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Speaker 1: So Jasindra Doom was worn repeatedly along with Grant Robertson,

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Speaker 1: that his spending spree during COVID would have dire consequences,

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Speaker 1: and she was warned as early as twenty twenty. Newly

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Speaker 1: released documents, Showerdourn's own treasury advised that a blowout of

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Speaker 1: public debt would leave us vulnerable for any future crises,

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Speaker 1: and avoided advised her rather to better target the spending.

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Speaker 1: Nicola Witus is the Finance minister with me this morning. Minister,

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Speaker 1: good morning, good morning. First of all, does the government

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Speaker 1: have any response to what Netanya, who's just announced he

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Speaker 1: wants to fully take control.

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Speaker 2: Of Gaza looks forgive me? I have not been briefed

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Speaker 2: on that, and I know very well on matters of foreignacys,

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Speaker 2: one should be brief before one comments.

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Speaker 1: Fair Now this report from Treasury. Does this mean that

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Speaker 1: in future events you won't be doing what Labour did

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Speaker 1: and pulling the fiscal lever and leave it to the

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Speaker 1: Reserve Bank.

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Speaker 2: That's exactly what it means. This is officials who have

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Speaker 2: looked very keyfully at what went on. They are not

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Speaker 2: political and what they make very clear in this report

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Speaker 2: very politely, is that big mistakes were made in the

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Speaker 2: way that the last government used government spending to respond

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Speaker 2: to COVID, and they are urging future politicians not to

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Speaker 2: repeat those mistakes, and our government will not.

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Speaker 1: The vast bulk of that spending was on the wage subsidy.

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Speaker 1: Did you support that, Well.

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Speaker 2: That's not actually correct. The wage subsidy was around thirty

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Speaker 2: five percent of spending. Hundred percent was eighteen percent was

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Speaker 2: helf That's here's the kicker. Nearly half of a COVID

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Speaker 2: spending was on a range of things with a very

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Speaker 2: varied range of objectives, whether that was school lunches, increases

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Speaker 2: to welfare benefits, public housing. Now all good things that

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Speaker 2: we know that many people like. But actually what the

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Speaker 2: officials say is that didn't really make a difference to

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Speaker 2: the economy doing that stuff. Not a very LaGG defect,

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Speaker 2: and it racked up huge amounts of debt. It was

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Speaker 2: extremely inflationary, and we're now in the position as a

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Speaker 2: country where we are paying the price for that. And

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Speaker 2: so the point is, Yep, you've got to do some things.

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Speaker 2: You've got to do wage subsidies, you've got to increase

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Speaker 2: your spending on the health system, but be really careful

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Speaker 2: that you do the things you have to do and

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Speaker 2: don't rack up so much extra spending and debt that

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Speaker 2: we end up as an economy paying it off for

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Speaker 2: a very long time. That's what the last government did.

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Speaker 1: Yeah, but it's your continuing with it, aren't you. I mean,

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Speaker 1: the bureaucrat counts barely moved. You've still got massive government debt,

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Speaker 1: is still spending more than spending more than you are earning.

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Speaker 2: Well, I reject that. Across our first two budgets, we

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Speaker 2: have already delivered forty four billion dollars worth of savings.

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Speaker 2: Now it is correct that we have put a lot

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Speaker 2: of those savings back into the system into education.

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Speaker 1: Government's still just as big, right, No, it is not just.

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Speaker 2: As big, because what we have had, well, we have

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Speaker 2: constrained government spending significantly. We've had much smaller editions of

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Speaker 2: additional funding, and we have ensured that we're in a

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Speaker 2: position where over the next four years we can get

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Speaker 2: the books back in balance. We've put that track down

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Speaker 2: that we get them back in balance and we start

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Speaker 2: bending down the deck curve.

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Speaker 1: Yeah, but that's one the other. That's what Grant used

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Speaker 1: to tell us too. How much smaller is the government

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Speaker 1: now under your watch than it was under labor? I mean,

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Speaker 1: you keep saying they increased spending eighty four percent, blah

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Speaker 1: blah blah. How much smaller is government spending now than

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Speaker 1: it was?

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Speaker 2: Well, government spending is on track to come down to

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Speaker 2: thirty point nine percent for context, the last government drove

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Speaker 2: it up to thirty four percent of the overall size

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Speaker 2: of the economy. And most importantly, what we've done is

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Speaker 2: ensured that when we've been making investments, we're doing them

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Speaker 2: in a way that actually stimulates growth in the private

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Speaker 2: sector of the economy, things like making sure we're reducing taxes,

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Speaker 2: making sure we've got that investment those schemes for businesses,

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Speaker 2: because we know the countries don't get rich just by

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Speaker 2: growing the size of their government. They have to grow

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Speaker 2: the size of those who are making things, misting things.

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Speaker 1: Very doing things very quickly. We've got the tariffs coming

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Speaker 1: in today. Do we have when is Todd McClay going

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Speaker 1: to be over the Do we have any idea whether

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Speaker 1: they're going to give us a reprieve?

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Speaker 2: Well, look, I think that those who observe Trump and

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Speaker 2: look internationally can see that that seems very unlikely at

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Speaker 2: the stage. Now that means that New Zealand needs to

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Speaker 2: keep pressing our case. We need to keep making sure

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Speaker 2: the a US administration remembers what a good partner they

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Speaker 2: have been to them. But look, I look at Switzerland.

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Speaker 2: They went over and did a huge amount of negotiating.

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Speaker 2: They thought they were going to be on a low tariff.

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Speaker 2: They ended up on thirty nine tea.

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Speaker 1: Almost made careful, Almost made the situation where Nicola will

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Speaker 1: appreciate your time this morning Finance Mins.

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