Kia ora. Good afternoon. This week the House will return from a two-week recess. Of note, the Reserve Bank monetary policy bill was tabled today and will have its first reading on Thursday. This bill makes two very important changes to the Reserve Bank Act, that will significantly improve monetary policy as it relates to its impact on New Zealanders and the real economy. The first change is to the objectives of monetary policy, that will now require consideration of maximum sustainable employment alongside price stability when making monetary policy decisions and setting the official cash rate.
This Government believes inflation is not the sole issue facing our economy. Our monetary policy settings will work to support maximum employment for New Zealanders, as much as keeping costs under control. We have been very successful at keeping inflation low while too many New Zealanders have lost their jobs. From now on, we aim to achieve better balance with higher levels of employment and low inflation.
The second change is the establishment of a monetary policy committee to make decisions of monetary policy and set the official cash rate. Previously, this has been a decision of the governor alone, but evidence suggests that committees make better decisions, on average, than individuals, including for monetary policy, because they include a range of perspectives and guard against extreme views or singular views that can hold our policy settings captive. A broader range of perspective will become especially important given the widening of the objectives of monetary policy to include employment. The monetary policy committee will need to have people on it who are labour market experts who can provide advice on that new dimension to the policy settings.
With regard to foreign affairs engagements, this evening I will meet with the visiting delegation from French Polynesia, led by Ḗdouard Fritch, the President of French Polynesia, while on Tuesday evening I’ll host a working dinner with the visiting Deputy Prime Minister and finance Minister of Japan, Mr Tarō Asō, and his delegation.
As you well know, Parliament resumes sitting this week, and I’ll attend question time on Tuesday, Wednesday, and Thursday.
Now, today Cabinet signed off an item appointing Dr Pauline Kingi CNZM to lead the inquiry into the appointment process of the deputy police commissioner. Dr Kingi has an extensive 28-year career in the Public Service, as both a community leader and senior public servant. She is a past Councillor for New Zealand Healthcare Standards, chair of the Auckland University of Technology, and an Auckland regional director of Te Puni Kōkiri. She was admitted as a barrister and solicitor in 1980, was a Harkness Fellow in 1983, and received a Master of Laws from Harvard University.
The inquiry will commence on August 6 and report back within 6 weeks of establishment. The inquiry’s purpose is to examine, identify, and report on the adequacy of the process that led to the appointment of the Deputy Commissioner of Police. It will not look into the suitability of the appointee for the role of Deputy Commissioner of Police. Any questions?
Ah, well, you’ll have to ask Dr Kingi, who has been given the role, and if she thought that was appropriate, we’d have to cross that bridge when we come to it.
Well, Mr Nash didn’t decide on the one recommendation. In the end, this matter came before Cabinet, and in the end Cabinet carries the can on this, not just the Minister of Police.
Well, it hasn’t taken very long at all. It’s been very expeditious, to be honest with you. We had to go through a number of people, had to find whether they were available, and, in the end, we had to also consult with their view on the terms of the inquiry and other matters. And, with the greatest of speed, in the time we had available, it’s been done.
Because the correction—rather, the correctness of the process will establish whether other questions arise from that, and suitability may be one of them. But it’s the process that people are complaining about. The process has been called into question, and an inquiry into the process is what’s happening now.
I shouldn’t enunciate my expectations because they’ve given someone the job, with the terms of reference and with the promise that we are prepared to look at an extension of time. We’ll look at resources if that becomes a question as to the quality of the inquiry. So that having been removed, I’d rather leave it over to Dr Kingi to decide rather than myself or my colleagues.
Well, if it was part of the process, it may well do, but I’m not going to foreclose on Dr Kingi’s means of going about finding the relevance of that question towards the process or what her conclusions might be.
Well, I can’t give you that figure at the moment because we don’t know the final cost—when it’s all over. But we should think it’ll be something within $150,000. It might cost much less. Perhaps it might cost more, depending on the request from the inquirer.
No. What the inquiry’s going to look at is as to the appropriateness and the propriety of the process, and you would assume that, if that is done, then the issue that you’re talking about may well arise. But it’s not for me or anyone to specify how Dr Kingi might go from the processes which she’s on, of inquiry, to the issue of suitability. You’d expect, though, that the question you’re asking would be answered after the first aspect has been properly looked into.
