1 00:00:00,080 --> 00:00:02,360 Speaker 1: The Prime Minister is in Malaysia drumming up business, or 2 00:00:02,400 --> 00:00:05,920 Speaker 1: assuming he's drumming up business. So Finance Minister Nicola Willis 3 00:00:05,960 --> 00:00:07,000 Speaker 1: is with us. Very good morning to you. 4 00:00:07,080 --> 00:00:09,680 Speaker 2: Good morning mate the. 5 00:00:08,840 --> 00:00:11,720 Speaker 1: Doctor caroly McLeish. Was she good news? 6 00:00:12,520 --> 00:00:15,319 Speaker 2: Ah, yeah she was. Look, she did a commendable job 7 00:00:15,360 --> 00:00:17,799 Speaker 2: for New Zealand through a time of real economic challenge. 8 00:00:17,880 --> 00:00:20,040 Speaker 2: She was there for the response to COVID nineteen, the 9 00:00:20,079 --> 00:00:23,439 Speaker 2: response to the cyclone Gabrielle dealing with the cost of 10 00:00:23,480 --> 00:00:27,760 Speaker 2: living crisis, and was instrumental in helping this new government 11 00:00:27,960 --> 00:00:29,600 Speaker 2: deliver on our change of agenda. 12 00:00:30,240 --> 00:00:33,839 Speaker 1: Is she wrong on CGT yes? Is she wrong on retirement? 13 00:00:34,440 --> 00:00:38,559 Speaker 2: Well, look, we have a coalition commitment National and New 14 00:00:38,640 --> 00:00:41,840 Speaker 2: Zealand first that we won't change the age of retirement 15 00:00:41,880 --> 00:00:45,320 Speaker 2: this term. But it's well known the National Party campaigned 16 00:00:45,440 --> 00:00:49,800 Speaker 2: on raising the superannuation eligibility age and we did that 17 00:00:49,920 --> 00:00:54,080 Speaker 2: because we simply observe people are living longer, working longer. 18 00:00:54,200 --> 00:00:59,440 Speaker 2: The superannuation bill is getting significantly bigger and eventually we 19 00:00:59,480 --> 00:01:01,320 Speaker 2: are going to have to do something about it if 20 00:01:01,320 --> 00:01:03,560 Speaker 2: we want it to be sustainable, and I want it 21 00:01:03,600 --> 00:01:04,480 Speaker 2: to be sustainable. 22 00:01:04,800 --> 00:01:07,560 Speaker 1: What's her argument? Do you know, around CGT or tax 23 00:01:07,600 --> 00:01:10,160 Speaker 1: in general. She was talking about the basic core debt 24 00:01:10,160 --> 00:01:12,080 Speaker 1: in this country and the problems we have around debt. 25 00:01:12,280 --> 00:01:15,319 Speaker 1: Why are we not talking about growing the economy so 26 00:01:15,360 --> 00:01:17,480 Speaker 1: we don't have to tax people more. Why is it 27 00:01:17,640 --> 00:01:19,840 Speaker 1: always the answer we need to find the money from 28 00:01:19,840 --> 00:01:21,520 Speaker 1: somebody else as opposed to doing better. 29 00:01:21,640 --> 00:01:24,440 Speaker 2: Well, I'm with you. Before we pick people's pockets more, 30 00:01:24,480 --> 00:01:27,880 Speaker 2: there's two things we must do. Number One, ensure we're 31 00:01:27,920 --> 00:01:32,160 Speaker 2: actually spending New Zealanders money efficiently and our found abundant 32 00:01:32,200 --> 00:01:34,360 Speaker 2: evidence since we came in that that is not the 33 00:01:34,400 --> 00:01:37,720 Speaker 2: case and we are trimming the sales significantly. Second job 34 00:01:37,800 --> 00:01:41,560 Speaker 2: we have is to actually grow the pie so that 35 00:01:41,640 --> 00:01:44,640 Speaker 2: instead of having endless conversations about how we divide what 36 00:01:44,720 --> 00:01:48,160 Speaker 2: we have, we all have more. And that's about ultimately 37 00:01:48,280 --> 00:01:51,560 Speaker 2: backing businesses, giving them the confidence to invest high, people, 38 00:01:51,640 --> 00:01:54,800 Speaker 2: innovate and grow. That's what our government's all about. 