GOOD MORNING AND WELCOME TO 'THE NATION'. I'M LISA OWEN. TODAY BALANCING THE NEEDS AND THE NUMBERS. FINANCE MINISTER STEVEN JOYCE JOINS US FOR AN ECONOMIC CHECK-UP AND A PREVIEW OF HIS FIRST BUDGET UNDER THE WATCHFUL EYE OF HIS PREDECESSOR. THEN ` WHY DO SO MANY OF OUR MOST VULNERABLE, THOSE SUFFERING FROM MENTAL ILLNESS, END UP BEFORE THE COURTS? IF YOU'RE NOT LOOKING AT THE ROOT CAUSE OF WHY THE CRIME'S OCCURRING, THEN WHAT THE HELL ARE WE DOING? OUR CRIMINAL JUSTICE SYSTEM HAS ALMOST BECOME THE LAST POINT BEFORE TOTAL DESPAIR. MIKE WESLEY-SMITH LOOKS AT WHAT'S CAUSING THE PROBLEM AND HOW WE COULD START FIXING IT. THE RHETORIC RAMPS UP BETWEEN NORTH KOREA AND THE UNITED STATES. NOW AN ALREADY VOLATILE SITUATION HAS DONALD TRUMP IN THE MIX. WE'RE USED TO DEALING WITH ONE UNPREDICTABLE LEADER WHEN IT COMES TO NORTH KOREA, BUT RIGHT NOW, FRANKLY, WE HAVE TWO. AND WE WRAP UP THE POLITICAL WEEK WITH OUR PANEL ` SHAMUBEEL EAQUB, TRACY WATKINS AND PHIL O'REILLY ` AND GET SOME MORE HOT TAKES FROM JEREMY CORBETT AND PAUL EGO. COPYRIGHT ABLE 2017 IT'S GREAT TO HAVE YOU WITH US TODAY. WE LOVE HEARING FROM YOU. SO GET IN TOUCH. OUR DETAILS ARE ON THE SCREEN NOW. AND IF YOU'RE ON TWITTER, CHECK OUT OUR TWITTER PANEL ` BUSINESS CONSULTANT TIM MCCREADY AND ACTION STATION'S MARIANNE ELLIOT. FOLLOW ALONG ON #NATIONNZ. WELL, A MONTH FROM NOW, FINANCE MINISTER STEVEN JOYCE WILL UNVEIL HIS FIRST BUDGET. ON MANY LEVELS, THE ECONOMY LOOKS IN GOOD HEART WITH POSITIVE PREDICTIONS FOR THE SURPLUS, GDP AND JOB GROWTH. SO IS IT TIME TO START SHARING THAT WEALTH AROUND? STEVEN JOYCE JOINS ME IN THE STUDIO NOW. GOOD MORNING. MORNING, LISA. HOW ARE YOU? FIRST BUDGET. YES. NO PRESSURE. LAUGHS: NO. YOU'VE GOT THE GUY WHO HAD THE JOB BEFORE YOU LOOKING OVER YOUR SHOULDER. YES, THAT'S CORRECT. HOW ARE YOU FEELING ABOUT IT? OVERALL, GOOD. I, OF COURSE, WAS BILL'S WINGMAN FOR EIGHT YEARS, SO IT'S ONE OF THE LONGEST APPRENTICESHIPS KNOWN TO HUMANKIND, AND IT IS ACTUALLY REFRESHING. IT'S EXCITING TO HAVE THE OPPORTUNITY, AND THE TEAM'S REALLY GOOD, AND I'VE DISCOVERED I HAVE MORE FRIENDS THAN I USED TO HAVE, AS BILL NOTICED TOO ` THAT HE HAS A FEW LESS FRIENDS AT THIS STAGE OF THE YEAR. AS THE MONEY GUY? YES, THAT'S RIGHT. LOTS OF PEOPLE WANT TO SAY HI. LET'S LOOK AT THE ROAD AHEAD. THIS WEEK, YOU ASSURED BUSINESSES THAT THE IMMIGRATION CHANGES THAT ARE COMING IN WON'T STUNT NEW ZEALAND'S STRONG ECONOMIC GROWTH. BUT DOESN'T THAT MEAN THAT ALL THE PRESSURES THAT WE HAVE ASSOCIATED WITH THAT ` INFRASTRUCTURE, HOUSING, SCHOOLS, TRANSPORT ` THEY'RE ALL STILL GOING TO BE THERE TOO, SO WHAT ARE YOU GOING TO DO ABOUT THAT? IT'S VERY IMPORTANT THAT WE KEEP INVESTING IN THE INFRASTRUCTURE. I LIKEN IT TO THE FACT THAT WE USED TO GROW LIKE, SAY, ADELAIDE IN AUSTRALIA, AND NOW WE'RE GROWING LIKE SOUTH-EAST QUEENSLAND. AND THAT'S GOOD, BECAUSE WE USED TO SEND ALL OUR KIDS OVER TO SOUTH-EAST QUEENSLAND TO WORK, AND NOW THEY'RE ALL COMING HERE. SO IT MAKES US A SUCCESSFUL COUNTRY. BUT THEN WE ALSO HAVE TO BE MATURE ABOUT THE WAY WE INVEST IN THAT INFRASTRUCTURE, AS YOU POINT OUT, AND DO THE OTHER THINGS ` INVESTING IN THE PUBLIC SERVICES THAT IS APPROPRIATE FOR A GROWING COUNTRY, AND YOU WILL SEE MORE ABOUT THAT IN THE BUDGET. YES, SO IS THERE GOING TO BE A SIGNIFICANT CHUNK OF THAT TO DEAL WITH THOSE POPULATION PRESSURES? WE HAVE FOUR PRIORITIES IN THE BUDGET, AND IT'S HARD TO SQUARE THEM ALL AWAY, BECAUSE THERE'S ALWAYS $5 FOR EVERY DOLLAR THAT'S AVAILABLE. BUT DEFINITELY CONTINUING TO INVEST IN PUBLIC SERVICES ` NOT JUST THROW MONEY AT IT, BE LOOKING AT PRODUCTIVITY BENEFITS FROM THAT. BUT WE WILL BE INVESTING IN THE FACT THAT THE COUNTRY'S GROWING. YOU'VE GOT TO INVEST MORE IN THE HEALTH AND EDUCATION AND SO ON. SO WE CAN EXPECT MORE INVESTMENT IN HEALTH, EDUCATION? THERE ALWAYS IS. IT'LL BE THE WAY IT'S INVESTED. BUT IT WILL REFLECT THE FACT THAT WE'RE A GROWING COUNTRY AND OUR POPULATION'S GROWING. SECOND THING IS THE INFRASTRUCTURE STORY, AND YOU'RE RIGHT. WE'RE ACTUALLY INVESTING A HUGE AMOUNT. THE NORMAL RUN RATE FOR THE NEW ZEALAND GOVERNMENT IN TERMS OF CAPITAL SPEND PRIOR TO THE LAST FEW YEARS WAS ABOUT $1 BILLION, $1.5 BILLION A YEAR. THIS YEAR, IT'S $7 BILLION IN TERMS OF BOTH EXISTING SPEND AND NEW SPEND. SO IT'S VERY BIG. AND YOU'VE USED THAT NUMBER A BIT RECENTLY, AND I JUST WANT TO TALK TO YOU ABOUT ONE OF THOSE TOP PRIORITIES WHICH YOU'VE IDENTIFIED THERE ` INFRASTRUCTURE. LET'S TALK ABOUT AUCKLAND. THEY'VE GOT A SHORTFALL OF $4 BILLION FOR DOING THE MINIMUM THEY REQUIRE IN TRANSPORT INFRASTRUCTURE OVER THE NEXT DECADE. HOW DO YOU THINK THAT CITY SHOULD PAY FOR THAT? AS AN AUCKLANDER, I THINK BOTH THE GOVERNMENT AND AUCKLAND COUNCIL SHOULD PRIORITISE TRANSPORT INVESTMENT. WE'RE CERTAINLY DOING IT, BECAUSE WE'RE SPENDING MORE THAN WE HAVE BEFORE AND A GREATER PROPORTION OF OUR SHARE. UNFORTUNATELY, AT THE MOMENT ANYWAY, THE WAY THE BUDGET IS SET UP FOR AUCKLAND COUNCIL, THEY'RE LOOKING AT ACTUALLY REDUCING THEIR EXPENDITURE ON TRANSPORT OVER THE NEXT FEW YEARS. AND I THINK IT'S IMPORTANT THAT AUCKLANDERS HAVE THAT DISCUSSION, BECAUSE YOU'VE GOT CENTRAL GOVERNMENT, WHICH INCLUDES TAXPAYERS EVERYWHERE ELSE OVER THE COUNTRY PUTTING MORE MONEY IN, AND LOOKS LIKE, ON THE FACE OF IT, A BIT OF A LOWER CONTRIBUTION BY AUCKLAND COUNCIL. SO IT'S REALLY IMPORTANT THAT AUCKLAND COUNCIL ` AND I'M TALKING ABOUT ALL THE COUNCILLORS, NOT JUST THE MAYOR ` LOOK REALLY CLOSELY AT THAT TRANSPORT SPEND AND ASK THEMSELVES, 'IS THAT A BIG ENOUGH PART OF THEIR BUDGET?' SO WHAT EXACTLY ARE YOU SAYING, THEN, IF YOU'RE ASKING THEM TO EXAMINE THAT? YOU'VE SAID NO. THE GOVERNMENT SAID NO TO REGIONAL FUEL TAX, NO TO A BED TAX, NOT KEEN ON EXTENDING THE INTERIM LEVY. THIS IS IMPORTANT, BECAUSE PHIL GOFF HAS SAID THAT IF THEY WERE TO COVER THAT, IT'S A RATE INCREASE OF ABOUT 16%. DO YOU WANT THE COUNCIL TO INCREASE RATES? DO YOU SEE THAT AS THE SOLUTION? NO, NOT AT ALL. SO, AUCKLAND COUNCIL'S... JUST SO WE KNOW, THEIR TURNOVER TWO YEARS AGO WAS $3.5 BILLION A YEAR. THIS YEAR, IT WILL BE $4 BILLION A YEAR. THAT'S HOW MUCH EXTRA THEY'RE GETTING IN TERMS OF INCOME FROM BOTH RATEPAYERS, FROM THE GROWTH IN THE CITY AND FROM THEIR OTHER ASSETS. SO IT'S GONE UP BY HALF A BILLION A YEAR. AT THE SAME TIME NOW, THEY'RE PROPOSING TO REDUCE THE AMOUNT THEY'RE SPENDING ON TRANSPORT. NOW, JUST LIKE ANY GOVERNMENT, CENTRAL OR LOCAL, IT'S ALL ABOUT HOW YOU PRIORITISE YOUR EXPENDITURE. I WOULD ARGUE THAT RATHER THAN TRYING TO PULL BACK` BASICALLY, WHAT PHIL SAID IS THAT HE ACTUALLY WANTS TO REDUCE HIS TRANSPORT SPEND AND REPLACE THAT WITH A REGIONAL FUEL TAX. AND WE'VE SAID, 'NO. ACTUALLY, WHY DON'T YOU MAINTAIN THAT TRANSPORT SPEND?' IT'S NOT ABOUT INCREASING RATES. IT'S ABOUT HOW YOU SPEND THE RATES YOU'VE GOT. SO, TO BE CLEAR, YOU THINK THEY CAN AFFORD IT? THEY'RE JUST DIRECTING THE MONEY IN AREAS THAT SHOULD BE A LESSER PRIORITY? ULTIMATELY, IT'S THEIR CALL. NO, BUT I'M ASKING YOU WHAT YOU THINK. WHAT I THINK IS THAT I WOULD PRIORITISE` IF I WERE THEM AND SITTING IN THEIR SEATS AND KNOWING HOW AUCKLANDERS FEEL ABOUT TRANSPORT` CENTRAL GOVERNMENT IS DEFINITELY PUTTING A LOT MORE IN. SO CAN THEY AFFORD THE $4 BILLION? ACTUALLY, THE $4 BILLION IS A LITTLE BIT OF A MISNOMER, BECAUSE OVER THE NEXT THREE YEARS, IT'S A FEW HUNDRED MILLION, SO IT'S NOT $4 BILLION OVER THE NEXT FEW YEARS. THEY CAN CERTAINLY