talks it'd be from six am weekdays,

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