1
00:00:00,160 --> 00:00:00,360
Speaker 1: With us.

2
00:00:00,360 --> 00:00:03,800
Speaker 2: Now is Nichola willis our finance minister High Nicoler, Hi, Heather,

3
00:00:04,080 --> 00:00:06,640
Speaker 2: have you seen the taxpayers Union attack which is out

4
00:00:06,640 --> 00:00:10,639
Speaker 2: on the L and g Levey Nope, calling it a

5
00:00:10,640 --> 00:00:12,240
Speaker 2: new tax on the electricity sector.

6
00:00:13,039 --> 00:00:15,880
Speaker 1: Oh well, that's just a ridiculous thing to say. What

7
00:00:15,920 --> 00:00:19,720
Speaker 1: it actually is is a way of reducing the costs

8
00:00:19,800 --> 00:00:22,680
Speaker 1: that New Zealanders are facing for their electricity bills, which

9
00:00:22,720 --> 00:00:25,840
Speaker 1: at the moment factor in a massive premium for the

10
00:00:25,840 --> 00:00:29,720
Speaker 1: fact that we don't have secure energy supply. So all

11
00:00:29,760 --> 00:00:33,320
Speaker 1: of the electricity companies are paying more on the basis

12
00:00:33,320 --> 00:00:34,879
Speaker 1: that they might run out of gas and then what

13
00:00:34,920 --> 00:00:37,400
Speaker 1: are they going to do? So we need this strategic

14
00:00:37,960 --> 00:00:42,440
Speaker 1: security asset and it's about actually ensuring that allergy prices

15
00:00:42,479 --> 00:00:44,360
Speaker 1: are lower in the future. And the estimate is that

16
00:00:44,400 --> 00:00:46,839
Speaker 1: it'll be worth around fifty dollars per household.

17
00:00:46,920 --> 00:00:48,840
Speaker 2: This is what they say. Introducing a new tax during

18
00:00:48,840 --> 00:00:51,440
Speaker 2: a cost of living crisis would be a huge political mistake.

19
00:00:51,800 --> 00:00:54,200
Speaker 2: Luxon promised no new taxes and he will destroy his

20
00:00:54,240 --> 00:00:56,240
Speaker 2: credibility if he u turns. Now, how do you get

21
00:00:56,240 --> 00:00:56,640
Speaker 2: out of that?

22
00:00:57,280 --> 00:01:00,600
Speaker 1: It is not a new tax. This is building a

23
00:01:00,640 --> 00:01:05,959
Speaker 1: new LNG importation facility for energy users to use, and

24
00:01:06,040 --> 00:01:09,600
Speaker 1: we want the industry to fund that asset because that

25
00:01:09,760 --> 00:01:13,080
Speaker 1: asset will support the industry and in doing that, when

26
00:01:13,080 --> 00:01:15,800
Speaker 1: the industry have more secure energy supply, that will mean

27
00:01:15,880 --> 00:01:18,680
Speaker 1: lower costs for households. So for the average key, we're

28
00:01:18,680 --> 00:01:21,720
Speaker 1: sitting at home, the average kit it's key, we sitting

29
00:01:21,720 --> 00:01:23,520
Speaker 1: at home. What they need to know is at the moment,

30
00:01:23,840 --> 00:01:26,880
Speaker 1: part of why your electricity bill keeps on rising is

31
00:01:26,920 --> 00:01:29,880
Speaker 1: because there is a lack of gas supply for when

32
00:01:29,920 --> 00:01:33,360
Speaker 1: the rain doesn't pour and the sun isn't shining, and

33
00:01:33,400 --> 00:01:36,160
Speaker 1: we are dealing with that problem. And actually this is

34
00:01:36,160 --> 00:01:38,760
Speaker 1: going to help lower your electricity and so look, the

35
00:01:38,800 --> 00:01:41,840
Speaker 1: Taxpayers Union should not be so irresponsible.

36
00:01:41,480 --> 00:01:43,960
Speaker 2: In the detail. I must have got it wrong because

37
00:01:44,000 --> 00:01:47,760
Speaker 2: I thought that we, as residential users, we're going to

38
00:01:47,760 --> 00:01:49,200
Speaker 2: be paying the levy. But you're telling me it's the

39
00:01:49,200 --> 00:01:50,360
Speaker 2: industry who's paying the levy.

40
00:01:50,640 --> 00:01:53,320
Speaker 1: Well, we're still in the procurement approach, but it's intended

41
00:01:53,360 --> 00:01:56,000
Speaker 1: to be funded by the industry because we think that

42
00:01:56,040 --> 00:01:59,040
Speaker 1: the costs of that will be less than the price

43
00:01:59,480 --> 00:02:00,440
Speaker 1: currently being paid.

