1 00:00:00,120 --> 00:00:03,199 Speaker 1: With us. Now is Nikola, willis the finance minister. Evening, Nikola, 2 00:00:03,960 --> 00:00:05,360 Speaker 1: good evening, welcome back. 3 00:00:05,600 --> 00:00:08,200 Speaker 2: I've had to go two weeks without talking about Willn 4 00:00:08,240 --> 00:00:09,520 Speaker 2: Carpett's and I've really missed it. 5 00:00:10,760 --> 00:00:12,479 Speaker 1: I wasn't going to raise it. But now that you've 6 00:00:12,520 --> 00:00:13,920 Speaker 1: raised it, have you got us the number? 7 00:00:15,280 --> 00:00:17,440 Speaker 2: No? But what I can tell you is we're delivering 8 00:00:17,480 --> 00:00:19,520 Speaker 2: better value for the taxpayer all round. 9 00:00:19,600 --> 00:00:22,200 Speaker 1: Okay, wonderful. Now do you reckon that this inflation spike 10 00:00:22,320 --> 00:00:22,919 Speaker 1: is temporary? 11 00:00:24,120 --> 00:00:27,040 Speaker 2: Well, that's what the Reserve Bank and the people advise 12 00:00:27,200 --> 00:00:30,520 Speaker 2: me think. They think they could continue to be upward 13 00:00:30,560 --> 00:00:34,200 Speaker 2: inflation pressure into the next quarter, but they're looking through 14 00:00:34,200 --> 00:00:37,000 Speaker 2: it and the medium term. They're still seeing capacity in 15 00:00:37,040 --> 00:00:40,000 Speaker 2: the economy, which gives them confidence that this isn't going 16 00:00:40,040 --> 00:00:41,040 Speaker 2: to be a long run thing. 17 00:00:41,360 --> 00:00:43,320 Speaker 1: How do you write the chances that this economy is 18 00:00:43,400 --> 00:00:45,320 Speaker 1: humming when we go to the polls next year? 19 00:00:47,240 --> 00:00:49,559 Speaker 2: I think it will be in much better shape when 20 00:00:49,600 --> 00:00:51,600 Speaker 2: we go to the polls next year. And that's based 21 00:00:51,640 --> 00:00:54,760 Speaker 2: on all of the forecasts I see, which tell me 22 00:00:54,800 --> 00:00:56,520 Speaker 2: that growth is going to be picking up on a 23 00:00:56,560 --> 00:00:59,560 Speaker 2: per capita basis in real terms, that inflation will be 24 00:00:59,680 --> 00:01:03,760 Speaker 2: under control that jobs will be being created and based 25 00:01:03,800 --> 00:01:05,840 Speaker 2: on the fact that between now and the next election, 26 00:01:06,040 --> 00:01:08,680 Speaker 2: this government's going to be doing a lot to drive. 27 00:01:08,520 --> 00:01:11,360 Speaker 1: Growth because Jesus, it's got to be worrying you, right, 28 00:01:11,400 --> 00:01:12,680 Speaker 1: it's going to be a close run thing. 29 00:01:13,600 --> 00:01:16,520 Speaker 2: Yeah. Look, I think we've had a really challenging quarter. 30 00:01:17,080 --> 00:01:19,840 Speaker 2: You know, the six months September through March. We know 31 00:01:20,000 --> 00:01:23,400 Speaker 2: that the economy was growing fast, faster than many countries 32 00:01:23,440 --> 00:01:26,040 Speaker 2: around the world, faster than one is being forecast in 33 00:01:26,040 --> 00:01:28,000 Speaker 2: the first three months of this year, four times as 34 00:01:28,040 --> 00:01:32,240 Speaker 2: fast as Australia. But come April, come Liberation Day, I 35 00:01:32,280 --> 00:01:35,680 Speaker 2: think a lot of New Zealand firms and households battened 36 00:01:35,680 --> 00:01:39,160 Speaker 2: down the hatchets. They saw that global uncertainty and they 37 00:01:39,200 --> 00:01:43,240 Speaker 2: went back into the defensive position. Now my view is 38 00:01:43,280 --> 00:01:46,800 Speaker 2: that actually, looking ahead, New Zealand has been less affected 39 00:01:46,880 --> 00:01:49,880 Speaker 2: by those tariff wars than many other countries, and we 40 00:01:50,000 --> 00:01:53,800 Speaker 2: have every reason to feel confident about our growth prospects. 