Post-Cabinet Press Conference: Monday, 14 October 2024

Well, kia ora, good afternoon, everyone, and it’s great to be back in Parliament for the next two weeks. As we get closer to the end of the year, we’ve got a lot on our plates. On Saturday, I returned home from a short but important trip to Laos for the East Asia Summit. A big focus for our Government is to lift the intensity and also the urgency of our foreign relationships, particularly in the Indo-Pacific region, and strengthening our international relationships is key to our economic prosperity. With job number one for our Government being to rebuild the economy, hustling for more trade and more investment overseas is a non-negotiable. But New Zealand’s economic prosperity is only possible with global and regional security, and that is why New Zealand needs to use our agency, our influence, and our role in the world to contribute to and shape global and regional security, and you’ve seen our Government demonstrate that from the outset.

In Laos, I met formally and informally with several leaders to discuss security challenges and also to advance New Zealand’s economic interests, and that included meeting Indian Prime Minister Narendra Modi, who I was pleased to sit down with for our first face-to-face meeting. It was a very warm, positive and constructive conversation that we were then able to continue when we were seated together at the leaders’ dinner. Prime Minister Modi and I reiterated our commitment to take the India‒New Zealand relationship to greater heights, and I accepted a formal invitation from the Prime Minister to visit India. And our teams will now work on securing mutually convenient dates for the visit to take place in what we hope will be the very near future, but likely in early next year.

Growing our trade relationships will boost New Zealand’s economy, lift incomes, reduce the cost of living and provide the public services that Kiwis deserve. Trade supports a quarter of all jobs in New Zealand, and for those working in export industries, their incomes are higher too, earning 7 percent more on average compared to other sectors. Trade helps business too. Exporting firms are 25 percent more productive and grow faster than non-exporting firms. And that is why I’m ambitious for New Zealand to do more on the world stage, because it’s how we become wealthier as a country, which in turn is how we can lift incomes, create jobs and opportunities, and afford to invest in better public services that Kiwis so deserve. Ultimately, it’s about improving the quality of life for New Zealanders, who we know have been doing it particularly tough over the last few years.

One year ago today, New Zealanders put their trust in National to lead a new Government and to get the country back on track. National campaigned on rebuilding the economy and lowering the cost of living, and New Zealanders responded to our plan by delivering us a historic victory, the first time under MMP that a major party has been returned to Government after just two terms in opposition.

Now in Government we are doing what we promised to do and what New Zealanders elected us to do. We are making the tough but necessary choices to help us rebuild the economy. We kicked off a savings programme as soon as we entered Government, with $7.5 billion in savings identified at the mini-budget last December, rising to $23 billion in savings locked in at the budget in May. And that ensured that we could deliver tax relief and fund frontline services without stoking inflation or driving debt higher.

We’re also taking bold action to turn New Zealand into a high-growth economy, and that means clearing out the blockages and opening up competition in construction and financial services, agriculture, infrastructure and housing. And of course at the centre of those reforms is fast-track, with 149 regionally and nationally significant projects set to enable 55,000 new homes and the equivalent of 30 percent of current renewable electricity generation.

We’re now seeing signs that our plan is working. With financial discipline in place, interest rates are falling, food inflation remains low, business confidence has risen significantly, and forecasts suggest that inflation is set to keep falling when the latest data is released this week. I know, however, it is still tough for many Kiwis out there and there is so much more for us to do. We certainly aren’t out of the woods yet, but as Forsyth Barr said last week, the contours of an economic recovery are starting to take shape, so we know that our plan is putting us on the right track. I’ll now hand over to our Finance Minister, Nicola Willis, to talk a little bit more about the direction of our economy and what it means for families and businesses.

Thank you, Prime Minister. We’re in the midst of a big couple of weeks. Last week the Reserve Bank dropped the official cash rate by 50 basis points, Treasury released the Government’s financial statements for the year and we got an update on food prices. This week, of course, we’ll get the latest inflation figures. What these various releases tell us is that neither the books nor the economy are in great shape, but the steps we are taking to bring Government spending under control, reduce the red tape that is stifling development and innovation, and restore confidence to the business sector are beginning to have an impact.