AFFORD THAT, AND THE QUESTION IS ` ARE THEY GOING TO MAKE THAT STEP IN THEIR BUDGET? BECAUSE THE THING IS, AS PART OF THE ATAP AGREEMENT ` THE AUCKLAND TRANSPORT ALIGNMENT PROJECT ` YOU'RE SUPPOSED TO ANNOUNCE A FUNDING SOLUTION BY MID THIS YEAR, SO THAT'S TWO MONTHS AWAY. HOW ARE YOU GOING WITH COMING TO AN AGREED ARRANGEMENT ON HOW TO MEET THAT SHORTFALL? WE'RE PUTTING A HUGE AMOUNT IN. ONE OF THE THINGS YOU'LL SEE IN THE BUDGET, OF COURSE, IS THE GOVERNMENT'S EXPENDITURE ON THE CENTRAL CITY RAIL LINK, WHICH IS VERY SIGNIFICANT, AND YOU'LL SEE ONE OF THOSE THINGS IN THERE. YOU'LL ALSO SEE A BUNCH OF OTHER STUFF THAT WE'RE DOING OVER THE NEXT FEW YEARS. BUT THAT ANNOUNCEMENT IS TWO MONTHS AWAY, MR JOYCE. HAVE YOU AGREED ON SOMETHING OR ARE YOU STILL AT THE TABLE TALKING ABOUT THAT? WELL, WE'RE STILL AT THE TABLE. WHAT WE'RE SAYING IS, 'HERE'S THE SORT OF MONEY THAT WE'LL BE PUTTING INTO IT,' AND I'M ASKING THE QUESTION OF THE COUNCIL AS TO WHAT THEIR SHARE WILL BE. AND, ACTUALLY, THERE'LL BE SOME NUMBERS ` QUITE CLEAR NUMBERS ` FOR PEOPLE TO SEE IN DUE COURSE, NOT NECESSARILY IN THE BUDGET BECAUSE THIS IS A DIFFERENT DISCUSSION, ABOUT WHAT THE RELATIVE PROPORTIONS ARE OF THE CENTRAL AND LOCAL GOVERNMENT. AND YOU'LL SEE, AS I SAID TO YOU AT THE OUTSET, CENTRAL GOVERNMENT SPEND IS GETTING BIGGER, AND CURRENTLY LOCAL GOVERNMENT SPEND IS GETTING SMALLER. AND I'M SCRATCHING MY HEAD ABOUT THAT. SO THE ONUS IS ON THEM? TO SOME DEGREE. ALL RIGHT, WELL, YOU MENTIONED THE CENTRAL RAIL LINK. YOU'VE GOT A HEADS OF AGREEMENT, SO YOU SAID THAT WE COULD EXPECT SOMETHING. WHAT ARE YOU GOING TO TELL US? A MORE DETAILED FUNDING PLAN AND A TIMETABLE? WELL, THOSE SORTS OF THINGS NEED TO BE IN THERE SOON, BUT WE'RE GETTING TO THE POINT WHERE I'M NOT GOING TO START TALKING ABOUT WHAT'S IN THE BUDGET, BUT I CAN TALK TO YOU ABOUT THE SORTS OF THINGS WE'RE FOCUSING ON. THERE'S OBVIOUSLY A CENTRAL RAIL LINK ANNOUNCEMENT IN THE BUDGET? OH, THERE'S BOUND TO BE A CENTRAL RAIL LINK ANNOUNCEMENT IN THE BUDGET. ARE YOU PREPARED TO FUND HALF NO MATTER HOW HIGH THE BILL GOES? LET'S JUST WAIT AND SEE. BECAUSE ESTIMATES ARE UPWARDS OF 3.4 BILLION. IT IS A REALLY SIGNIFICANT ITEM OF EXPENDITURE. THERE'S NO DOUBT ABOUT THAT. BUT WE NOW HAVE THE STRUCTURE IN PLACE, WE HAVE A COMPANY WHICH HAS BEEN SET UP SPECIFICALLY TO RUN THAT, AND THAT IS COMING TOGETHER WELL. IT'S A SHARED GOVERNANCE BETWEEN` ARE WE GOING TO GET A DOLLAR FIGURE IN THE BUDGET AS TO WHAT YOU'LL GO UP TO AND THE TIMETABLE? WE'LL HAVE THE EXPECTATION, BUT AS ALWAYS IN THIS STAGE OF THE PROCESS, IT'S STILL A RANGE, BECAUSE THEY HAVEN'T EVEN GOT THE TENDERS IN FOR THE ACTUAL CONSTRUCTION AT THIS POINT, SO IT'LL BE A RANGE OF THE EXPECTED EXPENDITURE ON THAT PARTICULAR PROJECT, AND WITHIN THAT RANGE WILL BE ACTUALLY WHERE IT FINALLY ENDS UP. OKAY. WELL, LET'S TALK BROADER HERE. WE'VE BEEN CALLED A ROCK STAR ECONOMY. ARE WE STILL ROCKING IT? WELL, I'VE NEVER CALLED US A ROCK STAR ECONOMY. I THINK NEW ZEALAND IS PERFORMING WELL. WE'VE PERFORMED BETTER THAN MOST OF THE OTHER COUNTRIES IN THE OECD OVER THE LAST FEW YEARS. WE ACTUALLY HAVE NOW HAD, BARRING ONE-QUARTER IN THE LAST SIX YEARS, SIX YEARS OF CONTINUOUS ECONOMIC GROWTH, AND TREASURY AND RESERVE BANK ARE PREDICTING ANOTHER FOUR YEARS IF WE CONTINUE WITH OUR CURRENT SETTINGS. IF THAT HAPPENS, THAT WOULD MAKE THAT DECADE A DECADE-LONG, CONTINUOUS ECONOMIC EXPANSION, WHICH WOULD BE ONE OF THE FASTEST` SORRY, ONE OF THE LONGEST SINCE THE SECOND WORLD WAR. SO THAT WOULD BE SIGNIFICANT. BUT LET'S DRILL DOWN INTO THAT, BECAUSE SOME ECONOMISTS SAY THAT GDP PER CAPITA IS THE REAL MEASURE OF GROWTH AND SUCCESS. AND THAT WAS LESS THAN 1% LAST YEAR. ARE YOU HAPPY WITH THAT? WELL, GDP PER CAPITA IS ONE MEASURE, WITH THE GREATEST RESPECT. AND IT'S A BIT LIKE PEOPLE LOOKING AT THE VASE AND SAYING, 'LOOK, HERE'S A GREAT ECONOMY. NOW LET'S SEE WHAT I CAN PICK AT IT.' BUT ARE YOU HAPPY WITH THAT NUMBER? WELL, THAT NUMBER GOES UP AND DOWN OVER TIME. I THINK IT'S ACTUALLY JUST OVER 1% AT THE MOMENT, AND IT DOES VARY ACCORDING TO A RANGE OF INPUTS. BECAUSE IF YOU LOOK AT THOSE HOURLY FIGURES FOR GDP, WE'RE BASICALLY JUST WORKING LONGER HOURS TO GET HIGHER PRODUCTIVITY. THAT'S NOT THE HIGH-WAGE ECONOMY THAT YOU'RE AIMING FOR, IS IT? THAT'S NOT QUITE TRUE, BECAUSE, ACTUALLY, IF YOU LOOK AT OTHER FIGURES, LIKE REAL GROSS NATIONAL DISPOSAL INCOME, WHICH IS ONE THAT GETS LOOKED AT, BECAUSE THAT COMES INTO THE WHOLE, SORT OF, EARNING POWER OF NEW ZEALANDERS, THAT'S GONE UP ABOUT 2.5% IN THE LAST YEAR. SO IT ALL DEPENDS ON HOW YOU CUT THE CAKE UP. BUT WHAT IT DOES MEAN IF YOU'RE GROWING OVER TIME AND SIGNIFICANTLY GROWING, AND WE'RE GROWING AT ABOUT 3%, 3.5%, YOU SEE THAT FLOW THROUGH INTO TWO REALLY IMPORTANT THINGS FOR NEW ZEALANDERS. ONE IS JOB GROWTH, AND WE ACTUALLY HAVE THE SECOND HIGHEST RATE OF EMPLOYMENT ACROSS THE WHOLE DEVELOPED WORLD RIGHT NOW ` 66.9%. SO JUST` I'M SORRY TO INTERRUPT YOU, BUT` THE OTHER ONE IS INCOMES, WHICH IS THE ONE YOU RAISED, AND THAT'S IMPORTANT. YOU MENTIONED JOBS ` 328,000 NEW JOBS, I THINK IT WAS, SINCE 2008. HOW MANY OF THOSE WERE FULL TIME? ACTUALLY, AT THE MOMENT, 75% OF NEW ZEALANDERS WHO ARE WORKING ARE WORKING FULL TIME. YOU COMPARE THAT WITH AUSTRALIA; AUSTRALIA, IT'S 64%. THAT'S ONE OF THE REASONS WHY` HOW MANY OF THE NEW JOBS, THOUGH, WERE FULL TIME? WELL, I CAN'T TELL YOU EXACTLY WHICH JOBS, BUT I CAN TELL YOU` ONE HOUR'S PAID WORK COUNTS AS A FULL-TIME JOB, DOESN'T IT, STATISTICALLY IN SOME MEASURES. NO, NO, NO. THAT'S NOT RIGHT. NO, FULL-TIME WORK, I THINK IT'S 40 HOURS OR 30-SOMETHING HOURS A WEEK. BUT YOU DON'T KNOW HOW MANY OF THOSE NEW JOBS ARE FULL TIME. I KNOW HOW MANY JOBS ARE, BUT` NO, NOT THE NEW JOBS, BECAUSE THAT'S CRITICAL. NO, IT'S NOT. WHAT'S IMPORTANT IS THE PERCENTAGE OF NEW ZEALANDERS WORKING AND THE PERCENTAGE OF NEW ZEALANDERS WORKING IN FULL-TIME JOBS. AND THE PERCENTAGE OF NEW ZEALANDERS WORKING IS THE HIGHEST IT'S EVER BEEN. AND THE PERCENTAGE OF NEW ZEALANDERS WORKING FULL TIME IS THREE-QUARTERS OF THOSE NUMBERS OF PEOPLE WORKING, WHICH IS VERY HIGH RELATIVE TO, SAY, AUSTRALIA, AND THAT'S WHY WE'RE GETTING SO MANY PEOPLE WANTING TO LIVE OVER HERE RATHER THAN IN AUSTRALIA. I'M SORRY TO RUSH YOU, BUT I WANT TO GET THROUGH A FEW THINGS AND WE'RE RUNNING OUT OF TIME. YOU TALK ABOUT THAT CAKE; I WANT TO TALK ABOUT THE CAKE TOO. YOU TALK ABOUT GROWING THE CAKE, BUT ISN'T THE FUNDAMENTAL PROBLEM THAT NOT EVERYONE IN THIS COUNTRY IS ENJOYING A FAIR SLICE OF THAT CAKE? WELL, THE ONLY WAY YOU CAN ENSURE THAT OCCURS IS YOU KEEP GROWING THE CAKE AND THEN ALSO LOOK AT YOUR INCOME SPOTS, YOUR TAX POLICIES AND YOUR TRANSFERS POLICY, AND I'VE INDICATED THAT'S SOMETHING THAT I THINK IS IMPORTANT FOR US TO LOOK AT. OBVIOUSLY, I'M CONSTRAINED ABOUT THE SIZE OF THE BUDGET IN TERMS OF WHAT I CAN OR CAN'T DO IN THIS PARTICULAR BUDGET, BUT FOR ME IT'S REALLY IMPORTANT THAT PEOPLE SEE THE BENEFIT OF THEIR WORK. THAT IF SOMEBODY MOVES UP FROM PART-TIME TO FULL-TIME, THEY'RE NOT HIT WITH, SAY, A MARGINAL TAX RATE FROM THE REDUCTION IN THEIR FAMILY TAX CREDITS OR SOMETHING WHICH TAKES THEIR TAX RATE SO HIGH IT'S HARDLY WORTH` SO THAT'S WHAT WE CAN EXPECT IN THE BUDGET? YOU CAN SEE US LOOKING AT STARTING ON THAT. FRANKLY, I CAN'T TELL YOU FINALLY WHAT'S IN IT YET, BECAUSE WE'RE STILL GETTING THE FINAL ECONOMIC INPUTS AND