March 6, 2025 • 36 mins
In the first political panel catchup for the year, Thomas is joined by Newstalk ZB Political Editor Jason Walls and NZ Herald Wellington Business Editor Jenee Tibshraeny to discuss a hectic period in local politics - ranging from the resignation of Reserve Bank Governor Adrian Orr, the firing of UK High Commissioner Phil Goff, the latest comments by Christopher Luxon, and Labour's reshuffle.
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Speaker 1 (00:06):
Hello and welcome to on the titles The New Zealand
Hero's Politics podcast. I am your host Thomas Coglan, the
Deputy Political editor of The New Zealand Hero, joining me
in the studio today and my colleagues from the Press
Gallery for a panel discussing the week that was the
weeks that are to come. News Talk politically to Jason Walls.
Speaker 2 (00:23):
Jason, Hello, how are you used to come as enticing?
I've got some reckons about many things.
Speaker 3 (00:29):
How many resignations?
Speaker 2 (00:30):
Oh well, how many have we had this week? It
was at three or four?
Speaker 1 (00:33):
Everyone must go, everyone must go. And and the voice
you heard just there is my is my other colleague,
you know. Tibsny, the Wellington business editor for The Herol. Hello, Hello,
what a week? What a week? Which resignations we talk about? First? Adrian?
Or Adrian or let's discuss that the Reserve Reserve Bank
(00:53):
governor fell in his sword this week mysteriously the Reserve Bank.
I asked him yesterday whether he was still in the
country where he was in the country this week. They
wouldn't they wouldn't confirm.
Speaker 2 (01:02):
That, they wouldn't see, they wouldn't give They're.
Speaker 1 (01:05):
WoT so somewhere somewhere on the on the planet, or
but you know, perhaps not, maybe he's in one of
these bezos planes business.
Speaker 3 (01:15):
Or bunker or bunker Peter's bunker.
Speaker 1 (01:19):
So somewhere somewhere in the country being paid eight hundred
thousand dollars a year is and with access to you know,
a money printer, which is you know, still hot after
as the as the Reserve Bank governor, who's still on
the payroll till the end of the month.
Speaker 2 (01:37):
What it is, Well, they can't even confirm if he's
in the country. To you, that's just that kind of
to me illustrates how absurd this whole thing has been.
Speaker 3 (01:45):
Okay, I'm right, I think that's fine. Really, Yeah, we
don't need to know where he is. That's his personal business.
But he didn't need to front the press conference after
being such a public figure, someone so powerful, someone paid
so much, leaving in the circumstances he did. I think
he needed to front, do a little press conference, explain
the situation, and then go wherever he wants to go
(02:05):
his personal business.
Speaker 1 (02:07):
Yeah, I think I think when you're when you're in
a leadership position like that, you know, people, particularly if
he was if he were still that in post. I
think it is the the switch over. The handover recurred
at midday on what day? It was Wednesday? Event, gosh,
it's all brilliant one it was Wednesday. So I think
we know if you're if you're if you're in post.
There's an importance to knowing where you are, perhaps not,
(02:29):
you know, like I think whether you're in the country
out of the country is always good things or.
Speaker 3 (02:32):
Know I mean it would be it would be interesting.
Speaker 2 (02:35):
I want to know exactly where he is. I want
to find him. I just I've got I've just got
some questions, like what's what's up mate? Why did you
do things well?
Speaker 1 (02:43):
And really it is I think when you when you
when you leave like this, potentially and a half. Maybe
he didn't leaven a half. Maybe maybe everything was fine.
Speaker 2 (02:50):
I'm very much like case. That's not the vibe that
I got from everybody else.
Speaker 3 (02:54):
So the old it was interesting. Was it you Jason?
Who said? Are you? Someone said, oh, the headline of
this is going to be shocked and shock and great,
great headline. But the interesting thing with Adrian is we've
had that headline so many times because there have been
so many.
Speaker 2 (03:11):
Shock end almost it's awful, oh, Thomas, like I honestly
I was. I was parading around the shock and or that.
I cannot roll my eyes when you say awful, withdraw
and apologize my disdain.
Speaker 1 (03:25):
So you have views on you have views on why
he went?
Speaker 3 (03:29):
Okay, yes, where he went? So these are guesses because
he hasn't talked to us, so anybody. So I guess
this is the problem. This is what happens. We fill
the void. But I think the guesses are quite educated.
Should I talk about one of them?
Speaker 2 (03:45):
You do the educated and I'll do the non educated,
just wild ones.
Speaker 3 (03:49):
Okay, So two things. It could be him basically him
clashing his with Finance Minister Nicola Willis. One issue could
be about funding and maybe you can talk about that after, Thomas.
The other issue could be clashing over the way the
Reserve Bank regulates banks. So one of the Reserve Bank's
main jobs is to make sure that banks are strong
(04:09):
and stable, they have enough capital so that if there's
a big crisis they can withstand it. A huge source
of contention since about twenty eighteen nineteen has been whether
the Reserve Bank is making banks hold too much capital.
So that's costing them a lot. The pro old banks,
you know, don't have much money, so they're not happy
about that. But also the other issue is that the
(04:30):
way these rules work could potentially disadvantage to the little
banks versus the big ones. So this has been a
point of contention. I talked to Nichola Willis this week
and she categorically said she is seeking advice on whether
and how to potentially override the Reserve Bank so that
it allows banks to hold less capital that makes them weaker,
(04:51):
and also change the way those the risk waiting so
the way those rules work.
Speaker 1 (04:56):
And this is an upbraide from her position last year
when the Common because the Comms Commission said that this
be looked at when it's a report on personal banking,
and at that point, Jane Nicola Willison's position was I'll
think about it. I'm open to it, and this has
been upgraded to I'm getting advice.
Speaker 3 (05:15):
On right, So I mean a slight shift, but I
said very clear yes. So the Reserve Bank, I thought,
was open to changing the details of the rules these
are the risk ratings, but it wasn't open at all
to letting the banks hold less capital. Like this issue
is worth billions of dollars. And these rules are still
being phased in until twenty twenty eight. So it's not
(05:35):
just a little thing you change, it's ready material. It's massive.
It effects the profitability of massive companies. She said she
is open to letting them hold less capital, overrating the
reserve bank, overwriting the Reserve bank. Now, these capital rules
all sounds a bit dry, but Adrian or is so
wedded to these rules. He has fought the banks in
a very fierce, quite an ugly campaign.
Speaker 1 (05:57):
Enough for him, enough fought.
Speaker 3 (05:58):
Him over years. It's on for years and years. We
had really a few really nasty points.
Speaker 1 (06:04):
It has been nasty.
Speaker 3 (06:04):
It has been nasty, and it's been sneaky some of
the fighting. I think that the big banks are no
longer saying publicly they want the rules loosen, that they're
letting others do that work. So that this might be something,
you know, Nicol Willis is coming in over top. The
argument is that it should, you know, boost the economy
if if banks are sort of deregulated a little bit.
(06:26):
The issue is it might not boost the economy. It
might just boost their profits.
Speaker 1 (06:29):
Yeah, it might just mean money heading off short of
Australia and the AFR. Today, a FR correspondent the Australian
Financial Review said that Champagne Corps were propping. There was
a source saying Champagne Corps were propping in Australian banks
around the Adrian Law's resignation. So that's you know that.
And there's two sides to this, as you say, like
it's there is a strong argument that's put forward by
(06:50):
the banks that these rules make them less competitive and
that means higher prices for New Zealand New Zealand bankers,
people who think those banks in New Zealand, which is
all the US basically, But it also means so yes,
there's that suse. And I suppose if you' Nicolo Willis,
you're thinking, well, let's put the competition leans on and
go go for better competition. But if you're Adrian, you're thinking, no,
this is about profitability, not competitional.
Speaker 3 (07:13):
Yeah, and I mean financial stability. So these rules are
set at a level that's meant to, you know, withstand
a one and two hundred year event, very conservative. The
Reserve Bank says it's not that conservative now because other
countries are moving towards that as well. Banks can absorb this.
I mean, you know, they can still satisfy their shareholders
whilst absorbing this. It's a very difficult issue for anyone
(07:37):
normal to have an informed opinion on. I believe it's interesting.
It's an interesting one that everyone seems to have a
view on. But I think unless you're a total expert
who's sat there for weeks and weeks, months and months,
how do you possibly know how much capital different banks
should hold us. I don't have a view on.
Speaker 2 (07:51):
There's a sense of irony as well, because when we're
asking the Prime Minister the other day why is Adrian
or resigning? He was firmly wedded to the view that
the Reserve Bank is independent and therefore he can't comment
on something like that. However, you've got Nikola Willis, who's
willing to override the reserve banks independence with something like
this just seems a little bit, you know.
Speaker 3 (08:12):
That's strange to me. It's an interesting debate because so
reserve bank two jobs that the monetary policy, setting the
interest rates, you know, controlling inflation, very important that that's
independent because if government did that, they just try to
stimulate the economy the whole time, not keep it in
check the other side around regulating banks, non banks and insurers.
