The Kākā by Bernard Hickey

Kia ora. Long stories short, here’s my top six things to note in Aotearoa’s political economy around housing, climate and poverty on Monday, September 30:

* Over 35,000 people marched in Dunedin on Saturday to protest against the Government’s plans to downgrade the new hospital being built there.

* In the scoop of the day, Labour’s internal polling shows the left bloc just two percentage points behind the Government, Chris Hipkins told Henry Cooke in The Post-$$$.

* In the deep-dive of the day, Ganesh Nana explains to Jack Tame on Q+A why Government debt is much less worrying than private debt.

* In solutions news, Chris Penk has announced building consent authority reforms and plans to shift final liability for building defects away from councils.

* In quote of the day, one of the 35,000 marchers in Dunedin explains their opposition to the Government.

* In chart of the day, the UK closes down its last coal-fired power plant, while New Zealand is still burning over a million tonnes a year to generate electricity.

(There is more detail, analysis and links to documents below the paywall fold and in the podcast above for paying subscribers. If we get over 100 likes we’ll open it up for public reading, listening and sharing.)

1. The Government just alienated the South Island

More than one in four people from Dunedin marched on Saturday to protest against the Government’s breaking of its promise to build full-sized new hospital that could cope with future growth.

Dunedin may be a Labour stronghold, but it is surrounded by National electorates and the protest was arranged and promoted by Dunedin’s conservative mayor and the conservative ODT.

2. Scoop of the day: ‘Just two points behind’

Labour leader Chris Hipkins told Henry Cooke via The Post-$$$ that polling done for the party by Talbot Mills showed the left bloc of Labour-Green-Te Pāti Maori was just two percentage points behind National-ACT-NZ First in its latest polls.

That is much closer than the gap indicated in other recent polls - which range from 12.7 percentage points in the Taxpayers’ Union/Curia poll to 5.2 percentage points in the Talbot Mills corporate poll. (Talbot Mills is Labour’s pollster, but the poll leaked earlier this month was for its corporate clients - not the party.)

“They have the gap between the centre-right and the centre-left at about 2% right. Which means that it’s very close,” Hipkins said.

The Sunday Star-Times verified that his description of the polling was accurate. Henry Cooke via The Post-$$$

3. Deep Dive of the day: ‘Public debt is not the problem’

4. Solutions news: Removing council liability

Building Minister Chris Penk announced proposals over the weekend for reform of the Building Consent Authority system to consolidate dozens of council-run authorities into one-stop-shops able to consent homes from larger-scale national builders. He also announced the Government would look to remove or shift final liability for defects away from councils.

As part of this work the Government will be looking at liability settings across the whole building system. 

“Under the current settings, councils and their ratepayers are liable for defective work. Joint and several liability means councils can be ‘the last person standing’ available to foot the bill when things go wrong. This creates a highly conservative and risk averse approach, which contributes cost and draws out deadlines.” Chris Penk announcement.

5. Quote of the day: A city speaks

"I had a dad who waited in agony for knee surgery for five years, so to hear they are going to downsize (the hospital) is absolutely appalling."Joanna Inch, Fairfield via ODT

6. Chart of the day: UK stops burning coal

Meanwhile, NZ burned 1.6 million tonnes of coal in the year to June 30

The Kākā’s Journal of Record for Monday, September 30

* Health: Minister of Health Shane Reti announced the Government would begin a business case for establishing a third medical school at the University of Waikato, following its "encouraging" initial cost-benefit analysis of the proposal. Reti said the medical school would focus on primary care.

* Transport: Transport Minister Simeon Brown announced the Government will reverse Labour's speed limit reductions on local streets, arterial roads, and increase speed limits on new expressways to 120km/h. Brown said the concurrent increase in alcohol breath testing wOULD preserve road safety; the Green Party said lower speeds were shown in Auckland to reduce deaths and increase trip times by roughly 20 seconds on an average 20 minute journey. RNZ

* Housing: Building and Construction Minister Chris Penk announced proposals to reduce the number of Building Consent Authorities, allowing councils to "group together to deliver building control functions.” The Government could also change liability settings, which currently mean that councils are liable for defective work. RNZ

* Fishing: Oceans and Fisheries Minister Shane Jones announced the Government will change the catch limits on a number of fisheries, including pāua, snapper, and orange roughy. The Deep Sea Conservation Coalition said the catch limits on orange roughy aren't enough to allow their population to recover to within the South Pacific Regional Fisheries Management Organisation's target levels.

* Transport: Transport Minister Simeon Brown said geotechnical drilling, mapping, and surveying is now underway for the Warkworth to Te Hana phase of the Northland Expressway. The work is due to finish in January 2025.

* Poverty: Whaikaha, the Ministry of Disabled People commissioned an independent investigation into the deaths of four people in disability support care. Although Whaikaha gave no comment on the reason for the investigation, an Official Information Act request by RNZ found one support provider reported 32 deaths this year. Jane Carrigan said the investigation may be into this provider.

Cartoon of the day

Timeline cleansing nature pic of the day

Braided streams

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 features co-hosts Bernard Hickey & Peter Bale talking about the week’s news with:

* The Kākā’s climate correspondent Cathrine Dyer on the latest climate news, including research suggesting a doubling of carbon dioxide in the atmosphere could trigger 8° of warming in the long run;

* Robert Patman on the escalating conflict between Israel and Hezbollah in Southern Lebanon, Vladimir Putin’s latest nuclear threats, Winston Peters’ comments this at the UN General Assembly;

* Matt Halliday on the 'F list' of ad and PR agencies helping fossil fuel companies in NZ. He also talked about a court case on greenwashing launched by activist Mike Smith (Guardian) and one against Z Energy by Consumer NZ, Lawyers for Climate Action and the Environmental Law Initiative. (RNZ)

The Hoon’s podcast version above was recorded on Thursday night during a live webinar for over 120 paying subscribers and was produced by Simon Josey.

Bernard mentioned at the beginning of the episode he would be interviewing former Kāinga Ora director Philippa Howden-Chapman at a public event in Auckland from 6.30 pm tonight. Details are here.

(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.)

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

Long stories short, here’s the top six news items of note in climate news for Aotearoa this week, and a discussion above between Bernard Hickey and The Kākā’s climate correspondent Cathrine Dyer:

* A seventh planetary boundary, for ocean acidification will soon be breached, and may have already done so, according to a new report from The Potsdam Institute for Climate Impact Research (PIK).

* A new study published in Science from 485 million years of data suggests a doubling of carbon dioxide (CO2) in the atmosphere could increase global mean surface temperatures (GMST) by 8˚C in the very long run, which is much more than previously thought.

* Governments can trigger positive social tipping points by adopting climate mandates requiring key sectors to adopt clean energy technologies by specific dates, according to a new report.  

* New Zealand’s gas industry boasted about its success in preventing legislation that it regarded as an ‘existential threat’ to its business from being adopted. It said it used advertising and “discussions with Ministers and officials to help craft its message.”

* GNS Science confirms that 59 jobs are to go as part of public sector cuts, including those of senior scientists, amounting to around 10% of the crown agency’s total workforce.

* A new report shows achingly slow progress in improving the integrity of global carbon markets. Nearly half of the projects assessed fell into the bottom two integrity categories, while none achieved a triple-A rating and just 1% got a double-A rating.

(See more detail and analysis below, and in the video and podcast above. Cathrine Dyer’s journalism on climate and the environment is available free to all paying and non-paying subscribers to The Kākā and the public. It is made possible by subscribers signing up to the paid tier to ensure this sort of public interest journalism is fully available in public to read, listen to and share. Cathrine wrote the wrap. Bernard edited it. Lynn copy-edited and illustrated it.)

1. Seventh planetary boundary soon to be breached

The world’s oceans are close to a critical threshold, and may already have breached it according to a new report from the Potsdam Institute for Climate Impact Research (PIK).

“The world's oceans are close to becoming too acidic to properly sustain marine life or help stabilise the climate.

The report by the Potsdam Institute for Climate Impact Research details nine factors that are crucial for regulating the planet's ability to sustain life.

In six of these areas, the safe limit has already been exceeded in recent years as a result of human activity.

The crucial threshold for ocean acidification could soon become the seventh to be breached, according to the Institute.” RNZ

The report authors suggest that even if emissions were to be rapidly reduced, additional acidification may be unavoidable, meaning that breaching the safe boundary is inevitable in coming years. In fact, it may have already crossed the boundary.

“At a briefing outlining the findings, Levke Caesar, a climate physicist at PIK and co-author of the report, said there were two reasons the levels of ocean acidification were concerning.

“One is [that] the indicator for ocean acidification, which is the current aragonite saturation state, while still being in the safe operating space, is approaching the threshold of transgressing the safe boundary,” Caesar said.