ESTIMATES, BUT SOON, AND CERTAINLY THIS YEAR OR NEXT YEAR OR THE YEAR AFTER, I'M VERY KEEN TO SEE US MAKE THE TAX SYSTEM WORK MORE CLEARLY FOR PEOPLE THAT WHEN THEY ADD ANOTHER HOUR'S WORK, THEY CAN SEE THAT THEY'RE ACTUALLY GETTING SIGNIFICANT BENEFIT BACK IN THEIR OWN POCKET. YOU ALSO RAISE THE ISSUE OF THE THRESHOLD. YOU SAID, 'I'M WORRIED ABOUT SOME OF THE THRESHOLDS ` THE 48K-LEVEL PEOPLE.' THAT'S A QUOTE FROM YOU. SO ARE YOU GOING TO CHANGE THAT THRESHOLD? WELL, I'D LIKE TO ONE DAY. CAN I DO IT THIS TIME? STILL DON'T FINALLY KNOW. MAYBE. BUT IT'S NOT OFF THE TABLE YET FOR THIS TIME? WELL, NOTHING'S OFF THE TABLE YET COS I'M NOT GOING TO RULE ANYTHING IN OR OUT IN THE BUDGET TODAY. BUT IF YOU LOOK AT THAT 48K RATE, IT'S INTERESTING, COS THE MEDIAN WAGE HAS BEEN GROWING IN NEW ZEALAND, AND THE MEDIAN WAGE IS NOW 48. THE AVERAGE WAGE IS NOW 55. SO SOMEBODY WHO HITS THE MEDIAN WAGE IS ON 30C IN THE DOLLAR AT THAT POINT. IF THEY'VE BEEN PAYING A STUDENT LOAN OFF, THAT'S ANOTHER 12, SO THAT'S 42C IN THE DOLLAR, AND WE RIGHTLY WORRY ABOUT WHETHER YOUNG PEOPLE CAN SAVE FOR A HOUSE, SO WE DO HAVE TO WORRY ABOUT THOSE` SO IT'S NOT OFF THE TABLE, BUT IF YOU CAN'T MANAGE IT THIS TIME, IS IT SOMETHING YOU'D BE COMMITTED TO IF YOU'RE STILL FINANCE MINISTER NEXT TIME ROUND? ABSOLUTELY, BECAUSE IT IS SOMETHING THAT'S REALLY IMPORTANT. OVER THE NEXT FEW YEARS, AS WE CAN AFFORD IT, AND YOU'VE MENTIONED SOME OF THE OTHER PRESSURES THAT WE'RE UNDER IN INFRASTRUCTURE AND PUBLIC SERVICES AND SO ON, THAT AS WE CAN AFFORD IT, WE'VE GOT TO LOOK AT THOSE TAXES, BECAUSE WAGES ARE RISING AND PEOPLE ARE BEING MOVED INTO HIGHER TAX BRACKETS. YES, BUT AROUND THAT WAGES THING, AND AGAIN WE COME BACK TO THE CAKE, YOUR WORDS, SOME OF THE REGIONS ARE REALLY HURTING, AND AS NATIONAL'S CAMPAIGN MANAGER, YOU MUST APPRECIATE THAT ELECTIONS CAN BE WON AND LOST ON WHAT HAPPENS IN THE REGIONS. WELL, I'VE BEEN THERE. ONLY TWO OF THE REGIONS IN THE DECEMBER QUARTER WERE CRACKING THAT NATIONAL AVERAGE WAGE OF $58,000. UNEMPLOYMENT IN NORTHLAND 7.2%, GISBORNE 8.1%, TARANAKI 6.8%. WELL, LET'S HAVE A LOOK AT THAT, COS I SPENT A LOT OF TIME IN REGIONAL NEW ZEALAND. WOULD YOU ACCEPT THAT SOME AREAS OF THE COUNTRY ARE HURTING? CERTAINLY AT THE MOMENT, MY OLD HOME PROVINCE OF TARANAKI IS STRUGGLING BECAUSE OF THE DAIRY INDUSTRY AND THE OIL AND GAS INDUSTRY, WHICH ARE ITS TWO BIG INDUSTRIES. THE GOOD NEWS IS WE'RE HELPING THEM INVEST IN THINGS LIKE THE TOURISM SECTOR AND ATTRACTING ADDITIONAL INVESTMENT, AND` IT'S NOT HAPPENING FAST ENOUGH, THOUGH, SOME PEOPLE WOULD ARGUE, IN TERMS OF SPREADING AROUND THE FRUITS OF OUR GROWING ECONOMY. WELL, YOU'VE PICKED ON TARANAKI, BUT LAST WEEK I WAS IN ROTORUA` WELL, THAT WAS A LIST, BUT, YEAH... LAST WEEK I WAS IN ROTORUA. IT'S GROWING WELL. TAUPO GROWING WELL. NORTHLAND, YOU RAISE, IS ACTUALLY AN ECONOMY THAT'S NOW DOING WELL. IT HAD UNEMPLOYMENT` SO, WHAT? ARE YOU TELLING PEOPLE IN NORTHLAND IT'S ALL GOOD UP THERE? NO, NOT YET. I'M TELLING YOU, THOUGH, THAT WE'VE SEEN A BIG RECOVERY. AND NORTHLANDERS WILL TELL YOU THAT. AS I SAY, I SPEND THE TIME THERE. WE HAVE GOT SOME LONG-TERM DEEP-SEATED ISSUES IN TERMS OF EMPLOYMENT IN NORTHLAND. I WAS UP IN A PROGRAMME THAT WE'VE BEEN WORKING ON CALLED KAIKOHE GROW, WHICH IS ABOUT GETTING YOUNG PEOPLE INTO WORK AND KEEPING THEM THERE. I SUPPOSE THAT COMES BACK TO THAT FUNDAMENTAL QUESTION, DO YOU ACTUALLY FEEL THAT THERE IS A FAIR SPREAD OF OUR ECONOMIC SPOILS? DO YOU FEEL THAT IT'S GETTING TO EVERYBODY? I THINK IT'S STEADILY GETTING FURTHER WITH EVERYBODY, AND THAT'S GOOD. EVERYBODY WANTS MORE. BUT OTAGO'S DOING WELL. CANTERBURY'S DOING WELL. YOU KNOW, OTAGO STRUGGLED FOR QUITE A WHILE WITH SOME OF THEIR TRANSITIONS, BUT NOW THEY'VE` DUNEDIN, IN PARTICULAR, A STRONG IT SECTOR, STRONG CREATIVE INDUSTRY SECTOR WHICH IS GROWING WELL. WELLINGTON'S COME BACK STRONGLY. YOUR OTHER REGIONS THAT I'VE BEEN VISITING, IN TERMS OF YOUR CHRISTCHURCHS, ROTORUAS, TAUPOS. I'M OFF TO PALMERSTON NORTH NEXT WEEK. AND KEEPING VERY CLOSE LINKS WITH THEM. TAURANGA, OF COURSE, RECOVERED VERY STRONGLY OVER THE LAST THREE YEARS. AND THAT WAS ACTUALLY WITH THE HELP OF THE GOVERNMENT INVESTMENT IN THE RECOVERY FROM PSA. SO WE'RE WORKING WITH ALL THOSE REGIONS. WE'VE GOT ONGOING WORK` OK, WE'RE ALMOST OUT OF TIME, AND I WANT TO GET TO TWO THINGS BEFORE WE HAVE TO MOVE ON. YOU MENTIONED TAX THRESHOLDS. WHAT ABOUT ACCOMMODATION SUPPLEMENT? ANYTHING ON THE TABLE THIS TIME ROUND? WELL, I CAN'T GO INTO ALL THE DIFFERENT, POSSIBLE MECHANISMS` HASN'T CHANGED SINCE 2007. YES, I'M WELL AWARE OF THAT. BUT THERE IS A COMBINATION OF INCOME, IF YOU LIKE, MAINTENANCE AND INCOME IMPROVEMENTS THAT WE'RE LOOKING AT AS A POTENTIAL FOR THIS YEAR'S BUDGET. BUT I'M LITERALLY NOT IN THE SITUATION YET WHERE I COULD MAKE ANY JUDGEMENTS ON THAT, AND, ANYWAY, I WOULD REALLY WANT TO TELL YOU IN THE BUDGET. OK, SO LOOKING AT EVERYTHING THAT YOU'VE GOT TO SPEND; ALL THE DRAWS ON PRIORITIES, THE CARER'S WAGE INCREASE, ALL THE REST OF IT, ARE YOU GOING TO INCREASE THE CAP ON SPENDING? AM I GOING TO INCREASE THE CAP ON SPENDING? WELL, ACTUALLY, WE'LL ALREADY BE OVER THE CAP BECAUSE TERRANOVA, THE BIG SETTLEMENT THIS WEEK, WILL BE OUTSIDE` ARE YOU GOING TO PUSH IT OUT FURTHER? NO, THAT WILL BE OUTSIDE... I'VE GOT FOUR PRIORITIES. VERY QUICKLY. 1) INFRASTRUCTURE. 2) BETTER PUBLIC SERVICES. 3) FAMILY INCOMES AND` SO YOU'RE GOING TO FUND THOSE PRIORITIES WITH THE MONEY THAT'S ON THE TABLE? YOU MISSED THE FOURTH ONE. STILL GETTING THE DEBT DOWN TO 40% OF GDP. THAT'S VERY IMPORTANT BECAUSE THAT'S ALL ABOUT THE RESILIENCE OF NEW ZEALAND'S ECONOMY. FINAL ANSWER. ARE YOU GOING TO PUSH THAT CAP OUT FURTHER? AM I GOING TO PUSH...? ARE YOU GOING TO SPEND MORE? WELL, ON BUDGET DAY I'LL TELL YOU EXACTLY WHAT I'M GOING TO DO. ALL RIGHT. NICE TO HAVE YOU WITH US THIS MORNING. I APPRECIATE YOUR TIME. AFTER THE BREAK, WHY ARE SO MANY PEOPLE WITH MENTAL HEALTH ISSUES GETTING CAUGHT UP IN THE JUSTICE SYSTEM? AND LATER IN THE PROGRAMME, HOW WORRIED SHOULD WE BE ABOUT THE STAND-OFF BETWEEN THE US AND NORTH KOREA? WE'LL SPEAK TO THE WASHINGTON POST'S ANNA FIFIELD. WELCOME BACK. MENTAL ILLNESS IS ONE OF THE BIGGEST CONCERNS FACING OUR JUSTICE SYSTEM. 91% OF PRISON INMATES HAVE EITHER A MENTAL HEALTH OR SUBSTANCE ABUSE DISORDER. BUT IS PRISON THE RIGHT PLACE FOR THESE PEOPLE? IN ASSOCIATION WITH THE MENTAL HEALTH FOUNDATION, HERE'S MIKE WESLEY-SMITH WITH PART ONE OF A SPECIAL INVESTIGATION. WEDNESDAY 8TH OF THE 6TH 2005. MT EDEN PRISON, AUCKLAND. DEAR MICHELLE, KIA ORA. WELL, I'M LOCKED UP FOR ANOTHER DAY. IN MY HEART, I JUST FEEL THIS ISN'T RIGHT. I'M STILL TRYING TO COME TO TERMS WITH THESE VOICES AND HALLUCINATIONS. YOU'VE BEEN WONDERFUL TO ME, MICHELLE, A REALLY GOOD FRIEND. YOU ARE... THERE ALWAYS FOR US. YOU GIVE US LIFE. YOU SEE... WHAT WE ARE. MERRY CHRISTMAS. HO, HO, HO. THAT WAS FROM ANDY, FROM INSIDE PRISON? YEAH. KAUPAPA MAORI RESEARCHER AND ADVOCATE MICHELLE KIDD KNEW ANDY THE LAST 20 YEARS OF HIS LIFE. A TROUBLED EXISTENCE LIVED ON THE STREETS, ANDY WAS PLAGUED BY MENTAL ILLNESS, STRUGGLING TO SURVIVE ON FOUNDATIONS FORCED UPON HIM. HE WAS TAKEN FROM HIS OWN FAMILY AND PUT INTO 12` IN THE END, 12 DIFFERENT FOSTER HOMES. HE WAS SEXUALLY ABUSED. HE WAS MENTALLY ABUSED. HE WAS PHYSICALLY ABUSED. HE COULD NOT REMEMBER THE NAMES OF ONE PERSON WHO ACTUALLY RAISED HIM. WHEN