44
00:02:00,520 --> 00:02:02,520
Speaker 2: Electricity users will not pay this.

45
00:02:04,000 --> 00:02:07,120
Speaker 1: We think this will lower costs to households because at

46
00:02:07,120 --> 00:02:09,640
Speaker 1: the moment you'll come on the risk premium.

47
00:02:09,760 --> 00:02:12,359
Speaker 2: Come on, be straight with me. Are punters going to

48
00:02:12,440 --> 00:02:14,720
Speaker 2: pay this? Are we going to pay this? As electricity users?

49
00:02:15,639 --> 00:02:18,840
Speaker 1: We are going to reduce the costs per household by

50
00:02:18,880 --> 00:02:21,720
Speaker 1: reducing the risk premium that you currently pay.

51
00:02:21,840 --> 00:02:24,440
Speaker 2: You're not answering my question. It's really obvious.

52
00:02:25,240 --> 00:02:28,280
Speaker 1: Well, we haven't announced what the levee will be because

53
00:02:28,320 --> 00:02:30,919
Speaker 1: we haven't actually got the procurement. Who's paying the levy

54
00:02:30,919 --> 00:02:34,040
Speaker 1: approach defined or the energy companies will pay it in

55
00:02:34,080 --> 00:02:35,440
Speaker 1: the first instance.

56
00:02:35,080 --> 00:02:36,280
Speaker 2: And then the punters will pay it.

57
00:02:37,320 --> 00:02:40,160
Speaker 1: They will face a reduced cost because at the moment

58
00:02:40,360 --> 00:02:42,680
Speaker 1: they are paying a higher price for their electricity.

59
00:02:42,800 --> 00:02:44,240
Speaker 2: I feel I hate to say this. I feel like

60
00:02:44,240 --> 00:02:46,680
Speaker 2: even Simon Watts was more honest before when he actually

61
00:02:46,760 --> 00:02:49,280
Speaker 2: answered that question. But anyway, we're back to that. Look

62
00:02:49,800 --> 00:02:52,240
Speaker 2: in the poll the Takespayers Union Curier poll that's just

63
00:02:52,240 --> 00:02:53,880
Speaker 2: come out, did you see the bump up that the

64
00:02:53,880 --> 00:02:56,400
Speaker 2: cost of living has taken as being like the most

65
00:02:56,400 --> 00:02:58,560
Speaker 2: important thing to people? I think it's thirty five percent

66
00:02:58,600 --> 00:02:59,880
Speaker 2: of people say this. Now have you seen that?

67
00:03:01,000 --> 00:03:03,880
Speaker 1: Well, I've seen lots of polls, but actually all I

68
00:03:03,919 --> 00:03:06,360
Speaker 1: need to do is talk to New Zealanders to understand

69
00:03:06,400 --> 00:03:08,400
Speaker 1: that what people want is to feel like they can

70
00:03:08,440 --> 00:03:11,480
Speaker 1: get ahead, and that at the moment, they continue to

71
00:03:11,480 --> 00:03:13,880
Speaker 1: be concerned about the costs they face, and they want

72
00:03:13,880 --> 00:03:15,839
Speaker 1: to see rising incomes and they want to see lower

73
00:03:15,880 --> 00:03:18,520
Speaker 1: costs than everyday life, which is why we're doing things

74
00:03:18,560 --> 00:03:21,720
Speaker 1: like capping rates. That's why we delivered tax relief.

75
00:03:22,639 --> 00:03:26,000
Speaker 2: Okay, I'm getting to something here. Can you explain to

76
00:03:26,040 --> 00:03:28,760
Speaker 2: me because I genuinely don't understand why it is that

77
00:03:28,880 --> 00:03:30,960
Speaker 2: cost of living is now at a point where it

78
00:03:31,080 --> 00:03:32,880
Speaker 2: was two years ago. How has it come back to

79
00:03:32,919 --> 00:03:34,680
Speaker 2: twenty twenty fours levels? What's going on?