That's where it's a bit more debatable as to whether
(08:33):
the Reserve Bank should have as much independence as it does,
whether government should be more involved in that like government
normally regulates things. So when it comes to financial institutions,
I think that's a it's a live debate as to
whether starts it should be independent.
Speaker 1 (08:50):
Look, you know this this this podcast is a very
particular audience, and I'll just I'll read of there's a
very interesting Treasury paper that was I've found on the
Anders might enjoy it. It was written by one of
the in terms of who works at Treasury, and it
makes the point that on the macro credential side, the
(09:12):
operational independence might be greater than the monetary policy side
because you have this broad operational independence with the tools
that you have to on the on the regulatory side
to to do with what you will. But then at
the same time it's less independent than the monetary policy
side because because every tool that you deploy you need
is it the gift of the finance minister. Effectively like
(09:33):
the dtiyes that have just got.
Speaker 3 (09:36):
So you're talking about these are the rules that the
reserving puts on banks that restricts the mortgage lending. So
the ones you have to have a twenty percent deposit
and the ones you need certain.
Speaker 2 (09:44):
Amount of income and come and you need the finance
ministers to get.
Speaker 1 (09:47):
Vocal yes the gift that those are at the gift
of the of the finance. By the gift, they have
to that they can't deploy the tools without the final
or they can't have the tools. It's up to the
bank whether or not they use them. But if in
order to use them they must that the finance minister
has to say to say so, which is not the
case and the bank capital also they're not that's likely
(10:10):
secret to that. So the other thing I thought was
quite interesting. Paul Goldsmith made the point when he was
during his brief time to Finance Pokes was in some
years ago when this was all shaking, when this was
going down the first time, that ultimately, if the banks
go go south and there's a banking crisis, it's the
finance minister who signs the check to boil them out.
(10:33):
And therefore the finance minister actually does have a view
on the amount of risk that the finance minister wants
to wear on behalf of taxpayers. And so you know,
the bank says, well, well, look we think that we
need the banks to be able to withstand this this
this level of shock. We think that that's prudent for
the New Zealand economy. And the finance minister can and
(10:54):
his view look at that and say, well, you know
what I think bank competition and profitability and you know
as important as important enough that I will tolerate a
lower threshold of safety and I will accept that that
means that it is more likely that the textpayer will
have to intervene to prop up from one of these
banks if it collapses. And as finance man, so I
(11:17):
go into that with my eyes open, knowing that that's
the trade off, which I just.
Speaker 2 (11:20):
To translate a little bit. Are you talking about see
the back the capital requirements five percent at the moment or.
Speaker 1 (11:29):
It's quite complicated because it's a different the ratio thing
as well.
Speaker 2 (11:33):
We want to get into the for argument's sake.
Speaker 1 (11:35):
This isn't about the details.
Speaker 2 (11:37):
After you just launch into those detail orientated explanation, but
it's so just say they're ten percent, so bring them
down to five percent. It makes you know it's more
profitable for the bank, but less safety in terms of
that if there's some sort of economic shock, they have
less money.
Speaker 1 (11:54):
There's a trade off between the amount of capital and
the stability.
Speaker 3 (11:57):
So yeah, so you're saying that that this is actually
a matter for government, for elected politicians, because you can't
just view financial stability as such as through in a vacuum.
It It's part of a broader economic fiscal picture. Yeah,
and this actually kind of segueys a little bit to
(12:19):
the second point, which is there are other thesis is
to why adrianal resigned, which is that he wanted more
money from the government. The government gives a reserve bank
an envelope of money every five years, and their negotiations
underweight at the moment over how much should be in there,
and the Reserve Bank seemingly wants more. Nicola Willis wants
(12:40):
to give it less. One of the reasons the Reserve
Bank has expanded its staff and it's spending so much
is because it's been creating this deposit compensation scheme. So
that means that banks and non bank deposit takers pay
levies into a pot, and if one of them collapses,
they use the money from that pot to give all
(13:02):
of us some of our money back, up to one
hundred thousand dollars of our savings. So it has been
going for a long time, but it's a pretty comprehensive scheme.
And I think the thing is is that traditionally, like
what Paul Goldsmith is saying, that yes, the government bails
out the bank. Technically, legally, the government does not need
to bowl out the bank. Sorry, that's clear at the moment.
If your bank collapses too bad, if the government wants
(13:25):
to step in, it can. But they're trying to create
the scheme to sort of ring fence that the scheme
is underwritten by the government, So if there's not enough
money in the pot, the government still steps in, but
it's capped how much you get back, and then the
banks and things need to pay the government back for
the money that it's length. So they're trying to get
some systems in place so we don't have a last
minute panic or expose the government to crazy amounts of
(13:50):
money and put them under pressure to do bailouts. So
you could argue that actually these things are set up
in such a way that there is a plan.
Speaker 1 (14:01):
I mean, it does sound like there's there's a bit,
there's a there is a plan, and I think you know,
if you're play of the bank for actually looking at
at what you know, for planning for when things go south,
as they inevitably do these banks. After all, you know,
a minister getting their hands duty with like regulation like
opera and operation you know operationally, well not quite operationally,
(14:22):
but you know, getting quite in the weeds and how
regulator works. It's you know, I'm missy, it's not pretty.
Speaker 2 (14:28):
I'm slightly confused though, so so Nikola Willis wants to
have to override the Reserve Bank on this one because
she wants potentially because she wants the capital requirements to
be higher or lower lower. So on the one hand,
you've got what you're talking about here. The financial liability
could potentially be back on the government if the banks collapse,
(14:49):
but she's wanting to pull it down further so that
this economy can be more stimulated.
Speaker 3 (14:54):
Well, yes, so the government would be potentially exposed, but
with this new insurance scheme in place that protects the
government because it means the the bailout will be paid
for by this insurance scheme. Uh, it won't be legally
technically paid for by the government.
Speaker 2 (15:12):
Really, so if that's the case, why does Adrian or
want the capital or did he want.
Speaker 1 (15:16):
The capitals embracest kind of approach, I suppose, right, So
it's just extra extra and I think you know has
point that he made it once is that these are
Australian owned banks and if they if they go south,
no Australian government is going to be there to It's
been Australian taxpayer dollars helping in New Zealand, the New
Zealand subsidiaries, which you know again but obviously our government
(15:37):
will for the breach. But yeah, it's I think it's
it's a it's an interesting one. It's a very like
I can I it's I really do see both sides
of it, because the banking competition issue is a serious
one and the cost so the New Zealand economy of
uncompetitive banks housing addictive banks. You know, that's that's a
very very serious problem that that ain't and always both
(16:00):
the bank and the government, but how you but you
know just who's operating and who's patch and the best
way to kind of have a competitive economy but not
an overly risky economy. And there but for the grace
of God.
Speaker 3 (16:14):
Well, yeah, it's tricky because so the issue that the
little banks have is that the big four banks can
set kind of set their own rules about the bank capital,
they can sort of decide how they do it, but
the little ones have to follow way more prescriptive rules.
Speaker 2 (16:28):
So that's one of the issues.
Speaker 3 (16:30):
Then the other issue is they say that what happens
is because you have to hold less capital for low
risk lending like mortgages than you do for high risk
lending like lending to farmers and businesses. The argument is
that that means that banks don't want to lend as
much to farmers and businesses because they have to hold
more capital. But the argument the Reserve Bank makes, which
(16:52):
is correct, is that well, even if they weren't these
rules in place, banks still need to make sure they're
safe and stable not collapse, so they will always see
business and farming loans is more risky than than mortgages,
so hold more capital against that.
Speaker 1 (17:06):
So you can't you know, even these beloved, these these
coal mines, the coal mines that are giving their banking
turned off, the cocing the cocing coal tell you what
what what self respecting bank are ever turned down? Good coke,
I tell you what kind of world are we living in?
Speaker 2 (17:26):
They would push back on that strongly, especially coming from
a journalist of all people funding the other.
Speaker 1 (17:32):
Yes funding yes in this Yes, I did write a
story a couple of weeks ago. It did. It's men.
It sounds like things went south pretty quickly because I
think I believe Adrian or was on actually some official business,
like as recently as a week ago. You know, so
that the government is involved in these fund five year
funding talks and were saying with the with the bank,
(17:53):
it's a tough one. You know, you do. You don't
want the bank to go through an annual funding cycle
with There's a very good article in Newsroom this morning
about how it was created. Actually that was that was
part of the reformers in the eighties and nineties. They've
funded on a five yearly basis and the bank, it seems,
wanted a lot of money this time around. Nicola Willis
made some remarks on this piece basically saying she thinks
(18:14):
they're a savings that can be made, i e. The
bank would not not only not get its funding increase,
but it would actually get a funding decrease. As most
public service departments have received in the last in the
last funding ground in terms of their departmental expenditure, the
service services have obviously had funding and increase that appears
not to have gone down particularly.
Speaker 2 (18:31):
Well with the bank clearly.
Speaker 1 (18:33):
Yeah. And the words funding were in the we're in
the we're in the statement that was made. So there
were word funding and then the Asian man mentioned funding.