I WENT TO GET HIS BIRTH CERTIFICATE... UM... I'M SORRY. THEY COULD NOT FIND HIS NAME. HE HAD NO NAME. UM, HIS NAME HAD BEEN... MISLAID BECAUSE OF THE AMOUNT OF CHANGES HE HAD IN HIS LIFE. WHAT IS A LIFE LIVED WITHOUT AN IDENTITY? WELL, IT'S WHAT HAPPENS WHEN WHO WE ARE IS DISSOLVED BY INTOXICATION, ISOLATION, INCARCERATION. IT WAS HERE ON THE STREETS OF AUCKLAND THAT ANDY WOULD COME TO ACCUMULATE ALMOST 400 CONVICTIONS ` MOSTLY FOR NUISANCE OFFENDING COMMITTED WHILE HE WAS MENTALLY UNWELL, LIKE THE TIME HE WAS ARRESTED FOR RANDOMLY YELLING AT PASSERS-BY OR THE TIME HE STARTLED CHINESE TOURISTS WITH AN IMPROMPTU HAKA IN AN ATTEMPT TO WELCOME THEM TO THE CITY. BUT MICHELLE WILL TELL YOU THAT WAS NOT REALLY WHO ANDY WAS. HE WAS A GOOD MAN, JUST ONE CAUGHT IN A REVOLVING DOOR OF OFFENDING HE COULD NOT ESCAPE. I USED TO CALL ANDY MY MILLION-DOLLAR MAN,... BECAUSE IF YOU THINK OF THE AMOUNT OF TIMES HE STOOD BEFORE, UM, THE JUDICIARY, THE AMOUNT OF TIMES HE WAS IMPRISONED, THE AMOUNT OF TIMES HE WAS REJECTED FROM REHABILITATION, THE AMOUNT OF TIMES NOBODY ADDRESSED HIS MENTAL UNWELLNESS, ALL THOSE THINGS COST THE TAXPAYER OVER A MILLION. IT'S JUST ONE SAD STORY OF THE THOUSANDS HEARD IN DISTRICT COURTS ACROSS NEW ZEALAND EVERY YEAR. AND AS THIS SERIES HOPES TO SHOW, NEW ZEALAND'S CRIMINAL JUSTICE INSTITUTIONS HAVE BEEN ALMOST BURIED BY THE OVERWHELMING NUMBER OF MENTAL HEALTH CASES. PARTICULARLY WHEN I WAS A DISTRICT COURT JUDGE, EVERY DAY, YOU WOULD SEE SOME, OFTEN MANY, PEOPLE WITH MENTAL HEALTH PROBLEMS. I WOULD SAY THERE WOULD BE VERY, VERY FEW POLICE OFFICERS IN THE COUNTRY WHO WOULDN'T BE DEALING WITH A PERSON IN A MENTAL HEALTH CRISIS EVERY WEEK. IT'S FOUND ME IN A LOT OF TROUBLE WITH THE POLICE, AND IT'S PUT ME IN PRISON. THE SERIES HAS MANY AIMS. ONE IS TO CLARIFY MISCONCEPTIONS... THE MAJORITY OF PEOPLE WHO ARE MENTALLY UNWELL ARE NOT VIOLENT PEOPLE. THEY ARE JUST IN NEED OF HELP. A GREATER RISK FOR PEOPLE WHO HAVE PSYCHIATRIC DISABILITIES IS THAT... ...AND TO REMIND US THAT ULTIMATELY, WHAT WE ARE SPEAKING ABOUT ARE PEOPLE WITH A HEALTH CONDITION. THE MARK OF A TRULY CIVILISED COUNTRY IS HOW IT TREATS THOSE PEOPLE WHO ARE VULNERABLE AND THOSE WHO DON'T HAVE MUCH IN THE WAY OF RIGHTS. AND WE'RE FACELESS. THAT'S WHY I LIKE TO PUT A FACE TO IT. FOR EVERY NUT, THERE'S A SPANNER. MORE KIWIS THAN YOU MIGHT THINK WILL NEED A SPANNER OF SORTS AT SOME POINT. ALMOST HALF OF US WILL EXPERIENCE A MENTAL ILLNESS OR ADDICTION IN OUR LIFETIME. FOR SOME PEOPLE, THESE CONDITIONS WILL, TO VARYING DEGREES, DISTURB THE WAY THEY THINK, THEIR PERCEPTION AND HOW THEY REGULATE THEIR EMOTIONS. AND WHEN IT COMES TO THE CRIMINAL JUSTICE SYSTEM, THOSE RATES SOAR WHERE MENTAL HEALTH AFFECTS 35% OF THOSE PROCEEDED AGAINST BY POLICE, 40% OF THOSE CHARGED IN COURT AND 51% OF THOSE STARTING A COMMUNITY SENTENCE. THEY ARE PEOPLE PSYCHIATRIST DR CONI KALINOWSKI SEES FREQUENTLY IN HER WORK WITH POLICE. WE SEE PEOPLE WHO HAVE PSYCHOSES OF VARIOUS SORTS, PEOPLE WHO ARE MANIFESTING POST-TRAUMATIC SYMPTOMS, UH, PEOPLE WITH EXTREME ANXIETY, THE FULL SPECTRUM OF SUBSTANCE ABUSE. DR KALINOWSKI AND HER COLLEAGUE, MENTAL HEALTH NURSE SALLY CRENE, SAY SUBSTANCE ABUSE OFTEN GOES HAND-IN-HAND WITH A MENTAL HEALTH CRISIS. NOW WE'VE GOT ECSTASY, GHB, METH, UM, SYNTHETIC CANNABIS, WHICH IS ALMOST THE WORST OF ALL OF THEM. THEY ARE THE LATEST IN A LONG LINE OF CLINICIANS WORKING TO TREAT MENTAL HEALTH PROBLEMS ` TREATMENT THAT HAS TRANSFORMED OVER THE YEARS. BETWEEN THE 1970S AND 1990S, NEW ZEALAND CLOSED MANY OF ITS PSYCHIATRIC HOSPITALS, A PROCESS REFERRED TO AS DEINSTITUTIONALISATION, WHERE PATIENTS WERE MOVED INTO COMMUNITY CARE. AND THERE ARE THOSE WHO WOULD WANT TO LOCK UP ANYONE WHO HAD A PSYCHIATRIC ILLNESS AWAY FROM SOCIETY. WE DON'T AGREE WITH THAT. COMMUNITY CARE WAS SEEN AS A MORE COMPASSIONATE TREATMENT MODEL, BUT THERE WERE CONCERNS IT WAS NEVER GIVEN THE FUNDING TO FULFIL ITS POTENTIAL. AS A RESULT, SOME PEOPLE FELL THROUGH THE CRACKS AND CAME INTO CONTACT WITH POLICEMEN LIKE KIM WORKMAN. SO, WHAT YOU GOT WAS A PERCENTAGE... OF PRISONERS WHO... WERE NOT SERIOUS OFFENDERS BUT WERE RATHER HOMELESS PEOPLE, PEOPLE WITH MENTAL ILLNESS, WHO FREQUENTLY... WERE ARRESTED FOR THINGS LIKE DRUNKENNESS, DISORDERLY BEHAVIOUR. AND THEN, AS IS TODAY, KIM FOUND THESE PEOPLE CAME FROM TROUBLED BACKGROUNDS. IT BECAME CLEAR TO ME THAT A LOT OF OFFENDERS HAD BEEN VIOLATED AND EITHER SEXUALLY OR PHYSICALLY ABUSED. ARCHIVE: THREE SPECIAL HOSPITALS, RUN BY THE MENTAL HEALTH DIVISION OF THE NEW ZEALAND DEPARTMENT OF HEALTH, CARING FOR 1500 PATIENTS. IN 1969, NEW ZEALAND HAD MORE THAN 10,000 PSYCHIATRIC HOSPITAL BEDS. IN 2017, THE NUMBER OF BEDS IN DHB FACILITIES FOR ACUTE, RESPITE OR FORENSIC CASES IS LESS THAN 1000. (INDISTINCT POLICE CHATTER) BUT AS OUR POPULATION INCREASES, THE NUMBER OF MENTAL HEALTH CALLOUTS RECEIVED BY POLICE CONTINUES ITS RELENTLESS CLIMB. FOR THE LAST 15, 20 YEARS, GIVE OR TAKE, THERE'S BEEN ROUGHLY A 7%` 7% TO 9% INCREASE EVERY YEAR. MATT MORRIS IS ON THE POLICE POLICY TEAM TASKED WITH IMPROVING THEIR MENTAL HEALTH STRATEGY. HE SAYS IN 2016, POLICE ATTENDED MORE THAN 32,000 MENTAL-HEALTH-RELATED INCIDENTS, WHICH TOOK, ON AVERAGE, 5.5 HOURS OF OFFICER TIME TO RESOLVE. THEY ARE` FROM THE POLICE POINT OF VIEW, THEY'RE VERY OFTEN LOW-LEVEL, PEOPLE IN DISTRESS, WANTING TO HARM THEMSELVES, UH, OR ACTING ERRATICALLY. TO RESPOND TO THIS DEMAND, IN 2014, THE POLICE COLLEGE INTRODUCED MENTAL HEALTH TRAINING. 540 RECRUITS HAVE SO FAR PASSED THROUGH, WITH GOOD RESULTS. 40% FOUND THAT TRAINING TO BE VERY USEFUL. AND ACCORDING TO A FORMER TOP POLICE NEGOTIATOR, THIS TRAINING IS VITAL WHEN RESPONDING TO PEOPLE IN MENTAL HEALTH CRISIS. MOST OF THEM ARE ANXIOUS, NERVOUS, SCARED. IF I WAS TO SUM IT UP, ONE WORD, THEY WERE SCARED, FRIGHTENED. LANCE BURDETT SPENT 22 YEARS IN THE POLICE AND ATTENDED HUNDREDS OF MENTAL HEALTH CALLOUTS. THE BIGGEST RULE I WOULD HAVE IN ANY OF THOSE SITUATIONS IS TO TALK TO THEM AS THOUGH THEY ARE A NORMAL PERSON. IN APPROACH, THAT SAVED THE LIVES OF PEOPLE LIKE THIS WOMAN, WHO WE WILL CALL MARY. SHE HAS A LONG HISTORY OF SELF-HARMING. LOTS OF SCARS. UH, LIKE, ALL OVER MY BODY, MY ARMS, LEGS AND TUMMY. I HAVE PROBABLY HAD 20 SURGERIES. MARY IS AN ACCOMPLISHED ACADEMIC, BUT SOMETIMES WHEN SHE FEELS DISTRESSED, SHE COMES INTO CONTACT WITH POLICE. SOME OF THEM HAVE PUT THEIR LIVES ON THE LINE WHEN I'VE BEEN SUICIDAL. UH, ONE TIME, I WAS SITTING ABOVE A TRAIN TRACK, AND A POLICE OFFICER CLIMBED OVER AND JUST CAME AND SAT NEXT TO ME. SADLY, THOUGH, IN A MINORITY OF CASES, A MENTAL HEALTH CALLOUT CAN DESCEND INTO VIOLENCE. (TASER ZAPS) POLICE! (DOG BARKS, YELPS) RESEARCH FROM 2009 SUGGESTS THAT IN CASES INVOLVING INDIVIDUALS EXPERIENCING A MENTAL HEALTH CRISIS, A TASER WAS TWICE AS LIKELY TO BE FIRED THAN IN A NON-MENTAL-HEALTH-RELATED CASE. 50,000 VOLTS. LISTEN TO MY VOICE. DO AS I SAY. (TASER ZAPS) LANCE BURDETT REMEMBERS ONE SUCH INCIDENT CLEARLY. IT WAS A LADY WHO WAS GOING THROUGH QUITE A BIT OF DISTRESS ` TRAPPED IN A BATHROOM, WOULDN'T COME OUT. AND I CALLED ON THE RADIO THAT I WAS A TRAINED NEGOTIATOR AND I COULD HEAD THAT WAY STRAIGHT AWAY. AND I... IT WASN'T WITHIN 10, FIVE OR 10 MINUTES, UM, THEY'D SAID THAT... IT'S OK. IT'S FINISHED. THEY'D USED A TASER TO END IT. AND FOR ME, THAT WAS` FOR SOMEBODY THAT'S GOING THROUGH DISTRESS ALREADY, YOU'RE JUST ADDING TO THAT DISTRESS. OF COURSE, THE MOST EXTREME MEASURE POLICE MAY HAVE TO RESORT TO IS A DECISION TO USE FIREARMS. (BANG! BANG!) SINCE 1994, THE INDEPENDENT POLICE CONDUCT AUTHORITY HAS INVESTIGATED AT LEAST 34 POLICE SHOOTINGS. 