39 00:01:54,920 --> 00:01:56,800 Speaker 1: Okay. So before the news I was talking about the 40 00:01:57,400 --> 00:02:00,640 Speaker 1: OECD report on rates. We rate people in this country 41 00:02:00,640 --> 00:02:04,080 Speaker 1: at one point nine percent versus the OECD average of 42 00:02:04,080 --> 00:02:06,280 Speaker 1: one So, in other words, our rates are double. So 43 00:02:06,400 --> 00:02:08,120 Speaker 1: you talk to the people, the primise that talk to 44 00:02:08,160 --> 00:02:11,080 Speaker 1: the people at the local body meeting last week and 45 00:02:11,080 --> 00:02:12,960 Speaker 1: tells you to get your act to They don't seem 46 00:02:13,000 --> 00:02:15,399 Speaker 1: to have heard that. They don't seem to get it. 47 00:02:15,440 --> 00:02:18,040 Speaker 1: Is that a road block for you generally, that people, 48 00:02:18,160 --> 00:02:22,000 Speaker 1: despite what you would argue, disagree or don't get it 49 00:02:22,240 --> 00:02:22,640 Speaker 1: or both. 50 00:02:23,280 --> 00:02:26,560 Speaker 2: Well, it's interesting. I think that message to local government 51 00:02:26,880 --> 00:02:31,399 Speaker 2: of actually brings some discipline has been really well received 52 00:02:31,480 --> 00:02:34,880 Speaker 2: by everyday New Zealanders and they are giving it to 53 00:02:34,960 --> 00:02:38,320 Speaker 2: their local councilors and mayors in stereo, which is actually 54 00:02:38,360 --> 00:02:41,040 Speaker 2: when that rates bill comes in and it's several thousand 55 00:02:41,080 --> 00:02:45,119 Speaker 2: dollars more than it was last year, it's very very painful. 56 00:02:45,160 --> 00:02:47,640 Speaker 2: And then when you have to drive over multiple speed 57 00:02:47,680 --> 00:02:52,240 Speaker 2: bumps on the way home past glorious gold plated cycle ways, 58 00:02:52,560 --> 00:02:56,000 Speaker 2: it doesn't feel very good. And I think that counselors 59 00:02:56,040 --> 00:02:57,880 Speaker 2: need to listen to that or they'll pay it the 60 00:02:57,880 --> 00:02:58,480 Speaker 2: ballot box. 61 00:02:58,840 --> 00:03:04,760 Speaker 1: Okay, So then we come to retirement CGT. We've covered off, 62 00:03:04,800 --> 00:03:06,799 Speaker 1: and then we to the pushback. I was talking to 63 00:03:06,800 --> 00:03:10,960 Speaker 1: Simmy and Brown about do you feel that you've got 64 00:03:11,639 --> 00:03:14,359 Speaker 1: a group of people who just don't agree with what 65 00:03:14,440 --> 00:03:18,320 Speaker 1: you want and are determined in some way or another 66 00:03:18,360 --> 00:03:21,000 Speaker 1: and sit. I suppose the MARII wards most of them 67 00:03:21,000 --> 00:03:24,679 Speaker 1: have voted to go to an election next year. They somehow, 68 00:03:24,760 --> 00:03:27,960 Speaker 1: for whatever reason, are not going to agree with you 69 00:03:28,320 --> 00:03:30,240 Speaker 1: and tow the line. 70 00:03:30,320 --> 00:03:33,120 Speaker 2: Well, look, the joy of democracy there is always a 71 00:03:33,160 --> 00:03:37,600 Speaker 2: diverse range of views. But you know our voter turnout 72 00:03:37,680 --> 00:03:40,680 Speaker 2: rates that local elections are pretty low. And what I'd 73 00:03:40,720 --> 00:03:42,840 Speaker 2: say to New Zealand is is, if you don't like 74 00:03:42,880 --> 00:03:45,200 Speaker 2: your rates bill, if you're not happy with the decision 75 00:03:45,240 --> 00:03:48,680 Speaker 2: making your local council's doing, for goodness sake, make sure 76 00:03:48,760 --> 00:03:51,560 Speaker 2: you vote, and make sure that you talk to your 77 00:03:51,560 --> 00:03:55,640 Speaker 2: friends about voting, and don't just vote by thinking about 78 00:03:55,640 --> 00:03:57,120 Speaker 2: it on the day. Have a look at who your 79 00:03:57,120 --> 00:04:00,000 Speaker 2: counselors are, what their track records are, and whether they 80 00:04:00,040 --> 00:04:02,640 Speaker 2: stand up for the things you believe in. Because actually, 81 00:04:02,880 --> 00:04:05,640 Speaker 2: ultimately I don't get to decide who local councils are 82 00:04:05,680 --> 00:04:06,400 Speaker 2: New Zealanders do. 83 00:04:06,600 --> 00:04:08,600 