Then Neil Neil quickly the chair of the board, mentioned
there were a couple of issues and that would learn
to we think funding with thing for capital requirements and
is there another wise there was there another? No, I
(18:55):
think that those were the two. Yeah, those are the
two are And then the whole kind of Maori fight,
which I really can't be bother going into because I
feel like I've dominated the last of seven years.
Speaker 2 (19:06):
Of my life.
Speaker 1 (19:08):
Adrian or liked the like, you know, dragging the bank
into the modern era with an embrace of Maori and
and some members of the financial community were les keen
in it.
Speaker 2 (19:18):
Just google us just on just five year funding. So
as you said, they get their funding every five years.
Does that come up in in the on budget day
or is it outside of the budget cycle.
Speaker 1 (19:31):
I actually asked that I think it is. I think
it is negotiated with the Bank and an agreement that's
signed off by the Board and the Finance Minister, and
then it's appropriate at each.
Speaker 2 (19:40):
Budget so we'll be able to see Yeah.
Speaker 1 (19:42):
I think you'll see it on I think you will
see it on budget day because it needs the funding
needs to be with the Bank on one July, which
is the start of the fiscal year, so you will
see it on. But I think I think it will
be negotiated before budget day. But I mean, I really
think when you think about it, the budget's probably but
the May tweeny two is budget and you usually have
those those those kind of critical budget cabinet meetings in
(20:05):
late April when you get the last forecast. So I
would imagine that things are pretty late stages now, which
makes you think, like what's happening on that? Like where's
the board on this? Is that does the board side
with Adrian on on the funding issue? Because it's the
negotiations aren't with Adrian with the board, So where's the
you know, where's the board on the funding issue? Whose
side are they take it?
Speaker 3 (20:23):
I asked Nichola Willis what her relationship was like with
Neil Quigley, the chair of the board, and she just
said good, good. But I suspect I suspect if it
was not good, she would have said.
Speaker 1 (20:34):
I have a relationship.
Speaker 3 (20:35):
I have. Yeah, well you know we had a good
working relationship. But you know she would have she's quite robust.
Speaker 2 (20:39):
Yeah, we have a robust relationship. You just say bad
at that point.
Speaker 3 (20:45):
And she reappointed Neil Quigley chair even though and this
is despite the fact Neil backed Adrian to be reappointed governor,
which Nicolair.
Speaker 2 (20:57):
Did she do was inn opposition because it was in opposition.
Speaker 1 (21:03):
It's I actually forgot this on the bridge the other
day as well. My have COVID brain for the last
twenty twenty to twenty five. I don't remember any.
Speaker 2 (21:10):
Thought Luxon was a bit mean to you on that one.
It was he went on for like you got like
a slight detail wrong, and he went on for like
a minute about this one thing. He was just running
the clock out. I think, I think, do not want
to talk about He's still a.
Speaker 1 (21:20):
Wee bit grumpy about the Tearsless stories, which is fine.
Marmite sandwiches all vigema. Are you a marmote person neither
(21:43):
not really.
Speaker 3 (21:44):
Yeah, I would go mar Mate, but I don't really
do either.
Speaker 1 (21:47):
Yes, I like, I tell you what I was rather
a bald and I think it was an orange story
that the stock photo was British Marmte rather than New
Zealand mar Mate. I've actually been to the birthplace of Marmite,
which is a town called Burton on Drint, is home
to a brewer. A brewer's where I p as, I
think was where I p as were invented, I think.
(22:09):
And they the beer and you scrape out the yeast
from the barrels or something, and then somehow you use
the byproduct of the beer to make the.
Speaker 2 (22:17):
Because I was going to ask you, Thomas, what is marmote?
It's like what, I know what it tastes like. I know,
I don't know what's in it.
Speaker 1 (22:25):
It's just it's good, like it's you know, it's like,
you know, do we want to like just lather our
children with mate instead of funding the school lunch program properly?
I'm I'm not sure about that, but it's nice.
Speaker 2 (22:41):
It's like get as bad pr if they did that.
Speaker 1 (22:44):
Well, second degree burns. Did we see this story last night?
Second degree bounds. I have to say that's probably it
would appear that this this scheme is not going to survive.
Speaker 3 (22:55):
So a child got second degree burns from there.
Speaker 2 (22:59):
It's opened, it explode.
Speaker 1 (23:01):
There are photographs, but I mean that's just kryptonie for
a government. You don't you know, like when somewhere do
you think of the children kind of stuff. It's just
it's this is just this is becoming absolutely antiina I could.
Speaker 2 (23:15):
I was the stories about, oh I don't like this,
I had no sympathy for like that. I had them.
They were fine. The story you did try the lunches.
I did try them. I thought I thought they were great.
In fact, at the time, before all of this went down,
I went on radio and said that if they can
pull this off, this would be an extremely successful, well
thought out policy because they've managed to shave x amount
(23:37):
of costs, the food is actually quite good, and they've
proved that they don't need to spend trillions of dollars.
Speaker 1 (23:42):
One was very confident in the lunch is confident enough
to do that the road, to bring them to Parliament
and to do the taste testing. He was confident that
they would not terrible.
Speaker 2 (23:51):
Yeah, so I'm fine with it. If all the stories
I thought, I don't like them, just they're free lunches,
you know, just suck it up each don't you know.
Speaker 1 (23:58):
There's no such thing as a free line.
Speaker 2 (24:01):
But it's the story. It's the stories of the burns
and the plastics. Those are I know, just saying it
out loud, like this is really bad, but you might despair.
Speaker 3 (24:10):
You know, we're trying to get these foreign vestas to
New Zealand next week, major infrastructure.
Speaker 1 (24:17):
Sandwiches at the higher on the waterfront.
Speaker 2 (24:21):
I reckon serve the school lunches hard.
Speaker 1 (24:24):
Apparently quite there's quite you know. You look at the
Americans ending people in the space and where meanwhile our
children are picking plastic out of their lunches, and you think,
I'm not sure this is the high productivity we think
it is. You know this we're meant to be food producers,
but this is what we meant to sell to the world.
Speaker 2 (24:43):
But again, like I think they take like listen, he
might have been giving us the best of the best
because we were journalists at Parliament, but I genuinely did
think that they were great, better than what I was
eating for lunch. No offense mum, if you if this
is if you're listening, your sandwiches were great, but it does.
It was quite stark. Actually, the way that the gover
It's messaging on this changed almost overnight. In fact, I
think it was overnight. We had the Marmite and Apple's
(25:06):
line and then every minister was using it, and that
was the line because I think they might have done
some focus groupings and denies that they have but basically
saying it is the parent's responsibility to provide lunches, and
we have a wide base of people that think this,
so we're going to lean into that.
Speaker 1 (25:20):
I think you're absolutely right, Jason. I've been wondering, you know,
looking at and I'm just thinking, you know, a lot
of a lot of a lot of if you look
at in a purely political way, like a lot of
a lot of voters have children, but you know, a
minority of voters have children who are currently receiving the lunches.
I mean, I think I think a minority of children
as some large minority, but a minority of children receiving
the lunches. So I think, you know, I think if
(25:41):
you're the government does almost appear to be trying to
reach them slightly and say like, lock, we're giving you
a free lunch, how do you complain about it? And
and and you know some of the stories that some
of them are appalling, like it burns, the plastic, the
you know, mislabeling, all that sort of stuff like that,
you know, not good. They've had an MPI complaint, although
I checked, you said Labor's lunch programs actually had seven
(26:02):
seven MPI complaints. So and when you're when you're dishing
a quarter of a million lunches, you think you're going
to get a lot of complaints.
Speaker 2 (26:09):
Yes, not many.
Speaker 1 (26:10):
Yeah, it's that you're going to survive. I would see
that the government is thinking, right, you know, and you did.
Some of the stories are like, well, you know, not
that not the lunch that gave people's people burns. But
another story was like, you know that the packaging was
difficult to hold and it was too hard, and you're like, well.
Speaker 2 (26:26):
Having problems with the cell phone and that sort of.
Speaker 1 (26:28):
And sometimes you well, maybe the teachers could just you know,
let them call off a little bit before feeding them children.
You know, like some of the stories are definitely you're like,
I think most voters would think that some of the
complaints seems slightly overagged, but enough of them are serious enough.
You know, I think the government will have to do something.
But it would appear that the government, I think, are
banking on the fact there are many voters, will think
(26:48):
that some of the many there are many voters will
think that many of the complaints are over egged, and
certainly it would see that many of the complaints are Again.
Speaker 3 (26:58):
Yeah, it's interesting because I wonder with it. Initially some
of the voters who might have thought the complaints are
over egg like the people thinking, oh, for goodness sake,
it's a free lunch. It's way better than the lunch
I got when I was a kid.
Speaker 2 (27:09):
Suck it up.
Speaker 3 (27:10):
Some of those people might also be the people who thought, actually,
I support the school lunches because rather than increase welfare
payments to then have parents spend it on whatever the
heck they want, it's good to buy food and get
and get it straight in the kids, you know, straight
in the kids mouths where it needs to be, you know,
look after the children, and then this is a good
(27:32):
tangible way. So it is interesting how it must have
been some focus gripping PEPs. As you say, Thomas that
I thought that was that would have been quite a
compelling narrative, which is the children. Yeah, and now it's
interesting how the dramas that have unfolded around it, actually
that they're now taking on a new narrative because they
(27:52):
obviously think that's these more greater political wins there.