15 CASES INVOLVED PEOPLE WITH A MENTAL HEALTH CONDITION OR MENTAL HEALTH HISTORY. SEVEN OF THESE POLICE SHOOTINGS WERE FATAL, AND ALL WERE FOUND TO BE JUSTIFIED. ARCHIVE: 15 HOURS AFTER BEING GUNNED DOWN BY POLICE BULLETS, THE BODY WAS TAKEN AWAY FOR A POST-MORTEM. AND THROUGH THE YEARS, THE NEED TO RESORT TO FIREARMS REMAINS A REAL AND PRESENT POSSIBILITY. A MAN SHOT BY POLICE AT HIS SOUTH AUCKLAND HOME LAST NIGHT REMAINS IN HOSPITAL IN A STABLE CONDITION. I WENT TOTALLY BALLISTIC. YEAH. KINDA GOT SHOT. FOR MANY KIWIS WHO SAW THAT 3 NEWS STORY BACK IN 2012, WILLIAM SMITH WAS JUST ANOTHER GUY WHO LOST IT WHEN HE ADVANCED ON POLICE, ARMED WITH A SPADE. THERE'S A` SORT OF THAT TENDON BIT THERE. YEAH. THROUGH THERE, AND EXIT WOUND THROUGH HERE. YEAH. BUT AS IS ALWAYS THE CASE, IT WAS MORE COMPLICATED THAN THAT. HE SAYS FOR YEARS, HE CHOSE TO IGNORE HIS DEPRESSION AND ANXIETY. SELF-MEDICATING WITH ALCOHOL, HE NOW REALISES WHY HE TURNED TO CRIME. WHAT WERE THOSE ISSUES? UM, HOW TO DEAL WITH BEING,... UM, LONELY. UM,... NOT KNOWING WHAT DEPRESSION WAS, FOR A START. HE ACCEPTS HE HURT MEMBERS OF HIS FAMILY, AND FOR THAT, HE WENT TO PRISON. I DO HAVE REGRETS ` WHAT I... PUT PEOPLE THROUGH. I DO. YEAH, YEAH. BUT... YEAH. IT'S... YEAH, I JUST` I'M` I WAS RESPONSIBLE FOR IT, SO, YEAH. DO YOU HAVE ANY ANIMOSITY TO THE COP THAT SHOT YOU? NO, I DON'T. THESE GUYS ARE JUST DOING WHAT THEY NEEDED TO DO. IF THEY HADN'T HAVE BEEN THERE, IT COULD'VE ESCALATED INTO SOMETHING TOTALLY DIFFERENT. NOT EVERYONE, THOUGH, SHOT BY POLICE LIVES TO TELL THE STORY. IT'S FOR THAT REASON THAT SOME MENTAL HEALTH ADVOCATES ARE CALLING FOR NEW ZEALAND POLICE TO ADOPT AN INITIATIVE FROM ACROSS THE TASMAN. (SIREN BLARES) STATES LIKE VICTORIA NOW HAVE TEAMS CALLED PACER UNITS INVOLVING POLICE AND CLINICIANS RESPONDING TOGETHER TO PEOPLE IN MENTAL HEALTH CRISIS. WOMAN: THE PATIENT GETS A REALLY GOOD LEVEL OF CARE, BECAUSE THEY'RE, UM... THEY'RE SEEN BY THE CLINICIAN OUT ON THE STREET, RATHER THAN BEING DRAGGED INTO A HOSPITAL, WHICH IS A HORRIBLE ENVIRONMENT FOR ANYBODY TO BE IN. A STUDY FOUND THAT THE PACER INITIATIVE RESULTED IN POSITIVE OUTCOMES, INCLUDING... AND... US LAW ENFORCEMENT AGENCIES ARE ALSO EMPLOYING OFFICERS SPECIALLY TRAINED IN CRISIS INTERVENTION. OFFICER: SO WHEN YOU HAVIN' A PROBLEM, CALL ME. IN ONE YEAR, FLORIDA POLICE DEPARTMENT RESPONDED TO MORE THAN 10,000 MENTAL-HEALTH-RELATED CALLS, WHICH RESULTED IN ONLY NINE ARRESTS. WE ARE INTERESTED IN THAT MODEL. I DON'T THINK YOU'LL FIND A POLICE OFFICER WHO WILL BE AGAINST IT. AND PEOPLE LIKE MARY SAID HAVING A CLINICIAN ARRIVE AT YOUR DOOR CAN BE LESS STIGMATISING THAN A POLICE OFFICER. BECAUSE, UH` BECAUSE WHEN YOUR NEIGHBOURS SEE TWO BIG POLICE OFFICERS COMING AND TAKING YOU AWAY, AND SOMETIMES, IF YOU'RE ACTIVELY TRYING TO HURT YOURSELF, IT'S IN HANDCUFFS, SO THEY AUTOMATICALLY ASSUME THAT YOU'VE BEEN ARRESTED. ULTIMATELY, IT'S AN APPROACH THAT'S ALL ABOUT RECOGNISING THAT A PERSON IN CRISIS MAY NOT SEE THE WORLD AS YOU DO. CONSIDER THIS. OUR BRAIN IS A MASSIVE TISSUE COMPOSED OF OVER 100 BILLION NEURONS, WHICH MAKE OVER 30 TRILLION CONNECTIONS, FORMING THE CIRCUITS WHICH RUN EVERY FUNCTION OF THE HUMAN BODY. IS IT ANY WONDER, THEN, THAT PEOPLE LIKE ARANA PEARSON MIGHT HAVE A MIND THAT'S DIFFERENT TO YOURS? I HEAR VOICES. I'VE GOT EIGHT VOICES I HEAR. THAT'S A PHOTO OF ME, UH, 30 YEARS AGO. A FORMER MENTAL HEALTH PATIENT, HIS STORY IS ONE OF RECOVERY. I WASN'T DISCHARGED IN THE END. I ESCAPED, AND, UH, I CALLED MYSELF THE PSYCHIATRIC HOUDINI. FOR THE LAST 20 YEARS, ARANA HAS RUN A WORKSHOP FOR MENTAL HEALTH CLINICIANS CALLED 'HEARING VOICES'. UH, YOU'LL HEAR VOICES ON THE MP3 PLAYERS THAT WE HAVE... (OVERLAPPING VOICES) JUMP IN FRONT OF THE CAR! GO ON! GO ON! DO IT! DO IT! ...FOR YOU TO EXPERIENCE WHAT THAT'S LIKE. TODAY, HIS CLASS IS WITH SECOND-YEAR NURSING STUDENTS FROM MASSEY UNIVERSITY. ARANA ASKED THEM TO CARRY OUT ORDINARY TASKS LIKE READING COMPREHENSION AND RUNNING ERRANDS ALL WHILE LISTENING TO VOICES. YOUR TASK IS TO WORK DOWN` WALK DOWN WALLACE STREET AND ASK SOMEONE FOR DIRECTIONS TO THE WELLINGTON ZOO. DON'T GO TO THE ZOO. (LAUGHTER) I WAS JUST IN MY OWN ZONE, AND ALL THESE OTHER PEOPLE WERE JUST IN A TOTALLY DIFFERENT PLANET TO ME. UM, SO IT'S VERY ISOLATING. DEFINITELY OPENED MY EYES. REALLY, IT'S ABOUT, UM, REDUCING FEAR AND CREATING A` AN UNDERSTANDING, UM, AND OPENING UP A DIALOGUE. A DIALOGUE WITH A MESSAGE THAT CANNOT BE REPEATED ENOUGH ` THERE CAN BE LIFE AFTER A CRISIS. YOU KNOW, MY FIRST WIFE, SHE WAS TOLD,... 'HE'S GONNA BE CROOK ALL HIS LIFE. HE PROBABLY WON'T WORK. 'HE'LL... YOU SHOULDN'T REALLY HAVE CHILDREN WITH THIS MAN. THEY'LL PROBABLY TURN OUT LIKE HIM.' (CHUCKLES) I HAVE HAD CHILDREN, AND THEY'RE BOTH AT UNIVERSITY, DOING RATHER WELL. BUT FOR SOME OF THOSE WHO HAVE WALKED A LIFELONG PATH OF MENTAL ILLNESS, WHAT IT IS THAT WE ALL STRIVE FOR ` A WARM HOME, A GOOD JOB, A LOVING FAMILY ` CAN EVEN, WHEN HELD TIGHTLY FOR A MOMENT, STILL SLIP FROM OUR GRASP. AND FOR ANDY, HE TOO, EVENTUALLY, HAD TO LET GO. HE DIED IN A BED. HE DID NOT DIE ON QUEEN STREET. HE DID NOT DIE IN A PARK, AS MANY OF OUR HOMELESS PEOPLE DO. I JUST WEPT, REALLY. BUT I STILL MISS HIM. I MISS` I MISS LOTS OF OUR PEOPLE. I'LL LEAVE IT THERE FOR NOW. LOVE YOU AND MISS YOU, MICHELLE. ANDY. AND NEXT WEEK, IN PART TWO OF THE SERIES, MIKE WESLEY-SMITH WILL EXAMINE THE EXPERIENCES OF PEOPLE WITH MENTAL ILLNESS IN POLICE CUSTODY AND IN COURT. AFTER THE BREAK ` HOW WORRIED SHOULD WE BE ABOUT AMERICA'S NUCLEAR STANDOFF WITH NORTH KOREA? BUT FIRST, JEREMY AND PAUL HAVE BEEN ASKING SOME MORE BIG POLITICAL QUESTIONS. THE BIG QUESTION THIS WEEK ` WHO'S MAKING THE SECRET VISIT TO QUEENSTOWN? OH, THE OLD SPY AGENCY'S GETTING TOGETHER FOR THREE AND A HALF DAYS TO TALK ABOUT THE OLD FIVE EYES SPY NETWORK. SO SECRET. MAKES YOU WONDER WHO'S THERE. YEAH. THE DIRECTORS OF THE FBI AND THE CIA STAYING IN THE MILLENNIUM. YOU JUST WONDER, DON'T YA? SUITE 26. WHO ARE THEY? BET THEY'RE LOOKING FORWARD TO THE GOLF ON MONDAY TOO AFTER THEY DO THE SHOTOVER. I GUESS WE'LL NEVER KNOW. THE OTHER BIG QUESTION ` IS WELLINGTON READY FOR THE BIG ONE? OOH, IS ADELE COMING BACK? NO, NO. THE BIG EARTHQUAKE, PAUL. THE GOVERNMENT IS GOING TO SET SOME MONEY ASIDE TO HELP. BUT THEY HAVEN'T HAD THE BIG EARTHQUAKE YET. YES, PAUL, BUT YOU SPEND THE MONEY NOW SO THAT WHEN YOU NEED SOMETHING, IT'S WORKING. WELL, I THINK THESE MPs NEED TO VISIT KAIKOURA. THEY CAN'T. THE HELICOPTERS AREN'T WORKING. OH, THAT'S A SHAME, COS ALL THAT NEW LAND THAT THE KAIKOURA EARTHQUAKE PUSHED UP WOULD BE VERY USEFUL FOR ALL THE NEW IMMIGRANTS. WOULDN'T IT? YES, YOU'RE TALKING, OF COURSE, ABOUT ALL THOSE KIWIS BEING SENT HOME FROM AUSTRALIA NOW THAT THEY'VE CHANGED THEIR RULES. YEAH. NOT VERY NICE, IS IT, CHANGING YOUR IMMIGRATION RULES. WHO'D DO THAT? SHAMEFUL, KICKING THE NZ OUT OF ANZAC. ALTHOUGH, I'M LOOKING VERY FORWARD TO AAC DAY. I LOVE AAC DAY. AAC DAY. WELCOME BACK. THE WAR OF WORDS BETWEEN AMERICA AND NORTH KOREA IS RAMPING UP WITH PYONGYANG TALKING OF A 'SUPER MIGHTY PREEMPTIVE STRIKE' THAT WOULD WIPE OUT THE