80
00:03:36,360 --> 00:03:39,880
Speaker 1: Well, I think that for a lot of people, they

81
00:03:40,240 --> 00:03:43,320
Speaker 1: came out of COVID, had that massive inflation spikes or

82
00:03:43,400 --> 00:03:47,760
Speaker 1: prices come back up, and lots of people think of

83
00:03:47,800 --> 00:03:50,720
Speaker 1: the cost of living as well as the supermarket bill

84
00:03:50,800 --> 00:03:53,480
Speaker 1: going to reduce next week. And actually what we're doing

85
00:03:53,560 --> 00:03:57,640
Speaker 1: is we've reduced their rate of increase. But what people

86
00:03:57,640 --> 00:04:00,400
Speaker 1: aren't seeing is a real reduction in the price of

87
00:04:00,440 --> 00:04:02,880
Speaker 1: their groceries, for example, or their rates bill. But it's

88
00:04:02,880 --> 00:04:06,400
Speaker 1: getting so it remains the top of mind concern. Well, look,

89
00:04:06,480 --> 00:04:08,840
Speaker 1: that's one poll here. I wouldn't overread one number. But

90
00:04:08,960 --> 00:04:11,200
Speaker 1: I think that what you are hearing as people remain

91
00:04:11,240 --> 00:04:12,320
Speaker 1: focused on the cost of living.

92
00:04:12,400 --> 00:04:14,920
Speaker 2: Okay, are you are you up for a ministerial review

93
00:04:14,960 --> 00:04:16,120
Speaker 2: into what's happened in Wellington?

94
00:04:17,760 --> 00:04:20,440
Speaker 1: Well, we do need to get answers about why that

95
00:04:20,520 --> 00:04:24,960
Speaker 1: plant has failed so catastrophically. The local government minister has

96
00:04:25,000 --> 00:04:27,080
Speaker 1: a number of tools available to him under the Act.

97
00:04:27,120 --> 00:04:29,560
Speaker 1: He is getting advice about whether he needs to use

98
00:04:29,600 --> 00:04:32,720
Speaker 1: any of those tools. He hasn't made any decisions at

99
00:04:32,720 --> 00:04:33,279
Speaker 1: this point.

100
00:04:33,440 --> 00:04:36,640
Speaker 2: Okay, in the insurance review that you're doing, would you

101
00:04:36,720 --> 00:04:40,840
Speaker 2: consider dropping the capital requirements that insurers have because they

102
00:04:40,880 --> 00:04:42,240
Speaker 2: reckon that'll make everything cheaper.

103
00:04:43,080 --> 00:04:45,279
Speaker 1: Well, that is one of the issues that we've asked

104
00:04:45,360 --> 00:04:48,440
Speaker 1: the Council of Financial Regulators to look at, which is

105
00:04:48,600 --> 00:04:52,240
Speaker 1: that the Reserve Bank sets these prudential rules, and we

106
00:04:52,279 --> 00:04:55,320
Speaker 1: want to ask is that in itself creating a cost pressure.

107
00:04:55,680 --> 00:04:58,039
Speaker 1: How much of this is about competition in the industry,

108
00:04:58,160 --> 00:05:00,560
Speaker 1: how much of this is about general construction costs, How

109
00:05:00,600 --> 00:05:03,160
Speaker 1: much of this is just we're getting more extreme weather events.

110
00:05:03,160 --> 00:05:06,039
Speaker 1: At the moment, we don't have good enough data to

111
00:05:06,240 --> 00:05:08,920
Speaker 1: really know which of those factors is biggest, but that's

112
00:05:08,920 --> 00:05:11,920
Speaker 1: why we're doing this study to find out what is

113
00:05:12,000 --> 00:05:14,040
Speaker 1: driving the cost and what options do we have for

114
00:05:14,080 --> 00:05:14,520
Speaker 1: reducing it.

115
00:05:14,640 --> 00:05:17,160
Speaker 2: And so if it comes back and the answer is Yep,

116
00:05:17,240 --> 00:05:19,080
Speaker 2: you need to drop the capital requirements, it will drop

117
00:05:19,160 --> 00:05:21,159
Speaker 2: the price of the insurance for everybody out there. Would

118
00:05:21,200 --> 00:05:22,040
Speaker 2: you consider doing it?

119
00:05:23,080 --> 00:05:25,760
Speaker 1: I'd consider doing it if I was confident that in

120
00:05:25,839 --> 00:05:29,400
Speaker 1: reducing that capital requirement that would actually be passed on

121
00:05:29,480 --> 00:05:33,240
Speaker 1: to you, the homeowner buying your home and contents insurance.

122
00:05:33,760 --> 00:05:36,640
Speaker 1: Because if what I'm doing is just creating more risk

123
00:05:37,160 --> 00:05:39,880
Speaker 1: of an insurer falling over, but your premium isn't going

124
00:05:39,880 --> 00:05:42,080
Speaker 1: to drop as a result, I wouldn't have an appetite. O.

125
00:05:42,640 --> 00:05:44,080
Speaker 2: Now, have you had a look at all at this

126
00:05:44,160 --> 00:05:47,679
Speaker 2: Crown Regional Holding's loan book and the risk of things

127
00:05:47,720 --> 00:05:48,640
Speaker 2: going into default here?