The drop in the official cash rate was particularly welcome. It confirmed the Reserve Bank’s confidence that inflation is back under control, and is helping to put more money in people’s pockets and increase the opportunities for businesses to invest and innovate. Last week’s drop of 50 basis points, of course, followed the 25 basis point drop in August. Individual circumstances vary a lot and if people are interested in what these dropped rates mean for them, I’d recommend they look at a reputable mortgage calculator. But to give one example, a drop from a 7 percent mortgage rate to 6.25 percent for a family with a the 25-year, $500,000 mortgage, would lower their fortnightly mortgage repayments by just over $100. Add to that tax relief that took effect on 31 July and the Family Boost payments that families earning up to $180,000 with childcare costs are now eligible for, and many families are now significantly better off than they were a year ago.

Markets are anticipating more good news this week when Stats NZ releases the latest inflation figures, and Friday’s food price release provided more good news, particularly if you like kumara, potatoes and onions. They were the standout performers in an 8.3 percent drop in the prices of fruit and vegetables over the past 12 months. Overall food prices increased just 1.2 percent for the year, which is a far cry from the double-digit that food price increases that were occurring under Labour.

Creating the economic conditions for these sorts of reductions is a key part of the Government’s plan to address the cost of living and ease the financial burden on Kiwis. It’s early days, there’s still more work to do, but our careful and deliberate plan to rebuild the economy is working. And I’ll now hand back to you, Prime Minister, because I know that you have an announcement to make that will be of considerable interest to everyone, including me as the Minister for the Public Service.

Well, thank you, Nicola. I am delighted to announce today that Sir Brian Roche has been appointed as the next Public Service Commissioner. Sir Brian, as many of you know, is a highly respected New Zealander who has held a number of significant leadership roles across both the private and public sectors. He was previously the Chair of the Cyclone Recovery Taskforce from 2023 to 2024, Chair of the New Zealand Transport Agency from 2019 to 2023, and Chief Executive of New Zealand Post from 2010 to 2017, and prior to that he was a partner at PricewaterhouseCoopers from ‘87 to 2009.

Sir Brian has built the trust and confidence of Ministers across successive Governments. He is authentic, he is honest and he has a deep understanding of the Public Service and its functions. He understands how to manage problems, develop talent and importantly drive performance, and this aligns with our Government’s focus on raising the performance of the Public Service so that New Zealanders get the services that they expect and deserve. And with broad networks across New Zealand and experience working with stakeholders, including several iwi, Sir Brian has the capability and credibility to lead the Public Service chief executives.

Sir Brian has been holding a number of directorships and appointments and has or shortly will be resigning from a number of these. However, he will retain a small number of private sector board positions and as part of his appointment process the Governor-General has given her approval for him to do this. The roles are expected to require less than four hours per week of his time on average across the year, and his remuneration will be adjusted to reflect this. Sir Brian will start as Public Service Commissioner on November 4, and his term will run until June 30, 2027.

I would like to take a brief moment to acknowledge the leadership and efforts of Heather Baggett, who has acted as Public Service Commissioner while the appointment process for a new Commissioner has been undertaken. Heather has stepped into the role and done an admirable job for the Government and for Public Service, and I’m sure many others will join with me in thanking her for her calm and very thoughtful leadership over recent months.

Before we get into questions—and we do need to hard stop just at 4.30—I’ll quickly run through House business. This week we will be considering further stages of the Gambling (Definition of Remote Interactive Gambling) Amendment Bill and the Resource Management (Freshwater and Other Matters) Amendment Bill, both of which are part of our quarter four plan. And with that, Nicola and I are very happy to take your questions.

It’s utterly unaccepted. I called it out in my statement at the East Asia Summit as well as saying that there is—it is totally, utterly unacceptable for Israel to be targeting UN peacekeepers. That is unacceptable.

Well, again, those are conversations we’ll have into the future. But for right now, you know, I think the whole world is outraged that Israel is targeting UN facilities. They are there on a peacekeeping mission to try and keep the peace on that border, and what we’ve seen overnight is—and what we’ve seen actually over the last few days is unacceptable.