“The second is that there are actually several new studies that were published over the last years that indicate that even these current conditions may already be problematic for a variety of marine organisms, suggesting a need [to] re-evaluate which levels can actually be called safe.”

Ocean acidification was getting worse globally, with the effects most pronounced in the Southern Ocean and the Arctic Ocean, she added.”  The Guardian

The Planetary Health Check 2024 report summary includes the following graphic, which illustrates the progress of key planetary boundary processes toward the high risk zone.

       Planetary Health Check 2024: The Postdam Institute

As a result of these concerns, the report authors have issued an open call for expert submissions on advancing the representation of the ocean in the planetary boundaries framework. They aim to discuss and integrate further research that will help to better determine the ocean’s critical role in shaping planetary conditions.

2. Is sensitivity actually more like 8° than 4°?

A new study published in the journal Science provides a deeper and more detailed look at the history of Earth’s climate over the last 485 million years. This period, known as the Phanerozoic includes the Paleozoic, Mesozoic, and Cenozoic eras. The study provides new insights into the relationship between carbon dioxide (CO2) in the atmosphere and global mean surface temperatures (GMST). It found that temperatures were more dynamic and that warmer periods were hotter in the past than previously believed.

They also found that a measure of long-term climate sensitivity known as earth system sensitivity (ESS) was approximately 8˚C. Climate sensitivity tells us how much of a temperature increase we should expect if we double CO2 in the atmosphere. Although a number of recent studies have indicated climate sensitivity might be higher than we expect in the long-run, they have not previously suggested anything quite this high.

Responses from other climate scientists include this, published in Salon;

“Dr. Michael E. Mann — a climatologist at the University of Pennsylvania who was not involved in the study but discussed these topics in depth in his 2023 book "Our Fragile Moment” — described the new paper as "a solid study" that “makes a compelling case” for something he’s been saying for some time, “namely that we shouldn’t rule out possible ‘hothouse feedbacks’ that might lead to greater warming that many climate models predict under a scenario of climate policy inaction.” 

He continued: “That having been said, I’ve also warned that the paleoclimate record also suggests that climate models might not be capturing very well certain feedbacks [e.g. related to the 'El Nino' phenomenon] that could actually lessen the warming somewhat." “

Dr Mann has tended to be sceptical of claims, such as that from Dr James Hanson, that current climate models are underestimating equilibrium climate sensitivity (ECS – a measure that includes feedbacks that play out over decades rather than centuries). An ESS of 8˚C may be challenging to reconcile with current central estimates of climate sensitivity of around 3˚C. What is certain is that more studies are needed to get a better understanding of the feedback mechanisms at play and the time frames over which we can expect them to impact temperatures.

3. Governments urged to adopt climate mandates

UK researchers are urging governments to adopt climate mandates that require key sectors to switch to clean energy, thereby triggering benevolent cascades from positive social tipping points.

4. NZ gas industry boasts of successful lobbying

The New Zealand gas industry has claimed at an international conference that it successfully stymied the introduction of new regulations recommended by the Climate Change Commission that would have banned new gas connections.

“The New Zealand gas industry went to an international fossil fuel forum and claimed responsibility for killing off a proposed government ban on new gas connections.

Gas NZ presented its success as a model for avoiding regulation for others in the fossil gas industry.

The body's presentation to the World LPG Association says it achieved its goal of stopping what it called the "existential threat" posed by a draft suggestion from the Climate Change Commission that new homes should not connect to the gas network, to avoid locking their owners in to rising energy bills.

"The immediate challenge was having the sections recommending an end-date for connections removed from the draft advice," said the presentation.

It said it avoided the ban by using a mix of public advertising to rouse support for gas, and discussions with Ministers and officials to help craft its message.” RNZ

Recent research has shown that gas stoves spew nitrogen dioxide (NO2) into homes at levels that exceed those deemed safe by health organisations. Those emissions linger in homes for hours, particularly in bedrooms and have been linked to respiratory conditions such as asthma and chronic obstructive pulmonary disease, that primarily affect the young and the old.

“By sampling homes across the U.S., the researchers found that in many, levels of exposure to NO2 can soar above the World Health Organisation’s one-hour exposure limit for multiple hours—even in the bedroom that is farthest from the kitchen.

"The concentrations [of NO2] we measured from stoves led to dangerous levels down the hall in bedrooms ... and they stayed elevated for hours at a time. That was the biggest surprise for me," says Rob Jackson, a sustainability researcher at Stanford University and senior author of the study, which was published on May 3 in Science Advances.” Scientific American

A 2016 New Zealand study of NO2 air pollution (primarily from motor vehicles) showed 2,025 premature deaths and over 8,531 hospitalisations. That study measured outdoor air pollution. The study did not consider the effects of NO2  pollution trapped inside peoples’ homes.

Gas stoves contribute comparatively little to global warming, but are seen as a ‘gatehouse appliance’ by an industry keen to maintain gas connections for water heating and other appliances in homes. They therefore work to heat up the debate.

Unlike most countries, New Zealand does not have regulations that limit lobbying, enforce ethical standards on lobbyists, or require them to register and reveal their funding sources. The influence of corporate lobbying in Aotearoa has been shown to result in weak and ineffectual responses from policymakers, thwarting the healthy functioning of democracy.

5. GNS Science cuts 59 jobs

Job cuts at GNS Science, including senior scientist roles, will amount to 10% of the crown agency’s workforce, according to the Public Service Association. In total 96 positions are being disestablished including 28 which are currently vacant, while 37 new roles are being established. RNZ

6. Achingly slow carbon markets progress

MSCI Carbon Markets’ report on the ‘State of Integrity in the Global Carbon-Credit Market’ shows that nearly half of projects are low-integrity, falling in the lowest two categories. None of the projects assessed attained the highest triple-A rating and only 1% achieved a double-A rating. While the report shows a gradual improvement in integrity, the progress is achingly slow, with higher costs a factor.

“This move to higher-integrity credits may seem modest, but the highest-

integrity credits have, until recently, been hard to identify and tend to be more expensive, damping the shift in demand towards them.” MSCI

Climate communicator Ketan Joshi posted a chart from data in the report showing the number of projects achieving different integrity ratings, by industry.

Source: Ketan Joshi’s Post on Linkedin

Chart of the week: An Atlantic bath

Sea surface temperatures (SST) in the Atlantic main development region (MDR) have spiked to new highs in recent days. The MDR is so-called because it is the source of the majority of the region’s major hurricanes. Sea surface temperatures in the tropical Atlantic are on average 1.64˚C warmer in 2024 compared to the decadal average from 1991-2020.

Source:The University of Arizona – Real Time Tropics Info

Ka kite ano

Bernard and Cathrine

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

Kia ora. Long stories short, here’s my top six things to note in Aotearoa’s political economy around housing, climate and poverty on Friday, September 27:

* Treasury’s Chief Economics Adviser Dominick Stephens gave the year’s most important speech yesterday, saying real and per-capita cuts in public spending implied by the Government’s surplus ambitions for 2028 would have to be unprecedented without tax increases, implying a fiscal savagery worse than that unleashed by Ruth Richardson in her ‘Mother of All Budgets’ of 1991.

* In the scoop of the day, Marc Daalder reports for Newsroom the Government could use creative accounting to claim it has sequestered millions of tonnes of additional carbon dioxide.

* In the deep-dive of the day, Jem Traylen reports via BusinessDesk-$$$ on how the new Government ignored advice from Treasury and MBIE about the need for a proper medium-to-long term review of immigration policy.

* In solutions news, Hastings District Council has appointed unelected youth councillors to its committes with voting rights, even though they’re currently too young to vote in next year’s council elections, Stuff’s Marty Sharpe reports.

* In quote of the day, Dunedin Mayor Jules Radich is shocked the Government is downgrading its plans for the new Dunedin Hospital. Stuff

* In chart of the day, NZ’s workforce participation rate of over 65s has surged to among the highest rates in the world in the last 20 years.

(There is more detail, analysis and links to documents below the paywall fold and in the podcast above for paying subscribers. If we get over 100 likes we’ll open it up for public reading, listening and sharing.)

1. Treasury warns of spending cuts worse than in 1991

It was billed as a speech about the Crown’s medium-to-long-term fiscal challenges because of an ageing population, which it did admirably, but it was the outlook for the next three years that was the most startling.

Treasury’s Chief Economics Adviser Dominick Stephens gave what I consider the year’s most important speech yesterday, saying real and per-capita cuts in public spending and services implied by the Government’s surplus ambitions for 2028 would have to be unprecedented without tax increases, implying a fiscal savagery worse than that unleashed by Ruth Richardson in her ‘Mother of All Budgets’ of 1991.

