The Kākā by Bernard Hickey

The podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night featured co-hosts Bernard Hickey & Peter Bale talking with regular guests Cathrine Dyer and Elaine Monaghan about geopolitics, the economy, climate change and politics here, along with special guest Associate Professor Polly Atatoa Carr from Waikato University’s Te Ngira Institute for Population Research.

This week:

* Bernard and Peter debated the Clerk of Parliament deciding to stop using X.

* Bernard and Cathrine talked about a paper showing climate policy inconsistency depresses economic growth and employment, along with another paper showing the social cost of carbon at over US$1,000/tonne, and a survey for The Post-$ showing voters here want flood protection projects, rather than motorways.

* Peter and Elaine talked about covering autocracies in Eastern Europe and Donald Trump’s State of the Union address.

* Bernard, Peter and Polly talked about how the Government’s ‘move-on’ orders are likely to affect young homeless people, and why ramping up Housing First by even more would be a better solution.

The Hoon’s podcast version above was recorded on Thursday night during a live webinar for over 200 paying subscribers and was produced and edited by Simon Josey.

The Hoon won the silver award for best current affairs podcast in last year’s New Zealand Podcast awards.

(This is a sampler for all free subscribers and anyone else who stumbles on it. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing in full. Remember, all students and teachers who sign up for the free version with their .ac.nz and .school.nz email accounts are automatically upgraded to the paid version for free. Also, here’s a couple of special offers: $3/month or $30/year for under 30s & $6.50/month or $65/year for over 65s who rent.)

Ngā mihi nui.

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

Independent economist David Skilling gave a stark public presentation to Treasury officials and others yesterday that painted a brutal picture of New Zealand’s labour productivity and real wage catastrophe since 2010, pointing out our economy remained stuck in a low-investment rut with weakening trade connections.

Skilling’s presentation in video form below is a must-watch and should be seen as a landmark moment ‘calling b******t’ on at least three decades of economic reforms focused on squeezing down the size of Government and keeping capital gains tax free at all costs.

I spoke with David in a Substack Live this morning, referencing his presentation below.

Thank you Ant O'Brien, Michael Sharpe, Steve Glicken, MD, James Wilkes, John Smart, and many others for tuning into my live video with David Skilling! Join me for my next live video in the app.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

Briefly in the news in Aotearoa’s political economy around housing, climate and poverty on Monday, February 23:

* The Lead - Justice Minister Paul Goldsmith and Police Minister Mark Mitchell announced yesterday the Government planned to change the law to allow Police to ‘move-on’ homeless people aged over 14 from city centers for 24 hours, with breaches punishable by a $2,000 fine, which most won’t be able to pay, or 90 days in prison, which would cost the taxpayer $49,680 per person at a cost of $552 per night for 90 nights.

* The Sidebar - The move to threaten to imprison the homeless came after the Government saved the annual equivalent of $156 million over the last 18 months by removing 3,525 people from emergency accommodation in motels at a cost of $233 per person per night. Social service providers reported a doubling of homelessness to 940 in Auckland by September last year after the emptying of motels.

* The Reaction - Homeless people described the ‘move on’ orders as ‘draconian bullying,’ while social service providers said the homeless needed to be housed rather than imprisoned. PM Christopher Luxon told NewstalkZB this morning: “The bigger issue is like Chuck and Mary coming in for their once-in-a-lifetime trip to New Zealand on a cruise ship, walking around downtown and getting intimidated because someone’s sitting on the doorstop of a shop they’re trying to get into, threatening, shouting at them, abusing them. Right now it doesn’t trigger an offence under other pieces (of legislation), but by putting this in place that helps.”

* The Perspective - The Government has added 2,000 beds to the prison system since its election in November 2023, while its moves in Budget 2024 and Budget 2025 have delivered 420 new social homes and it has funded places for an extra 113 people in ‘Housing First’.

* In my view - The Government is betting it will have to imprison a much lower number of people than it housed in motels, even though it costs more than twice as much per night to house a person in prison. The Government’s fiscal position would be net better off if it imprisoned fewer than 774 homeless people. If it only imprisoned 280 people over a year for 90 days each then the total annual cost of $13.9 million would still leave savings on motels of $142 million per year.