Well, I’m actually very proud of the way that we’ve actually stood up. We’ve actually put sanctions in place with, you know, extremist settlers on the occupied territories, as you well know. We’ve been consistent calling for Israel to respect international law and the protection of civilians, and we’ll continue to do so. You know, the reality is this is new news. It’s unacceptable. I’ve called it out in the East Asia Summit as one of the few leaders who identified it when it was happening, and I’ll continue to do so.

That is what we’ve asked all parties in this to do. Of course, more military action doesn’t get us to a peaceful situation in the Middle East. What we need is the parties to negotiate, to get around the table and to put themselves properly on a path where actually Palestinians and Israelis can live side by side, in two separate states, in peace and dignity.

Well, I’m really pleased we’ve been able to secure someone of his calibre. He’ll actually hit the ground running on day one. But both Nicola and my message to him is that we want to see improved performance from the Public Service. We want to see, obviously, the delivery of the Government’s goals and targets, but importantly we also want to see the development of the next generation of talent within the Public Service. We have incredible public servants and we want to make sure that we’re developing that next rung of talent that will be the future CEOs of these organisations in the years to come, and so I think there’s a big focus on talent development as well.

Our focus hasn’t been and our conversations haven’t been around that. Our focus has been on about making sure we get a high performing Public Service that is motivated with a strong culture to deliver for the Government.

Yeah, I’ll let Nicola talk to that one.

Look, I asked Sir Brian to apply for this role. He wasn’t in the initial batch of applicants. I judged that he has a particularly special skill set with the balance of public and private sector experience. And in asking him to apply, he made it clear that that was going to require sacrifice from his family, and this was the term that he wanted to sign up to. And we have accepted that in two years and eight months he will have a significant impact, he will be able to make big changes in the Public Service, and as the Prime Minister says, one of his key roles will be to develop the next generation of talent so that there is a suitable successor to him.

Well, we’re satisfied that Sir Brian is a fantastic Public Service Commissioner, and we are pleased that we were patient. We consistently said that getting the right person was more important than being in a hurry.

As the Prime Minister said, we’ve asked him to have a focus on performance and delivery against the Government’s targets. And we’ve had a period in New Zealand’s history, over the past six years before we came to Government, in which expenditure by public sector agencies increased dramatically but many New Zealanders couldn’t point to improvements in the services they receive. Our focus, and what we’ve asked to be judged by, is: are New Zealanders receiving better services? And we want to see the Public Service innovating, doing things differently, using resources in new ways to deliver better outcomes for people, and we’re confident that there is the potential to do a lot more. There are some incredibly talented, driven, smart people in the Public Service, and with Sir Brian Roche as their leader, we think that there’s the potential for there to be a lot more delivery and a lot higher performance.

OK, Thomas and then Joe.

Well, the great thing is that Sir Brian has been fully endorsed by every political leader of every political party in the Parliament—and I think that’s a good sign that we’ve actually got someone of mana and respect and capability, that we’ve been able to attract such a high-calibre individual actually to take on this role, and I think he’s going to hit the ground running from day one. Yes, it’s a shortened term but he’s going to add a lot of value to the Public Service.

Again, I won’t talk about those operational issues at this point.

Yes, I have in the course of last week, not today, but I will follow that through. But the important thing is that, you know, we don’t have a habit of talking about those operational issues. Jo?

Having come back, I haven’t been briefed on that. But what I can say is I called that out very explicitly, to say that UN personnel, UN officials, UN leadership and UN facilities should not be targeted by any country on Earth. You know, they are there to do a job on behalf of humanity and we expect them to go about that job unimpeded. So my position is pretty strong about it. We’ll have a look at the letter and see what we think.

Look, where we are is—first and foremost, we’ve got the personnel off, which is fantastic. We’ve got, as you all know, a full-court press on making sure we mitigate any environmental damage. The work will begin with the Navy and with the insurers about whether it’s a salvage or a wreck. I haven’t been briefed that we’re going down one of those paths at this point in time. That’ll ultimately be a decision for the Navy to work with the insurers around. But for right now, what our focus is on is making sure that there is no contamination on the beaches, there is no impact on wildlife. We have removed debris from beaches, and importantly we now need to work to plug the small venting leaks that we see. But the good news is that the main fuel tanks are actually intact at this point in time, which is exactly what we want to see.

