Nicola Willis: Finance Minister on the OCR, Methanex closing its Taranaki plant after more than 30 years
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What is the Reserve Bank’s current stance on inflation and interest rates?
So two key things for the economy. One, the cash right, the good doctor from the reserve bank is with us after seven thirty, and two, Methanex packing up and going home. The finance minister Nicola Willis back with us morning. So R B first, twenty five points more to come. Is that a good news story because of a broad based recovery? Or is it stamping on a fragile economy that needs help?
Well, uh it is the in uh job of the Reserve Bank to target inflation and they have to remain vigilant about that because inflation getting out of control is what drives prices high and hurts every Kiwi. Interestingly, the markets interpreted yesterday's statement as reasonably dovish. Uh they have in some cases lessened their predictions of two more hikes towards the end of the year. So it all is very data dependent. Depends what comes through with inflation, what comes through with growth.
How are global oil price movements influencing New Zealand’s economy?
Uh
and we'll we'll see that in October.
What's your vibe given she specifically along with I think it was three if not four other members s saw saw inflation worries in a in a in a dovish sort of I'm a bit worried about them kind of way?
Well, my my my ad vibe is it does depend on what happens in the Middle East. We're back there, which is that actually if there isn't more shocks coming out of the Middle East and the oil price doesn't spike again, then you're relieved of that potential inflationary pressure. Across the economy you're seeing a broadening in recovery, exports really leading the way, and we uh we have every reason to expect that that will continue. I I think my my vibe is looking at the data, you saw the two year swap rate actually fell yesterday, which suggests that the markets are saying there's less of a risk of a hike uh in October now. Uh but it's all heavily dependent on what what happens over the next couple of months.
Do you have any intel that I don't? I mean I'm looking at um oh Chris Watts' name out of America said the seventy million barrels came out of the Bahumuz on Monday. Pre war it was twenty. So seventeen V twenty, it's not bad. And yet oil this morning's ninety four ninety five.
What does the Methanex plant closure mean for domestic gas supply?
Yeah, well look, everyone's looking at the American midterms to some extent because if something significant happened in the States where they in any way restricted their exports of oil, that would be problematic because if you look at our refineries in Asia they've really switched. uh to receiving a lot of their oil out of different parts of the world. So as long as that continues Everything's fine, but if there was a major change in uh the export behaviour of any major oil exporter, that would be a real risk. But uh look, the the data we're looking at continues to tell us we've got good supply into New Zealand. Uh we have seen some stabilisation in the oil price, but I've learned with the Middle East anything can happen and it probably will.
Is Methanex it's a sad deal and it's a shame, but the the the gas they've got and the contracts they've got, does that help us to any remarkable Extent or not?
Well, it is very sad, but unfortunately we had already factored this in and were predicting uh that Lethenix would close next year. So we've factored that into all of our assessments of electricity sufficiency into the future. So when we assess Do we have
Why does the released Methanex gas not solve New Zealand’s medium‑term energy needs?
enough gas to get us through a dry winter, we'd already factored in this methane methanex gas being released into the market. So it doesn't solve the medium term problem. And of course I'm just really conscious of the people who have lost their jobs and the families that they're supporting. So it's the ultimate aftershock of the stupid decision to ban oil and gas exploration. And it doesn't change your
it doesn't change your L and G argument.
No, it doesn't because as I say, we factored this into our L and G business case, which was Let's just consider that the methanex gas will be released into the market. Will that be enough to solve our problems? Answer no. Still need to look at getting an additional fuel so that we can cover off a dry year.
What were the lollies yesterday at question time?
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Chapters
6 chapters
1
What is the Reserve Bank’s current stance on inflation and interest rates?
0:00–0:48
2
How are global oil price movements influencing New Zealand’s economy?
0:48–1:53
3
What does the Methanex plant closure mean for domestic gas supply?
1:53–3:03
4
Why does the released Methanex gas not solve New Zealand’s medium‑term energy needs?
3:03–3:58
5
How does the government’s LNG terminal plan remain unchanged despite Methanex’s shutdown?
3:58–4:27
6
What are the broader implications of the ban on oil and gas exploration for jobs and energy security?
4:27–4:51
Speakers
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