* In summary - The Government has chosen to threaten homeless people as young as 14 with prison in order to save $142 million per annum, and to reduce its borrowing requirements by $142 million, as requested by Treasury, which worries global bond investors might boycott New Zealand Government debt, even though last week’s bond tender of $450 million of bonds received bids of nearly $4 for each 1$ offered.

* The bottom line - The savings for New Zealand taxpayers as a whole due to the lower borrowing requirement would amount to less than a tenth of a basis point, equivalent to savings to the taxpayer of $208,500 per year, or less than 3.7 cents per person per year. A tenth of a basis point off the cost of a mortgage would save the average mortgage payer $3.38 per year or 6.5 cents per week.

My Picks n’ Mixes

Scoops & Breaking News this morning

* RNZ: ‘Hard to know how this is a solution’ Homeless move-on orders questioned

* RNZ: Uncertainty likely to remain with US tariff ruling - trade minister

* Henry Cooke for The Post-$: Govt considers requiring car parks in new developments again

* Fox Meyer for Newsroom: What Trump’s America wants from NZ’s mines

* Deep-dive by Nicholas Dynon for Newsroom Pro-$: Why NZ’s retail crime statistics rose so sharply… and then declined

Hot topics: Densification downgrade

* Column by Andrea Vance for SST-$: Housing reform in the too-hard basket, and the base cheers ‘Every nervous homeowner in Epsom or Remuera matters more to the coalition than a young family struggling to get on the housing ladder.’

* Stewart Sowman-Lund for SST-$: Voters back intensification - just not in their backyard ‘As Auckland’s housing plan gets watered down, new polling reveals how voters in the super city feel about potential growth.’

* Deep-dive by Stewart Sowman-Lund for SST-$ A crazy nightmare: what housing developers feel about politicians’ flip-flopping ‘Housing policy often treated as a political football, and the game may not be over quite yet.’

* Column by Henry Cooke for The Post-$: The many knives in Chris Bishop’s back ‘The Housing Minister’s latest backdown may not be the last. His experience will turn off other politicians keen to take a punt on our knottiest issues.’

* Column for NZ Herald-$: Matthew Hooton: Interest rates and Auckland housing U-turn could give Luxon election tailwind

Politics in Aotearoa

* Henry Cooke for The Post-$: Exclusions spark tension as Greens tighten list rules. ‘Members complain that the new process has created a “very James Shaw party list” of people who play “respectability games”.

* Andrea Vance for The Post-$: A hard sell in the capital: National’s Wellington North candidate drought

* David Fisher for NZ Herald-$: ‘Totally inappropriate’: Coalition upset over Army’s new te ao Māori bicultural plan

* Column for NZ Herald-$: Thomas Coughlan: A policy that could win the election, and keep thousands of Kiwis in NZ - raising the student loan repayment threshold

* Colin Peacock for RNZ Mediawatch: Mediawatch: Immigration amping up in election year

Geopolitics & the Global Economy

* FT-$: Trump’s new flat-rate tariff is a boost for China and Brazil

* Reuters: Tariff ruling won’t end uncertainty for trade partners

* Reuters: Iran and US views on sanctions relief differ, new talks planned

* AP: Armed man shot and killed after entering secure perimeter of Mar-a-Lago, Secret Service says

* Reuters: Trump’s aides urge him to focus on voters’ worries, not war with Iran

* Reuters: Blue Owl halts redemptions at one of its funds, deepening selloff in private equity shares

NZ Economy & Business

* Jenee Tibshraeny for NZ Herald-$: IRD quietly consults on bank tax tweaks – is a bigger tax grab in the works?