Here’s the chart, which is simple to read, but the implications are brutal.

‘Unprecedented cuts in real, per-capita Government spending coming’

Stephens spoke plainly of how much will need to be cut by 2028 (bolding mine):

“In Budget 2024, the Treasury forecast that the operating balance – both actual and structural – would return to surplus in 2027/28. To achieve this consolidation, the Government has announced operating allowances for new spending of $2.4 billion per annum for Budget 2025 through to Budget 2027.

“Pre-commitments and other non-discretionary spending will use up some of those allowances. The Treasury’s high-level estimates suggest that the cost of delivering current services will rise by around $2.5 billion over the year ahead, and we must bear in mind that the population will grow.

“This means that the Government will have to increase revenue or reduce the amount that it spends per person, in inflation adjusted terms, to meet this target. This implies that savings and reprioritisation will likely be a feature of future Budgets, as in Budget 2024.

“The Treasury’s latest forecasts assume that most of the return to surplus will be driven by declines in per capita government consumption (see Figure 7 (above)). The implied speed and size of this decline is generally unprecedented in recent history in New Zealand.” Treasury Chief Economic Adviser Dominick Stephens in his speech titled: “Longevity and the public purse: Fiscal and economic impacts of increasing longevity.”

In my view

The wider speech itself is an excellent explainer on both the fiscal challenges of ageing, but how migration, our rising workforce participation rate because of a relatively high universal NZ Superannuation, along with low interest rates, have softened the burden, relative to previous Treasury forecasts.

The obvious conclusion, which Stephens did not reach, is that either the current entitlements of publicy funded healthcare, education, welfare and universal NZ Super at 66% of the average wage from 65 will have to change, or taxes will have to rise. The obvious hole in our tax system is the taxation of wealth and income from capital gains, especially on the wealth tied up in residential land values.

2. Scoop of the day: ‘Let’s just move the goalposts’

Govt asks if a different assumption about existing trees might help

In a sign the Coalition wants to assume away Aotearoa’s need to reduce emissions or buy emission credits internationally to meet our international and local obligations, Newsroom‘s Marc Daalder reports the Government could use creative accounting to say it has sequestered millions of tonnes of Co2 above expectations through better management of existing forests, rather than cutting emissions or planting new trees.

Forestry Minister Todd McClay sought advice from officials earlier this year about how management of pre-1990 forestry – which includes 1.4 million hectares of planted trees and 7.8 million hectares of natural forest – could contribute to meeting New Zealand’s climate obligations under the Paris Agreement.

Though officials reported back that tens of millions of tonnes could be sequestered, perhaps without having to do much at all, experts warn this could lead to a repeat of the “hot air” carbon credits debacle of the 2010s.

I’m curious

When is the big end of town going to call b******t on all of this?

3. Deep Dive of the day: ‘Hey. We need a migration strategy.’

Yet Stanford tells Treasury & MBIE: ‘Strategy not possible in ‘real world’.

Jem Traylen reports via BusinessDesk-$$$ on how the new Government and Immigration Minister Erica Stanford in particular ignored advice from Treasury and MBIE about the need for a proper medium-to-long term review of immigration policy.

Treasury said the Government’s policy programme was too focused on short-term, quick fixes & needed to consider how immigration could best support the country’s labour market, and economic and fiscal needs, over the medium to long term.

A recently published Cabinet paper disclosed the internal debate to an unusual level of detail, with Immigration Minister Erica Stanford saying such “theoretical” policy exercises consumed significant time and energy and often failed to reflect “real-world realities”.

In her Cabinet paper, Stanford said there was “no ‘ideal’ number of migrants” and “no ‘target’ for net migration”, but there was a “right balance” that supported growth without putting significant pressure on physical and social infrastructure.

She said the Government would reduce the pressure with its work across housing, healthcare, education, transport, and cutting red tape, while changes to immigration settings would also help in the short to medium term.

‘Let’s have a proper strategy before we reset the settings’

Treasury supported this direction but said a medium- to longer-term picture was needed to guide policy decisions. This would balance the longer-term benefits of immigration policy, such as human capital and labour market benefits, with short-term pressures and challenges.

Treasury said the Government also needed to keep track of the cumulative impact of individual policy changes, including how they affected public services. It said it would be better if officials spent six months upfront sorting out this bigger picture before embarking on another review of work visas.

MBIE said there was a set of “known issues” the minister was focused on responding to, which weren’t likely to change if it did the big-picture work Treasury recommended.

Stanford then was clear that wouldn’t happen.

Stanford said there were several coalition and government priority commitments that had to be fulfilled in the next two years. In an ideal world, she said, these would sit alongside an accurate medium- to longer-term view of how immigration could support New Zealand’s labour market and its economic and fiscal needs.

“However, we know that in reality the development of these types of theoretical outputs by Government consume a significant amount of time and resource and often fail to reflect real-world realities.

“This is particularly true when it comes to forecasting human behaviour, which is always context-dependent and can be unpredictable.” Stanford in the paper.

In my view:

Stanford is essentially saying we should ignore the future because it’s too hard to know what people will do and migration trends are like the weather. They just happen and there’s nothing much any Government can do.

Perhaps she should tell Cabinet colleagues Nicola Willis, Christopher Bishop and Simeon Brown, who are making a lot of long-term decisions that will have to respond or pre-empt what happens with our population.

This refusal to even try to engage with a rational immigration and ‘absorptive capacity’ policy debate just beggars belief.

4. Solutions news: ‘Let’s the give the young the power’

Hastings decides in tight vote to give committee voting powers to youth

This is one way to rectify the democratic deficit endemic right across our governance institutions, both centrally and locally.

Hastings District Council has (ony just) decided to appoint unelected youth councillors to its committes with voting rights, even though they are currently too young to vote in next year’s council elections, Stuff’s Marty Sharpe reports.

5. Quote of the day: Here comes trouble for the Govt

Dunedin Mayor and ODT go ballistic over plan to scale back hospital

“Shocked and outraged, it is quite astonishing ... to be honest I was expecting them to come down here with good news because we are having a march on Saturday and instead we’ve got exactly the opposite.” Dunedin Mayor Jules Radich via Stuff.

Here’s more to suggest the Government is about to lose a lot of support in the South Island. It’s the first five pages of this morning’s Otago Daily Times, along with links to articles the ODT decided not to paywall.

6. Chart of the day: Our pensioners increasingly work too

The Kākā’s Journal of Record for Friday, September 27

* Health: Infrastructure Minister Chris Bishop and Health Minister Shane Reti announced the new Dunedin hospital could cost $3 billion to build so the Government would either scale it back or develop the old hospital site instead.

* Health: New research found the rate of new prescriptions for puberty blockers for youth with gender dysphoria rose in NZ after 2014, but has decreased by roughly 20% since 2021.

* Health: Associate Professor Siouxsie Wiles called the Government's move to stop distributing free COVID-19 RATs tests "depressing,” saying a recent study found cognitive deficits associated with even mild COVID-19 infection persisted for at least a year.

* Science & climate: Science, Innovation & Technology Minister Judith Collins said the Government agreed in-principle to NIWA acquiring MetService. RNZ

* Environment: Stats NZ reported air pollutant concentrations dropped at many air quality monitoring sites over the past eight years.

* Economy: Trade Minister Todd McClay announced a new trade deal between NZ and the United Arab Emirates to remove duties on 99% of NZ’s exports to the UAE within three years. RNZ

Cartoon of the day

Timeline cleansing nature pic of the day

‘Whew. The coast is clear for a feed. What? There’s someone behind me?’

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

Kia ora. Long stories short, here’s my top six things to note in Aotearoa’s political economy around housing, climate and poverty on Thursday, September 26:

* Days after realising hundreds of thousands of tax-free gains on the sale of one of his rental properties, PM Christopher Luxon responded yesterday to ANZ CEO Antonia Watson’s comments in favour of a tax on realised capital gains on rental properties by accusing her of “wanting to take more money off New Zealanders” and suggested her bank could start by sending less profit back to Australia. Labour’s Kieran McAnulty said said Luxon’s comments were an attack “unbecoming of a leader” and showed he was “under a bit of pressure, that bloke, I reckon.” RNZ

* In scoop of the day, the The Press-$$$’s Rachel Thomas reports from official documents with advice from Te Whatu Ora-Health NZ’s Chief Infrastructure Officer Jeremy Holman to ministers that its plans to cut spending on $3.2 billion worth of hospital rebuilds and upgrades meant they couldn’t cope with rising demand and meant some buildings would have to go into “reactive maintenance (run to fail)” mode.

