September 2, 2024 • 9 mins
The Finance Minister has a simple message for anyone who doesn't like their rates bill.
A new IRD report shows New Zealand's council rates are almost double the OECD average, with most councils opting for double digit rates rises this year.
Most affected households didn't vote in the last local election.
Nicola Willis told Mike Hosking that if people don't like how much they're paying in rates or how it's being spent, the power is in their hands.
She says if people don't like their rates bill and they don't like the decisions their local council is making, they should make sure they vote.
She also disagrees with the outgoing Treasury boss on her calls for a Capital Gains Tax.
Dr Caralee McLiesh has made it clear there's a need for such a tax and superannuation changes as her five-year term comes to an end.
Willis says she's wrong on tax, but right on retirement age.
She told Hosking that while they're supportive of lifting the age of eligibility, they've agreed with NZ First it won't make the change.
Willis says something will have to change eventually, as the population is going to continuing to get older.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Prime Minister is in Malaysia drumming up business, or
assuming he's drumming up business. So Finance Minister Nicola Willis
is with us. Very good morning to you.
Speaker 2 (00:07):
Good morning mate the.
Speaker 1 (00:08):
Doctor caroly McLeish. Was she good news?
Speaker 2 (00:12):
Ah, yeah she was. Look, she did a commendable job
for New Zealand through a time of real economic challenge.
She was there for the response to COVID nineteen, the
response to the cyclone Gabrielle dealing with the cost of
living crisis, and was instrumental in helping this new government
deliver on our change of agenda.
Speaker 1 (00:30):
Is she wrong on CGT yes? Is she wrong on retirement?
Speaker 2 (00:34):
Well, look, we have a coalition commitment National and New
Zealand first that we won't change the age of retirement
this term. But it's well known the National Party campaigned
on raising the superannuation eligibility age and we did that
because we simply observe people are living longer, working longer.
The superannuation bill is getting significantly bigger and eventually we
(00:59):
are going to have to do something about it if
we want it to be sustainable, and I want it
to be sustainable.
Speaker 1 (01:04):
What's her argument? Do you know, around CGT or tax
in general. She was talking about the basic core debt
in this country and the problems we have around debt.
Why are we not talking about growing the economy so
we don't have to tax people more. Why is it
always the answer we need to find the money from
somebody else as opposed to doing better.
Speaker 2 (01:21):
Well, I'm with you. Before we pick people's pockets more,
there's two things we must do. Number One, ensure we're
actually spending New Zealanders money efficiently and our found abundant
evidence since we came in that that is not the
case and we are trimming the sales significantly. Second job
we have is to actually grow the pie so that
instead of having endless conversations about how we divide what
(01:44):
we have, we all have more. And that's about ultimately
backing businesses, giving them the confidence to invest high, people,
innovate and grow. That's what our government's all about.
Speaker 1 (01:54):
Okay. So before the news I was talking about the
OECD report on rates. We rate people in this country
at one point nine percent versus the OECD average of
one So, in other words, our rates are double. So
you talk to the people, the primise that talk to
the people at the local body meeting last week and
tells you to get your act to They don't seem
to have heard that. They don't seem to get it.
(02:15):
Is that a road block for you generally, that people,
despite what you would argue, disagree or don't get it
or both.
Speaker 2 (02:23):
Well, it's interesting. I think that message to local government
of actually brings some discipline has been really well received
by everyday New Zealanders and they are giving it to
their local councilors and mayors in stereo, which is actually
when that rates bill comes in and it's several thousand
dollars more than it was last year, it's very very painful.
(02:45):
And then when you have to drive over multiple speed
bumps on the way home past glorious gold plated cycle ways,
it doesn't feel very good. And I think that counselors
need to listen to that or they'll pay it the
ballot box.
Speaker 1 (02:58):
Okay, So then we come to retirement CGT. We've covered off,
and then we to the pushback. I was talking to
Simmy and Brown about do you feel that you've got
a group of people who just don't agree with what
you want and are determined in some way or another
and sit. I suppose the MARII wards most of them
(03:21):
have voted to go to an election next year. They somehow,
for whatever reason, are not going to agree with you
and tow the line.