41 00:01:53,960 --> 00:01:55,880 Speaker 2: But we're going to get that confidence back and we 42 00:01:56,000 --> 00:01:57,480 Speaker 2: need businesses feeling confident. 43 00:01:57,560 --> 00:02:00,840 Speaker 1: On the White Cutle Medical School, can you get guarantee 44 00:02:01,080 --> 00:02:03,040 Speaker 1: that the cost is not going to blow out on 45 00:02:03,120 --> 00:02:03,520 Speaker 1: this thing? 46 00:02:05,000 --> 00:02:07,840 Speaker 2: Well, the Crowns made it clear we're contributing eighty million 47 00:02:07,880 --> 00:02:11,280 Speaker 2: in capital cost. Wykato University have said that they will 48 00:02:11,320 --> 00:02:13,960 Speaker 2: stump up the rest. The cost has been brought down 49 00:02:14,000 --> 00:02:17,160 Speaker 2: from the original three hundred and eighty million to two 50 00:02:17,280 --> 00:02:20,480 Speaker 2: hundred and thirty million, and y Kuttle have committed that 51 00:02:20,480 --> 00:02:22,240 Speaker 2: they'll be stumping up one hundred and fifty of that. 52 00:02:22,400 --> 00:02:23,639 Speaker 2: So that's up to them. 53 00:02:23,880 --> 00:02:26,560 Speaker 1: And can you guarantee that the eighty three million from 54 00:02:26,600 --> 00:02:28,880 Speaker 1: the government is all that we will put in. 55 00:02:30,120 --> 00:02:32,560 Speaker 2: Well, that's what the business case is based on. And 56 00:02:32,560 --> 00:02:34,160 Speaker 2: I think the other side of this you need to 57 00:02:34,200 --> 00:02:37,600 Speaker 2: remember is that these students are there for four years 58 00:02:37,720 --> 00:02:40,520 Speaker 2: rather than the six years that is traditionally the case 59 00:02:40,520 --> 00:02:44,880 Speaker 2: at Otago in Auckland. So overall, that ongoing cost of 60 00:02:45,000 --> 00:02:48,760 Speaker 2: creating these doctors is lower because there's a fewer years 61 00:02:48,760 --> 00:02:49,560 Speaker 2: that they're studying. 62 00:02:50,000 --> 00:02:53,280 Speaker 1: If y Cuttle University and philanthropists cannot find the one 63 00:02:53,360 --> 00:02:55,800 Speaker 1: fifty million, can you guarantee that we're not going to 64 00:02:55,800 --> 00:02:57,480 Speaker 1: bridge the gap as taxpayers? 65 00:02:58,400 --> 00:03:01,520 Speaker 2: Well that the commitment that Waikato has made to us 66 00:03:01,600 --> 00:03:03,600 Speaker 2: is that they will stump up that money. That is 67 00:03:03,600 --> 00:03:07,440 Speaker 2: the basis on which this is going for everything here 68 00:03:07,520 --> 00:03:09,840 Speaker 2: am no, I'm not keeping my options open. 69 00:03:10,120 --> 00:03:13,440 Speaker 1: Guarantee guarantee it's not going to blow out, and guarantee 70 00:03:13,440 --> 00:03:15,079 Speaker 1: we aren't going to stump up what they what they 71 00:03:15,120 --> 00:03:15,720 Speaker 1: are short on. 72 00:03:16,200 --> 00:03:19,160 Speaker 2: Well, I'm guaranteeing you that the entire business case is 73 00:03:19,200 --> 00:03:22,280 Speaker 2: based on that eighty million dollar Crown contribution and that way, 74 00:03:22,360 --> 00:03:25,400 Speaker 2: Katto University have made undertakings that they will be funding 75 00:03:25,440 --> 00:03:28,080 Speaker 2: the rest. And the good news is they expect to 76 00:03:28,080 --> 00:03:32,160 Speaker 2: get construction under way later this year. That's exciting for 77 00:03:32,400 --> 00:03:33,080 Speaker 2: white cattle. 