U.S. MAINLAND AND THE UNITED STATES VICE PRESIDENT SAYING ANY SUCH ATTACK WOULD MEET AN OVERWHELMING AND EFFECTIVE RESPONSE. SO I SPOKE TO ANNA FIFIELD, THE WASHINGTON POST'S TOKYO BUREAU CHIEF, AND ASKED HER HOW REAL THOSE THREATS ARE. RIGHT, SO, NORTH KOREA IS A MASTER OF THIS BOMBASTIC KIND OF PROPAGANDA. THESE THREATS ARE ONE OF THE FEW RELIABLE EXPORTS THAT NORTH KOREA HAS. SO THIS KIND OF LANGUAGE, WHILE VERY INCENDIARY, IS KIND OF PAR FOR THE COURSE FOR NORTH KOREA. BUT IT'S APRIL. APRIL IS ALWAYS A VERY SENSITIVE TIME ON THE KOREAN PENINSULA, BECAUSE EVERY APRIL THE U.S. AND SOUTH KOREA MILITARIES CONDUCT JOINT EXERCISES IN THE SOUTHERN HALF OF THE PENINSULA IN WHICH THEY BASICALLY REHEARSE TO STRIKE NORTH KOREA OR TO RESPOND TO A COLLAPSE OF NORTH KOREA, AND NORTH KOREA FIND THIS A VERY PROVOCATIVE ACTION, BECAUSE THEY VIEW THAT AS A PRETEXT FOR AN INVASION. SO NORTH KOREA IS ALREADY ON TENTERHOOKS IN APRIL, PLUS THERE'S THESE TWO REALLY BIG ANNIVERSARIES THAT THE NORTH KOREAN REGIME CELEBRATES WITH A LOT OF FANFARE AND THIS SORT OF MILITARY PARADE THAT WE SAW LAST WEEK HERE. BUT THE WILD CARD FACTOR THAT'S COME IN THIS APRIL TO MAKE IT A BIT DIFFERENT IS DONALD TRUMP. WE'RE USED TO DEALING WITH ONE UNPREDICTABLE LEADER WHEN IT COMES TO NORTH KOREA, BUT RIGHT NOW, FRANKLY, WE HAVE TWO. THE ASSUMPTION AT THE MOMENT IS THAT NORTH KOREA DOESN'T YET HAVE THE MISSILE CAPACITY TO REACH THE U.S., BUT DO WE KNOW THAT FOR SURE? WE DON'T KNOW IT FOR SURE, BECAUSE WE WON'T KNOW IT UNTIL THEY ACTUALLY TEST ONE OF THESE INTERCONTINENTAL BALLISTIC MISSILES. BUT FOR YEARS AND YEARS, PEOPLE, PARTICULARLY IN THE U.S., HAVE BEEN SAYING, 'OH, NORTH KOREA WILL NEVER BE ABLE TO DO THIS KIND OF STUFF. THIS KIND OF STUFF IS REALLY HARD.' IT IS HARD, BUT NORTH KOREA IS TRYING REALLY HARD. THEY HAVE THE POLITICAL WILL TO DO THIS, AND INCREASINGLY THEY ARE DEVELOPING THE TECHNICAL CAPABILITY TO DO IT TOO. SO A YEAR AGO, NORTH KOREA COULD NOT SHOOT A BALLISTIC MISSILE FROM A SUBMARINE. BY THE END OF THE YEAR, THEY COULD. SAME THINGS WITH SOME OF THEIR MEDIUM-RANGE MISSILES THAT ARE THOUGHT TO BECOME, OR DESIGNED TO BE, SOME OF THE STAGES IN THIS THREE-STAGE LONG-RANGE MISSILE. THEY ARE GETTING BETTER AND BETTER AT DOING THAT. SO IT'S VERY UNWISE TO SAY, 'OH, NORTH KOREA CAN'T DO THIS,' BECAUSE WHILE THEY MAY NOT BE ABLE TO DO IT RIGHT NOW, THEY ARE WORKING TOWARDS IT, THEY ARE MAKING VERY TANGIBLE, OBSERVABLE PROGRESS, AND THEY WILL BE ABLE TO DO IT EVENTUALLY. SO THE MISSILE FAILURE RECENTLY, THERE HAS BEEN TALK THAT THE U.S. INTERVENED IN THAT THROUGH SOME FORM OF HACKING. IS THAT PLAUSIBLE? I GUESS IT'S PLAUSIBLE. I DON'T THINK IT'S LIKELY, THOUGH THERE HAS BEEN SOME TALK ABOUT HACKING. IF THE U.S. WAS ABLE TO HACK INTO NORTH KOREA'S MISSILE PROGRAMME, IT'S MORE LIKELY THAT THEY WOULD BE ABLE TO INFECT THE SYSTEM AS A WHOLE WITH SOME KIND OF MALWARE OF SOMETHING. EXPERTS I TALK TO SAY IT'S VERY UNLIKELY THAT THEY WOULD BE ABLE TO DISRUPT INDIVIDUAL MISSILE LAUNCHES ALONG THE WAY. SO I THINK THAT THAT'S REALLY UNLIKELY IN THIS LATEST SITUATION. SO, IN THE WORST CASE SCENARIO, IF THERE WAS A FULL-BLOWN CONFLICT IN THE REGION, WHAT WOULD THAT MEAN FOR U.S. RELATIONS WITH BOTH RUSSIA AND CHINA? IT WOULD BE VERY, VERY DIFFICULT FOR RELATIONS ALL ACROSS THE REGION WITH THE U.S. CHINA AND THE U.S. WOULD FIND THEMSELVES AT LOGGERHEADS AGAIN. IT WOULD BE VERY COMPLICATED. BUT I THINK WE ARE A LONG WAY FROM THAT EVEN BEING A REALITY RIGHT NOW. I DO NOT THINK THAT THERE IS A HIGH RISK OF CONFLICT HAPPENING RIGHT NOW SIMPLY BECAUSE IT'S IN NOBODY'S INTEREST FOR THIS TO HAPPEN. THE U.S. DOES NOT WANT TO GET BOGGED DOWN IN ANOTHER MILITARY CONFLICT. FOR NORTH KOREA, EVEN THOUGH IT DOES HAVE THESE NUCLEAR DEVICES AND SOME MISSILES THAT DO WORK, THEY WOULD BE ANNIHILATED BY THE SUPERIOR POWER OF THE U.S. IF THEY GOT INVOLVED IN A CONFLICT. BUT THE OVERALL RESTRAINING FACTOR HERE, AS IT HAS BEEN FOR DECADES, IS SOUTH KOREA, IS SEOUL. THERE ARE 25 MILLION PEOPLE LIVING IN GREATER SEOUL. IT'S LESS THAN 50KM FROM THE D.M.Z. THAT SEPARATES NORTH AND SOUTH KOREA. AND THAT'S WITHIN RANGE OF NORTH KOREA'S CONVENTIONAL ARTILLERY. LIKE, NEVER MIND ABOUT NUKES AND MISSILES; THEY'VE GOT ALL THESE ROCKET LAUNCHERS LINED UP ON THE BORDER THERE THAT THEY COULD UNLEASH ON SEOUL AND CAUSE A LOT OF DEVASTATION, A LOT OF PANIC. SOME ESTIMATES SAY THEY COULD KILL 60,000 PEOPLE WITH CONVENTIONAL ARTILLERY IN THE FIRST DAY. AND THAT, WHETHER IT'S THE BUSH ADMINISTRATION, THE CLINTON ADMINISTRATION, OBAMA, NOW, THAT HAS ALWAYS BEEN THE RESTRAINING FACTOR THAT THE U.S. SIMPLY CAN'T GET INVOLVED IN ANY KIND OF MILITARY ACTION IN NORTH KOREA BECAUSE IT WOULD COME AT SUCH A HUGE COST TO ITS ALLY IN SOUTH KOREA. SO THEN WHAT HAPPENS NOW? WHAT'S THE WAY FORWARD? YEAH, I THINK WE'RE GOING TO SEE MORE OF THESE TENSIONS AND JITTERS AND THE PSYCHOLOGICAL WARFARE CONTINUING OVER THE NEXT FEW WEEKS. COMING UP NEXT WEEK WE HAVE ANOTHER BIG ANNIVERSARY IN NORTH KOREA ON TUESDAY THAT THEY WILL CELEBRATE. MAYBE THEY'LL JUST CELEBRATE IT WITH STATEMENTS. MAYBE WE'LL SEE ANOTHER MISSILE LAUNCH. IT'S LIKELY THAT WE WILL SEE ANOTHER NUCLEAR TEST AT SOME STAGE. MAYBE NOT AROUND A BIG DATE, MAYBE NOT IN THE NEXT MONTH, BUT BEFORE THE END OF THE YEAR, IT'S VERY POSSIBLE THAT NORTH KOREA WILL TRY TO TEST AGAIN TO, YOU KNOW, LEARN FROM THE TEST, LEARN WHAT ITS CAPABILITIES ARE AND TO SEND A SIGNAL TO THE OUTSIDE. SO THE QUESTION IS, REALLY ` HOW DOES THE U.S. RESPOND AGAIN? BECAUSE NOW THE TRUMP ADMINISTRATION HAS COMPLETELY RULED OUT DIPLOMATIC NEGOTIATIONS WITH NORTH KOREA, SO IT LEAVES THEM VERY FEW GOOD OPTIONS FOR HANDLING THIS SITUATION. RIGHT NOW ALL OF THE FOCUS IS ON CHINA, ON PUTTING PRESSURE ON CHINA TO PUT PRESSURE ON NORTH KOREA AND TRY TO CONVINCE KIM JONG-UN TO CHANGE HIS MIND, WHICH IS A PRETTY TALL ORDER. ANNA FIFIELD, THANKS SO MUCH FOR JOINING US FROM TOKYO THIS MORNING. APPRECIATE YOUR TIME. AND AFTER THE BREAK, OUR PANEL TRACY WATKINS, PHIL O'REILLY AND SHAMUBEEL EAQUB. WELCOME BACK. I'M JOINED NOW BY OUR PANEL ` FAIRFAX POLITICAL EDITOR TRACY WATKINS; FOUNDER OF IRON DUKE CONSULTANCY PHIL O'REILLY; AND ECONOMIST SHAMUBEEL EAQUB. GOOD MORNING TO YOU ALL. WE HEARD THERE FROM STEVEN JOYCE. WHAT ARE YOUR EXPECTATIONS? WHAT ARE GONNA BE THE BIG TICKET ITEMS IN THE BUDGET, HAVING HEARD HIM? WELL, I MEAN, OBVIOUSLY THERE'S GONNA BE SOME MOVEMENT ON TAX AND TAX CUTS, AND HE SEEMS TO BE POINTING AT THE TAX THRESHOLDS, AND ALSO HIS FOCUS ON FAMILIES SUGGESTS TO ME WORKING FOR FAMILIES. TAX THRESHOLDS, THEY'RE THE OBVIOUS ONE, BECAUSE THEY FALL OUT OF LINE WITH INFLATION, BUT ALSO IT'S QUITE HARD TO DO IT SO THAT YOU DELIVER A REALLY MEANINGFUL TAX CUT USING THAT. 'COURSE WE HAD A FEW YEARS AGO THE CHEWING GUM TAX CUTS WHICH ENDED UP GETTING CANNED BECAUSE EVERYONE WAS JUST SO CONTEMPTUOUS OF THEM ` THOSE WERE UNDER MICHAEL CULLEN. THE THING IS HE WAS STILL HEDGING HIS BETS A BIT ABOUT THAT, WASN'T HE, THOUGH, SHAMUBEEL? COS HE SAID, 'YEAH, I'D LIKE TO DO IT, BUT I'M NOT SURE THAT I CAN AFFORD IT YET. 