Nicola Willis challenged over climate change, cancer drugs

Finance Minister Nicola Willis has revealed new details about the timeline for cancer drug funding, and faced a barrage of questions over climate under questioning from MPs.

Willis appeared before the Finance and Expenditure Committee on Wednesday as part of Parliament’s first Scrutiny Week, a new initiative which allows for extended questioning of ministers over the government’s spending.

She quickly came under fire from Labour’s Finance and Climate spokespeople Barbara Edmonds and Megan Woods, and the Greens’ co-leader and Finance spokesperson Chlöe Swarbrick.

Cancer drugs

The election policy of funding 13 specific cancer drugs had been a glaring broken promise from this year’s Budget.

Willis told the committee MPs that as the Budget for this year was formulated, the cancer drugs policy “did require more work”, and she outlined how the government intended to pay for the drugs using money from next year’s Budget while still working to supply the promised drugs.

“It was not resolved in time for Budget 2024, so we agreed it would be a priority for funding set aside in Budget 2025,” she said. “So we are now working diligently on the policy delivery ahead of Budget 2025, with a view to making a decision on it shortly.”

However, she soon clarified that “we will be funding those drugs this year”, and the reason the policy was not funded in this year’s Budget was “we still had significant policy choices to make as we worked through the problem. And so it wasn’t appropriate to set aside a contingency until those fundamental policy decisions had been made”.

She later explained under questioning from Woods that people would be able to access at least some of the drugs before 2025.

“We will be making an announcement that will ensure that some of those medicines are funded this year,” she said.

Woods questioned if that would mean funding for the drugs this year, and Willis agreed.

Under questioning from Edmonds she said expressed confidence that the government would find the money, noting the government had already approved health funding from the 2025 and 2026 Budgets.

“As the member says, budgets are about priorities – and we are confident that, because this policy is a priority, we can and will fund it.”

She later told reporters at Parliament the word “some” was “just a use of a word, we will be funding the 13 medicines, we’ve made that commitment, we’ll be making announcements on it shortly”.

When pressed, however, she would not confirm whether that meant all 13 specific drugs listed in National’s policy would be funded and available before 2025.

“We’ll make a full announcement with the details of how drugs will be accessed and what dates in due course. I’m not making that announcement today.”

She also refused to shed light on how exactly the drugs would be funded.

Climate change

Swarbrick focused in on the Budget and its effect on climate change, asking how Williis could account for the $700m her Budget assumed would be coming from Emissions Trading Scheme revenue when today’s unit auction appeared likely to fail.

Swarbrick highlighted that at an expected $58 price point they would fall short of the $60 lower limit at which the units would be permitted to sell, and asked what would happen if the units failed to sell, but Willis said she was “not going to go into a hypothetical”.

“We have a requirement for approximately $2.9b in terms of your numbers stacking up here for revenue from the emissions trading scheme,” Swarbrick said, “but you’ve also have presented a Budget which cuts approximately $15m from market governance and integrity of the emissions trading scheme, so I’m wondering if you could help us reconcile those things”.

“It is very important … that I not in any way influence auction behaviour,” she said. “We want it to be a functional, effective, reliable market.”

When Swarbrick pushed her on why the funding had been cut from the efficacy and market governance, Willis said the government did not consider that funding necessary to improving the market’s operations, and rejected Swarbrick’s characterisation there was “next to no meaningful regulation of the ETS market, for example insider trading is technically legal”.

“We do not have concerns about the current way in which the ETS is regulated,” Willis said. She noted the government was yet to release the second Emissions Reduction Plan, due in December. That plan would set out how the government intends to achieve the emisssions reductions set out in the Emissions Budget, in line with international obligations.

“The government is doing its own work on the emissions reduction plan and we envisage the ETS will play a critical role,” Willis said. She also pointed to some initiatives the government had not scrapped in this year’s Budget including the rollout of electric vehicle chargers and the purchase of electric buses for local councils to buy.

Swarbrick earlier asked whether the decisions in this year’s Budget would increase or decrease emissions. Willis acknowledged climate impact policy assessments had showed they “won’t make a significant material difference to emission period 1. Over the second two emission periods, they will have an impact of potentially increasing emissions”.

However, she questioned whether those reports were “as good as they could be”, and pointed to the emissions impact report having included policies like more police on the roads, and upgrades to Defence Force equipment and infrastructure, as examples of where the reports were questionable.

“My point is it is not always appropriate to narrowly look at a policy based simply on its emission impact, because I don’t think there is a New Zealander who would say ‘I don’t want you hiring more police because it might add to emissions’.”

She later told reporters the assessment only looked at a subset of 40 initiatives.

Swarbrick also asked about the $3 billion to $24b the government is estimated to need to fork out in “offshore liability” – buying foreign climate credits to make up for the lack of domestic emissions reductions, and whether Willis had budgeted for those expected costs this year.

“No, I have not,” Willis said. “That has not been a priority in this Budget.”