* Column for NZ Herald-$: Fran O’Sullivan: New Zealand’s fiscal ‘directors’ are sailing us towards a debt reckoning

* David Chaston for Interest: Westpac actions u-turn on longer mortgage rates ahead of rivals

* RNZ: Consumer NZ urges government to press ahead with fixing surcharge ‘mess’

* RNZ: Soaring bills put households’ spending on ice

* RNZ: Fonterra raises forecast farmgate milk price for season

* Blayne Slabbert for The Press-$: Reserve Bank governor urges the country to ‘look to Canterbury’

* Joel MacManus for The Spinoff: Reserve Bank signals a ‘structural change to the housing market’ in Anna Breman’s debut

Housing, Transport, Infrastructure & Councils

* Bernard Orsman for NZ Herald-$: ‘Shame on them’: Community fears housing plans behind Anglican trust’s legal fight over sports club

* Nikki Preston for One Roof: Why NZ’s ‘rock star’ MP is now selling houses

* Nikki McDonald for The Post-$: What’s the magic visitor number? Queenstown searches for optimal tourism. ‘Mountain mecca Queenstown Lakes has developed a way to measure the benefits and burdens of more tourists. It measures the impact of tourists on everything from the economy and jobs, to roads and sewerage.’

* Ayla Yeoman for LDR/RNZ: ‘Full circle’: No housing for Parau Farms as city reverts to sports field plans

* RNZ: Neighbour fears losing thousands as unfinished apartment owner faces deregistration

* Op-Ed by Rehette Stolz for The Post-$: Latest weather crises highlight funding plight for local govt. ‘We need to have a clear conversation about how we pay for a stronger emergency management system as a country.’

* Mike Tweed for Whanganui Chronicle: ‘Why don’t we just fund it?’: The bridge replacement battle

* Blayne Slabbert for The Press-$: The $3b plan to stop Canterbury being isolated by bridge failures ‘A new report urges Canterbury to bundle ageing bridges into a 30-year upgrade plan, funded by a new regional fund, asset sales and targeted charges.’

* Tina Law for The Press-$: Christchurch’s Civic Building now considered ‘earthquake prone’, but still safe to occupy, council says

* Op-Ed by Barney Irvine for NZ Herald-$: Barney Irvine: A new Waitematā Harbour crossing? Break the cycle of planning failure first

Poverty, Health, Education, Incomes, Living Costs & Justice

* Deep-dive by Isaac Davison for Stuff: Boston was two months old. His death is part of a nationwide problem that hasn’t gone away

* Mary Afemata for LDR/RNZ: Charity requests $30k to keep Pacific seniors gatherings running

* Rosie Leishman for NewstalkZB: ‘Students are really doing it hard’: Part-time jobs dry up for uni students

* Gary Hamilton-Irvine for Hawkes Bay Today-$: Baby bust: Fewer than 2000 births in this NZ region for first time in almost 50 years

* Anneke Smith for RNZ: Promises to ban paywave surcharges ‘going nowhere’

* Ethan Griffiths for NZ Herald: ‘Going nowhere’: Peters pours cold water on Govt’s card surcharge ban

* Harriet Laughton for The Post-$: Health NZ’s budget improving but it will struggle to meet targets ‘A Cabinet paper shows that Health NZ is on track to balance its books but faces significant challenges in meeting this year’s health targets.’

* RNZ: E-scooter injuries on the rise, young people most affected

Climate & Environment

* Deep-dive by Charlie Mitchell for The Press-$: The pressure campaign that sank a phantom water tax. There was no water tax. ‘But through branding and a manufactured sense of urgency, a pressure campaign on the Government appeared to secure a victory.’

* Deep-dive Andrea Vance for The Post-$: The great flush: Are new sewage laws reverting to 1930s standards? ‘Experts and watchdogs warn new rules could allow plants like Wellington’s Moa Point to scale back treatment, raising fears of a return to outdated sewage practices.’

* Frances Chin for The Post-$: Homeowners pay hundreds to clean homes after storm ‘Business has doubled for a tradesman who specialises in cleaning the exterior of houses following last week’s storm and the Moa Point disaster.’