Just on another issue, taxpayers are potentially in line to hand over millions of dollars in compensation to disgraced US broadcasting host Matt Lauer for access to his Hunter Valley Station in Central Otago. Do you have any views on this? It’s seems like it’s— he’s complied with all of the requirements of his lease that were negotiated with OIO at the time, but—
Well, I do have views on it. For a start, I mean, what on earth was the National Party doing in April last year of allowing that sort of sale in the way they did? Perhaps you could explain that to me. Why don’t you ask them a few questions—or Mr Bridges when he turns up now and again, to give an account of himself.
It doesn’t stop with that. There’s the Thiel purchase, or sale, as well. It’s one after the other. And now we’re inheriting it and we’ve got to handle it, and it’s complicated. And I can’t give you an answer because we don’t know where it’s going to at this point of time.
Well, I mean that’d be the last aspect that should’ve been raised, but the reality is that they were selling it off to anyone offshore who had enough money to buy it, or wanted to buy it, in an international market, in a way that they should never have been and which we will not allow now.
Even though, obviously, it could potentially be the fault of negotiators at the time— the Government and officials under the last Government—do you think taxpayers should still be liable for this?
Well, again, it’s a further complication of what we’ve inherited. It doesn’t stop at—this is a classic example. And having looked at what information is available at this point in time, including the latest news reports and other correspondence, I can’t give you a conclusion as to where things go from here, because it’s not within our purview or our control.
We do not envisage sales like this going on into the future. That’s why the new Government has changed the policy completely. I do not envisage selling this country out, like the last Government did. No.
Mr Peters, can you give us an idea of what, in particular, you would like to speak about with the President of French Polynesia and the Deputy Prime Minister of Japan?
Very happy to; I’m very happy that they’ve reached out to be engaged with New Zealand in a way they never have in the past. I’m very pleased that they’re a member of the Pacific Islands Forum. We’ve got a lot of work to do. We’ve got a reawakening in Polynesia of the French people themselves, all the way to France, and so we’re looking forward to very positive engagement, including discussions on Pacific agreement on closer economic relations and a whole host of things like that.
Ah, well, we’re renewing a meeting that we began in Japan when I was last there, and he’s passing through Auckland on his way back from South America and he’s stopping off for a working dinner.
Well, you know, we’re a country that is built on and survives on our agricultural exports, and if we undermine that then it somewhat defeats the purpose of the country’s long history of trying to sustain in an added-value way, to the top of its value, our off-farm products.
Minister, your party has put out a media statement about this, congratulating Virgin Australia on its ad campaign. Is it a little bit odd that New Zealand First is backing an Australian airline over a New Zealand airline, do you think?
Mr Peters, various groups have come out today against the Government’s Budget responsibility rules, saying that they’re a bit too limiting. I was wanting to get your perspective on that: do you think that they’re too limiting?
Well, you use the word “rules”, and I find that a misuse of the word because, frankly, whilst it’s couched in that phrase, it’s a question of the ratio of debt in that sound economy. Now, when you look at Germany, it’d be over 60 percent, and they’ve got a powerhouse of exports and manufacturing and the full modern economy. They would have the same equivalence of, probably, Tonga. One can pay its debt back, the other can’t. So our question—sorry the issue for the New Zealand Government is to ensure that we have got enough aside for a rainy day of the type that we’ve seen already in terms of events— Mycoplasma bovis and Psa with respect to two inherited problems that we as a Government are now dealing with, and there may be others. So it’s with caution that we are proceeding with this, and maybe three years down the track when we’ve had three years to get on top of things, you may be right, but for the time being, I think it’s premature to make that stance.
So you say that in another three years, when the Government is reassessing the Budget responsibility rules, there is scope to lift that debt limit and change that spending limit as well?
Look, it’s not what you do with debt—sorry, it’s not your debt; it’s what you do with it. If your debt is for consumption, then you’ve got a problem. If it’s for production, for the growth of the economy, to build new industries, then maybe it is a very sound answer. So any increased debt from here of that nature would have to be for not consumption but for production and increased wealth creation. So it’s a very complex question.
He had said, “Never ever threaten the United States again, or suffer the consequences, the like of which few throughout history have ever suffered before.” Does that concern you?