Speaker 1 (27:55):
Yeah. Yeah, it's very it's an interest. It'll be very
interesting how it shakes out. I think I think I
could see it going either way. Actually it does. You know,
if the complaints, if the complaints kind of died down,
if they af because they couldn't, they could get on
top of it. But if certainly, if there are more
burns and more plastic and lunches, I imagine that I
kind of fine.
Speaker 3 (28:12):
Yeah, I mean hopefully people have some perspective though, like
surely that that.
Speaker 1 (28:15):
You go, well for quarter of a million lunches and for.
Speaker 3 (28:19):
Kids who might not otherwise have proper food, is that something?
Speaker 2 (28:23):
You know?
Speaker 3 (28:23):
What what's the money? How much?
Speaker 1 (28:26):
It's about one hundred and thirty million, it was yeah
a year. So it's like and the Treasury papers. Treasury
has never really been that keen in it. It was
the Children's Commissioner put up an idea for it about
a decade ago, and so the key government Treasury was like, look,
the international evidence is not that flesh in terms of
approving its attendance in terms of improving their their mental
(28:50):
well being considers, you know, that early advice is not
so flesh. Labor's Child Children spokesperson at the time one
just under a.
Speaker 2 (28:57):
Dune, I remember her.
Speaker 1 (28:58):
Remember her? She not a fan of that trusury advice.
She had a bit of a crecket it. Obviously, they
then introduced it into government and the whole way through
Treasury was like, it's expensive for what you get, and
it's it is like for what you get, it's very expensive.
And it's interesting. It started off as a child poverty
appropriation as a joint bid from the Children Social Development
(29:19):
and Education portfolios, and then it's kind of from that
shifted into an education thing. But but the and and
Truasury kind of has given it an easy ride through
the budget process because it was partly a manifesto commitment,
which basically gives it, you know, a much easier ride
through through the process. And but the the you know,
and I'm sympathetic to the Treasury review on the Social
(29:42):
Development on both sides, because on the social development side
of things, you know, the government got rid of the
benefit indexation to wages, which which the advice on that
is pretty strong and compelling in terms of what that
does for lifting people out of poverty, children out of poverty,
and it helps you. It's yeah, the index and benefits
to wages rather than inflation. That that how it's not
that much cheaper than the school lunches over the forecast period.
(30:03):
Obviously it gets more expensive as it goes on, but
it's you know, it's pretty compelling, and I think this
the lunches as labor is funding them in the vicinity
of half a billion dollars, I think not, but over
the forecast period and then the indexation, I think the
governments saved about six hundred and fifty seven hundred million
over the forecast period from that. So it's not you
(30:24):
know that the sums are both quite large but similar.
And you'd think if you if you're doing a straight
child poverty thing, well maybe you get rid of the
lunches because the lunches is quite untargeted a lot of
kids again, the lunches who don't need them, then and
you go straight for the interest the indexation. Again, it
is just simply a better policy. If you're going to
spend a dollar anywhere, spend it on the indexation. Then
(30:45):
Treasury on the education side of things, when it was
when funding came around again in twenty twenty three, and
it was an education but for another extension, Jans and Eddi,
the Education minister, wanted it to be funded permanently. Treasury said,
don't fund it permanently. Labor, so grant Robins inside it
with Treasury they said, Treasury said, don't fund it permanently.
Value from money not so flash and we recommend if
(31:06):
it's an education thing, the mental health impact some of
the kids who are receiving the lunches we're having actually
no real mental health improvement. There was a nutrition there
was a nutritional improvement, and the educational improvements. I think
we're maxed. There are five There were five evaluations from
the Ministry of Education which were actually quite positive, but
Treasury was not keen. What a surprise, Treasury doesn't. But
(31:28):
they were basically saying, take the money and do targeted
maths and maths programs with it. That's where the need
is because educational attainment is dropping. So much that if
this is an education bid, take it out of lunches,
give it to targeted maths. So Treasury, it would seem
Treasury has always like has tended to support the pilots
so that you know, it doesn't it's not like I
do not fund, but but it would appear that it's
(31:50):
because it's a manifesto commitment, commitment. And it would also
seem that Treasury officials are like, why are you spending
money on this? You know, it's trusury doing its job.
I think if you have a dollar it should go
to the best thing and stuff like you know, annexation.
Speaker 2 (32:05):
Very s black and white like that Treasury and they
often cop it the holiday. Remember when Phil Twyford said
that the Treasury and the Jerry Brownie when he was minister,
used to have a crack of them all the time.
They're just doing their jobs, you know.
Speaker 1 (32:16):
Michael Woodhouse called them the abominable. No men's rue.
Speaker 2 (32:21):
It's clever. It's me.
Speaker 1 (32:24):
I'm last, but not least. As Phil gets sacked and
Labour does a reshuffle the next day. Coincidence, coincidence, I'm
doing my research. No we no, no, you know, what
do you think about Phil goff just quickly. I think,
not very good.
Speaker 3 (32:39):
I mean, you need to be diplomatic when you're a diplomat.
Speaker 2 (32:43):
Yeah, yeah, I agree with what he said, but not
how he said it. Yeah, I mean I was actually
quite clever how he said it. But you're as you say, I.
Speaker 1 (32:50):
Think he thought it was clever, and the whole world
is like, I mean, I understand what you're saying.
Speaker 2 (32:55):
Yeah, yeah, sick burn, but you're fired.
Speaker 3 (32:57):
Yeah. But you know what's interesting with this whole Donald
Trump thing is that he got so unhinged. I mean,
he is increasingly unhinged that so many people said, I
mean I just called him unhinged. I'm trying to always
be quite neutral journalists.
Speaker 1 (33:12):
But he is quite.
Speaker 3 (33:14):
Yeah. But so many people who tried to have bring
some professional newtap neutrality to their to their jobs said
crazy things about him because what he did.
Speaker 2 (33:25):
Was just so because they're all accurate, exactly.
Speaker 3 (33:30):
And now it's kind of interesting, and you know, I
certainly didn't think he'd be back, and we said all
these things. Everyone says these things, and now everyone's having
to walk them back and go, well, okay.
Speaker 1 (33:39):
There's quite a sight that will never forget all these
sort of sensible and normal politicians walking into the overlapness
and just supplicating kissing the red. It's so it's so embarrassing.
Speaker 2 (33:50):
And it really showed this whole saga for me has
really showed how insecure various different countries are around the
US right now. Like they fired him based on a
Q and a like. It's such a small thing. For
most people, you wouldn't I mean, you'd listen to what
he said. It was actually so complex in its comedic nature,
(34:11):
in what he was saying in terms of the bust
and the understanding of history, that most people wouldn't have
even understood that it was an insult. But somebody in
the Trump administration might have. And you don't want to
get offside with the Trump administration right now, so you
need to look like you're being.
Speaker 1 (34:24):
In there against Yeah, I mean it's extremely online. Yeah,
it's very I mean everyone even I loved why him
does Zelenskin. We'll be thinking, I don't want that to
be me. And I think even you look that Linskin
thought that could be me, That could be anyone.
Speaker 2 (34:38):
Luxon will be thinking, if I go visit the White House,
what's you gonna do? Is he gonna be like a
nuggie in front of the cameras. Wouldn't really work with
a ball man. Well, that's when you rub someone's head right,
just making sure that I've got the right word. They
were really out of pocket.
Speaker 1 (34:53):
If anyone from the Trump administration there's list thing, please
do not do that. That would be very human.
Speaker 2 (34:57):
Do it. It would make for great news content.
Speaker 3 (35:00):
Don't nuggy Meggy Jason. It would be good on I.
Speaker 1 (35:06):
Did not want to see the Prime minister subjected to
that labour reshuffle are happening and read about it went
not in Auckland, Adam Adam Piers. My colleague is up
there and writing about it. So labor has created war portfolios.
I'm not you know, nationals about it. By the time
this podcast goes out, national will have criticized it. I
(35:27):
think that's a wee bit, I must say. I think
we're done with portfolio creation. I tell you what, how
about sinking lid free free free free policy idea, sinking
lid on portfolios? I just think we've got enough.
Speaker 2 (35:43):
Well, it was it was my colleague soul through Trigger
that was making the point that the gnats or labor
took a crack at the gnats for making you very
different portfolios, and now they're doing the same thing.
Speaker 1 (35:53):
Yes, I just think there are enough basically basically finance, health, education, you.
Speaker 2 (35:59):
Know, yeah, what have They've got a spokesman for Friendship
now or something.
Speaker 1 (36:03):
Growth and investment and jobs, and you're like, oh man.
Speaker 2 (36:07):
Aspisman for Wellington specific cafes that might be going out.
Speaker 3 (36:12):
I'd happily do that, most of which weren't they good
to begin with?
Speaker 2 (36:16):
Oh, big take, I got a spokesman for Big Mojo
over here.