* Sharon Bretkelly for RNZ/Newsroom’s The Detail: Barker’s of Geraldine in a jam over waste

Cartoon: Honk

Ka kite ano,

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

The podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night featured co-hosts Bernard Hickey & Peter Bale talking with regular guests Robert Patman and Cathrine Dyer about geopolitics, the economy, climate change and politics here, along with special guests Simplicity Chief Economist Shamubeel Eaqub and Coalition for More Homes Spokesman Scott Caldwell.

This week:

* Bernard, Peter and Cathrine talked about the week’s news in climate change, including criticism of the Government’s climate non-action by outgoing Tower Insurance Chair Michael Stiassny, Marc Daalder’s piece for Newsroom on climate preparedness, the US move to wipe out a climate change finding and remove all regulation of emissions, and the impending shutdown of the Ministry of the Environment here.

* Bernard, Peter and Robert talked about Donald Trump’s ‘coercive’ approach to diplomacy with Iran, and the risk of imminent US strikes on Iran, which would trigger damaging Iranian counter-attacks on Israel.

* Bernard, Peter, Shamubeel and Scott talked about Chris Bishop’s watering down yesterday of housing intensification plans in Auckland and the Infrastructure Commission’s final 30-year plan presented earlier this week.

The Hoon’s podcast version above was recorded on Thursday night during a live webinar for over 200 paying subscribers and was produced and edited by Simon Josey.

The Hoon won the silver award for best current affairs podcast in last year’s New Zealand Podcast awards.

(This is a sampler for all free subscribers and anyone else who stumbles on it. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing in full. Remember, all students and teachers who sign up for the free version with their .ac.nz and .school.nz email accounts are automatically upgraded to the paid version for free. Also, here’s a couple of special offers: $3/month or $30/year for under 30s & $6.50/month or $65/year for over 65s who rent.)

Ngā mihi nui.

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

The podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night featured co-hosts Bernard Hickey & Peter Bale talking with New Zealand journalist Andrew Gunn in Kiev and Rewiring Aotearoa CEO Mike Casey in central Otago.

We talked about:

* Bernard’s time at the NZ Association of Economists’ forum at the University of Waikato on Thursday and Friday;

* Nicola Willis’ announcement of a new inquiry into the RBNZ’s actions over Covid;

* The Government’s announcement of a levy on all electricity consumers to pay for LNG import infrastructure;

* Whether solar panels and batteries would do a better job than LNG.

The Hoon’s podcast version above was recorded on Thursday night during a live webinar for over 200 paying subscribers and was produced and edited by Simon Josey.

The Hoon won the silver award for best current affairs podcast in last year’s New Zealand Podcast awards.

(This is a sampler for all free subscribers and anyone else who stumbles on it. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing in full. Remember, all students and teachers who sign up for the free version with their .ac.nz and .school.nz email accounts are automatically upgraded to the paid version for free. Also, here’s a couple of special offers: $3/month or $30/year for under 30s & $6.50/month or $65/year for over 65s who rent.)

Ngā mihi nui.

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

I spoke with Salvation Army Social Policy & Parliamentary Unit Director Bonnie Robinson yesterday about the unit’s State of the Nation 2026 report, which showed a range of indicators of poverty worsening through 2024 and 2025.

She challenged the Government to adopt specific policies to address rising levels housing un-affordability and homelessness, more food and electricity poverty, and the worst domestic violence figures since 2018.

“I’m not an economist, but I like to say the rising tide lifts all boats, but you need a boat in the first place.”

Robinson said housing remained a significant barrier to wellbeing for many, adding:

“Yes, there’s been some increase in supply. Yes, there’s been a bit more social housing built, but that’s slowed and we still have those large numbers on the social housing register.

“I like to say there’s no silver bullet in social wellbeing, but if there was, I think it would look like a warm, dry, affordable house because we know that if people have a warm, dry, secure, affordable house, then it’s a lot easier for people to deal with everything else that might be happening in their life.

“If you don’t have housing it makes everything hard. It makes finding a job hard. It makes sending the kids to school hard. It makes making ends meet and providing healthy kai hard.