* In deep-dive of the day, The Post-$$$’s Nicholas Boyack looks into why independent commissioners have effectively blocked the building of 1,600 new homes in Upper Hutt by recommending an area known as the Silverstream Spur be rezoned from Residential to Natural Open Spaces.

* In solutions news, Waka-Kotahi-NZTA is now introducing a "planning and investment evidence base programme," to "enable evidenced-based decision making,” the Ministry of Transport has advised Simeon Brown after telling him big investment decisions such as Brown’s $10 billion Northland Expressway were being made without business cases or evidence.

* In quote of the day, Christopher Luxon tells Antonia Watson banks shouldn’t be telling the Government to take more money off homeowners.

* In charts of the day, the world’s fastest growing large economy has record high homelessness and massively-stressed low-income workers, suggesting a rising tide doesn’t lift all, which is the current Government’s strategy here.

(There is more detail, analysis and links to documents below the paywall fold and in the podcast above for paying subscribers. If we get over 100 likes we’ll open it up for public reading, listening and sharing.)

1. PM accuses ANZ CEO of ‘wanting to take more off NZers’

Labour’s McAnulty says Luxon’s comments ‘unbecoming of a leader’

PM Christopher Luxon’s reaction yesterday to questions about ANZ CEO Antonia Watson’s comments in favour a Capital Gains Tax was to laugh and say this (video below):

“She is more than welcome to enter the political domain. As a former CEO, I understand what she's doing. The point I’d make is the big Australian banks make a lot of money off the New Zealand public, and I would just suggest to her that maybe taking more money off New Zealanders isn't the road forward."

"I love it that the CEO of a big bank from Australia wants to take more money off New Zealanders.

"You don't tax your way out of a recession. You grow your way out of a recession." Christopher Luxon speaking to reporters in Parliament yesterday via RNZ

Watson told RNZ earlier yesterday it was time for a capital gains tax on the realised capital gains beyond the family home. Luxon’s comments came days after confirmation he had sold one of his rental properties in Onehunga, realising hundreds of thousands of capital gains, without having to pay tax. Stuff reported on Sunday the two-bedroom brick and tile property was sold after being listed with a fixed price of $945,000, suggesting Luxon made a capital gain tax free of $295,000 on his 2015 purchase price of $650,000.

Labour’s Kieran McAnulty described Luxon’s comments as “unbecoming of a leader,” and said he hoped that Watson’s comments favouring a CGT, along with supportive comments by other business leaders and the outgoing Secretary of the Treasury, Caralee McLeish, meant the tax debate would become less divisive.

"The CEO of a company surely is capable of making their own mind up and expressing it without the prime minister having a crack.

"He's starting to show a bit of pressure, that bloke, I reckon." Labour spokesman Kieran McAnulty via RNZ.

2. Scoop of the day: Govt eyes hospital build cuts

Health NZ’s Infrastructure boss warns Govt of ‘run to failure’ risk

The Press-$$$’s Rachel Thomas reports this morning Te Whatu Ora-Health NZ’s Chief Infrastructure Officer Jeremy Holman has told ministers now considering cutting the size of a hospital rebuild and upgrade programme costed at $3.2 billion that smaller buildings may mean some buildings couldn’t cope with rising demand and would have to go into “reactive maintenance (run to fail)” mode.

The news comes as hospital rebuilds and expansions for Dunedin, Nelson, Whangārei and Taranaki are being rescoped by new Commissioner Lester Levy after he was told to cut $1.4 billion immediately. There are 20 projects rated as ‘red’ and therefore under active consideration, with current costs of a total of $3.2 billion. Dunedin City Council has launched a campaign to stop the downgrading of its hospital build.

Thomas reported on advice from Holman to Ministers on the reconsideration of the $3.2 billion worth of ‘red’ projects.

The documents obtained by Thomas under the OIA showed Holman’s warning Health NZ had been “forced into a reactive mode,” which meant addressing risks without lifting capacity, which in turn was “inherently more dangerous” than a planned approach.

“The current in-flight portfolio only provides a 4% expansion of capacity,” Holman advised.

He told The Post there were no plans to change this, outside of health and safety requirements.

“Reactive maintenance (‘run to fail’) is a legitimate maintenance strategy for non-critical assets that do not directly support critical clinical function [and] will continue to be a part of our maintenance approach...”

3. Deep Dive of the day: 1,600 new homes blocked

Development in Upper Hutt blocked by hearings panel

The Post-$$$’s Nicholas Boyack reported yesterday on why independent commissioners have effectively blocked the building of 1,600 new homes in Upper Hutt by recommending an area known as the Silverstream Spur be rezoned from Residential to Natural Open Spaces.

Here’s the key details (bolding mine):

In May, council chief executive Geoff Swainson wrote to the Government supporting Guildford Timber Company Ltd’s application to fast-track the project to build houses above a piece of land known as the Silverstream Spur.

The move blindsided councillors. A subsequent statement from Emma Holderness confirmed that her fellow councillors Dylan Bentley, Matt Carey, Tracey Ultra and Chris Carson were not aware of the council’s support for fast tracking until it was raised by a member of the public.

Independent commissioners have, however, dealt the project a blow by recommending the zoning change, making it significantly harder to get a road built.

Silver Stream Railway spokesperson Jason Durry is urging councillors to endorse the panel’s recommendation. There was clear community support for the land being rezoned for recreational use, he said.

Holderness said the issue was a complex one. She noted the panel had acknowledged that Upper Hutt was not short of long-term housing options, including the Trentham Racecourse and intensification along the rail corridor. The Post-$$$’s Nicholas Boyack

Why isn’t there ‘clear community support’ for more houses? There were 177 families registered in Upper Hutt as homeless in the June quarter. Upper Hutt’s house value to income multiple is 5.4 and Infometrics reports 37.9% of the average household income would be needed to service a 20 year mortgage on the average house value, with a 20% deposit at average 2-year fixed interest rates in 2024.

4. Solutions news: ‘Make decisions with evidence’

Ministry scathing of huge RONS dreamt up on backs of envelopes

Waka-Kotahi-NZTA is now introducing a "planning and investment evidence base programme," to "enable evidenced-based decision making,” the Ministry of Transport (MOT) has advised Simeon Brown after telling him big investment decisions such as Brown’s $10 billion Northland Expressway were being made without business cases or evidence, as RNZ’s Phil Pennngton reported yesterday (bolding mine):

The government has been warned that business cases for many projects - even large roading projects - have become so weak that they are disconnected from reality.

The Transport Ministry (MOT) has told the government that "investment decisions have become disconnected from the available revenue and market capacity," in proactively-released documents.

"There has been a breakdown in the relationship between business case developers, decision makers and funders."

The MOT is also beginning work on a 'Future of the Transport Investment System' plan. MOT's warning to Brown in November overshadowed subsequent planning for the RONs, when it said:

"Decisions are increasingly being made without business cases being completed and the project scope and cost being fully understood, meaning more cost increases, delays and ultimately an inability to deliver intended benefits."

The initial cost for RONs - estimated to complete 14 of the 17 highways - was $17.3 billion in the MOT papers, plus another $3b for the other three.

The latest estimates have been entirely blanked out of the newly-released documents.

"Initial cost estimates are increasingly unreliable indicators of final costs", MOT stated.

MOT has now adopted Treasury’s ‘Better Business Cases’ framework.

"Business cases will be targeted, and include only what is required.

"This work aims to create a significant improvement in the time and cost to develop business cases, as well as a more accurate cost estimation."

The agency is now introducing a "planning and investment evidence base programme" to make a change to "enabling evidenced-based decision making".

5. Quote of the day

‘You grow your way out of a recession,’ says cost cutter.

“You don't tax your way out of a recession. You grow your way out of a recession.” PM Christopher Luxon, who has tightened fiscal policy, cut infrastructure and services spending and increased inflation through various new fees and charges (taxes) since taking office.

6. Charts of the day: Growth doesn’t lift all boats

US economy growing fastest, but poorest more homeless & poor

The Kākā’s Journal of Record for Thursday, September 26

* Wellbeing: Stats NZ reported the 2023 General Social Survey found NZers' sense of belonging declined since 2021, as well as their sense of safety after dark and their trust in key institutions such as the education and health systems, Parliament, media, courts, and the police. Trust in Parliament decreased the most, from 5.7 in 2021 to 4.9 in 2023. RNZ

* Health & poverty: Health Minister Dr Shane Reti announced $4.85 million in funding towards researching the prevalence of Fetal Alcohol Spectrum Disorder (FASD) in NZ, training health professionals to recognise it, and promoting alcohol-free pregnancies. Reti said an estimated three to five children with FASD were born in NZ every day, extrapolating from overseas data.