Speaker 1 (36:25):
I'll leave you all enjoy your weekend. Thank you very
much for joining us on the titles. Thank you, Janane,
Jason so Little, I never I never realized, Jay's and
Thomas Sedley. I have a lovely weekend. Ethan Stills produced
this podcast and we'll be with you next week on
the tiles. Thank you very much listening. Goodbye,
Hello and welcome to on the titles The New Zealand
Hero's Politics podcast. I am your host Thomas Coglan, the
Deputy Political editor of The New Zealand Hero, joining me
in the studio today and my colleagues from the Press
Gallery for a panel discussing the week that was the
weeks that are to come. News Talk politically to Jason Walls.
Speaker 2 (00:23):
Jason, Hello, how are you used to come as enticing?
I've got some reckons about many things.
Speaker 3 (00:29):
How many resignations?
Speaker 2 (00:30):
Oh well, how many have we had this week? It
was at three or four?
Speaker 1 (00:33):
Everyone must go, everyone must go. And and the voice
you heard just there is my is my other colleague,
you know. Tibsny, the Wellington business editor for The Herol. Hello, Hello,
what a week? What a week? Which resignations we talk about? First? Adrian?
Or Adrian or let's discuss that the Reserve Reserve Bank
(00:53):
governor fell in his sword this week mysteriously the Reserve Bank.
I asked him yesterday whether he was still in the
country where he was in the country this week. They
wouldn't they wouldn't confirm.
Speaker 2 (01:02):
That, they wouldn't see, they wouldn't give They're.
Speaker 1 (01:05):
WoT so somewhere somewhere on the on the planet, or
but you know, perhaps not, maybe he's in one of
these bezos planes business.
Speaker 3 (01:15):
Or bunker or bunker Peter's bunker.
Speaker 1 (01:19):
So somewhere somewhere in the country being paid eight hundred
thousand dollars a year is and with access to you know,
a money printer, which is you know, still hot after
as the as the Reserve Bank governor, who's still on
the payroll till the end of the month.
Speaker 2 (01:37):
What it is, Well, they can't even confirm if he's
in the country. To you, that's just that kind of
to me illustrates how absurd this whole thing has been.
Speaker 3 (01:45):
Okay, I'm right, I think that's fine. Really, Yeah, we
don't need to know where he is. That's his personal business.
But he didn't need to front the press conference after
being such a public figure, someone so powerful, someone paid
so much, leaving in the circumstances he did. I think
he needed to front, do a little press conference, explain
the situation, and then go wherever he wants to go
(02:05):
his personal business.
Speaker 1 (02:07):
Yeah, I think I think when you're when you're in
a leadership position like that, you know, people, particularly if
he was if he were still that in post. I
think it is the the switch over. The handover recurred
at midday on what day? It was Wednesday? Event, gosh,
it's all brilliant one it was Wednesday. So I think
we know if you're if you're if you're in post.
There's an importance to knowing where you are, perhaps not,
(02:29):
you know, like I think whether you're in the country
out of the country is always good things or.
Speaker 3 (02:32):
Know I mean it would be it would be interesting.
Speaker 2 (02:35):
I want to know exactly where he is. I want
to find him. I just I've got I've just got
some questions, like what's what's up mate? Why did you
do things well?
Speaker 1 (02:43):
And really it is I think when you when you
when you leave like this, potentially and a half. Maybe
he didn't leaven a half. Maybe maybe everything was fine.
Speaker 2 (02:50):
I'm very much like case. That's not the vibe that
I got from everybody else.
Speaker 3 (02:54):
So the old it was interesting. Was it you Jason?
Who said? Are you? Someone said, oh, the headline of
this is going to be shocked and shock and great,
great headline. But the interesting thing with Adrian is we've
had that headline so many times because there have been
so many.
Speaker 2 (03:11):
Shock end almost it's awful, oh, Thomas, like I honestly
I was. I was parading around the shock and or that.
I cannot roll my eyes when you say awful, withdraw
and apologize my disdain.
Speaker 1 (03:25):
So you have views on you have views on why
he went?
Speaker 3 (03:29):
Okay, yes, where he went? So these are guesses because
he hasn't talked to us, so anybody. So I guess
this is the problem. This is what happens. We fill
the void. But I think the guesses are quite educated.
Should I talk about one of them?
Speaker 2 (03:45):
You do the educated and I'll do the non educated,
just wild ones.
Speaker 3 (03:49):
Okay, So two things. It could be him basically him
clashing his with Finance Minister Nicola Willis. One issue could
be about funding and maybe you can talk about that after, Thomas.
The other issue could be clashing over the way the
Reserve Bank regulates banks. So one of the Reserve Bank's
main jobs is to make sure that banks are strong
(04:09):
and stable, they have enough capital so that if there's
a big crisis they can withstand it. A huge source
of contention since about twenty eighteen nineteen has been whether
the Reserve Bank is making banks hold too much capital.
So that's costing them a lot. The pro old banks,
you know, don't have much money, so they're not happy
about that. But also the other issue is that the
(04:30):
way these rules work could potentially disadvantage to the little
banks versus the big ones. So this has been a
point of contention. I talked to Nichola Willis this week
and she categorically said she is seeking advice on whether
and how to potentially override the Reserve Bank so that
it allows banks to hold less capital that makes them weaker,
(04:51):
and also change the way those the risk waiting so
the way those rules work.
Speaker 1 (04:56):
And this is an upbraide from her position last year
when the Common because the Comms Commission said that this
be looked at when it's a report on personal banking,
and at that point, Jane Nicola Willison's position was I'll
think about it. I'm open to it, and this has
been upgraded to I'm getting advice.
Speaker 3 (05:15):
On right, So I mean a slight shift, but I
said very clear yes. So the Reserve Bank, I thought,
was open to changing the details of the rules these
are the risk ratings, but it wasn't open at all
to letting the banks hold less capital. Like this issue
is worth billions of dollars. And these rules are still
being phased in until twenty twenty eight. So it's not
(05:35):
just a little thing you change, it's ready material. It's massive.
It effects the profitability of massive companies. She said she
is open to letting them hold less capital, overrating the
reserve bank, overwriting the Reserve bank. Now, these capital rules
all sounds a bit dry, but Adrian or is so
wedded to these rules. He has fought the banks in
a very fierce, quite an ugly campaign.
Speaker 1 (05:57):
Enough for him, enough fought.
Speaker 3 (05:58):
Him over years. It's on for years and years. We
had really a few really nasty points.
Speaker 1 (06:04):
It has been nasty.
Speaker 3 (06:04):
It has been nasty, and it's been sneaky some of
the fighting. I think that the big banks are no
longer saying publicly they want the rules loosen, that they're
letting others do that work. So that this might be something,
you know, Nicol Willis is coming in over top. The
argument is that it should, you know, boost the economy
if if banks are sort of deregulated a little bit.
(06:26):
The issue is it might not boost the economy. It
might just boost their profits.
Speaker 1 (06:29):
Yeah, it might just mean money heading off short of
Australia and the AFR. Today, a FR correspondent the Australian
Financial Review said that Champagne Corps were propping. There was
a source saying Champagne Corps were propping in Australian banks
around the Adrian Law's resignation. So that's you know that.
And there's two sides to this, as you say, like
it's there is a strong argument that's put forward by
(06:50):
the banks that these rules make them less competitive and
that means higher prices for New Zealand New Zealand bankers,
people who think those banks in New Zealand, which is
all the US basically, But it also means so yes,
there's that suse. And I suppose if you' Nicolo Willis,
you're thinking, well, let's put the competition leans on and
go go for better competition. But if you're Adrian, you're thinking, no,
this is about profitability, not competitional.
Speaker 3 (07:13):
Yeah, and I mean financial stability. So these rules are
set at a level that's meant to, you know, withstand
a one and two hundred year event, very conservative. The
Reserve Bank says it's not that conservative now because other
countries are moving towards that as well. Banks can absorb this.
I mean, you know, they can still satisfy their shareholders
whilst absorbing this. It's a very difficult issue for anyone
(07:37):
normal to have an informed opinion on. I believe it's interesting.
It's an interesting one that everyone seems to have a
view on. But I think unless you're a total expert
who's sat there for weeks and weeks, months and months,
how do you possibly know how much capital different banks
should hold us. I don't have a view on.
Speaker 2 (07:51):
There's a sense of irony as well, because when we're
asking the Prime Minister the other day why is Adrian
or resigning? He was firmly wedded to the view that
the Reserve Bank is independent and therefore he can't comment
on something like that. However, you've got Nikola Willis, who's
willing to override the reserve banks independence with something like
this just seems a little bit, you know.
Speaker 3 (08:12):
That's strange to me. It's an interesting debate because so
reserve bank two jobs that the monetary policy, setting the
interest rates, you know, controlling inflation, very important that that's
independent because if government did that, they just try to
stimulate the economy the whole time, not keep it in
check the other side around regulating banks, non banks and insurers.
That's where it's a bit more debatable as to whether
(08:33):
the Reserve Bank should have as much independence as it does,
whether government should be more involved in that like government
normally regulates things. So when it comes to financial institutions,
I think that's a it's a live debate as to
whether starts it should be independent.