“Although we’ve seen the supply of emergency housing grants basically plummet because the government was rightly concerned about people in motels etc, the difficulty is that has left some people without options, and what we are seeing is a rise in street homelessness.” The Salvation Army’s Bonnie Robinson

‘The power poverty shows up in the food bank line’

Robinson said incomes had barely grown over the last year, and not nearly enough to keep up with basic living costs such as housing, electricity and food.

“You see the power poverty in the food bank line, because people will pay the power bill and then realise they don’t have enough money to buy food for the week.

“We don’t get people presenting so much directly and saying: ‘I can’t pay my power bill.’ We more get people presenting at our centres saying: ‘I haven’t got enough money for food.’

“And when you sit down and talk to people, it’s the cost of their rent, and it’s the cost of power. And they’ve paid those bills because you have to, otherwise, you’re homeless or you sit in the dark.

“But then there’s nothing left for other things. And people are paying 30% or 40% or perhaps more of their income on rent. It really doesn’t leave enough to fully cover all your other bills.” Bonnie Robinson.

It’s great to be going for growth, but how are you going to make sure that actually gets to the people who have the greatest need

Robinson said people on insufficient incomes needed higher, more reliable incomes.

“At the Salvation Army, we are a provider of what’s called financial mentoring, which, used to be called budget advice. And a lot of people who come for budget advice, they’re actually pretty good managers.

“Their income isn’t sufficient and it’s quite hard often to find those places where they could trim back or do something differently. So the research does suggest that those income transfers that are for most families reliable, that people know are coming and they can use that to meet their basic needs, is what many, many people need.

“Some people need further wraparound support because their life is complex and paying them more money alone won’t resolve their issues. But for a lot of people, an income that is liveable, that they can rely on, that’s what they need.

“So we need to look at how are we supporting our low income households and particularly our households with children, and is that sufficient to bring people out of hardship, out of material hardship, above the poverty line, where people can at least reliably know they will meet their basic needs?” Bonnie Robinson

So what would you say to Cabinet?

At what point do we say we’re just not going to accept this as a nation anymore, and we are going to do what it takes to shift the dial on child poverty.

I asked Bonnie what she would say to Cabinet if she was given a chance to present the report to them. Here’s her response (bolding mine):

“If I had the opportunity, I wouldn’t necessarily be telling them exactly what to do, but I’d be saying we need urgent action, particularly around child poverty, because we know that any time spent in poverty and material hardship as a child, even if your life later on takes a better trajectory, it can still lead to trauma, and it can mar your life for the rest of your life.

“At what point do we say we’re just not going to accept this as a nation anymore, and we are going to do what it takes to shift the dial on child poverty.

“Children can’t wait. They can’t wait for the recession to be over, or the economy to suddenly boom. They are affected now and that impact will have a lasting effect.

“So we need to be doing what is it that we can do right now, that will really have an impact on those child poverty stats. Because if we don’t, we will see the cost of that in the future. We’ll see it in our health system. We’ll see it in our criminal justice system.” Bonnie Robinson.

I asked Bonnie if the Government’s total focus on generating economic growth would reverse the deterioration in poverty, given its argument that ‘the rising tide lifts all boats.’

“We see at our Salvation Army centres the people who don’t have a boat. And we know, obviously, it’s good to come out of recession, but how is that benefit going to be shared across everyone?

“It looks from the data like even the little bits of improvement in the economy, those on the lowest incomes get the least share of that. People have had pay rises, but down the low end, it’s been quite small.

“How are we going to improve the share of that going to actually lift the people who are at the low income end out of poverty? And sometimes that actually takes some deliberate decisions about how are we going to do that?

“How are we going to make sure that happens? It doesn’t necessarily just automatically happen. And you we need to be really aware of the fact that people can, through no fault of their own, just get left behind.

“So, yes, it’s great to be going for growth, but how are you going to make sure that actually gets to the people who have the greatest need.” Bonnie Robinson

Children can’t wait. They can’t wait for the recession to be over, or the economy to suddenly boom. They are affected now, and that impact will have a lasting effect.