Nicola will be involved in it, but the answer is to do the right thing first and foremost, and so we’ll worry—we’ll deal with the cost implications.

Well, I’d just say to you there haven’t been conversations about the cost inside Cabinet.

Well, no, because he’s empowered to go off and work with the insurers, and that is a conversation he’ll be working through with them. And obviously we have—as we’ve said before, we’ve got sort of a type of third-party insurance around the salvage and also around the environmental protection. But those are issues that he will work through commercially with the insurers.

No, we don’t. But again, we will let him go through the process with insurers first and foremost, as he should.

Well, I mean in my conversations with the Acting Prime Minister, and even with Prime Minister Fiamē just a few days ago while I was in Laos, I’ve consistently conveyed that we are sorry this unfortunate accident happened. But what we are very focused on as a combined Samoa‒New Zealand team is actually making sure we stay very, very focused on the task at hand. You know, every day that we’re not making progress is a day lost. And so we want to make sure that we are trying to do the best we can to plug any leaks, importantly removing any debris from beaches, containers on reefs—and we’ve got to make sure that we’re communicating the status of where the fuel is and what any contaminants could be causing. And at this point it’s good—you know, it’s not great but it’s encouraging that we actually haven’t seen a major leak of diesel into the ocean and onto the beaches.

Yeah, it’s just a question of—I thought about that last week, actually, before I shot through to Laos, but I don’t want to be a burden on resources that are stretched up there and I know my arrival would cause a distraction on some level. So I’m sure when I’m up there, there will be an opportunity for me to understand the situation even further and physically sight it. But for now, you know, what I want is a full-court press. I want ruthless focus on the task at hand because every day we just need to march our way through cleaning up and mitigating any mess.

We have not seen, as I understand it, no contaminants or fuel or diesel on beaches. We’ve seen no loss of wildlife. We’ve had crews actually doing pick-up and clean-up on beach, but that was initially a few days ago with respect to debris that had come off the surface of the boat. As I understand, that’s been cleaned up. We have an 0800 number available for Samoan villages to actually call in to if they see any debris or any issues on any of the beaches on that coastline. There is, as we’ve shown, a small leak which is coming through venting pipes, and that is dispersing a very small amount of fuel and diesel which is obviously evaporating off and diluting and moving out to the west of the island, not onto shore. So that’s where we are today but, you know, situations change very quickly and that’s why I want everybody focused on doing everything they can right now to minimise any environmental impact.

Sorry, sorry, I’ll just go to—

Yeah, look, no, I think, you know, we’ve ended up in a place where we’ve got to— you know, we’ve managed to keep all the parties on board. It’s good that we’ve got bipartisan support for the Bill. I appreciate, yes, there’s a small concession made there for commercial fishing, on ring net fishing in a very small scale, but—you know. And I’m sure it’s not perfect. I’m sure there’ll be people who would continue—that we should do a lot more. There’ll be others that think we’ve done too much. But the reality is, you know, it’s a New Zealand issue, it’s not a political issue, and we’re trying to make sure we get protection around the Gulf and it’s going to be better protected than it’s ever been.

Well, there’s a small concession that’s been made and considered at Cabinet—

—and that is, you know, a Cabinet decision that we have collectively made. But I just put to you that the vast bulk of protection across the Gulf sits intact. And I hope that other parties will continue to support it, as they have done, as we were doing in Opposition for the previous administration. I think it’s a—you know, there’s lots of stakeholders involved around the Gulf. There’s trade-offs that have to be made. But I think we’ve got to a place that actually will put really good protection in the Gulf, and that’s a good starting point.

Again, it’s come to Cabinet. Tama Potaka brought it forward as Minister of Conservation. You need to talk to him a bit more about the detail of it if you want to.

Sorry, hang on. We’ll just come back to you, Jenna. We’ll just keep making sure we get everyone else off.