'AND IF NOT THIS TIME, NEXT TIME.' SO... OR IS HE JUST LEADING US UP THE GARDEN PATH? NO, I THINK THAT WHAT HE'S SAYING IS THEY HAVEN'T GOT THE FORECAST YET IN TERMS OF THE FISCAL NUMBERS. I EXPECT THERE WILL BE BIG ENOUGH SURPLUSES THAT THEY WILL PROMISE TAX CUTS. THE QUESTION IS ` WHEN WILL IT BECOME IMPLEMENTED? AND IT'S USUALLY AFTER THE ELECTIONS SO THAT IT'S A PROMISE THAT, 'AFTER WE'RE ELECTED, WE WILL GIVE YOU TAX CUTS.' WE KNOW THAT THERE IS BIG CHANGES THAT ARE COMING FOR WORKING FOR FAMILIES, BECAUSE THE THRESHOLDS HAVEN'T INCREASED ENOUGH FOR A LONG TIME. WITH THE LATEST INFLATION NUMBERS, THEY WILL AUTOMATICALLY JUMP UP, SO IT WILL SHOW UP IN THE BUDGET NUMBERS EVEN IF IT'S NOT AN INCREASE. I THINK HIS RESPONSE ON THE INFRASTRUCTURE WAS A BIT WEAK. THE REALITY IS THAT IF YOU LOOK AT WHAT'S HAPPENING IN AUCKLAND ` THE CONGESTION, THE INABILITY TO MOVE THINGS AROUND, THE LACK OF HOUSING ` THERE WAS REALLY NO PLAN, AND THERE WAS NO AMBITION. BUT THE THING THERE, PHIL, WAS HOW BIG A SERVE WAS THAT FOR PHIL GOFF AND THE AUCKLAND COUNCIL, DO YOU THINK? IT WAS A LITTLE BIT OF A, 'WELL, I'M PUTTING MY MONEY IN. 'WHAT ABOUT YOU, BUDDY?' AND WHAT HE'S TALKING ABOUT, OF COURSE, IS THE TRANSPORT ALIGNMENT PLAN ` ATAP ` WHICH IS WHERE THE SPENDING IS... AND THERE'S A $4B SHORTFALL. PRECISELY. AND HE'S SAYING, 'WELL, WE'RE GONNA COME TO THE PARTY WITH OUR PIECE.' AND THAT'S THE THING ABOUT CENTRE-RIGHT GOVERNMENTS. IF IN DOUBT, POUR CONCRETE. AND THEY DO THAT ALL ROUND THE WORLD, AND THEY'RE DOING IT HERE, AND THEY'LL CONTINUE TO DO IT. AND AUCKLANDERS WILL FEEL AS THOUGH THINGS AREN'T GOING VERY WELL FOR THEM, BUT NO MATTER WHO'S IN POWER AND NO MATTER WHAT GOFF OR JOYCE DOES, IT'S GONNA FEEL LIKE THAT FOR A LITTLE WHILE, BECAUSE YOU SIMPLY CAN'T BUILD ROADS VERY QUICKLY. AS FOR TAX CUTS, HE'S DEFINITELY GOING TO DO SOME, AND I AGREE WITH SHAMUBEEL; HE'LL DO THEM AFTER THE ELECTION. HE'LL TIME THEM IN AFTER THE ELECTION. TAKE INTO ACCOUNT ALSO THAT BIG SETTLEMENT THEY MADE TO THE CARE WORKERS THIS WEEK. THAT'S $2B, AND THAT'S NOT THE END OF IT. THERE'S A NUMBER OF CLAIMS SITTING BEHIND THAT. SO ALSO LOOK FOR SOME NUMBERS AROUND THAT, AND THAT WILL ACTUALLY HAVE QUITE A BIG IMPACT IN TERMS OF THE WAY IN WHICH THE LOW PAID IN NEW ZEALAND GET IMPACTED OVER THE NEXT FEW YEARS. SO A LOT OF MOVING PARTS IN THIS BUDGET AND A LOT OF BIG NUMBERS ARE GONNA COME OUT, I SUSPECT. MM. IN TERMS OF WHAT HE WAS SAYING THERE ABOUT THE CRL AS WELL ` THE CENTRAL RAIL LINK ` YOU TALK ABOUT NOT ENOUGH SAID ABOUT INFRASTRUCTURE, BUT HE SEEMED TO BE INDICATING THAT WE'RE GOING TO GET SOMETHING IN THE BUDGET. I THINK THEY HAVE TO DO SOMETHING ON AUCKLAND TRANSPORT AND SOMETHING QUITE BOLD AND SOMETHING THAT LOOKS VISIONARY AND SOMETHING THAT HAPPENS BEFORE 2030. AND I THINK THAT'S THEIR BIG ISSUE. AND, LOOK, AUCKLAND IS JUST` PART OF THE PROBLEM IS, ACTUALLY, THERE IS A LOT OF ROAD-BUILDING GOING ON, AND THAT'S CAUSING MORE CONGESTION, WHICH IS ACTUALLY CONTRIBUTING TO THE PROBLEM. BUT I THINK RAIL IS ONE OF THE BIG ISSUES. IT'S NOT SO MUCH THAT. ACCORDING TO A.T., THE TRAFFIC'S ACTUALLY MOVING BETTER EVEN WITH WHAT'S GOING ON WITH THE ROADWORKS. THE REAL PROBLEM IS WE SIMPLY DON'T HAVE ENOUGH CAPACITY, AND THAT` YOU THINK WE SHOULD SPEND, DON'T YOU? BECAUSE I ASKED HIM WHETHER HE'S GONNA SPEND SOME MORE MONEY, RAISE THE CAP AND GO FOR IT, BASICALLY. THIS IS ABOUT NATION-BUILDING. LET'S NOT PRETEND THAT WE HAVEN'T UNDERINVESTED IN INFRASTRUCTURE IN NZ FOR THE LAST 30 YEARS. THIS IS NOT ABOUT THIS GOVERNMENT. LET'S TAKE THE IDEOLOGY OUT OF THIS. WE HAVEN'T GO ENOUGH INFRASTRUCTURE IN NZ, PARTICULARLY IN PLACES LIKE AUCKLAND. AND WE CAN'T COPE WITH GROWTH. AND I THINK FOR A LONG TIME WE DIDN'T REALLY LOOK AT OURSELVES AS HAVING AN INTERNATIONAL-CLASS CITY, BUT AUCKLAND NOW IS, AND THAT DOES HAVE TO HAVE THE INFRASTRUCTURE TO DEAL WITH THAT. PHIL, ARE THEY BEING TOO CAUTIOUS WITH SPENDING, THOUGH? I THINK IN SOME OF THE AREAS THEY'RE BEING A BIT CAUTIOUS ABOUT THEIR RELATIONSHIP WITH AUCKLAND COUNCIL. AND THERE'S SOME POLITICS BEING PLAYED OUT` NOT THIS MORNING, MAYBE. YEAH, PERHAPS A LITTLE MORE BLUNT THIS MORNING. BUT THE RELATIONSHIP BETWEEN THE TWO OF THEM APPEARS TO BE INCREDIBLY DIFFICULT. AND GOFF SOMETIMES HAS A BIT OF TIN EAR ABOUT WHAT WELLINGTON'S SAYING. I THINK THAT` JOYCE HAS SAID, 'NO MORE NEW TAXES,' AND GOFF SAYS, 'HOW ABOUT A PETROL TAX?' 'DID YOU HEAR ME, PHIL?' YOU KNOW, SO I THINK MUCH MORE THERE NEEDS` THE NATION BUILDING ALSO NEEDS TO GO ON BETWEEN AUCKLAND AND WELLINGTON A LITTLE BIT TO BUILD TRUST. BUT IT'S BECAUSE IT'S THE BENEFITS OF THE GROWTH IS GOING TO CENTRAL GOVERNMENT TAXES, NOT TO LOCAL GOVERNMENT. AND WE NEED TO HAVE A MUCH FAIRER WAY TO FUND INFRASTRUCTURE. IT'S NOT FAIR. THERE'S THE INVESTMENT FUND, THOUGH. I MEAN, A BILLION DOLLARS THE GOVERNMENT'S PUTTING UP, MOST OF WHICH WILL GO TO AUCKLAND. WELL, BUT EVEN THAT IS NOT ENOUGH. SURE, I UNDERSTAND. AND I THINK THAT THE CHALLENGE IS WE HAVE TO BE MUCH MORE AMBITIOUS IF WE WANT TO DO THIS, AND WHEN WE'VE GOT INTEREST RATES THAT ARE AS LOW AS IT IS NOW AND THE WORK THAT THEY HAVE DONE IN TERMS OF CLEANING UP THE BALANCE SHEET, WHY WOULDN'T YOU INVEST IN SOMETHING THAT WILL GIVE YOU THE DIVIDENDS? I COULDN'T AGREE MORE. IN TERMS OF, UM` THE GOVERNMENT'S ALWAYS QUICK TO SAY THE ECONOMY'S GROWING, JOB GROWTH'S GROWING, WAGE GROWTH IS GOING WELL, BUT IS THERE A GROUP OF FORGOTTEN STRUGGLERS OUT THERE, TRACY, THAT ARE GONNA HURT THEM AT ELECTION TIME? WELL, I DON'T KNOW IF THEY WILL HURT THEM, BECAUSE THEY'RE PROBABLY NOT THEIR VOTERS, AND THIS IS ALWAYS THE ISSUE. BUT, ACTUALLY, I THINK THERE IS A SENSE AMONG PEOPLE THAT THERE IS A PROBLEM WITH GROWING INEQUALITY, AND MOST PEOPLE, MOST VOTERS, REGARDLESS OF WHERE THEY SIT ON THE INCOME SCALE, DO WORRY ABOUT THINGS LIKE LACK OF AFFORDABLE HOUSING, LACK OF OPPORTUNITY FOR YOUNG PEOPLE, AND SOME OF THE THINGS WE'VE SEEN UP IN PLACES LIKE KAIKOHE WITH LAWLESS YOUTHS AND THINGS, THAT CAUSES A RIPPLE OF CONCERN THROUGH EVERY GROUP, NOT JUST, SORT OF, YOU KNOW` BUT HE SAID THINGS ARE LOOKING UP IN NORTHLAND. WELL, CERTAINLY THINGS ARE LOOKING UP IN TAURANGA AND HAMILTON. MY WORD, THEY'RE GOING CRAZY. BUT THERE ARE STILL` WOULD YOU ACCEPT THERE'S STILL AREAS, POCKETS THAT ARE...? NO QUESTION. AND THERE ALWAYS HAVE DONE. AND THAT'S ONE OF THE REAL PROBLEMS OF NEW ZEALAND. IT'S A BIG COUNTRY WITH VERY FEW PEOPLE IN IT, SO IT'S ACTUALLY QUITE HARD TO GET ECONOMIC GROWTH INTO SOME OF THOSE AREAS USING THE NORMAL WAYS THAT YOU WOULD THINK ABOUT THAT IN OTHER ECONOMIES. AND SOME OF THE MEASURES, EVEN, YOU KNOW, YOU DO GO TO SOME OF THESE PLACES, AND THEIR MAIN STREETS, THEIR RETAIL CENTRES ARE LOOKING A LITTLE BIT EMPTY. NOW, PART OF THAT IS JUST THE CHANGING NATURE OF RETAIL, BUT AT THE SAME TIME, WHEN YOU REMOVE THE HEART OF THOSE CENTRES, IT'S A CONCERN. ALL RIGHT, WE'LL LEAVE IT THERE FOR THE MOMENT. BUT DO STAY WITH US. AFTER THE BREAK WE'LL FIND OUT WHAT MIGHT BE MAKING THE NEWS NEXT WEEK. WELCOME BACK. YOU'RE WITH THE NATION AND OUR PANEL. THE OTHER BIG NEWS THIS WEEK WAS THE PAY EQUITY DEAL FOR AGED CARE WORKERS. IS IT GOING TO OPEN THE FLOODGATES, PHIL? A LITTLE BIT BECAUSE YOU'VE GOT THE $2B FOR AGED-CARE WORKERS BUT THEN YOU'VE GOT SOME OTHER QUITE BIG CHUNKS OF STATE SECTOR EMPLOYMENT THAT WILL BE IMPACTED BY FURTHER NEGOTIATIONS AND FURTHER DEAL-DOING. THAT IS TWO IMPACTS. ONE WILL HAVE AN OSMOSIS EFFECT INTO THE PRIVATE SECTOR WHERE YOU'RE COMPETING FOR THOSE SAME WORKERS` YEAH, COS THEY WANT TO GO WHERE THEY CAN GET THE EXTRA 2 BUCKS OR 10 BUCKS. AND THERE WILL ALSO BE SOME CLAIMS IN THE PRIVATE SECTOR