The Chapter list:

* 00:00 Introduction to the State of the Nation Report

* 02:30 Trends in Social Wellbeing

* 05:35 Child Poverty and Economic Impact

* 07:56 Housing Crisis and Its Effects

* 10:07 Food and Energy Poverty

* 13:30 Policy Recommendations for Improvement

* 17:20 Economic Growth vs. Social Equity

Ka kite ano

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

I had a chat recently with economist Peter Redward about gold, the future of money, the US dollar and central bank independence. He writes an excellent substack on gold called About Gold.

“China is emerging as a major factor here.”

Here’s a couple of examples of his recent work that I’d recommend reading and subscribing to.

We spoke about how:

* Gold prices have surged due to stagnant production and increased demand.

* Investment demand for gold is coming from both retail and institutional investors.

* Chinese investors are increasingly buying gold-backed ETFs.

* Central banks have significantly increased their gold holdings post-Ukraine invasion.

* The relationship between gold prices and the dollar has changed dramatically.

* Concerns about US fiscal policy are leading to a debasement trade.

* The alignment of monetary policy with political agendas is becoming more pronounced.

* Public investors are becoming more influential in market dynamics.

* China’s economic growth poses a challenge to the US dollar’s dominance.

* The future of the US dollar is uncertain amidst rising global competition.

Here’s the various points in our conversation:

* 00:00 The Surge in Gold Prices

* 06:07 Demand Dynamics: Retail, Central Banks, and ETFs

* 12:12 The Dollar’s Sustainability and Global Economic Factors

* 17:51 The Future of the US Dollar and Global Power Dynamics

Cheers

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

In recent weeks we’ve seen AA Insurance publicly acknowledge it has stopped writing new home insurance policies in Westport, Woodend in North Canterbury and in Blenheim to avoid taking on more flood and quake risk in those towns.

The NZ Herald’s Front Page Editor Chelsea Daniels asked me to come on to her show to talk about what insurance retreat means for homeowners and why home buyers need to do their own research about flood risk and insurance risk, in the absence of a managed retreat organized and underwritten by central and local Government.

“A mass delusion is not a solution.”

We talked about how and why:

* Insurers are retreating from high-risk areas due to climate change.

* Homeowners face higher premiums and potential uninsurability.

* Uninsurable towns become unbankable, affecting property values.

* People often discover insurance issues at the last minute.

* The government may need to step in as an insurer of last resort.

* Buyers must conduct thorough research before purchasing homes.

* Education on climate risks is crucial for potential homeowners.

* Banks and insurers are lagging in risk assessment related to climate change.

* The frequency of severe weather events is increasing due to climate change.

* Responsibility lies with buyers to be informed and cautious.

Here’s the various points in the conversation:

* 00:00 The Impact of Climate Change on Insurance

* 03:04 The Consequences of Uninsurability

* 05:53 The Role of Government and Community

* 09:06 The Future of Home Insurance

* 11:58 Navigating the Housing Market

* 15:08 The Responsibility of Buyers

* 18:06 The Need for Education and Awareness

* 20:59 The Role of Banks and Insurers

* 24:03 Addressing Climate Change in Housing Policy

Here’s the resulting article on NZ Herald and the Youtube version is below.

Ka kite ano

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

Briefly in Aotearoa’s political economy on Tuesday, February 10:

* The Lead: The Government announced last night it planned to levy each household $15-30 per year to pay for a $1 billion-plus LNG import terminal and reduce the risk of massive price spikes during a dry year, saying this would reduce future wholesale prices by up to five times as much, which it expected gentailers to pass on to consumers. Paying subscribers can see more detail below the paywall fold and hear more analysis in the podcast above.

* The Sidebar: However, the Government chose not to compare this LNG import option against investing the same amount in solar panels and batteries to allow the hydro lakes to be used as storage, choosing instead to only compare LNG against new coal and diesel ‘peaker’ plants. It’s also choosing to pay for the LNG terminal through a type of hire-purchase ‘lease’ agreement that increases the $1 billion up-front cost to $2.7 billion over the 15-year life of the facility, even though it may never be used if there is no dry year.

* Question for the minister: Why not choose to spend that $2.7 billion on grid-scale and residential solar panel and battery installations that would now create four Lake Benmores’ worth of storage and generation, which would be enough to power over 2.5 million homes?