Speaker 2 (03:30):
Well, look, the joy of democracy there is always a
diverse range of views. But you know our voter turnout
rates that local elections are pretty low. And what I'd
say to New Zealand is is, if you don't like
your rates bill, if you're not happy with the decision
making your local council's doing, for goodness sake, make sure
you vote, and make sure that you talk to your
(03:51):
friends about voting, and don't just vote by thinking about
it on the day. Have a look at who your
counselors are, what their track records are, and whether they
stand up for the things you believe in. Because actually,
ultimately I don't get to decide who local councils are
New Zealanders do.
Speaker 1 (04:06):
One of the things you announced last week is this
cross party idea, this consensus idea around the infrastructure, thirty
year plant, all that sort of stuff. It was poop
pooed almost immediately. Is it possible we are too divided
as a nation politically anyway that we will never agree,
and yesterday's announcement on roads, for example, is a good
example of that.
Speaker 2 (04:23):
Well, look, I think you're right and you're wrong. You're
right that there will always be some issues that there
will be disagreement on. That's healthy and that's important. But
can we decide to collectively agree to the bulk of
infrastructure projects. I don't think that's beyond us. If you
think over the next thirty years what we're going to
require in terms of roads, hospitals, school buildings, there shouldn't
(04:45):
be a big hullabaloo of a debate about that, and
we should be able to put that in writing. Agree
as parties, give the construction sector certainty, allow them to
build their workforces. And that's the aspiration we have, and
we're going to keep urging opposition parties to work with
us on it.
Speaker 1 (05:02):
Okay, Having said that, there was a letter yesterday from
the Power people. And so when you've got one party,
rightly or wrongly, that wants a big bucket at sixteen
billion dollars and you've got you guys wanting to look
for some coal or some oil and burn it, that's
an insurmountable gap, isn't it.
Speaker 2 (05:18):
Well, look, I would just invite those parties on the
other side to come join me in the real world,
because here in the real.
Speaker 1 (05:24):
World a problem right there, isn't it. I mean as
good a one line as that was. That's your problem,
isn't it.
Speaker 2 (05:31):
Well, look here it is. New Zealanders want to turn
the lights on. They want they want there to be
industry that can afford the price of the electricity bill
that comes. And we've got to be truth tellers. Unless
we have some backup gas, New Zealand is going to
have terribly insecure electricity supply. Those are the facts. So actually, Mike,
I remain hopeful that labor will reflect on that situation
(05:53):
and see it's simply not credible for a mainstream party
to claim they can have a growing, stable economy unless
they can confirm there will be stable, affordable electricity supply
that requires backup gas.
Speaker 1 (06:07):
Okay, also yesterday, so mean brown again. Open electricity and
open banking. I get open banking. I thought electricity was
reasonable in the sense that if you wanted to change
companies you can relatively easily, and people do. Is that
not the case? Do we not have open electricity?
Speaker 2 (06:22):
Well, issue that a lot of New Zealanders talk about
is when they go to compare their pricing from one
electricity provider to another, it's quite difficult to compare because
of the different approaches to pricing, and so the idea
with open electricity is that you can really get in
and compare the data. When do you use your electricity,
what kind of electricity are you using? And what therefore,
(06:42):
which plan, which regime would suit. So it's all about
making it simpler for people to make good decisions.
Speaker 1 (06:47):
Because I'm also last week there was some stats i
think put out by the Reserve Bank that when it
comes to refinancing at the moment, people are moving banks
and they're taking detail. So you would have us believe
that banking's problem and it's not open enough. The ComCom
says the same thing. Is that actually true? We just
inventing some problems that don't exist.
Speaker 2 (07:05):
It is absolutely true. Historically around only half of New
Zealanders have you ever switched their bank, And when you
look at banking behavior, banks in New Zealand just haven't
acted as competitively as banks in other parts of the world,
nor have they invested as much in technology and innovation.