Speaker 1: One of the things you announced last week is this 84 00:04:08,680 --> 00:04:11,800 Speaker 1: cross party idea, this consensus idea around the infrastructure, thirty 85 00:04:11,880 --> 00:04:13,520 Speaker 1: year plant, all that sort of stuff. It was poop 86 00:04:13,520 --> 00:04:17,000 Speaker 1: pooed almost immediately. Is it possible we are too divided 87 00:04:17,040 --> 00:04:20,360 Speaker 1: as a nation politically anyway that we will never agree, 88 00:04:20,400 --> 00:04:22,680 Speaker 1: and yesterday's announcement on roads, for example, is a good 89 00:04:22,680 --> 00:04:23,320 Speaker 1: example of that. 90 00:04:23,760 --> 00:04:25,280 Speaker 2: Well, look, I think you're right and you're wrong. You're 91 00:04:25,320 --> 00:04:27,200 Speaker 2: right that there will always be some issues that there 92 00:04:27,200 --> 00:04:31,080 Speaker 2: will be disagreement on. That's healthy and that's important. But 93 00:04:31,400 --> 00:04:35,479 Speaker 2: can we decide to collectively agree to the bulk of 94 00:04:35,520 --> 00:04:38,520 Speaker 2: infrastructure projects. I don't think that's beyond us. If you 95 00:04:38,520 --> 00:04:40,760 Speaker 2: think over the next thirty years what we're going to 96 00:04:40,800 --> 00:04:45,640 Speaker 2: require in terms of roads, hospitals, school buildings, there shouldn't 97 00:04:45,640 --> 00:04:48,240 Speaker 2: be a big hullabaloo of a debate about that, and 98 00:04:48,240 --> 00:04:51,080 Speaker 2: we should be able to put that in writing. Agree 99 00:04:51,120 --> 00:04:55,039 Speaker 2: as parties, give the construction sector certainty, allow them to 100 00:04:55,040 --> 00:04:58,800 Speaker 2: build their workforces. And that's the aspiration we have, and 101 00:04:58,839 --> 00:05:01,440 Speaker 2: we're going to keep urging opposition parties to work with 102 00:05:01,520 --> 00:05:01,920 Speaker 2: us on it. 103 00:05:02,040 --> 00:05:04,040 Speaker 1: Okay, Having said that, there was a letter yesterday from 104 00:05:04,040 --> 00:05:07,320 Speaker 1: the Power people. And so when you've got one party, 105 00:05:07,440 --> 00:05:10,320 Speaker 1: rightly or wrongly, that wants a big bucket at sixteen 106 00:05:10,360 --> 00:05:13,240 Speaker 1: billion dollars and you've got you guys wanting to look 107 00:05:13,279 --> 00:05:15,320 Speaker 1: for some coal or some oil and burn it, that's 108 00:05:15,800 --> 00:05:17,800 Speaker 1: an insurmountable gap, isn't it. 109 00:05:18,040 --> 00:05:21,479 Speaker 2: Well, look, I would just invite those parties on the 110 00:05:21,520 --> 00:05:23,479 Speaker 2: other side to come join me in the real world, 111 00:05:23,600 --> 00:05:24,679 Speaker 2: because here in the real. 112 00:05:24,480 --> 00:05:28,760 Speaker 1: World a problem right there, isn't it. I mean as 113 00:05:28,800 --> 00:05:30,880 Speaker 1: good a one line as that was. That's your problem, 114 00:05:31,000 --> 00:05:31,360 Speaker 1: isn't it. 115 00:05:31,440 --> 00:05:33,560 Speaker 2: Well, look here it is. New Zealanders want to turn 116 00:05:33,600 --> 00:05:35,719 Speaker 2: the lights on. They want they want there to be 117 00:05:35,839 --> 00:05:38,880 Speaker 2: industry that can afford the price of the electricity bill 118 00:05:38,960 --> 00:05:42,400 Speaker 2: that comes. And we've got to be truth tellers. Unless 119 00:05:42,400 --> 00:05:45,479 Speaker 2: we have some backup gas, New Zealand is going to 120 00:05:45,520 --> 00:05:49,920 Speaker 2: have terribly insecure electricity supply. Those are the facts. So actually, Mike, 121 00:05:49,960 --> 00:05:53,800 Speaker 2: I remain hopeful that labor will reflect on that situation 122 00:05:53,960 --> 00:05:57,000 Speaker 2: and see it's simply not credible for a mainstream party 123 00:05:57,160 --> 00:06:00,680 Speaker 2: to claim they can have a growing, stable economy unless 124 00:06:00,720 --> 00:06:05,200 Speaker 2: they can confirm there will be stable, affordable electricity supply 125 00:06:05,640 --> 00:06:07,080 Speaker 2: that requires backup gas. 126 00:06:07,120 --> 00:06:10,479 Speaker 1: Okay, also yesterday, so mean brown again. Open electricity and 127 00:06:10,560 --> 00:06:14,280 Speaker 1: open banking. I get open banking. I thought electricity was 128 00:06:14,320 --> 00:06:16,640 Speaker 1: reasonable in the sense that if you wanted to change 129 00:06:16,640 --> 00:06:19,919 Speaker 1: companies you can relatively easily, and people do. Is that 130 00:06:20,040 --> 00:06:21,920 Speaker 1: not the case? Do we not have open electricity? 131 00:06:22,000 --> 00:06:24,159 Speaker 2: Well, issue that a lot of New Zealanders talk about 132 00:06:24,240 --> 00:06:26,960 Speaker 2: is when they go to compare their pricing from one 133 00:06:27,040 --> 00:06:30,960 Speaker 2: electricity provider to another, it's quite difficult to compare because 134 00:06:30,960 --> 00:06:34,920 Speaker 2: of the different approaches to pricing, and so the idea 135 00:06:34,920 --> 00:06:37,120 Speaker 2: with open electricity is that you can really get in 136 00:06:37,200 --> 00:06:39,760 Speaker 2: and compare the data. When do you use your electricity, 137 00:06:39,920 --> 00:06:42,839 Speaker 2: what kind of electricity are you using? And what therefore, 138 00:06:42,839 --> 00:06:45,600 Speaker 2: which plan, which regime would suit. So it's all about 139 00:06:45,680 --> 00:06:48,120 Speaker 2: making it simpler for people to make good decisions. 140 00:06:47,800 --> 00:06:49,960 Speaker 1: Because I'm also last week there was some stats i 141 00:06:49,960 --> 00:06:51,839 Speaker 1: think put out by the Reserve Bank that when it 142 00:06:51,880 --> 00:06:54,760 Speaker 1: comes to refinancing at the moment, people are moving banks 143 00:06:54,760 --> 00:06:56,680 Speaker 1: and they're taking detail. So you would have us believe 144 00:06:56,720 --> 00:06:59,440 Speaker 1: that banking's problem and it's not open enough. The ComCom 145 00:06:59,440 --> 00:07:02,240 Speaker 1: says the same thing. Is that actually true? We just 146 00:07:02,360 --> 00:07:04,799 Speaker 1: inventing some problems that don't exist. 147 00:07:05,000 --> 00:07:09,760 Speaker 2: It is absolutely true. Historically around only half of New 148 00:07:09,840 --> 00:07:12,160 Speaker 2: Zealanders have you ever switched their bank, And when you 149 00:07:12,200 --> 00:07:15,840 Speaker 2: look at banking behavior, banks in New Zealand just haven't 150 00:07:15,880 --> 00:07:18,400 Speaker 2: acted as competitively as banks in other parts of the world, 151 00:07:18,440 --> 00:07:21,080 Speaker 2: nor have they invested as much in technology and innovation. 152 00:07:21,240 --> 00:07:24,239 Speaker 2: But I've seen those numbers about more New Zealanders switching 153 00:07:24,280 --> 00:07:26,600 Speaker 2: their banks, and I think that is great because the 154 00:07:26,640 --> 00:07:28,960 Speaker 2: best way to hold the bank's feet to the fire 155 00:07:29,400 --> 00:07:30,920 Speaker 2: is to actually stop around. 156 00:07:31,000 --> 00:07:33,480 Speaker 1: Because that's their argument, though, isn't it It works the market, 157 00:07:33,560 --> 00:07:35,560 Speaker 1: The market's actually working. If you want to change banks, 158 00:07:35,560 --> 00:07:36,920 Speaker 1: you can, if you want to change power providers. 159 00:07:36,960 --> 00:07:40,080 Speaker 2: Have you ever tried to change bank? Make it ain't easy? 160 00:07:40,600 --> 00:07:42,680 Speaker 1: Easy though it does not know I would agree with you, 161 00:07:42,720 --> 00:07:44,240 Speaker 1: but at the end of the day, there's nothing actually 162 00:07:44,280 --> 00:07:45,760 Speaker 1: stopping me if I want to. 163 00:07:45,960 --> 00:07:49,320 Speaker 2: Well, I think making it easier is important, but also 164 00:07:49,440 --> 00:07:52,520 Speaker 2: making sure that the banks don't settle back into a 165 00:07:52,560 --> 00:07:55,720 Speaker 2: comfortable position, and that's where having an aggressive competitor, much 166 00:07:55,760 --> 00:08:00,840 Speaker 2: as Australia had Macquarie Bank enter and really disrupt pricing, 167 00:08:01,120 --> 00:08:02,920 Speaker 2: I think the same in New Zealand would be positive. 