* Te Tiriti: Treaty Negotiations Minister Paul Goldsmith announced that legislation to revert the criteria for granting customary marine title to stricter 2011 conditions passed its first reading in Parliament. Under the changes, applicants will have to prove "exclusive use and occupation" of the marine area from 1840 to the present day. RNZ

* Infrastructure: A new report from Te Waihanga-The Infrastructure Commission on NZ's long-term infrastructure needs estimated that almost 60% of NZ's annual infrastructure spend would need to go in future towards renewing or replacing existing infrastructure.

* Electricity: The Electricity Authority's report into the June 2024 collapse of a Northland transmission tower found Transpower failed to respond to a senior engineer's concerns that maintenance crews were under-trained.

* Fisheries: Oceans and Fisheries Minister Shane Jones proposed fishing boats who've verified their catch with onboard cameras can tip unwanted fish overboard rather than bring all their catch on shore. Jones also proposed to continue the rollout of onboard cameras to monitor fishing activity. RNZ

Cartoon of the day

Nanny state? Or Dominatrix state?

Timeline cleansing nature pic of the day

The first bloom of summer

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

Kia ora. Long stories short, here’s my top six things to note in Aotearoa’s political economy around housing, climate and poverty on Wednesday, September 25:

* Ad agency climate activist group Comms Declare today launched the New Zealand version of the globally compiled ‘F list,’ which names 14 local agencies “which have ignored the scientific consensus and kept promoting fossil fuel clients,” with Z Energy called out in particular as the biggest fossil fuel advertiser that uses four local ad agencies and one PR company.

* In scoop of the day, The CEO of New Zealand’s biggest bank with the most exposure to the housing market has come out in favour of a Capital Gains Tax on realised gains on housing, telling RNZ’s Guyon Espiner in an interview aired this morning that “the time has arrived for a capital gains tax”.

* In deep-dive of the day, RNZ’s Eloise Gibson looks in depth at the burgeoning demand for renewable electricity from new data centres in Aotearoa.

* In solutions news, the International Energy Agency (IEA) published a major report overnight on the next six years of energy transition, saying tripling global renewable energy capacity by 2030 was within reach thanks to “favourable economics, ample manufacturing potential and strong policies.”

* In quote of the day, Samoa’s environment minister says his people are being drained by the lip service of the world’s richest economies failing to do enough to limit climate change.

* In charts of the day, the NZ economy is set to keep contracting in line with the slump seen during the 2008/09 Global Financial Crisis, as shown by the latest leading indicators and a fresh consumer confidence survey.

(There is more detail, analysis and links to documents below the paywall fold and in the podcast above for paying subscribers. If we get over 100 likes we’ll open it up for public reading, listening and sharing.)

1. Z Energy & five agencies called out in global climate ‘F list’

NZ version published of ‘F list’ naming agencies for fossil fuel advertisers

Comms Declare today launched the New Zealand version of the globally compiled ‘F list,’ which names 14 local agencies “which have ignored the scientific consensus and kept promoting fossil fuel clients.”

Z Energy was called out in particular as the biggest fossil fuel advertiser. It uses four local ad agencies and one PR company.

Consumer New Zealand, the Environmental Law Initiative and Lawyers for Climate Action New Zealand filed a joint claim in the High Court in November last year, alleging Z Energy breached the Fair Trading Act with its claims about saving emissions in its Moving with the Times advertising campaign. RNZ

2. Scoop of the day: ‘The time has come for a CGT’

ANZ CEO Antonia Watson agrees with CGT on realised gains on homes

Antonia Watson, the chief executive of New Zealand’s largest and most housing-exposed bank, ANZ, has come out for the first time in favour of a capital gains tax on the realised capital gains from housing. She was speaking in an interview with Guyon Espiner aired on RNZ this morning.

"The time has arrived for a capital gains tax.”

"In this country, people are investing in housing for the purpose of getting a capital gain on it. And if that's the purpose of it, why not have that as part of the tax take? Have a capital gains tax on realised gains?"

The tax should be levied "once you've got the money in the bank," she said.

"I think that there is some fairness in saying that a gain from a capital gain [is the same] compared to a gain from your income."

Watson qualified her comments with a warning about the compliance costs of introducing such a tax, and she made it clear she was opposed to any tax on unrealised gains.

Honorable mentions

Health: ED patient attempts 19km walk home at night due to long wait. Nigel Wade says he didn’t want to wait all night to see a doctor at Hutt Hospital, so he tried to walk home ... to Upper Hutt. The Post-$$$’s Rachel Thomas

Forestry: Slash left on steeplands due to health and safety will ‘chaotically mobilise’Scientific paper calls for an urgent review of forestry regulations after finding “systemic failure” in rules about what clearing slash. Stuff’s Marty Sharpe

Environment: Fears landmark ruling to protect tiny island’s coastline will be overturnedMōtītī Islanders took on the Crown, the fishing industry and big iwi ‒ and won ‒ but they’re now preparing for another battle. The Post-$$$’s Andrea Vance

Politics: Greens vow to revoke new oil and gas permits, but Labour doesn’t appear on board. Difference between opposition parties’ positions crystallise after Government introduces legislation that would overturn the offshore exploration ban. The Post-$$$’s Tom Pullar-Strecker

Research: ‘Huge blow’: GNS Science confirms move to cut 10% of its workforce NZ Herald’s Jamie Morton

3. Deep Dive of the day

Climate: Energy-hungry data centres want NZ's renewable electricity to reduce climate impact RNZ’s Eloise Gibson

In a high-growth scenario, New Zealand government estimates say data centres could suck up as much electricity in 2030 as is used today by the country's current biggest power user - Tiwai Point aluminium smelter - equal to over 7 per cent of the country's future supply.

New Zealand's grid is currently about 85 percent renewable-powered, and that's expected to rise into the 90s with the growth of solar and wind.

But when renewable supply is tight, power generators turn to coal - with impacts on New Zealand's electricity emissions.

A common way for data centres to lower their reported climate impacts is paying a premium to an electricity company, in return for a certificate saying they received 100 percent renewable power for their operations.

But while the generator itself might be producing only renewables, in reality the electricity is drawn from the national grid with its mix of wind, solar, hydro, geothermal, gas and coal. Renewables supply most of the baseload.

But when demand gets too high, typically on a winter's evening, and the grid as a whole runs short of renewable power, other generators have to burn coal to compensate.

Buyers of these green certificates say by that supporting renewable generators, they are supporting New Zealand's clean power supply.

Honorable mentions

Economy The perfect storm for Wairarapa commuters RNZ’s Emily Ireland

Economy: Why has work stopped on one of NZ’s tallest buildings? The luxury Seascape development in Auckland should be full of rich listers in penthouses. Instead, it’s an empty construction site with the builder and developer at loggerheads. Stuff’s Lloyd Burr

4. Solutions news

Electricity: How floating solar panels could help solve NZ's energy crisis Lincoln University’s Faith Jeremiah via The Conversation/RNZ

Honorable mentions

Poverty: 'When communities meet together, there's more blessing' RNZ

Housing 'Fantastic development opportunity': Head Hunters gang pad sells for bargain $378k NZ Herald

5. Quote of the day

‘We’re fighting for our futures in the Pacific. Help us.’

“I wonder if our countries are moving further and further away from the unity and the moral fortitude we require to protect our people. We need all countries, but particularly the G20, to lead the way. The vulnerable people of our world are drained by the lip service" Samoan Natural Resources and Environment Minister Cedric Schuster, who chairs the Alliance of Small Island States (AOSIS), speaking overnight in New York during ‘Climate Week’. Via Reuters

6. Charts of the day

Back on track?

The Kākā’s Journal of Record for Wednesday, September 25

* Work & economy: The Westpac-McDermott Miller Employment Confidence Index for the September quarter was down 2.2 points to the lowest level since NZ emerged from the first Covid-19 lockdown. Wellington was the most pessimistic region, with Auckland "not far behind." RNZ

* Climate & business: The External Reporting Board said it will potentially ease certain climate disclosure requirements, allegedly to allow climate-reporting entities time to improve their data quality & availability. The move comes in response to feedback from climate reporting entities who "raised concerns" about aspects of the disclosure regime.

* Politics & governance: Chris Bishop announced that the Parliament Bill, which will "consolidate and modernise the four Acts comprising Parliament’s statutory framework", passed its first reading. The Bill gives parliamentary security officers powers similar to court security officers. It also gives the Electoral Commission the role of deciding when a petition is big enough to trigger a referendum. RNZ

* Transport: Justice Minister Paul Goldsmith & Transport Minister Simeon Brown announced that people who abuse or attack public transport workers and taxi drivers will face harsher sentences. Councils will also soon be able to apply for funding for safety screens & CCTV monitoring for public transport. 1News

* Health: Te Whatu-Ora Health New Zealand’s 2024-27 plan to grow the mental health and addiction workforce will fund more clinical psychology internships & working with the tertiary sector to redesign training. The plan also intends to strengthen the mental health system’s focus on prevention & early intervention.