78 00:03:33,880 --> 00:03:36,760 Speaker 1: Yeah, now yeah, and I am excited for them. But Nikola, 79 00:03:37,280 --> 00:03:39,080 Speaker 1: mark my words, this is going to blow out and 80 00:03:39,640 --> 00:03:41,880 Speaker 1: the estimates you've given us are never going to stand, 81 00:03:42,040 --> 00:03:42,400 Speaker 1: are they. 82 00:03:43,840 --> 00:03:48,040 Speaker 2: Well, they have been through a very thorough business case process. 83 00:03:48,880 --> 00:03:51,360 Speaker 2: The every eye was picked out of it to see 84 00:03:51,400 --> 00:03:53,880 Speaker 2: what was involved in those costs and what it looks like. 85 00:03:54,560 --> 00:03:57,720 Speaker 2: And we were very clear with Waikato University that if 86 00:03:57,720 --> 00:04:00,000 Speaker 2: they were saying they were going to contribute a significant 87 00:04:00,280 --> 00:04:02,160 Speaker 2: of the funds and they needed to make that rail, 88 00:04:02,600 --> 00:04:06,200 Speaker 2: they I understand have had undertakings from philanthropists and others 89 00:04:06,280 --> 00:04:09,880 Speaker 2: or helping them make that contribution, but ultimately they really 90 00:04:09,880 --> 00:04:12,200 Speaker 2: want this thing to happen that Crown said, this is 91 00:04:12,240 --> 00:04:14,320 Speaker 2: how much will punt up, and of course we will 92 00:04:14,320 --> 00:04:18,320 Speaker 2: fund the ongoing costs of those future students, but it's 93 00:04:18,400 --> 00:04:19,279 Speaker 2: up to them to deliver. 94 00:04:19,680 --> 00:04:21,039 Speaker 1: If they come to you and they say we haven't 95 00:04:21,040 --> 00:04:22,680 Speaker 1: got the money, what are you going to say to them. 96 00:04:23,160 --> 00:04:24,680 Speaker 2: I'm going to say, well, you said you would, so 97 00:04:24,680 --> 00:04:25,960 Speaker 2: you're in trouble now and you're going to have to 98 00:04:25,960 --> 00:04:26,560 Speaker 2: find the money. 99 00:04:26,640 --> 00:04:30,760 Speaker 1: Okay, Look, why are you guys paying Sonny Kochal for 100 00:04:30,880 --> 00:04:33,040 Speaker 1: ideas that he was giving you for free? 101 00:04:33,720 --> 00:04:36,880 Speaker 2: Oh look, he's done a great job, so he's. 102 00:04:36,760 --> 00:04:41,760 Speaker 1: There's no disputing, no disputing. But but he was giving 103 00:04:41,800 --> 00:04:44,479 Speaker 1: you these ideas for free, Nikola because they benefit his business. 104 00:04:44,520 --> 00:04:46,039 Speaker 1: Why did you then offer to pay for them? 105 00:04:46,640 --> 00:04:49,680 Speaker 2: Well, let's be clear, it's not you, the taxpayer that 106 00:04:49,800 --> 00:04:52,720 Speaker 2: is paying him. He is being paid out of the 107 00:04:52,760 --> 00:04:56,680 Speaker 2: proceeds of crime fund, which would be criminals are literally paying. 108 00:04:56,800 --> 00:04:59,599 Speaker 1: Yeah, but what there's an opportunity cost That money would 109 00:04:59,600 --> 00:05:00,679 Speaker 1: have been used for something else. 110 00:05:01,320 --> 00:05:04,240 Speaker 2: Yeah, it would have been used on crime prevention activities 111 00:05:04,320 --> 00:05:06,840 Speaker 2: in the community. And I'd say that Sunny Koschal has 112 00:05:06,880 --> 00:05:11,560 Speaker 2: made a very significant contribution to crime prevention in our community. 113 00:05:11,680 --> 00:05:15,560 Speaker 1: But on these issues, we're broke, right, we're broke, and 114 00:05:15,600 --> 00:05:18,160 Speaker 1: that money could be used for a very urgent problem. 