168 00:08:03,000 --> 00:08:04,360 Speaker 1: So what do you do with Kywibank? What are we 169 00:08:04,360 --> 00:08:06,760 Speaker 1: going to find out about this this mystery idea? And 170 00:08:06,840 --> 00:08:08,600 Speaker 1: thinking you have around key we Bank and how do 171 00:08:08,640 --> 00:08:11,040 Speaker 1: you turbo charge them and to what extent? Because they 172 00:08:11,200 --> 00:08:14,120 Speaker 1: their result last week was a good result. I mean, yes, 173 00:08:14,120 --> 00:08:16,440 Speaker 1: they're a small bank, but they're out performing the other banks. 174 00:08:16,440 --> 00:08:18,320 Speaker 1: Why is that? Because people are going to them using 175 00:08:18,360 --> 00:08:21,000 Speaker 1: them see the opportunity. So that's a market working as Yeah, 176 00:08:21,000 --> 00:08:21,640 Speaker 1: look it's. 177 00:08:21,560 --> 00:08:23,640 Speaker 2: Good to see it growing in New Zealanders. They're obviously 178 00:08:23,720 --> 00:08:27,320 Speaker 2: choosing to use that bank. I'm taking proposals to Cabinet 179 00:08:27,360 --> 00:08:29,640 Speaker 2: by the end of the year about what we would 180 00:08:29,680 --> 00:08:31,560 Speaker 2: need to do to get more capital into it so 181 00:08:31,680 --> 00:08:33,920 Speaker 2: it can grow further. Obviously, it can only grow so 182 00:08:33,960 --> 00:08:36,080 Speaker 2: far as it's got the money to back its own lending, 183 00:08:36,480 --> 00:08:39,920 Speaker 2: and so there are some options there. There are investors 184 00:08:39,960 --> 00:08:42,439 Speaker 2: here in New Zealand who may be interested in investing 185 00:08:42,520 --> 00:08:44,560 Speaker 2: in that bank, so we need to work through what 186 00:08:44,600 --> 00:08:45,320 Speaker 2: those arrangements. 187 00:08:45,640 --> 00:08:48,080 Speaker 1: It's an assessment that there are investors who because it's 188 00:08:48,120 --> 00:08:49,840 Speaker 1: one thing to talk about it. But it's not that 189 00:08:49,880 --> 00:08:51,880 Speaker 1: I'm only investing in a bank. But I truly believe 190 00:08:51,920 --> 00:08:53,480 Speaker 1: the bank will go somewhere and there is a gap 191 00:08:53,520 --> 00:08:55,760 Speaker 1: in the marketplace for it to grow, et cetera. You 192 00:08:55,880 --> 00:08:58,720 Speaker 1: believe that's true and that's the information you are getting. 193 00:08:58,960 --> 00:09:01,760 Speaker 2: Yes, I do, for two reasons. One, the context here 194 00:09:01,880 --> 00:09:05,240 Speaker 2: is that the New Zealand banking sector is enormously profitable 195 00:09:05,520 --> 00:09:07,480 Speaker 2: compared to banking around the world, so that makes it 196 00:09:07,520 --> 00:09:11,240 Speaker 2: an attractive investment. The second reason is that I have 197 00:09:11,440 --> 00:09:14,960 Speaker 2: had key we save a fund. Providers and others say 198 00:09:14,960 --> 00:09:16,960 Speaker 2: to me, look, we'd like a slice of the banking 199 00:09:17,040 --> 00:09:20,040 Speaker 2: action and Kiwi Bank would be a path for getting there. 200 00:09:20,160 --> 00:09:22,080 Speaker 1: All right, good to see, great to be on the show, 201 00:09:22,320 --> 00:09:23,120 Speaker 1: Nikola Willis. 202 00:09:23,559 --> 00:09:26,439 Speaker 2: For more from the mic Asking Breakfast, listen live to 203 00:09:26,559 --> 00:09:29,640 Speaker 2: news talks that'd be from six am weekdays, or follow 204 00:09:29,679 --> 00:09:31,240 Speaker 2: the podcast on iHeartRadio.