* Savings & ageing: The Financial Markets Authority's annual report on KiwiSaver found that strong investment returns and member contributions led KiwiSaver funds to rise over $100 billion for the first time, to $111.8 billion by March 31. The amount withdrawn due to financial hardship was up 82.4% in the year to March 31, however, to $264.3 million. RNZ

Cartoon of the day

Not so funny

Timeline cleansing nature pic of the day

Morena

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

Kia ora. Long stories short, here’s my top six things to note in Aotearoa’s political economy around housing, climate and poverty on Tuesday, September 24:

* Australia’s competition watchdog has launched legal action against Woolworths and Coles, alleging they both systematically misled customers by promising ‘every day low prices’, but only on products just after price increases.

* In scoop of the day, Tova O’Brien reports for Stuff this morning that NZ First’s desire for new rail-enabled ferries is holding up a Coalition decision about replacing the Cook Strait ferries.

* In deep-dive of the day, RNZ’s Farah Hancock reveals how a little-watched fight over a quarry in the Waikato could see Fast-Track consenting wipe out environment protections for private land under QE II covenants.

* In solutions news, Dunedin City Council has launched a campaign to stop the downgrading of the new Dunedin hospital by a penny-pinching Government.

* In quote of the day, an activist pledges to block J Swap’s quarrying plans.

* In chart of the day, per-capita GDP has barely increased in the last four years.

(There is more detail, analysis and links to documents below the paywall fold and in the podcast above for paying subscribers. If we get over 100 likes we’ll open it up for public reading, listening and sharing.)

1. Did Woolworths do the same here?

ACCC alleges customers misled via ‘everyday low prices’ tactic

Adding to the allegations our supermarkets duopoly of Woolworths and Foodstuffs have inflated prices and profits at the expense of consumers, the Australian Competition and Consumer Commission (ACCC) yesterday alleged in Federal Court that both Woolworths Australia and its main competitor Coles Myer advertised ‘everyday low prices’ on hundreds of products at certain times, but only after big price hikes.

Here’s the core of the allegations from the ACCC:

The ACCC’s allegations relate to products sold by each of Woolworths and Coles at regular long-term prices which remained the same, excluding short-term specials, for at least six months and in many cases for at least a year.

The products were then subject to price rises of at least 15 per cent for brief periods, before being placed in Woolworths’ ‘Prices Dropped’ promotion and Coles’ ‘Down Down’ promotion, at prices lower than during the price spike but higher than, or the same as, the regular price that applied before the price spike.

“Following many years of marketing campaigns by Woolworths and Coles, Australian consumers have come to understand that the ‘Prices Dropped’ and ‘Down Down’ promotions relate to a sustained reduction in the regular prices of supermarket products. However, in the case of these products, we allege the new ‘Prices Dropped’ and ‘Down Down’ promotional prices were actually higher than, or the same as, the previous regular price,” ACCC Chair Gina Cass-Gottlieb said.

“We allege that each of Woolworths and Coles breached the Australian Consumer Law by making misleading claims about discounts, when the discounts were, in fact, illusory.”

“We also allege that in many cases both Woolworths and Coles had already planned to later place the products on a ‘Prices Dropped’ or ‘Down Down’ promotion before the price spike, and implemented the temporary price spike for the purpose of establishing a higher ‘was’ price,” Ms Cass-Gottlieb said.

The ACCC alleges the conduct involved 266 products for Woolworths at different times across 20 months, and 245 products for Coles at different times across 15 months. The representations were made on pricing tickets displayed to consumers in-store on supermarket shelves and online, usually with a ‘was’ price displayed showing what the price was during the short-term price spike and the date of that price. ACCC statement.

Woolworths faces fines of $5 million per breach and a total of up to a third of its turnover, which was A$67 billion in the last year.

Here’s an example, as detailed in The Conversation, of the misleading pricing allegations, along with the list of products subject to the allegations.

2. Scoop of the day

Politics & transport: Expensive impasse: National, ACT, NZ First disagree on replacing ferries. Stuff understands government parties disagree about replacing ferries, expensive impasse a major test for coalition. Stuff’s Tova O’Brien

3. Deep Dive of the day

RNZ’s Farah Hancock reported yesterday on a quarrying application that could eat away at a sacred mountain and wipe out the QE-II protections on private land. Here’s a sample, but I’d also recommend the video below:

Clouds cloak the top of the mountain, throwing a veil over a contentious quarry which has chewed away at the maunga since the 1950s.

"My biggest fear is the quarry is going to continue for another 300 years if they lift the QEII covenant," he says. "If the covenant was to be lifted, our maunga will disappear."

Standing in the way of the quarry eating away more of the South Waikato mountain is a QEII covenant which protects areas of privately owned land with significant environmental value. Forty-six hectares of native bush is protected by the covenant in perpetuity. But beneath the tree roots lies rock the quarrying company is desperate to mine.

The owner of the quarrying company, J Swap, has repeatedly tried to find ways around the covenant in order to expand the Matamata quarry. It's gone from asking nicely, to informing, to involvement in a proposal for a special law to be written to swap land, and to court several times. To date, each attempt has failed, with one court appeal still to be decided.

Its latest attempt is via the Fast-track Approvals bill, which has been touted as a "one-stop shop" to get infrastructure and development projects moving. The proposed legislation would sit over numerous other acts and would allow activities prohibited under the Resource Management Act or projects which have been rejected by courts to go ahead.

J Swap told MPs considering the bill at the select committee that land currently protected in perpetuity under a QEII covenant should be swept up in the changes the bill proposes.

Adopting this suggestion could have far-reaching implications. The QEII Act purposefully ensures the trust managing these protected parcels of land is an independent body, at arm's length from the government of the day. RNZ’s Farah Hancock

4. Solutions news

Health: Council launches campaign against hospital project cuts - with a song. The Dunedin City Council is organising a march to protest possible cuts to the city’s new hospital, and has released a campaign song to a familiar tune. Stuff

Honorable mentions:

Health 'We're reaching a crisis point': GPs calling for urgent overhaul of funding model RNZ

5. Quote of the day

Fighting for their maunga

“We will oppose any project that is approved for J Swap. Enough is enough." Local activist Te Ao o te Rangi Apaapa on J Swap’s plans to quarry maunga Te Weraiti via RNZ’s Farah Hancock in this deep-dive article and the video above.

6. Chart of the day

Who are we kidding?

The Kākā’s Journal of Record for Tuesday, September 24

* Work & politics: Public Service Minister Nicola Willis announced that agencies must "actively monitor" the impact and prevalence of public servants working from home under a revised guidance, which also specifies that working from home is "not an entitlement". The Public Service Association said the move is "out of step with modern workplaces", citing a study by 2Degrees suggesting that 51% of businesses believe hybrid working increases productivity. NZ Herald

* Economy: Stats NZ reported a $2.2 billion monthly trade deficit for August 2024. Meat and dairy products led a 0.1% fall in goods exports in August 2024 as compared to August 2023, whereas fruit and crude oil exports rose 53% and 89% respectively. NZ Herald

* Electricity: The Environmental Protection Authority announced resource consent approval for a Carterton solar farm to be constructed and operated by UK-based renewables developer Harmony Energy. The 240,000-panel farm covering roughly 156 hectares will supply electricity to the national grid.

* Disasters: The Natural Hazards Commission announced it's developing a model to forecast the damage caused by ashfall during and after volcanic eruptions. The model can use engineering reports, satellite images, and crowd-sourced data including social media after an eruption.

* Competition: The Australian Competition & Consumer Commission launched proceedings against Woolworths and Coles, alleging they illegally misled customers by raising prices on goods for brief periods before advertising them at a "discount" that was actually their old regular price or higher. The ACCC said it's also looking for Woolworths and Coles to receive community service orders to fund food charities. 1News

* Work & migration: Manufacturing, engineering, and logistics peak body Hanga-Aro-Rau released an action plan on Pasifika workforce development, intending to partner with communities, businesses, and education providers to deliver employment and training initiatives that "improve outcomes for Pacific peoples." A progress report on the initiative will be released next year.

Cartoon of the day

‘How do I sleep at night? Quite well, thanks.’