Well, you’re reading out something that I haven’t seen, and I’m not going to come down here and respond to something that I haven’t seen, just having had it recited to me.
It sounds like him, and it probably is him, but I’m not going to come here at a press conference and start responding to it when I don’t know for a fact.
I think the tweets, Mr Peters, are about the stability of oil exports passing through the Gulf of Hormuz. The Iranians have said that if their oil exports are cut off entirely, they have it within their power to block the Strait of Hormuz.
Well, of course, we’re seriously concerned. We’re concerned that every comment and every act that would destabilise any part of the world, because in the end there can be consequences for our country. But there’s only so many we can respond to in a valid way, other than just to make a comment of no value to the issue.
Oh, look, I’m not going to come here and spin a critique on the American President, or any other leader, for that matter. You’ll write what you like anyway, so you go right ahead.
This young fellow has been released from the prison, and my view, as a consequence of questioning the propriety of him being there, given that we’re both signatories to the UN declaration on these matters. And now he’s been let go back to his family in Sydney, and I do hope that he uses this opportunity to reconstruct his life. It’s a serious problem.
Well, it’s not the way the British law, on which the Australian law was constructed, or our law either. It should be a habeas corpus matter, and it’s not being followed properly.
No, but somebody should be tried before they’re evicted from a country. At least they should be given a hearing as to whether or not what’s about to happen is fair within the law of that host country.
No, I don’t. The fact that they’re geographically placed where they are is a fact of geography. But to say that they’re doing all the heavy lifting, given the reset in the amount of money and investment we’re putting into helping our neighbourhood become a safer and more secure place—no, I do not agree with them at all.
No, I don’t go getting upset because, you know, in the end, foreign affairs is between peoples of different countries, not temporarily empowered political personalities, and we should never forget that.
Just going back to the Japan visit for a moment, in the light of the tit-for-tat trade wars that seem to be developing between China and the United States, does that make Japan a more important potential market to us as a kind of a plan B?
Right. But I was asking in the context of this tit-for-tat between China and our potential to be affected by the battling tariffs. Does that make a market like Japan seem more attractive to us?
Mr Peters, you’ve been one of the strongest critics of the Reserve Bank for a number of years now. Now that we’re seeing some of the legislation go through Parliament this week, I wonder if you could reflect on that legislation to think—does it go far enough, in your opinion as a New Zealand First leader?
If there was Crown land that was close to an infrastructure project that was sold to developers to develop that land because it would increase in value—would you support that sale if the proceeds from that sale went into funding the infrastructure?
Well, that seems a seriously old-fashioned view of sound economics. So you put a railway in and you price the price of the land next to it that you might own, it goes rocketing up in value and you sell it for that purpose. That’s what you’re suggesting. That sounds like the economies of other countries where railways were in past times, even over a hundred years ago.
Yes, I am, of holding on—well, if it makes sense. If you’re holding onto land for no good reason in the sense that it is a liability to you, it may be different.
Imperial Tobacco have commissioned a report into how illicit tobacco is sold in New Zealand. They say 9 percent of tobacco sold in New Zealand is sold illicitly. So no excise taxes are coming in, and the Government’s missing out on $180 million. They blame it on high excise taxes. Do you think there’s a relationship between the excise taxes on tobacco and people using it illicitly?
Of course there is. I’ve always said there is. I’ve always questioned the integrity of the whole taxation system here. You know that the previous Government promised smoke-free by 2025. Right now, we’re passing $2 billion in taxation on cigarettes and tobacco and 3 percent of it is going for the minimisation of smoking and the other 97 percent’s going somewhere else. We all need to put our hands on our heart and say whether that’s got any integrity—whether it’s fair or not.
You couldn’t be more precise. Of course it’s leading to that, and it’s leading to people being murdered and assaulted in our dairies.
No, I’m just giving you the facts. You decide whether it’s too high or not. All I do know is the money’s not going for the purpose for which it’s been collected in the first place.
Yeah, I know, but we’ve also got the situation where we will be having to readjust the fiscals in our economy at the same time, and you can’t do them all at once. You can’t have every area of infrastructure, every area of education, health, policing, military, foreign affairs all in deficit and fix it in one Budget flat. Thank you very much.