EVENTUALLY. I THINK THE FIRST TARGETS FOR THE UNIONS ARE IN... MOST OF THE ACTION IS IN THE GOVERNMENT SECTOR, THAT'S WHERE MOST OF THIS UNDERPAYMENT HAS OCCURRED. BUT THERE WILL ALSO BE SOME ACTION IN THE PRIVATE SECTOR AND THAT WILL ALSO HAVE AN IMPACT. SO I DON'T THINK IT WILL BE AS BIG AS... I DON'T THINK IT WILL BE VOLCANIC, BUT OVER TIME, IT WILL HAVE AN IMPACT OF LIFTING LOW WAGES IN NEW ZEALAND AND PROBABLY YOU'D HAVE TO SAY IF THAT IMPACTS OUR PRODUCTIVITY, COS IT'S CLEARLY` THERE'S A PRODUCTIVITY LINK, THEN THAT'S PROBABLY A GOOD THING OVERALL. THERE NEEDS TO BE AFFORDABLE OVERTIME, AND THE BARGAINING PROCESS THAT WE'VE AGREED FOR THIS NEW LEGISLATION IS REALLY KEY TO THAT. EMPLOYERS AND WORKERS CAN BARGAIN AN OUTCOME ON PAY EQUITY RATHER THAN HAVING A COURT SET A RATE. THAT'S A KEY ASPECT OF IT THAT WILL MAKE IT MORE AFFORDABLE OVER TIME. WHAT DO YOU GUYS THINK OF THE TIMING OF THIS AND THE POLITICS OF IT? BECAUSE THE GOVERNMENT HAS SAID THEY WERE ABLE TO DO THIS BECAUSE OF THE HEALTHY SURPLUS. BUT HANG ON A MINUTE. DIDN'T SEE THE COURT CASE. YEAH. WHICH SORT OF FORCED THEIR HAND. WELL, I SUPPOSE THEY CAN ALWAYS HAVE RETROSPECTIVE LEGISLATION, BUT IT WOULD NOT HAVE BEEN A GREAT LOOK AND IT WOULD HAVE GIVEN LABOUR AN 'IN', AND IT ACTUALLY SQUEEZES LABOUR. I MEAN, THIS WOULD HAVE BEEN A CORE THING THAT LABOUR WOULD HAVE ANNOUNCED. YOU KNOW, PAY EQUITY FOR THE LOWEST, MOST VULNERABLE WORKERS, AND SO IT LEAVES THEM WITH LESS ROOM TO MOVE. NOW, THEY COULD ARGUE THAT THEY'LL, SORT OF, SEE IT GO THROUGH OTHER SECTORS BUT THIS BY FAR IS THEIR BIGGEST SECTOR, AND THE GOVERNMENT DOES GET THE KUDOS FOR IT. YEAH, I MEAN, THEIR ONLY CRITICISM ANDREW LITTLE COULD LEVEL WAS TOO LITTLE, TOO LATE. ARE THEY RUNNING OUT OF ROOM TO MOVE, LABOUR, DO YOU THINK? WELL, I MEAN, THIS IS THE PROCESS. YOU KNOW, THERE WAS A LEGAL CHALLENGE. YOU HAVE TO GO THROUGH THAT PROCESS, CONTEST IT IN THE LEGAL PROCESS. I DON'T THINK THEY COULD HAVE DONE IT ANY OTHER WAY. THE OUTCOME IS THE RIGHT ONE. THE SECTOR IS EXTRAORDINARILY LOW PAID AND THESE PEOPLE NEED BETTER INCOMES TO BE ABLE TO LOOK AFTER OUR OLDER AND VULNERABLE PEOPLE. THE CHALLENGES WITH OUR IMMIGRATION POLICY CHANGES THAT ARE ALSO ANNOUNCED, I THINK, WE'RE GOING TO FIND IT REALLY HARD TO GET ENOUGH PEOPLE COMING IN TO DO THESE QUITE DIFFICULT JOBS. SO, YES, I THINK IT IS DIFFICULT FOR LABOUR TO, KIND OF, MOVE INTO THIS SPACE THAT NATIONAL HAS MOVED INTO, WHICH IS VERY MUCH TO THE LEFT. YEAH. PHIL, DO YOU THINK LABOUR IS BEING SQUEEZED FOR ANY EXCLUSIVE KIND OF AREA? ABSOLUTELY. HENCE ANDREW HAVING A GO AT IMMIGRATION THIS WEEK, WHICH I JUST THOUGHT WAS DOG-WHISTLE POLITICS AND RATHER SAD. I THOUGHT HE WAS A BETTER MAN THAN THAT. IT WAS RATHER SILLY OF HIM TO DO THAT. BUT THIS SETTLEMENT WAS A COMBINATION OF THE GOVERNMENT HAVING TO DO IT, OF COURSE, BECAUSE OF THE COURT DECISION. BUT THEY COULD HAVE CARRIED ON IN COURT FOR THE NEXT 20 YEARS. EASY. AND THEY COULD HAVE JUST BATTLED AND BATTLED AND BATTLED. AND THEY MADE A CALL, AND THE NATURE OF THE SETTLEMENT... IT'S A BIG SETTLEMENT. IT'S A BIG SETTLEMENT. SO THERE WAS A COMBINATION, I THINK, OF HAVING TO DO SOMETHING AND THEN SAYING, 'OK, LET'S MAKE THE MOST OF IT. LET'S SET OUR STORE FORWARD. 'AND DON'T UNDERESTIMATE THE INFLUENCE OF`' BUT THEN THEY'RE MAKING ALL THE MOVES. I MEAN, YOU LOOK AT THE LAST BUDGET WITH THE FIRST INCREASE IN BENEFITS IN DECADES. YEP. FAMILY PACKAGE BEFORE THAT. THEY'RE JUST MAKING ALL THE MOVES IN THOSE TRADITIONAL AREAS FOR LABOUR AND IT'S INCREDIBLY DIFFICULT FOR LABOUR TO TRY AND CARVE` JUST KEEP PUSHING THEM FURTHER AND FURTHER. ONLY IN HOUSING AND RENT. ONLY IN HOUSING HAS NATIONAL BEEN BEREFT OF ANY LEADERSHIP AND ACTION. YEAH. PHIL RAISED ANDREW LITTLE'S WANTING TO CUT BY TENS OF THOUSANDS. IS THAT ACTUALLY CONCEIVABLE? YOU'RE TALKING ABOUT NOT BEING ABLE TO GET ENOUGH WORKERS TO COVER THE AGED-CARE SECTOR. COULD YOU ACTUALLY SLASH BACK 50,000 LIKE HE'S FLOATING? YOU CAN. I MEAN, WE'VE HAD THESE MASSIVE SWINGS IN NEW ZEALAND IN THE PAST, SOMETIMES WITHOUT OUR OWN INTENTION. SO IT CAN ABSOLUTELY HAPPEN. I THINK THE PROBLEM WITH THAT IS RIGHT NOW, NEW ZEALAND ACTUALLY NEEDS MORE PEOPLE IN SKILLS THAT WE HAVEN'T TRAINED ENOUGH PEOPLE FOR. SO WE'VE GOT THIS INTENSE SHORTAGE. I HEAR THIS FROM BUSINESSES ALL THE TIME THAT WE NEED SKILLED PEOPLE. WE CAN'T GET THEM, AND THIS IS ACROSS THE BOARD. THIS IS JUST NOT SKILLED JOBS. THIS IS ALSO UNSKILLED JOBS. AND WHEN YOU TIGHTEN THE IMMIGRATION BARRIER, IT'S UNLIKELY THAT WE WILL BE ABLE TO BUILD THE HOUSES AND THE INFRASTRUCTURE AND ALL THOSE OTHER THINGS AS WELL. SO IT'S IMPOSSIBLE, I THINK, TO SQUARE THAT CIRCLE. OK. NEO-LIBERALISM HAS ABSOLUTELY FAILED ACCORDING TO JIM BOLGER. HE CAME OUT SAYING THAT ON A NEW RADIO NEW ZEALAND PODCAST SERIES, '9TH FLOOR'. VERY INTERESTING STUFF. WERE YOU SURPRISED BY HIS COMMENT? ACTUALLY, NO, I WASN'T. AND I WAS SAYING BEFORE, HIS IS THE INTERVIEW I WAS LOOKING FORWARD TO THE MOST. BECAUSE HE HAS BECOME QUITE A WEE RADICAL THE LONGER HE IS OUT OF PARLIAMENT. HE'S GIVEN A FEW SPEECHES WHERE HE HAS REALLY STOOD OUT AND ACTUALLY CHALLENGED HIS OWN PARTY ON A NUMBER OF ISSUES, PARTICULARLY AROUND MAORI ISSUES, TREATY OF WAITANGI. SO, NO, I WASN'T SURPRISED AT ALL. UNIONS AREN'T STRONG ENOUGH, PHIL. YEAH, WELL, HE WAS THE GUY WHO KICKED OFF THE MAORI TREATY SETTLEMENT PROCESS THROUGH DOUG GRAHAM, YOU'LL RECALL, AND WAS ALWAYS BIG ON THOSE KINDS OF THINGS. HE WAS ALWAYS A NAT. HE WAS NEVER A RUTH RICHARDSON NAT. HE WAS ALWAYS A CENTRALIST KIND OF A NAT. SO IT DOESN'T SURPRISE ME HE'S DONE THIS. THE ONE THOUGHT... THE ONE, SORT OF` WHEN I SCREWED MY FACE UP A BIT WHEN HE SAID IT, I'M ALWAYS A BIT CONCERNED ABOUT LABELS. NEO-LIBERALS, YOU KNOW. OH, COMMUNISTS. MARXISTS. WELL, CAN WE JUST HAVE A SLIGHTLY MORE COMPREHENSIVE AND COMPLEX DEBATE ABOUT WHAT'S BEEN GOING ON IN NEW ZEALAND RATHER THAN USING LABELS. SO I WAS A BIT DISAPPOINTED HE USED THE LABEL. UNSURPRISED HE SAID WHAT HE SAID. HEY, UM, WE'RE GOING TO LOSE TWO MINISTERS THIS WEEK ` MURRAY MCCULLY AND HEKIA PARATA. WHO ARE YOUR PICKS? WHO ARE THE REPLACEMENTS? I'M GOING WITH BROWNLEE IN FOREIGN AFFAIRS, AND EDUCATION, NIKKI KAYE. COULD BE WRONG, BUT THAT'S MY PICK. WHY BROWNLEE? WELL, BECAUSE BROWNLEE, I THINK, IS SENIOR ENOUGH TO DO THE JOB, AND HE'S DONE A GREAT JOB IN DEFENCE. HE WANTS THE JOB, I SUSPECT. AND IF THEY'VE GOT SOME DEAL-DOING TO DO AFTER THE ELECTION, HE'S THE GUY WHO IS SENIOR ENOUGH TO SLOT INTO ANOTHER CABINET POST. IF YOU LOOK AT SOME OF THE OTHERS, THEY LOSE A BIG CABINET POST QUITE HARD IN A POTENTIAL- SO YOU'RE SAYING HE CAN TAKE ONE FOR THE TEAM IF THEY NEED WINSTON AND LOSE HIS JOB? HE'S A LOYAL PARTY MAN. ALL RIGHT. WE'LL LEAVE IT THERE. TIME NOW FOR A LOOK AT SOME OF WHAT COULD BE MAKING THE NEWS NEXT WEEK. NEGOTIATIONS START ON TUESDAY TO UPGRADE NEW ZEALAND'S FREE TRADE DEAL WITH CHINA. AND FINANCE MINISTER STEVEN JOYCE GIVES A PRE-BUDGET SPEECH TO THE WELLINGTON EMPLOYERS CHAMBER OF COMMERCE. AND THAT IS ON THURSDAY. AND THE GREEN PARTY'S MAORI CAUCUS GOES ON A NATIONWIDE TOUR FROM FRIDAY, KICKING OFF IN NORTHLAND. BUT THAT'S ALL FROM US TODAY. WE'LL SEE YOU BACK HERE NEXT WEEKEND. THANKS FOR JOINING US. CAPTIONS BY DESNEY SHAW, ALEX WALKER AND ANNE LANGFORD. WWW.ABLE.CO.NZ CAPTIONS WERE MADE POSSIBLE WITH FUNDING FROM NZ ON AIR. COPYRIGHT ABLE 2017