* Chart of the Day: Climate scientist James Hansen has predicted record high temperatures in 2026 and 2027 because of another El Niño, which he says indicates climate warming of two degrees celsius by the mid 2030s, a decade earlier than expected.

* Scoop of the Day: Andrea Vance reports this morning for The Post-$ that the Public Service is paying out millions each year in settlements of bullying, harassment and discrimination complaints that allow agencies to keep the cases secret.

* Today’s Deep-dive of the Day is from Amanda Gillies for RNZ/Newsroom’s The Detail on how Government policies scuppered a surge in imports of electric vehicles.

Join us as a paying subscriber to get more analysis and detail below the paywall fold and in the podcast above. Paying subscribers can also comment below and join The Kākā community in webinars and our chat room. Paying subscribers also enable me to do this journalism. If paying subscribers ask in the comments below and ‘like’ the article more than 100 times, I will open it up for full public reading, listening and sharing later today.

Why not spend $2.7b on solar & batteries instead?

Being in Government is all about making choices, hopefully buying the most public good for the least public cost.

Last night’s decision to go ahead with an LNG re-gasification plant in Taranaki was another case of ignoring the cheapest and best option in cost-of-living, current account deficit, energy resilience and climate emissions terms.

The Government announced last night it had ordered a $1 billion-plus LNG import and re-gasification facility in Taranaki, paid for through an annual lease of up to $180 million per year, or $2.7 billion over the 15-year life of the facility.

The Government said this cost to insure against a ‘dry year’ would be paid for by consumers through a $2-$4 per MW/hr electricity ‘levy,’ which equates to a cost per average household of about $15-30 per year. It said this would ‘save’ households around $50 per home per year because it expected the ‘insurance’ of having certain gas supplies would lower future wholesale power costs by around $10/MWhr, assuming power companies passed that on to consumers.

But the decision didn’t include the option of using that $2.7 billion up-front to pay for grid-scale, residential and commercial solar panel and battery capacity that would allow the lakes to remain full in a dry year. That amount would buy the equivalent of 2 Gigawatts worth of generation and storage, which is the equivalent of about four Benmore Dams worth and enough to power 2.5 million households for a year.

Instead, the LNG terminal may never be used but will have to be paid for annually, and the benefits in the counterfactual put forward by the Government in its fact sheet are dependent on lower wholesale prices (than would otherwise be the case) being passed on by gentailers to consumers.

When is a levy a tax?

The announcement was attacked from both the left and the right for being an unnecessary ‘tax’ that would increase living costs for households, while also keeping New Zealand reliant on foreign fossil fuels and paying out hundreds of millions per year in foreign currency for electricity production.

PM Christopher Luxon was forced to defend the decision as a tax, shortly after Minister Simon Watts portrayed the decision as a move to lower power costs (than would otherwise be the case.

“This is not a tax, it’s a levy. It is a levy to fund a key piece of infrastructure.

“There are a series of things that we have to do to make sure that we have the supply in place, so that we get the low year risk down, so that we can keep stabilised prices for the consumer.” PM Christopher Luxon

Opposition Leader Chris Hipkins described the levy as a ‘gas tax’ and ‘another kick for households’ cost of living.

“Power bills are likely to continue to keep going up. $1 billion would buy you a hell of a lot of solar panels and batteries, which would save households a significant amount of money,” Labour Leader Chris Hipkins to reporters.

The Taxpayers Union also described the levy as a tax.

“You don’t make electricity bills cheaper by taxing them. Dancing on the head of a pin over what is a tax and what is a levy is a Labour Party talking point. Luxon should spare us the spin and abandon this folly.” Taxpayers’ Union spokesman James Ross via statement.

‘Choosing a fuel that costs twice as much’

Renewable energy campaigners also criticized the decision, including 350 Aotearoa co-director Alva Feldmeir and Rewiring Aotearoa CEO Mike Casey. Feldmeir said LNG-generated electricity was double the price of new renewable electricity, and embedded the risk of New Zealand importing international gas price shocks, such as the one that doubled gas prices after Russia’s invasion of Ukraine.