But I've seen those numbers about more New Zealanders switching
their banks, and I think that is great because the
(07:26):
best way to hold the bank's feet to the fire
is to actually stop around.
Speaker 1 (07:31):
Because that's their argument, though, isn't it It works the market,
The market's actually working. If you want to change banks,
you can, if you want to change power providers.
Speaker 2 (07:36):
Have you ever tried to change bank? Make it ain't easy?
Speaker 1 (07:40):
Easy though it does not know I would agree with you,
but at the end of the day, there's nothing actually
stopping me if I want to.
Speaker 2 (07:45):
Well, I think making it easier is important, but also
making sure that the banks don't settle back into a
comfortable position, and that's where having an aggressive competitor, much
as Australia had Macquarie Bank enter and really disrupt pricing,
I think the same in New Zealand would be positive.
Speaker 1 (08:03):
So what do you do with Kywibank? What are we
going to find out about this this mystery idea? And
thinking you have around key we Bank and how do
you turbo charge them and to what extent? Because they
their result last week was a good result. I mean, yes,
they're a small bank, but they're out performing the other banks.
Why is that? Because people are going to them using
them see the opportunity. So that's a market working as Yeah,
look it's.
Speaker 2 (08:21):
Good to see it growing in New Zealanders. They're obviously
choosing to use that bank. I'm taking proposals to Cabinet
by the end of the year about what we would
need to do to get more capital into it so
it can grow further. Obviously, it can only grow so
far as it's got the money to back its own lending,
and so there are some options there. There are investors
here in New Zealand who may be interested in investing
(08:42):
in that bank, so we need to work through what
those arrangements.
Speaker 1 (08:45):
It's an assessment that there are investors who because it's
one thing to talk about it. But it's not that
I'm only investing in a bank. But I truly believe
the bank will go somewhere and there is a gap
in the marketplace for it to grow, et cetera. You
believe that's true and that's the information you are getting.
Speaker 2 (08:58):
Yes, I do, for two reasons. One, the context here
is that the New Zealand banking sector is enormously profitable
compared to banking around the world, so that makes it
an attractive investment. The second reason is that I have
had key we save a fund. Providers and others say
to me, look, we'd like a slice of the banking
action and Kiwi Bank would be a path for getting there.
Speaker 1 (09:20):
All right, good to see, great to be on the show,
Nikola Willis.
Speaker 2 (09:23):
For more from the mic Asking Breakfast, listen live to
news talks that'd be from six am weekdays, or follow
the podcast on iHeartRadio.
The Prime Minister is in Malaysia drumming up business, or
assuming he's drumming up business. So Finance Minister Nicola Willis
is with us. Very good morning to you.
Speaker 2 (00:07):
Good morning mate the.
Speaker 1 (00:08):
Doctor caroly McLeish. Was she good news?
Speaker 2 (00:12):
Ah, yeah she was. Look, she did a commendable job
for New Zealand through a time of real economic challenge.
She was there for the response to COVID nineteen, the
response to the cyclone Gabrielle dealing with the cost of
living crisis, and was instrumental in helping this new government
deliver on our change of agenda.
Speaker 1 (00:30):
Is she wrong on CGT yes? Is she wrong on retirement?
Speaker 2 (00:34):
Well, look, we have a coalition commitment National and New
Zealand first that we won't change the age of retirement
this term. But it's well known the National Party campaigned
on raising the superannuation eligibility age and we did that
because we simply observe people are living longer, working longer.
The superannuation bill is getting significantly bigger and eventually we
(00:59):
are going to have to do something about it if
we want it to be sustainable, and I want it
to be sustainable.
Speaker 1 (01:04):
What's her argument? Do you know, around CGT or tax
in general. She was talking about the basic core debt
in this country and the problems we have around debt.
Why are we not talking about growing the economy so
we don't have to tax people more. Why is it
always the answer we need to find the money from
somebody else as opposed to doing better.