Speaker 1 (08:50):
Look, you know this this this podcast is a very
particular audience, and I'll just I'll read of there's a
very interesting Treasury paper that was I've found on the
Anders might enjoy it. It was written by one of
the in terms of who works at Treasury, and it
makes the point that on the macro credential side, the
(09:12):
operational independence might be greater than the monetary policy side
because you have this broad operational independence with the tools
that you have to on the on the regulatory side
to to do with what you will. But then at
the same time it's less independent than the monetary policy
side because because every tool that you deploy you need
is it the gift of the finance minister. Effectively like
(09:33):
the dtiyes that have just got.
Speaker 3 (09:36):
So you're talking about these are the rules that the
reserving puts on banks that restricts the mortgage lending. So
the ones you have to have a twenty percent deposit
and the ones you need certain.
Speaker 2 (09:44):
Amount of income and come and you need the finance
ministers to get.
Speaker 1 (09:47):
Vocal yes the gift that those are at the gift
of the of the finance. By the gift, they have
to that they can't deploy the tools without the final
or they can't have the tools. It's up to the
bank whether or not they use them. But if in
order to use them they must that the finance minister
has to say to say so, which is not the
case and the bank capital also they're not that's likely
(10:10):
secret to that. So the other thing I thought was
quite interesting. Paul Goldsmith made the point when he was
during his brief time to Finance Pokes was in some
years ago when this was all shaking, when this was
going down the first time, that ultimately, if the banks
go go south and there's a banking crisis, it's the
finance minister who signs the check to boil them out.
(10:33):
And therefore the finance minister actually does have a view
on the amount of risk that the finance minister wants
to wear on behalf of taxpayers. And so you know,
the bank says, well, well, look we think that we
need the banks to be able to withstand this this
this level of shock. We think that that's prudent for
the New Zealand economy. And the finance minister can and
(10:54):
his view look at that and say, well, you know
what I think bank competition and profitability and you know
as important as important enough that I will tolerate a
lower threshold of safety and I will accept that that
means that it is more likely that the textpayer will
have to intervene to prop up from one of these
banks if it collapses. And as finance man, so I
(11:17):
go into that with my eyes open, knowing that that's
the trade off, which I just.
Speaker 2 (11:20):
To translate a little bit. Are you talking about see
the back the capital requirements five percent at the moment or.
Speaker 1 (11:29):
It's quite complicated because it's a different the ratio thing
as well.
Speaker 2 (11:33):
We want to get into the for argument's sake.
Speaker 1 (11:35):
This isn't about the details.
Speaker 2 (11:37):
After you just launch into those detail orientated explanation, but
it's so just say they're ten percent, so bring them
down to five percent. It makes you know it's more
profitable for the bank, but less safety in terms of
that if there's some sort of economic shock, they have
less money.
Speaker 1 (11:54):
There's a trade off between the amount of capital and
the stability.
Speaker 3 (11:57):
So yeah, so you're saying that that this is actually
a matter for government, for elected politicians, because you can't
just view financial stability as such as through in a vacuum.
It It's part of a broader economic fiscal picture. Yeah,
and this actually kind of segueys a little bit to
(12:19):
the second point, which is there are other thesis is
to why adrianal resigned, which is that he wanted more
money from the government. The government gives a reserve bank
an envelope of money every five years, and their negotiations
underweight at the moment over how much should be in there,
and the Reserve Bank seemingly wants more. Nicola Willis wants
(12:40):
to give it less. One of the reasons the Reserve
Bank has expanded its staff and it's spending so much
is because it's been creating this deposit compensation scheme. So
that means that banks and non bank deposit takers pay
levies into a pot, and if one of them collapses,
they use the money from that pot to give all
(13:02):
of us some of our money back, up to one
hundred thousand dollars of our savings. So it has been
going for a long time, but it's a pretty comprehensive scheme.
And I think the thing is is that traditionally, like
what Paul Goldsmith is saying, that yes, the government bails
out the bank. Technically, legally, the government does not need
to bowl out the bank. Sorry, that's clear at the moment.
If your bank collapses too bad, if the government wants
(13:25):
to step in, it can. But they're trying to create
the scheme to sort of ring fence that the scheme
is underwritten by the government, So if there's not enough
money in the pot, the government still steps in, but
it's capped how much you get back, and then the
banks and things need to pay the government back for
the money that it's length. So they're trying to get
some systems in place so we don't have a last
minute panic or expose the government to crazy amounts of
(13:50):
money and put them under pressure to do bailouts. So
you could argue that actually these things are set up
in such a way that there is a plan.
Speaker 1 (14:01):
I mean, it does sound like there's there's a bit,
there's a there is a plan, and I think you know,
if you're play of the bank for actually looking at
at what you know, for planning for when things go south,
as they inevitably do these banks. After all, you know,
a minister getting their hands duty with like regulation like
opera and operation you know operationally, well not quite operationally,
(14:22):
but you know, getting quite in the weeds and how
regulator works. It's you know, I'm missy, it's not pretty.
Speaker 2 (14:28):
I'm slightly confused though, so so Nikola Willis wants to
have to override the Reserve Bank on this one because
she wants potentially because she wants the capital requirements to
be higher or lower lower. So on the one hand,
you've got what you're talking about here. The financial liability
could potentially be back on the government if the banks collapse,
(14:49):
but she's wanting to pull it down further so that
this economy can be more stimulated.
Speaker 3 (14:54):
Well, yes, so the government would be potentially exposed, but
with this new insurance scheme in place that protects the
government because it means the the bailout will be paid
for by this insurance scheme. Uh, it won't be legally
technically paid for by the government.
Speaker 2 (15:12):
Really, so if that's the case, why does Adrian or
want the capital or did he want.
Speaker 1 (15:16):
The capitals embracest kind of approach, I suppose, right, So
it's just extra extra and I think you know has
point that he made it once is that these are
Australian owned banks and if they if they go south,
no Australian government is going to be there to It's
been Australian taxpayer dollars helping in New Zealand, the New
Zealand subsidiaries, which you know again but obviously our government
(15:37):
will for the breach. But yeah, it's I think it's
it's a it's an interesting one. It's a very like
I can I it's I really do see both sides
of it, because the banking competition issue is a serious
one and the cost so the New Zealand economy of
uncompetitive banks housing addictive banks. You know, that's that's a
very very serious problem that that ain't and always both
(16:00):
the bank and the government, but how you but you
know just who's operating and who's patch and the best
way to kind of have a competitive economy but not
an overly risky economy. And there but for the grace
of God.
Speaker 3 (16:14):
Well, yeah, it's tricky because so the issue that the
little banks have is that the big four banks can
set kind of set their own rules about the bank capital,
they can sort of decide how they do it, but
the little ones have to follow way more prescriptive rules.
Speaker 2 (16:28):
So that's one of the issues.
Speaker 3 (16:30):
Then the other issue is they say that what happens
is because you have to hold less capital for low
risk lending like mortgages than you do for high risk
lending like lending to farmers and businesses. The argument is
that that means that banks don't want to lend as
much to farmers and businesses because they have to hold
more capital. But the argument the Reserve Bank makes, which
(16:52):
is correct, is that well, even if they weren't these
rules in place, banks still need to make sure they're
safe and stable not collapse, so they will always see
business and farming loans is more risky than than mortgages,
so hold more capital against that.
Speaker 1 (17:06):
So you can't you know, even these beloved, these these
coal mines, the coal mines that are giving their banking
turned off, the cocing the cocing coal tell you what
what what self respecting bank are ever turned down? Good coke,
I tell you what kind of world are we living in?
Speaker 2 (17:26):
They would push back on that strongly, especially coming from
a journalist of all people funding the other.
Speaker 1 (17:32):
Yes funding yes in this Yes, I did write a
story a couple of weeks ago. It did. It's men.
It sounds like things went south pretty quickly because I
think I believe Adrian or was on actually some official business,
like as recently as a week ago. You know, so
that the government is involved in these fund five year
funding talks and were saying with the with the bank,
(17:53):
it's a tough one. You know, you do. You don't
want the bank to go through an annual funding cycle
with There's a very good article in Newsroom this morning
about how it was created. Actually that was that was
part of the reformers in the eighties and nineties. They've
funded on a five yearly basis and the bank, it seems,
wanted a lot of money this time around. Nicola Willis
made some remarks on this piece basically saying she thinks
(18:14):
they're a savings that can be made, i e. The
bank would not not only not get its funding increase,
but it would actually get a funding decrease. As most
public service departments have received in the last in the
last funding ground in terms of their departmental expenditure, the
service services have obviously had funding and increase that appears
not to have gone down particularly.
Speaker 2 (18:31):
Well with the bank clearly.
Speaker 1 (18:33):
Yeah. And the words funding were in the we're in
the we're in the statement that was made. So there
were word funding and then the Asian man mentioned funding.
Then Neil Neil quickly the chair of the board, mentioned
there were a couple of issues and that would learn
to we think funding with thing for capital requirements and
is there another wise there was there another? No, I
(18:55):
think that those were the two. Yeah, those are the
two are And then the whole kind of Maori fight,
which I really can't be bother going into because I
feel like I've dominated the last of seven years.
Speaker 2 (19:06):
Of my life.