That is not a conversation that we’ve had at this point in time. I’m aware different parties may have different views or policies that they are free to take to the election in 2026. What I would say is that our Government is united on making sure that this is a more attractive place to undertake investment and that part of it—you know, I sit down with investors regularly offshore and say, “What’s the good, the bad and the ugly of investing in New Zealand?” The messages are pretty simple: it’s too hard to get anything done, it takes too long. That’s why fast-track consenting’s important.

You’re seeing adjustment, as you’ve seen from the principles that David Seymour talked about with our Overseas Investment Review. There’ll be a shift there in terms of—we’ll have protection but we want to make sure we welcome capital to New Zealand. And then we’ve also created the National Infrastructure Agency with a view of actually having a clear set of investable pipeline of assets that actual overseas investors could invest in, with respect to public infrastructure. And obviously investments with private companies are welcome too.

New Zealand does need to do more.

Well, no, I’d just say to you, you know, you’ve watched over the last six years New Zealand fall to the bottom of the OECD as being a place that doesn’t attract foreign direct investment to its shores. We think that actually putting in place a new funding and financing mechanism that’s open to foreign capital is a good thing. And that will be delivered through the NIA, as I said, the fast-track consenting, given the problems of actually—of building things taking too long and too expensive. And if you’re a global investor you’ve got 195 other countries and options to invest in, and we have to make sure we’re competitive in that regard. And importantly, yes, making sure that we make the process more simple and easy for people to bring investment here.

No, we haven’t had that direct conversation about her comments in 2014. But what I’d just say to you is, you know, we’ve come out very clearly and said, you know, many Government agencies handled the situation abysmally poorly, and you’ll hear me talk more about that on 12 November.

Well, I reject the characterisations in your question. As I’ve previously said, we intend to make further announcements about it this year, and that remains our intention.

It is absolutely the case that the Cook Strait requires ferries that are able to take rail freight, and that is our intention.

We require a ferry service that can integrate effectively with our rail service because our rail service has an important future in distributing freight from the North Island to the South Island.

There are a number of ways of achieving that.

The only regrets we’re going to have is that we don’t go fast enough and we’re not bold enough, and that’s the—that’s the focus of our Government. We have those conversations amongst ourselves every single day. It’s why you’ve seen us set six-year goals, which we think represent what New Zealanders would expect us to do to deliver better outcomes. And importantly, that’s why we have the quarterly action plans because we are focused on actually making sure every 13-week period counts and we’re getting things done.

No, I’m only really looking forward, saying: how do I go faster? How do I get things sorted faster and quicker? We’ve got a big turnaround job. And I just say to you what is encouraging is when we see inflation coming down, we see interest rates coming down, we see confidence rising to high levels. That’s a good thing.

That’ll be for you to judge, Jason. I’m sure you’ll write some lovely articles about it, so it’ll be great. Jo.

Well, look, that’s for New Zealanders to judge, but I think most of the time it is reliable, and our interest as a Government is in ensuring that it’s safe and reliable into the future.

I think if you look back over the last five years, Jenna, that hasn’t been the case for some time, that it’s reliable every day. That just hasn’t been the case for many, many years. In fact decades.

That may not be the case for other transport businesses as well, whether they’re, you know, airlines or freight companies or ferries. You know, there’s on-time performance and delivery. It’s important. But importantly, it’s up to repairs and maintenance schedules to make sure that those assets are maintained well.

That’s what we’re doing. We’re working very quickly at it to get a great solution for New Zealanders, knowing that’s a critical piece of national infrastructure.

Yes, we are.

Well, look, I mean, as you heard the Minister say last week, you know, there’s an incredibly complex set of recommendations. I presume you’ve read the report yourselves but, you know, over 230 recommendations from the interim report and the final report. They are complex. It took six years to generate that report. We are working at pace within it. I had another meeting this morning with a number of Ministers on the subject and, you know, we’re going to do everything we can to make sure that we address the issue so that it doesn’t happen again and that we actually support those that have been abused.

And so I’m sure what I say on 12 November won’t satisfy everybody. I expect that will be the case going forward. Everyone’s situation is different and difficult, but equally, we’ve got a lot of work to do and it won’t be in place by 12 November. We’ve still got to keep working at a whole bunch of those recommendations and processing them, so that we actually get a quality response from our system. OK, thank you team, have a good week.