Timeline cleansing nature pic of the day

Chowing down

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

Kia ora. Long stories short, here’s my top six things to note in Aotearoa’s political economy around housing, climate and poverty on Monday, September 23:

* The Government was advised in the Budget process that sticking to Labour’s child poverty reduction targets would cost $3 billion, which is less than 1% of GDP and about the same as the cost of tax reductions for landlords, but Social Development Minister Louise Upston said the extra spending wasn’t ‘realistic’. NewstalkZB

* In scoop of the day, David Seymour secured a $30 million funding boost in the Budget for his new Regulation Ministry when others were forced to cut spending, Andrea Vance reports for The Post-$$$ this morning.

* In deep-dive of the day, analysis by the CTU of wage inflation since 2002 finds the Government’s sinking lid policy on public spending means cuts of $3.2 billion to $5.5 billion will have to be found next year. Craig Renney via X. Sunday Star Times-$$$

* In solutions news, a Philippino dairy farm manager being deported for health reasons after being on a temporary work visa for 10 years has finally been allowed to stay in the country.

* In quote of the day, a young electrician explains his move to Perth.

* In chart of the day, public sector pay hasn’t risen as a share of GDP in 20 years.

(There is more detail, analysis and links to documents below the paywall fold and in the podcast above for paying subscribers. If we get over 100 likes we’ll open it up for public reading, listening and sharing.)

1. Poverty solution cost of <1% GDP ‘not realistic’ to pay

DPMC advised sticking to Labour’s targets would cost $3b per year.

The Department of Prime Minister and Cabinet (DPMC) advised the new Government during the Budget 2024 process that it would cost around $3 billion a year for it to achieve the poverty reduction targets set by the previous Government.

The Labour Government set a long-term goal in 2018 of reducing the number of children experiencing “material hardship” from 13.3% down to 6% by mid 2028. However, there were 12.5% in material hardship by last year and DPMC advised it would not be possible to achieve the 9% target for this year without significant new spending.

“The necessary year-on-year progress is not on track and the estimated costs of now meeting these targets would require investment in the region of $3 billion per year,” DPMC officials advised, according to documents released under the Official Information Act and republished in the NewstalkZB article by Jason Walls below.

DPMC also presented two other “lower ambition targets” for 2028, which they said were more realistic and could be achievable without spending more money.

Upston rejected both options, which would have seen the current 6% material hardship target increase to a figure closer to 10%. Upston believes a more effective way to lift children out of poverty is by growing the economy and cutting taxes.

Upston was quoted as saying said the previous Government’s 9% goal was no longer realistically achievable.

“Our new targets are ambitious, but also reflect the reality of the economic and social climate the country is in today.” Louise Upston

Poverty: The $3b child poverty price tag: Why the minister's not writing that cheque NewsTalkZB’s Jason Walls

2. Scoop of the day

Politics: Red tape ministry got budget boost while other agencies made cuts David Seymour’s Ministry for Regulation secured $30 million as ministers wrangled over May’s Budget. But the ACT leader argues it is solving a $5b problem. The Post-$$$’s Andrea Vance

Honorable mentions

Poverty: Christchurch care and protection facility ‘chronically under-resourced’, investigation finds Stuff’s Sam Sherwood

Security: ‘We don’t feel safe here’: Call for urgent inquiry into foreign interference in NZ. Chinese New Zealanders document a long list of foreign interference activities by their homeland government and call on the PM to take action. Stuff’s Paula Penfold

Housing: Kāinga Ora block in upmarket Auckland suburb fenced off and left empty - why? The $6.8m complex in Ponsonby was only built in 2019, but its tenants have been vacated and the locals say the vacant lot is an eyesore. Stuff’s Annemarie Quill

Security: SovCits used fake ID to access PM's floor, police say RNZ

3. Deep Dive of the day

Amelia Wade wrote a deeply-reported feature in the Sunday Star Times that looked at the future cuts likely because of the Government’s sinking lid policy aimed at reducing the size of Government. See more in Chart of the day below too.

Fiscal policy deep-dive: Why the scale of government cuts to come could ‘dwarf’ those to date. Thousands have lost their jobs, and for many remaining civil servants there’s no pay rise or relief on the horizon. But things could still get much worse. Sunday Star Times-$$$’s Amelia Wade

Cost of living deep-dive: ‘It’s obscene’: Should ATM monopolies really charge $3 per transaction?Until recently, Naenae had two free ATMs. Now they’re gone, and locals are forced to pay through the nose if they want to access cash. The Sunday Star Times-$$$’s Virginia Fallon

Electricity deep-dive: Inside NZ’s stalling EV market - and how the country fares on infrastructure roll outA look at the electric vehicle market, and what needs to be done to turn around ailing EV sales and to ramp up charging stations. The Sunday Star Times-$$$’s Aimee Shaw

Migration: Govt decision to not advance modern slavery law criticised. A plan by the previous government making businesses report publicly on their actions to address exploitation risks was deemed not to be a priority. 1News

4. Solutions news

This case below of a dairy farm manager from the Philippines and his family who were on rolling temporary visas for 10 years and on the verge of being kicked out because of a kidney condition is a stunning example of what’s wrong with our temporary migration strategy. The news is he is allowed to stay, but only just, and only after some excellent journalism by Corazon Miller.

Migration Waikato farmer's bid to stay in NZ after 10 years accepted. Noland Kinney's residency application was earlier declined due to his chronic kidney condition. 1News Corazon Miller

Honorable mentions:

Housing: 'Huge difference': Twenty-eight 'affordable' rentals to be built NZ Herald

5. Quote of the day

A new Australian

“I didn’t feel that my job was secure enough to finish my apprenticeship, or that there would be many opportunities once I became a fully qualified electrician, which is why I’ve made the jump to Perth.

“I believe New Zealand is moving backwards. The cost of living has skyrocketed, and I don’t know how people are surviving. I hate to say it, but I’ll probably become a first-generation Australian.” Electrician Aaron Gerrandaro in the Stuff article below.

Migration: ‘I’ve made the jump’: Kiwis pushed across the ditch as unemployment rises. Aaron Gerrandaro was made redundant, and with a feeling of no hope for his industry, he moved to Perth. He’s not alone. Stuff’s Brianna McIlwraith

Migration Sorry New Zealand, I'm heading overseas because I need a jobIt's nothing personal Aotearoa, it's the economy. Natalia Sutherland via 1News

6. Chart of the day

The public sector has not ‘exploded’ or is eat the rest of the economy

“The 2024 Workforce Policy Statement is trying to tackle a problem that only exists because the government has chosen to give around $15bn in tax cuts mainly to landlords and higher income earners.

“If pay increases in line with average change since 2002, that means finding $5.5bn a year in cuts for four years. If we take the 5 years after the GFC, that means cuts of $3.5bn.” CTU Chief Economist Craig Renney via X

The Kākā’s Journal of Record for Monday, September 23

* Infrastructure & environment: RMA Reform Minister Chris Bishop announced that "property rights" will be the guiding principle of two new laws being developed to replace the Resource Management Act. Labour environment spokesperson Rachel Brooking said there needed to be a bipartisan approach to replacing the RMA and she had written to Chris Bishop to offer to work with him. BusinessDesk-$$$

* Transport: Energy Minister Simeon Brown and Climate Change Minister Simon Watts announced the launch of a $27.75 million one-time fund to offset the costs of low and zero-emissions heavy vehicles. Energy Efficiency & Conservation Authority modelling estimated up to 500 diesel vehicles would be replaced with zero or low-emissions vehicles by 2028 via the fund.

* Poverty: The Te Puna Aonui Expert Advisory Group for Children and Young People presented a report on improving family and sexual violence outcomes. The report suggested more people should know about Te Puna Aonui, which was formed to improve the whole-of-government approach to family violence and sexual violence. It released its national strategy in December 2021.

* Welfare: The Ministry of Social Development's latest weekly benefits update showed the number of main benefit recipients is up roughly 30,000 from September 2023. Deputy Labour Leader Carmel Sepuloni said this surpassed the peak forecast for January next year.

* Housing: Associate Minister of Housing Tama Potaka said the total number of households in emergency housing motels fell from 3,141 in December 2023 to 1365 at the end of August, and that 645 households have been moved so far from emergency into social housing via the Government's Priority One policy. He said those leaving emergency housing "don't have to tell us where they are moving to" and "may no longer need to access Government support."

* Health: Chief Children’s Commissioner Dr Claire Achmad highlighted research by charity Cure Kids showing that children in socioeconomically deprived areas have double the rate of hospitalisations for respiratory conditions. Hospitalisation of young people for mental health reasons almost doubled in the past 20 years. Psychological distress among young people rose quintupled to 25%.

Cartoon of the day

The A320 solution

Timeline cleansing nature pic of the day

‘I’m off’

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

Long story short, I interviewed transport and energy activist Patrick Reynolds this week about the bid to run Entrust by a new campaign group he’s part of called More for you; better for Auckland. There’s a lot more detail in this GreaterAuckland post and on ‘Better’s’ website.