128
00:05:50,320 --> 00:05:54,719
Speaker 1: Yes? I have. So. Essentially the report that you're referring

129
00:05:54,760 --> 00:06:00,440
Speaker 1: to relates primarily to loans made under the Provincial Growth Fund,

130
00:06:00,960 --> 00:06:03,320
Speaker 1: and it reflects the fact that some of those loans

131
00:06:03,360 --> 00:06:06,360
Speaker 1: are now on a longer repayment schedule, or if I

132
00:06:06,400 --> 00:06:09,120
Speaker 1: had more concessionary interest terms applied than at the time

133
00:06:09,240 --> 00:06:13,280
Speaker 1: the loan was made, and as we now have a

134
00:06:13,520 --> 00:06:17,080
Speaker 1: Regional Infrastructure Fund. We're much tighter and clearer about the

135
00:06:17,080 --> 00:06:18,599
Speaker 1: conditions under which we give loans.

136
00:06:18,640 --> 00:06:21,200
Speaker 2: Shane Jones seems to suggest that it's limited to about

137
00:06:21,200 --> 00:06:23,280
Speaker 2: twenty five to twenty eight million dollars and the rest

138
00:06:23,360 --> 00:06:25,440
Speaker 2: is fine. Do you have a Are you sharing his

139
00:06:25,560 --> 00:06:26,280
Speaker 2: confidence there?

140
00:06:27,680 --> 00:06:30,760
Speaker 1: Well? It is the fact that the PGF right from

141
00:06:30,760 --> 00:06:33,080
Speaker 1: the get go, was about giving loans to things that

142
00:06:33,120 --> 00:06:35,560
Speaker 1: wouldn't otherwise get loans at a lower rate than they

143
00:06:35,560 --> 00:06:38,760
Speaker 1: would get from the normal system, So that's baked into

144
00:06:38,760 --> 00:06:41,600
Speaker 1: the whole design of the thing. He's right to say

145
00:06:41,600 --> 00:06:45,480
Speaker 1: that there's a limited number of projects that are really

146
00:06:45,480 --> 00:06:47,920
Speaker 1: really struggling or might have to be written off entirely.

147
00:06:47,960 --> 00:06:50,120
Speaker 1: There's a number of them where they've made adjustments and

148
00:06:50,480 --> 00:06:53,279
Speaker 1: they're likely to pay back those lines over time.

149
00:06:54,279 --> 00:06:57,479
Speaker 2: Do you subscribe to the view that Shane Jones has

150
00:06:57,560 --> 00:07:00,440
Speaker 2: that if we have regions and news eland that are

151
00:07:00,440 --> 00:07:02,440
Speaker 2: suffering and people are losing their jobs and businesses are

152
00:07:02,480 --> 00:07:04,480
Speaker 2: falling over in the market's not working, that we need

153
00:07:04,520 --> 00:07:07,400
Speaker 2: to step in as taxpayers and subsidize these jobs. Are

154
00:07:07,400 --> 00:07:07,960
Speaker 2: you into that.

155
00:07:09,560 --> 00:07:11,960
Speaker 1: In general? I think you've got to be really careful

156
00:07:11,960 --> 00:07:15,160
Speaker 1: about that, because the government has a track record over many,

157
00:07:15,200 --> 00:07:19,480
Speaker 1: many decades of picking the wrong things and not quite

158
00:07:19,480 --> 00:07:22,400
Speaker 1: getting it right, and then it's your money on the line.

159
00:07:22,520 --> 00:07:25,920
Speaker 1: So sometimes in a region, yes, extra support needs to

160
00:07:25,920 --> 00:07:28,480
Speaker 1: go in to help them transition when they're moving away

161
00:07:28,520 --> 00:07:32,200
Speaker 1: from one industry to another. But it's also the case

162
00:07:32,280 --> 00:07:35,520
Speaker 1: that me deciding who to loan money to, well, I'm

163
00:07:35,520 --> 00:07:37,360
Speaker 1: not always the best place to make that decision. And

164
00:07:37,440 --> 00:07:39,080
Speaker 1: the same can be said for everyone in government.

165
00:07:39,120 --> 00:07:40,760
Speaker 2: All Right, hen Nichola, thank you very much, appreciate it.

166
00:07:40,840 --> 00:07:44,840
Speaker 2: Nichola Willis, Finance Minister. For more from Heather duplessy Ellen Drive,

167
00:07:45,040 --> 00:07:48,400
Speaker 2: listen live to news talks the'd be from four pm weekdays,

168
00:07:48,560 --> 00:07:50,760
Speaker 2: or follow the podcast on iHeartRadio