Speaker 2 (01:21):
Well, I'm with you. Before we pick people's pockets more,
there's two things we must do. Number One, ensure we're
actually spending New Zealanders money efficiently and our found abundant
evidence since we came in that that is not the
case and we are trimming the sales significantly. Second job
we have is to actually grow the pie so that
instead of having endless conversations about how we divide what
(01:44):
we have, we all have more. And that's about ultimately
backing businesses, giving them the confidence to invest high, people,
innovate and grow. That's what our government's all about.
Speaker 1 (01:54):
Okay. So before the news I was talking about the
OECD report on rates. We rate people in this country
at one point nine percent versus the OECD average of
one So, in other words, our rates are double. So
you talk to the people, the primise that talk to
the people at the local body meeting last week and
tells you to get your act to They don't seem
to have heard that. They don't seem to get it.
(02:15):
Is that a road block for you generally, that people,
despite what you would argue, disagree or don't get it
or both.
Speaker 2 (02:23):
Well, it's interesting. I think that message to local government
of actually brings some discipline has been really well received
by everyday New Zealanders and they are giving it to
their local councilors and mayors in stereo, which is actually
when that rates bill comes in and it's several thousand
dollars more than it was last year, it's very very painful.
(02:45):
And then when you have to drive over multiple speed
bumps on the way home past glorious gold plated cycle ways,
it doesn't feel very good. And I think that counselors
need to listen to that or they'll pay it the
ballot box.
Speaker 1 (02:58):
Okay, So then we come to retirement CGT. We've covered off,
and then we to the pushback. I was talking to
Simmy and Brown about do you feel that you've got
a group of people who just don't agree with what
you want and are determined in some way or another
and sit. I suppose the MARII wards most of them
(03:21):
have voted to go to an election next year. They somehow,
for whatever reason, are not going to agree with you
and tow the line.
Speaker 2 (03:30):
Well, look, the joy of democracy there is always a
diverse range of views. But you know our voter turnout
rates that local elections are pretty low. And what I'd
say to New Zealand is is, if you don't like
your rates bill, if you're not happy with the decision
making your local council's doing, for goodness sake, make sure
you vote, and make sure that you talk to your
(03:51):
friends about voting, and don't just vote by thinking about
it on the day. Have a look at who your
counselors are, what their track records are, and whether they
stand up for the things you believe in. Because actually,
ultimately I don't get to decide who local councils are
New Zealanders do.
Speaker 1 (04:06):
One of the things you announced last week is this
cross party idea, this consensus idea around the infrastructure, thirty
year plant, all that sort of stuff. It was poop
pooed almost immediately. Is it possible we are too divided
as a nation politically anyway that we will never agree,
and yesterday's announcement on roads, for example, is a good
example of that.
Speaker 2 (04:23):
Well, look, I think you're right and you're wrong. You're
right that there will always be some issues that there
will be disagreement on. That's healthy and that's important. But
can we decide to collectively agree to the bulk of
infrastructure projects. I don't think that's beyond us. If you
think over the next thirty years what we're going to
require in terms of roads, hospitals, school buildings, there shouldn't
(04:45):
be a big hullabaloo of a debate about that, and
we should be able to put that in writing. Agree
as parties, give the construction sector certainty, allow them to
build their workforces. And that's the aspiration we have, and
we're going to keep urging opposition parties to work with
us on it.
Speaker 1 (05:02):
Okay, Having said that, there was a letter yesterday from
the Power people. And so when you've got one party,
rightly or wrongly, that wants a big bucket at sixteen
billion dollars and you've got you guys wanting to look
for some coal or some oil and burn it, that's
an insurmountable gap, isn't it.
Speaker 2 (05:18):
Well, look, I would just invite those parties on the
other side to come join me in the real world,
because here in the real.
Speaker 1 (05:24):
World a problem right there, isn't it. I mean as
good a one line as that was. That's your problem,
isn't it.
Speaker 2 (05:31):
Well, look here it is. New Zealanders want to turn
the lights on. They want they want there to be
industry that can afford the price of the electricity bill
that comes. And we've got to be truth tellers. Unless
we have some backup gas, New Zealand is going to
have terribly insecure electricity supply. Those are the facts. So actually, Mike,
I remain hopeful that labor will reflect on that situation
(05:53):
and see it's simply not credible for a mainstream party
to claim they can have a growing, stable economy unless
they can confirm there will be stable, affordable electricity supply
that requires backup gas.