Speaker 1 (19:08):
Adrian or liked the like, you know, dragging the bank
into the modern era with an embrace of Maori and
and some members of the financial community were les keen
in it.
Speaker 2 (19:18):
Just google us just on just five year funding. So
as you said, they get their funding every five years.
Does that come up in in the on budget day
or is it outside of the budget cycle.
Speaker 1 (19:31):
I actually asked that I think it is. I think
it is negotiated with the Bank and an agreement that's
signed off by the Board and the Finance Minister, and
then it's appropriate at each.
Speaker 2 (19:40):
Budget so we'll be able to see Yeah.
Speaker 1 (19:42):
I think you'll see it on I think you will
see it on budget day because it needs the funding
needs to be with the Bank on one July, which
is the start of the fiscal year, so you will
see it on. But I think I think it will
be negotiated before budget day. But I mean, I really
think when you think about it, the budget's probably but
the May tweeny two is budget and you usually have
those those those kind of critical budget cabinet meetings in
(20:05):
late April when you get the last forecast. So I
would imagine that things are pretty late stages now, which
makes you think, like what's happening on that? Like where's
the board on this? Is that does the board side
with Adrian on on the funding issue? Because it's the
negotiations aren't with Adrian with the board, So where's the
you know, where's the board on the funding issue? Whose
side are they take it?
Speaker 3 (20:23):
I asked Nichola Willis what her relationship was like with
Neil Quigley, the chair of the board, and she just
said good, good. But I suspect I suspect if it
was not good, she would have said.
Speaker 1 (20:34):
I have a relationship.
Speaker 3 (20:35):
I have. Yeah, well you know we had a good
working relationship. But you know she would have she's quite robust.
Speaker 2 (20:39):
Yeah, we have a robust relationship. You just say bad
at that point.
Speaker 3 (20:45):
And she reappointed Neil Quigley chair even though and this
is despite the fact Neil backed Adrian to be reappointed governor,
which Nicolair.
Speaker 2 (20:57):
Did she do was inn opposition because it was in opposition.
Speaker 1 (21:03):
It's I actually forgot this on the bridge the other
day as well. My have COVID brain for the last
twenty twenty to twenty five. I don't remember any.
Speaker 2 (21:10):
Thought Luxon was a bit mean to you on that one.
It was he went on for like you got like
a slight detail wrong, and he went on for like
a minute about this one thing. He was just running
the clock out. I think, I think, do not want
to talk about He's still a.
Speaker 1 (21:20):
Wee bit grumpy about the Tearsless stories, which is fine.
Marmite sandwiches all vigema. Are you a marmote person neither
(21:43):
not really.
Speaker 3 (21:44):
Yeah, I would go mar Mate, but I don't really
do either.
Speaker 1 (21:47):
Yes, I like, I tell you what I was rather
a bald and I think it was an orange story
that the stock photo was British Marmte rather than New
Zealand mar Mate. I've actually been to the birthplace of Marmite,
which is a town called Burton on Drint, is home
to a brewer. A brewer's where I p as, I
think was where I p as were invented, I think.
(22:09):
And they the beer and you scrape out the yeast
from the barrels or something, and then somehow you use
the byproduct of the beer to make the.
Speaker 2 (22:17):
Because I was going to ask you, Thomas, what is marmote?
It's like what, I know what it tastes like. I know,
I don't know what's in it.
Speaker 1 (22:25):
It's just it's good, like it's you know, it's like,
you know, do we want to like just lather our
children with mate instead of funding the school lunch program properly?
I'm I'm not sure about that, but it's nice.
Speaker 2 (22:41):
It's like get as bad pr if they did that.
Speaker 1 (22:44):
Well, second degree burns. Did we see this story last night?
Second degree bounds. I have to say that's probably it
would appear that this this scheme is not going to survive.
Speaker 3 (22:55):
So a child got second degree burns from there.
Speaker 2 (22:59):
It's opened, it explode.
Speaker 1 (23:01):
There are photographs, but I mean that's just kryptonie for
a government. You don't you know, like when somewhere do
you think of the children kind of stuff. It's just
it's this is just this is becoming absolutely antiina I could.
Speaker 2 (23:15):
I was the stories about, oh I don't like this,
I had no sympathy for like that. I had them.
They were fine. The story you did try the lunches.
I did try them. I thought I thought they were great.
In fact, at the time, before all of this went down,
I went on radio and said that if they can
pull this off, this would be an extremely successful, well
thought out policy because they've managed to shave x amount
(23:37):
of costs, the food is actually quite good, and they've
proved that they don't need to spend trillions of dollars.
Speaker 1 (23:42):
One was very confident in the lunch is confident enough
to do that the road, to bring them to Parliament
and to do the taste testing. He was confident that
they would not terrible.
Speaker 2 (23:51):
Yeah, so I'm fine with it. If all the stories
I thought, I don't like them, just they're free lunches,
you know, just suck it up each don't you know.
Speaker 1 (23:58):
There's no such thing as a free line.
Speaker 2 (24:01):
But it's the story. It's the stories of the burns
and the plastics. Those are I know, just saying it
out loud, like this is really bad, but you might despair.
Speaker 3 (24:10):
You know, we're trying to get these foreign vestas to
New Zealand next week, major infrastructure.
Speaker 1 (24:17):
Sandwiches at the higher on the waterfront.
Speaker 2 (24:21):
I reckon serve the school lunches hard.
Speaker 1 (24:24):
Apparently quite there's quite you know. You look at the
Americans ending people in the space and where meanwhile our
children are picking plastic out of their lunches, and you think,
I'm not sure this is the high productivity we think
it is. You know this we're meant to be food producers,
but this is what we meant to sell to the world.
Speaker 2 (24:43):
But again, like I think they take like listen, he
might have been giving us the best of the best
because we were journalists at Parliament, but I genuinely did
think that they were great, better than what I was
eating for lunch. No offense mum, if you if this
is if you're listening, your sandwiches were great, but it does.
It was quite stark. Actually, the way that the gover
It's messaging on this changed almost overnight. In fact, I
think it was overnight. We had the Marmite and Apple's
(25:06):
line and then every minister was using it, and that
was the line because I think they might have done
some focus groupings and denies that they have but basically
saying it is the parent's responsibility to provide lunches, and
we have a wide base of people that think this,
so we're going to lean into that.
Speaker 1 (25:20):
I think you're absolutely right, Jason. I've been wondering, you know,
looking at and I'm just thinking, you know, a lot
of a lot of a lot of if you look
at in a purely political way, like a lot of
a lot of voters have children, but you know, a
minority of voters have children who are currently receiving the lunches.
I mean, I think I think a minority of children
as some large minority, but a minority of children receiving
the lunches. So I think, you know, I think if
(25:41):
you're the government does almost appear to be trying to
reach them slightly and say like, lock, we're giving you
a free lunch, how do you complain about it? And
and and you know some of the stories that some
of them are appalling, like it burns, the plastic, the
you know, mislabeling, all that sort of stuff like that,
you know, not good. They've had an MPI complaint, although
I checked, you said Labor's lunch programs actually had seven
(26:02):
seven MPI complaints. So and when you're when you're dishing
a quarter of a million lunches, you think you're going
to get a lot of complaints.
Speaker 2 (26:09):
Yes, not many.
Speaker 1 (26:10):
Yeah, it's that you're going to survive. I would see
that the government is thinking, right, you know, and you did.
Some of the stories are like, well, you know, not
that not the lunch that gave people's people burns. But
another story was like, you know that the packaging was
difficult to hold and it was too hard, and you're like, well.
Speaker 2 (26:26):
Having problems with the cell phone and that sort of.
Speaker 1 (26:28):
And sometimes you well, maybe the teachers could just you know,
let them call off a little bit before feeding them children.
You know, like some of the stories are definitely you're like,
I think most voters would think that some of the
complaints seems slightly overagged, but enough of them are serious enough.
You know, I think the government will have to do something.
But it would appear that the government, I think, are
banking on the fact there are many voters, will think
(26:48):
that some of the many there are many voters will
think that many of the complaints are over egged, and
certainly it would see that many of the complaints are Again.
Speaker 3 (26:58):
Yeah, it's interesting because I wonder with it. Initially some
of the voters who might have thought the complaints are
over egg like the people thinking, oh, for goodness sake,
it's a free lunch. It's way better than the lunch
I got when I was a kid.
Speaker 2 (27:09):
Suck it up.
Speaker 3 (27:10):
Some of those people might also be the people who thought, actually,
I support the school lunches because rather than increase welfare
payments to then have parents spend it on whatever the
heck they want, it's good to buy food and get
and get it straight in the kids, you know, straight
in the kids mouths where it needs to be, you know,
look after the children, and then this is a good
(27:32):
tangible way. So it is interesting how it must have
been some focus gripping PEPs. As you say, Thomas that
I thought that was that would have been quite a
compelling narrative, which is the children. Yeah, and now it's
interesting how the dramas that have unfolded around it, actually
that they're now taking on a new narrative because they
(27:52):
obviously think that's these more greater political wins there.