“Essentially, what they’re doing now is putting a new tax on every New Zealander’s power bill to subsidise an expensive sunset industry.

“This is a political choice this government is making. They’d rather kowtow to the fossil fuel and the gas lobbies and keep us hooked on gas for longer, than explore how we’re going to get off it, and how we’re going to make some tough decisions in the next few months and years.” 350 Aotearoa co-director Alva Feldmeir via a statement

Casey said the Government couldn’t create cheap electricity with expensive fuel.

“The Government is basically forcing New Zealanders to invest in an LNG terminal and hoping prices might go down eventually. You cannot make cheap electricity with expensive fuels and LNG is one of the most expensive fuels there is. We don’t like burning Indonesian coal. So why replace it with expensive Australian gas? This decision just locks us into another expensive overseas dependency.” Rewiring Aotearoa CEO Mike Casey via a statement

Chart of the day: Ready for 2 degrees C warmer by 2040?

Climate scientist says 2 degrees of warming likely 10 years earlier

Picks n’ Mixes

Scoops & News breaking this morning

* Tom Pullar-Strecker for The Post-$: Electricity Authority staff breached guidelines accepting dinners from Meridian’ The watchdog says it has reimbursed the power firm and reminded staff of their obligations under its gifts and koha guidelines.’

* Thomas Coughlan for NZ Herald-$: Trade Minister standing by India FTA claims as others point out contradictions

* Tony Wall for Stuff: Bank sells pensioner’s home, demands he leave

News elsewhere in the last 24 hours

Politics & the economy

* Danyl McLauchlan for The Listener-$ (gift): There are pathways to government for Labour but will it be in any shape to govern?

* Column by Joel Maxwell for Stuff: He’s shaping up as kingmaker again, but I think Peters and NZ First have never been weaker

* Analysis by Nik Dirga for RNZ: How fake NZ news pages are swamping Facebook with AI slop

Housing, infrastructure & councils

* Bernard Orsman for NZ Herald: ‘Reasonable investment certainty’: Industry urges clarity on Auckland housing rules

* Deep-dive by Shanti Mathias for The Spinoff: Is 2026 the year New Zealand councils crack down on Airbnb operators?

* Jonathan Milne for Newsroom Pro-$: Cash-strapped Clutha resorts to a little Think Big

* Column by Hayden Donnell for The Spinoff: ‘Let’s not screw up our train system just as it’s getting good’

Poverty, health, living costs, incomes & education

* Nicholas Jones for Stuff: Why public access to a life-changing cancer treatment is ‘on a knife edge’ ‘A game-changing cancer treatment could be available in the NZ health system as early as next year, experts say - but only if health officials approve special support.’

* Deep-dive by Venetia Sherson for The Spinoff: NZ emergency rooms: No place for old men (or women)

* Kim Baker Wilson for RNZ: ‘Cascade of errors’: Man died after St John ambulance delays, coroner finds

* Dr Andrew Dickson via his substack: Lucky vs. Unlucky: The Election-Year Question New Zealand Refuses to Ask ‘We have built a system where a child’s quality of life depends on a lawyer’s ability to prove the impossible. It’s time to move from a cause-based system to a needs-based one.’

* Dr Bex via her substack: A radically different approach is needed to address material deprivation and grinding poverty ‘Substantial increases in income and/or direct supports for households with disabled people are needed to address the higher levels of material deprivation experienced by these households.’

* RNZ’s Nine to Noon: Call to levy services to keep financial mentor sector viable

* Op-Ed by Hinemoa Elder for The Post-$: NZ’s meth crisis is growing — and we’re underfunding the fix

Climate & environment

* NZ Herald: Could your home become uninsurable, unbankable and worthless?

* Bloomberg-$ (gift): Climate Risk Threatens Credit Ratings for Dozens of Countries

* AP: Olympic town warms up as climate change puts Winter Games on thin ice

Cartoon of the Day: A tragedy of our horizon

Ka kite ano,

Bernard

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