115 00:05:18,200 --> 00:05:19,920 Speaker 1: So why are you handing it out to somebody who 116 00:05:19,960 --> 00:05:22,160 Speaker 1: has given you this helpful free. 117 00:05:22,000 --> 00:05:24,920 Speaker 2: Because the assessment we made was that retail crime had 118 00:05:24,960 --> 00:05:27,599 Speaker 2: got so out of control under the last government that 119 00:05:27,640 --> 00:05:30,920 Speaker 2: we needed people who were actually at the front line, 120 00:05:31,440 --> 00:05:34,480 Speaker 2: who understood what that looked like giving us advice on 121 00:05:34,520 --> 00:05:36,440 Speaker 2: what needed to change. Now, we could have gone to 122 00:05:36,480 --> 00:05:39,279 Speaker 2: all of our policy advisors in the Ministry of Justice 123 00:05:39,279 --> 00:05:41,000 Speaker 2: here in Wellington and I'm sure they would have wrung 124 00:05:41,040 --> 00:05:43,400 Speaker 2: their hands and come up with some delightful over you 125 00:05:43,600 --> 00:05:44,760 Speaker 2: that's every human right. 126 00:05:44,839 --> 00:05:47,320 Speaker 1: Would have given you these ideas for free and continued 127 00:05:47,360 --> 00:05:49,400 Speaker 1: to give give you these ideas whether whether you paid 128 00:05:49,440 --> 00:05:49,840 Speaker 1: them or not. 129 00:05:50,720 --> 00:05:52,480 Speaker 2: Yeah, well, I think you're being unfair because this is 130 00:05:52,520 --> 00:05:55,040 Speaker 2: a group of people that he has been sharing that 131 00:05:55,120 --> 00:05:58,560 Speaker 2: represent a range of interests from the retail sector, and 132 00:05:58,600 --> 00:06:01,120 Speaker 2: he's brought them together where they've been able to make 133 00:06:01,200 --> 00:06:04,080 Speaker 2: joint recommendations to government, but have given us the confidence 134 00:06:04,080 --> 00:06:07,320 Speaker 2: that we're acting on the interests of the people affected 135 00:06:07,520 --> 00:06:10,400 Speaker 2: by these issues. And actually, I think too much of 136 00:06:10,480 --> 00:06:14,120 Speaker 2: government is done by advice provided by people who are 137 00:06:14,160 --> 00:06:16,080 Speaker 2: not affected by the issues. So we're sitting here in 138 00:06:16,120 --> 00:06:19,720 Speaker 2: Wellington in their offices who have a theoretical idea. Well, actually, 139 00:06:20,000 --> 00:06:23,360 Speaker 2: people who are being affected should be listened to, and 140 00:06:23,400 --> 00:06:25,560 Speaker 2: this forum has provided us a way to do that. 141 00:06:25,720 --> 00:06:28,240 Speaker 1: Hey, if the school comes to you and says we're 142 00:06:28,240 --> 00:06:29,640 Speaker 1: fed up with the open plan, we want to go 143 00:06:29,680 --> 00:06:31,920 Speaker 1: back to single cells, do you pay to put the 144 00:06:31,960 --> 00:06:34,679 Speaker 1: walls back up or do they Look. 145 00:06:34,520 --> 00:06:37,200 Speaker 2: I have to ask Erica Stanford about that. What we 146 00:06:37,279 --> 00:06:38,880 Speaker 2: have said is, look, we're not going to be doing 147 00:06:38,920 --> 00:06:41,760 Speaker 2: any more of those barns in future. We don't think 148 00:06:41,800 --> 00:06:44,960 Speaker 2: they stack up, and we think single cell is better. Certainly, 149 00:06:45,000 --> 00:06:48,200 Speaker 2: I've had four kids through the school system, still going 150 00:06:48,200 --> 00:06:51,680 Speaker 2: through the school system, and I've experienced both, and I'd 151 00:06:51,720 --> 00:06:56,200 Speaker 2: go single cell every single time. In some cases, schools 152 00:06:56,200 --> 00:06:58,640 Speaker 2: do have the ability to use the spaces they already 153 00:06:58,680 --> 00:07:01,039 Speaker 2: have and divide them up and take more of a 154 00:07:01,080 --> 00:07:04,400 Speaker 2: single cell approach, and I expect many boards of trustees 155 00:07:04,440 --> 00:07:07,080 Speaker 2: are going to move in that direction. In the company years. 