Speaker 1 (27:55):
Yeah. Yeah, it's very it's an interest. It'll be very
interesting how it shakes out. I think I think I
could see it going either way. Actually it does. You know,
if the complaints, if the complaints kind of died down,
if they af because they couldn't, they could get on
top of it. But if certainly, if there are more
burns and more plastic and lunches, I imagine that I
kind of fine.
Speaker 3 (28:12):
Yeah, I mean hopefully people have some perspective though, like
surely that that.
Speaker 1 (28:15):
You go, well for quarter of a million lunches and for.
Speaker 3 (28:19):
Kids who might not otherwise have proper food, is that something?
Speaker 2 (28:23):
You know?
Speaker 3 (28:23):
What what's the money? How much?
Speaker 1 (28:26):
It's about one hundred and thirty million, it was yeah
a year. So it's like and the Treasury papers. Treasury
has never really been that keen in it. It was
the Children's Commissioner put up an idea for it about
a decade ago, and so the key government Treasury was like, look,
the international evidence is not that flesh in terms of
approving its attendance in terms of improving their their mental
(28:50):
well being considers, you know, that early advice is not
so flesh. Labor's Child Children spokesperson at the time one
just under a.
Speaker 2 (28:57):
Dune, I remember her.
Speaker 1 (28:58):
Remember her? She not a fan of that trusury advice.
She had a bit of a crecket it. Obviously, they
then introduced it into government and the whole way through
Treasury was like, it's expensive for what you get, and
it's it is like for what you get, it's very expensive.
And it's interesting. It started off as a child poverty
appropriation as a joint bid from the Children Social Development
(29:19):
and Education portfolios, and then it's kind of from that
shifted into an education thing. But but the and and
Truasury kind of has given it an easy ride through
the budget process because it was partly a manifesto commitment,
which basically gives it, you know, a much easier ride
through through the process. And but the the you know,
and I'm sympathetic to the Treasury review on the Social
(29:42):
Development on both sides, because on the social development side
of things, you know, the government got rid of the
benefit indexation to wages, which which the advice on that
is pretty strong and compelling in terms of what that
does for lifting people out of poverty, children out of poverty,
and it helps you. It's yeah, the index and benefits
to wages rather than inflation. That that how it's not
that much cheaper than the school lunches over the forecast period.
(30:03):
Obviously it gets more expensive as it goes on, but
it's you know, it's pretty compelling, and I think this
the lunches as labor is funding them in the vicinity
of half a billion dollars, I think not, but over
the forecast period and then the indexation, I think the
governments saved about six hundred and fifty seven hundred million
over the forecast period from that. So it's not you
(30:24):
know that the sums are both quite large but similar.
And you'd think if you if you're doing a straight
child poverty thing, well maybe you get rid of the
lunches because the lunches is quite untargeted a lot of
kids again, the lunches who don't need them, then and
you go straight for the interest the indexation. Again, it
is just simply a better policy. If you're going to
spend a dollar anywhere, spend it on the indexation. Then
(30:45):
Treasury on the education side of things, when it was
when funding came around again in twenty twenty three, and
it was an education but for another extension, Jans and Eddi,
the Education minister, wanted it to be funded permanently. Treasury said,
don't fund it permanently. Labor, so grant Robins inside it
with Treasury they said, Treasury said, don't fund it permanently.
Value from money not so flash and we recommend if
(31:06):
it's an education thing, the mental health impact some of
the kids who are receiving the lunches we're having actually
no real mental health improvement. There was a nutrition there
was a nutritional improvement, and the educational improvements. I think
we're maxed. There are five There were five evaluations from
the Ministry of Education which were actually quite positive, but
Treasury was not keen. What a surprise, Treasury doesn't. But
(31:28):
they were basically saying, take the money and do targeted
maths and maths programs with it. That's where the need
is because educational attainment is dropping. So much that if
this is an education bid, take it out of lunches,
give it to targeted maths. So Treasury, it would seem
Treasury has always like has tended to support the pilots
so that you know, it doesn't it's not like I
do not fund, but but it would appear that it's
(31:50):
because it's a manifesto commitment, commitment. And it would also
seem that Treasury officials are like, why are you spending
money on this? You know, it's trusury doing its job.
I think if you have a dollar it should go
to the best thing and stuff like you know, annexation.
Speaker 2 (32:05):
Very s black and white like that Treasury and they
often cop it the holiday. Remember when Phil Twyford said
that the Treasury and the Jerry Brownie when he was minister,
used to have a crack of them all the time.
They're just doing their jobs, you know.
Speaker 1 (32:16):
Michael Woodhouse called them the abominable. No men's rue.
Speaker 2 (32:21):
It's clever. It's me.
Speaker 1 (32:24):
I'm last, but not least. As Phil gets sacked and
Labour does a reshuffle the next day. Coincidence, coincidence, I'm
doing my research. No we no, no, you know, what
do you think about Phil goff just quickly. I think,
not very good.
Speaker 3 (32:39):
I mean, you need to be diplomatic when you're a diplomat.
Speaker 2 (32:43):
Yeah, yeah, I agree with what he said, but not
how he said it. Yeah, I mean I was actually
quite clever how he said it. But you're as you say, I.
Speaker 1 (32:50):
Think he thought it was clever, and the whole world
is like, I mean, I understand what you're saying.
Speaker 2 (32:55):
Yeah, yeah, sick burn, but you're fired.
Speaker 3 (32:57):
Yeah. But you know what's interesting with this whole Donald
Trump thing is that he got so unhinged. I mean,
he is increasingly unhinged that so many people said, I
mean I just called him unhinged. I'm trying to always
be quite neutral journalists.
Speaker 1 (33:12):
But he is quite.
Speaker 3 (33:14):
Yeah. But so many people who tried to have bring
some professional newtap neutrality to their to their jobs said
crazy things about him because what he did.
Speaker 2 (33:25):
Was just so because they're all accurate, exactly.
Speaker 3 (33:30):
And now it's kind of interesting, and you know, I
certainly didn't think he'd be back, and we said all
these things. Everyone says these things, and now everyone's having
to walk them back and go, well, okay.
Speaker 1 (33:39):
There's quite a sight that will never forget all these
sort of sensible and normal politicians walking into the overlapness
and just supplicating kissing the red. It's so it's so embarrassing.
Speaker 2 (33:50):
And it really showed this whole saga for me has
really showed how insecure various different countries are around the
US right now. Like they fired him based on a
Q and a like. It's such a small thing. For
most people, you wouldn't I mean, you'd listen to what
he said. It was actually so complex in its comedic nature,
(34:11):
in what he was saying in terms of the bust
and the understanding of history, that most people wouldn't have
even understood that it was an insult. But somebody in
the Trump administration might have. And you don't want to
get offside with the Trump administration right now, so you
need to look like you're being.
Speaker 1 (34:24):
In there against Yeah, I mean it's extremely online. Yeah,
it's very I mean everyone even I loved why him
does Zelenskin. We'll be thinking, I don't want that to
be me. And I think even you look that Linskin
thought that could be me, That could be anyone.
Speaker 2 (34:38):
Luxon will be thinking, if I go visit the White House,
what's you gonna do? Is he gonna be like a
nuggie in front of the cameras. Wouldn't really work with
a ball man. Well, that's when you rub someone's head right,
just making sure that I've got the right word. They
were really out of pocket.
Speaker 1 (34:53):
If anyone from the Trump administration there's list thing, please
do not do that. That would be very human.
Speaker 2 (34:57):
Do it. It would make for great news content.
Speaker 3 (35:00):
Don't nuggy Meggy Jason. It would be good on I.
Speaker 1 (35:06):
Did not want to see the Prime minister subjected to
that labour reshuffle are happening and read about it went
not in Auckland, Adam Adam Piers. My colleague is up
there and writing about it. So labor has created war portfolios.
I'm not you know, nationals about it. By the time
this podcast goes out, national will have criticized it. I
(35:27):
think that's a wee bit, I must say. I think
we're done with portfolio creation. I tell you what, how
about sinking lid free free free free policy idea, sinking
lid on portfolios? I just think we've got enough.
Speaker 2 (35:43):
Well, it was it was my colleague soul through Trigger
that was making the point that the gnats or labor
took a crack at the gnats for making you very
different portfolios, and now they're doing the same thing.
Speaker 1 (35:53):
Yes, I just think there are enough basically basically finance, health, education, you.
Speaker 2 (35:59):
Know, yeah, what have They've got a spokesman for Friendship
now or something.
Speaker 1 (36:03):
Growth and investment and jobs, and you're like, oh man.
Speaker 2 (36:07):
Aspisman for Wellington specific cafes that might be going out.
Speaker 3 (36:12):
I'd happily do that, most of which weren't they good
to begin with?
Speaker 2 (36:16):
Oh, big take, I got a spokesman for Big Mojo
over here.
Speaker 1 (36:25):
I'll leave you all enjoy your weekend. Thank you very
much for joining us on the titles. Thank you, Janane,
Jason so Little, I never I never realized, Jay's and
Thomas Sedley. I have a lovely weekend. Ethan Stills produced
this podcast and we'll be with you next week on
the tiles. Thank you very much listening. Goodbye,
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