Speaker 1 (06:07):
Okay, also yesterday, so mean brown again. Open electricity and
open banking. I get open banking. I thought electricity was
reasonable in the sense that if you wanted to change
companies you can relatively easily, and people do. Is that
not the case? Do we not have open electricity?
Speaker 2 (06:22):
Well, issue that a lot of New Zealanders talk about
is when they go to compare their pricing from one
electricity provider to another, it's quite difficult to compare because
of the different approaches to pricing, and so the idea
with open electricity is that you can really get in
and compare the data. When do you use your electricity,
what kind of electricity are you using? And what therefore,
(06:42):
which plan, which regime would suit. So it's all about
making it simpler for people to make good decisions.
Speaker 1 (06:47):
Because I'm also last week there was some stats i
think put out by the Reserve Bank that when it
comes to refinancing at the moment, people are moving banks
and they're taking detail. So you would have us believe
that banking's problem and it's not open enough. The ComCom
says the same thing. Is that actually true? We just
inventing some problems that don't exist.
Speaker 2 (07:05):
It is absolutely true. Historically around only half of New
Zealanders have you ever switched their bank, And when you
look at banking behavior, banks in New Zealand just haven't
acted as competitively as banks in other parts of the world,
nor have they invested as much in technology and innovation.
But I've seen those numbers about more New Zealanders switching
their banks, and I think that is great because the
(07:26):
best way to hold the bank's feet to the fire
is to actually stop around.
Speaker 1 (07:31):
Because that's their argument, though, isn't it It works the market,
The market's actually working. If you want to change banks,
you can, if you want to change power providers.
Speaker 2 (07:36):
Have you ever tried to change bank? Make it ain't easy?
Speaker 1 (07:40):
Easy though it does not know I would agree with you,
but at the end of the day, there's nothing actually
stopping me if I want to.
Speaker 2 (07:45):
Well, I think making it easier is important, but also
making sure that the banks don't settle back into a
comfortable position, and that's where having an aggressive competitor, much
as Australia had Macquarie Bank enter and really disrupt pricing,
I think the same in New Zealand would be positive.
Speaker 1 (08:03):
So what do you do with Kywibank? What are we
going to find out about this this mystery idea? And
thinking you have around key we Bank and how do
you turbo charge them and to what extent? Because they
their result last week was a good result. I mean, yes,
they're a small bank, but they're out performing the other banks.
Why is that? Because people are going to them using
them see the opportunity. So that's a market working as Yeah,
look it's.
Speaker 2 (08:21):
Good to see it growing in New Zealanders. They're obviously
choosing to use that bank. I'm taking proposals to Cabinet
by the end of the year about what we would
need to do to get more capital into it so
it can grow further. Obviously, it can only grow so
far as it's got the money to back its own lending,
and so there are some options there. There are investors
here in New Zealand who may be interested in investing
(08:42):
in that bank, so we need to work through what
those arrangements.
Speaker 1 (08:45):
It's an assessment that there are investors who because it's
one thing to talk about it. But it's not that
I'm only investing in a bank. But I truly believe
the bank will go somewhere and there is a gap
in the marketplace for it to grow, et cetera. You
believe that's true and that's the information you are getting.
Speaker 2 (08:58):
Yes, I do, for two reasons. One, the context here
is that the New Zealand banking sector is enormously profitable
compared to banking around the world, so that makes it
an attractive investment. The second reason is that I have
had key we save a fund. Providers and others say
to me, look, we'd like a slice of the banking
action and Kiwi Bank would be a path for getting there.
Speaker 1 (09:20):
All right, good to see, great to be on the show,
Nikola Willis.
Speaker 2 (09:23):
For more from the mic Asking Breakfast, listen live to
news talks that'd be from six am weekdays, or follow
the podcast on iHeartRadio.
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