156 00:07:06,960 --> 00:07:09,640 Speaker 1: Now, are we still handing out cash or handing out 157 00:07:09,640 --> 00:07:11,520 Speaker 1: loans through Crown Regional Holdings? 158 00:07:12,720 --> 00:07:16,880 Speaker 2: Crown Regional Holdings holds the loans both from the old 159 00:07:16,960 --> 00:07:20,880 Speaker 2: Provincial Growth Fund which we have stopped, also the North 160 00:07:20,920 --> 00:07:23,240 Speaker 2: Island Weather Event loans which were made to a number 161 00:07:23,280 --> 00:07:27,360 Speaker 2: of horticulturalists following cyclone Gabriel so that they could get 162 00:07:27,360 --> 00:07:29,800 Speaker 2: their businesses up and running, which has been pretty successful, 163 00:07:29,800 --> 00:07:32,640 Speaker 2: you know, Apple and Pierre had a record year. And 164 00:07:32,680 --> 00:07:35,560 Speaker 2: then we have the Regional Infrastructure Fund, which has been 165 00:07:35,600 --> 00:07:40,080 Speaker 2: set up quite differently from the Provincial Growth Fund, and 166 00:07:40,120 --> 00:07:43,920 Speaker 2: that does continue to provide some loans to some projects 167 00:07:43,960 --> 00:07:47,080 Speaker 2: and they are managed through this entity. But it's important 168 00:07:47,120 --> 00:07:51,360 Speaker 2: to note that we in December agreed to implement a 169 00:07:51,480 --> 00:07:54,640 Speaker 2: very detailed monitoring and evaluation framework for that fund, and 170 00:07:54,680 --> 00:07:56,920 Speaker 2: that follows feedback from the Officer of the Order to 171 00:07:57,000 --> 00:07:59,080 Speaker 2: general lessons learned from the province. 172 00:07:59,160 --> 00:08:02,400 Speaker 1: So are you confident that your Regional Growth Fund is 173 00:08:02,480 --> 00:08:04,080 Speaker 1: not going to fall into the same trap as the 174 00:08:04,080 --> 00:08:06,320 Speaker 1: Provincial Growth Fund, which is like fifty percent of its 175 00:08:06,360 --> 00:08:07,760 Speaker 1: loans are at risk of impairment. 176 00:08:08,680 --> 00:08:12,320 Speaker 2: Well, we are being much stricter about what we lend to, 177 00:08:12,520 --> 00:08:15,960 Speaker 2: so it's a very focused fund. We've been very much 178 00:08:16,000 --> 00:08:20,400 Speaker 2: focused on infrastructure, so in particular we've been helping councils 179 00:08:20,440 --> 00:08:24,320 Speaker 2: build stock banks around the country and flood protection mechanisms. 180 00:08:24,880 --> 00:08:28,800 Speaker 2: We've been investing in water storage projects where we know 181 00:08:28,880 --> 00:08:31,600 Speaker 2: that getting that water storage project up and running means 182 00:08:31,600 --> 00:08:33,960 Speaker 2: that many farmers in a region will be more productive 183 00:08:34,520 --> 00:08:37,960 Speaker 2: and ultimately will be able to pay for those facilities themselves. 184 00:08:38,800 --> 00:08:42,080 Speaker 2: And so in general, we've been very careful about the 185 00:08:42,080 --> 00:08:44,000 Speaker 2: way that we invest in as a group of ministers 186 00:08:44,000 --> 00:08:45,079 Speaker 2: involved in that good stuff. 187 00:08:45,080 --> 00:08:46,240 Speaker 1: Hey, it's very good to talk to you. Thank you 188 00:08:46,320 --> 00:08:49,000 Speaker 1: so much for your time. That is Nicola Willis Finance Minissystem. 189 00:08:49,440 --> 00:08:52,599 Speaker 2: For more from Heather duplessy Ellen Drive, listen live to 190 00:08:52,720 --> 00:08:55,720 Speaker 2: news talks it'd be from four pm weekdays, or follow 191 00:08:55,800 --> 00:08:57,559 Speaker 2: the podcast on iHeartRadio.