They’re campaigning to win the trustee seats of Entrust off the conservative Citizens and Ratepayers’ (C&R) group that have run it for decades. There’s a postal election about to start. Last time the Entrust board was elected with less than 10% of the vote. The ‘Better’ team want to shake up Entrust to focus on making power more affordable, possibly through Auckland’s lines company Vector or others using increasingly cheap solar powers and batteries on the rooves of Auckland’s factories, warehouses and homes.

“C&R have run it for 30 years and they've not changed anything in that time, yet the world has changed substantially in those 30 years. And especially the repricing and the massive sophistication in solar and batteries, which has altered power supply and pricing all over the world.” Patrick Reynolds

We spoke about:

* Better’s ideas for a solar ‘giga plant’ in South Auckland;

* the long-running operation of Entrust without much public involvement;

* Entrust’s use of community funds to pay for undergrounding in the leafiest suburbs of Auckland;

* Entrust’s lack of adjustment to massive technology change; and,

* Auckland’s 2% solar panel penetration rate, vs Australia’s 35%, even though Auckland is on the same latitude as South Australia and Victoria.

“If you fly into Māngere over the Isthmus and you look down, you see all those warehouse and factory roofs just staring up, reflecting sunlight back up at you, It's quite easy to calculate. You could have a power station by working with those owners, the scale of Huntly or Manapouri.” Patrick Reynolds

This is the second in series of interviews for The Kākā Project 2026 for 2050 (TKP 26/50). I interviewed Simon Kingham about transport policy earlier this week. See link below.

Possible TKP 26/50 policies in the interview

Better proposes:

* Accelerating the rollout of rooftop solar and batteries in Auckland by financing new panels and batteries;

* Symmetrical tariffs that would mean solar generators are able to sell surplus power back into the grid at the same price as the consumer buys power from the grid;

* Rolling out solar panels and batteries to community facilities such as maraes and churches to improve resiliency and spread the benefits through the community; and,

* Supporting the building of a new ‘giga plant’ in South Auckland.

Your thoughts, challenges and alternatives?

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

Long stories short, here’s the top six news items of note in climate news for Aotearoa-NZ this week, and a discussion above between Bernard Hickey and The Kākā’s climate correspondent Cathrine Dyer:

* Central Europe is reeling from the devastating effects of Storm Boris, which has so far caused 21 deaths and left a wide swathe of destruction. Climate scientists say they aren’t surprised by the intensity of the storm, but troubled by the unpreparedness for such flooding events, despite all their warnings.

* There has been a somewhat tepid media response to Simon Watts’ testing of the waters last week on the Government’s preparedness to pay for international carbon offsets to meet Paris Agreement targets. His suggestion the Government does not intend to cough up for ‘politically unrealistic’ costs was a whisker away from admitting that the coalition government intends to renege.

* An article in the Atlantic this month blows open Microsoft’s claim that its massive investment in AI will lead to solutions for planetary crises. Instead, the company is making a far more substantive contribution to worsening the crisis by actively pursuing deals, valued at between US$35 billion to US$75 billion annually, with the fossil fuel industry to sell its AI for the purposes of optimising and automating drilling to maximise oil and gas production.

* New non-solutions to climate change continue to arrive thick and fast as old non-solutions collapse in what George Monbiot refers to as ‘‘perceptionware’.

* The Environment Ministry has opened up a public database of detailed climate projections by NIWA.

* Chart of the week from the IPCC’s Working Group I report shows projected changes in extremes are larger in frequency and intensity with every additional increment of global warming.

(See more detail and analysis below, and in the video and podcast above. Cathrine Dyer’s journalism on climate and the environment is available free to all paying and non-paying subscribers to The Kākā and the public. It is made possible by subscribers signing up to the paid tier to ensure this sort of public interest journalism is fully available in public to read, listen to and share. Cathrine wrote the wrap. Bernard edited it. Lynn copy-edited and illustrated it.)

1. Deadly consequences of failing to prepare

Flooding in central European countries caused a swathe of destruction and 21 deaths so far in Austria, the Czech Republic, Poland, Romania, Slovakia, Croatia and Hungary this week. Italy is now bracing for impact from Storm Boris, with warnings issued for heavy rain, strong winds and floods. Poland’s Prime Minister, Donald Tusk, has declared a month-long state of natural disaster.

Source: BBC

“Climate scientists say they are troubled by the damage but unsurprised by the intensity. “The catastrophic rainfall hitting central Europe is exactly what scientists expect with climate change,” said Joyce Kimutai, of Imperial College London’s Grantham Institute.

She said the death and damage across Africa and Europe highlighted “how poorly prepared the world is for such floods”. Guardian

Sonia Seneviratne, a climate scientist at ETH Zürich pointed to the extra heat absorbed by oceans that result in more water evaporating into the air.

“On average, the intensity of heavy precipitation events increases by 7% for each degree of global warming,” she said. “We now have 1.2C of global warming, which means that on average heavy precipitation events are 8% more intense.” Guardian

A recent study by Niwa climate scientists in Aotearoa attributed an additional 10% precipitation to human-caused climate change during Cyclone Gabrielle, which caused 11 deaths and $3.5b in damages.

The suggestion that leaders and policymakers are at fault for failing to respond to warnings from climate scientists is entirely valid. But they have been receiving mixed messages from experts with economic modelling regularly advising them that climate-related damages will be relatively limited and that action is less urgent than the consensus of climate scientists describe.

Nicholas Stern, Jospeh Stiglitz and Charlotte Taylor criticised Integrated Assessment Models (IAMs) for their failure to deal adequately with risk and uncertainty in a 2022 paper, highlighting the massive divide between the conclusions of climate scientists and the policy recommendations that emerge from IAMs.  These are a primary tool for formulating policy advice to governments in regular reports to the United Nations (UN) by the Intergovernmental Panel on Climate Change (IPCC). Stern et al. (2022) conclude that IAMs offered limited value in answering two critical questions:

“They fail to provide much in the way of useful guidance, either for the intensity of action, or for the policies that deliver the desired outcomes.

In spite of these basic problems of methodology and sensitivity, the IAMs have had enormous influence, especially in the United States, and their shortcomings have had serious policy consequences.”

The repeated failure to recommend sufficiently stringent or urgent policy action will resonate with those readers who took note of a report last year from UK actuaries. The report looked at the use of climate scenario analyses by financial institutions and regulators, finding that they systematically underestimate climate risk and the economic damages that will ensue. These are the same climate scenario analyses that central banks, including our RBNZ, use to test countries’ financial stability.

Not only do the models systematically underestimate climate change uncertainty and risk, they have largely ignored or assumed away potentially catastrophic risks of the type that, according to Stern et al., most of the rest of the world wants to avoid.

2. Watts tests the water and gets a tepid response  

A report carried by Carbon News last week, in which Simon Watts described the planned purchase of international carbon offsets to meet the country’s Paris Agreement targets as ‘politically unrealistic’, has so far failed to break into mainstream media coverage, apart from a paywalled article in BusinessDesk. It was, however, picked up by the UK-based Carbon Pulse which, like Aotearoa’s Carbon News, is widely read by carbon market experts.

Watts’ words have resonated with market experts alert to the risks intrinsic to New Zealand reneging on its international commitments under the Paris Agreement, particularly in relation to the country’s trade relationships. While Watts claimed that the government was ”absolutely categorically focused” on minimising the gap, the recently released Emissions Reduction Plan does not reflect that kind of effort. Instead, domestic policy enacted since the coalition government was elected has achieved the diametrically opposing effect of increasing domestic gross emissions.

It is incumbent on the Minister to clarify the discrepancy between what the government says it is doing and what is actually happening. The Minister was warned in a briefing by environmental officials, as recounted by RNZ back in February.

“Minister Simon Watts was told Aotearoa's international climate commitment for 2030 required significantly greater emissions cuts than were required by domestic legislation.

He was told the government needed to decide whether to scale up domestic action, or move ahead with international negotiations to buy carbon credits.

The new government has previously been wary of committing to buying international credits, but meeting the entire target with carbon cuts here would be big task and major change of direction.”

It is also worth noting that the quantity of international carbon offsets required in order to meet Paris Agreement targets was halved in 2021 under the previous government, indicating that such emissions reductions have been achieved before, in relatively short timeframes, through increased domestic action. Outlined here by carbon market expert, Dr Christina Hood:

3. The dark side of Microsoft’s AI services

An article in the Atlantic this month blows open Microsoft’s claims that its work on AI will lead to solutions for planetary crises like climate change and biodiversity loss. It turns out that while making those claims, Microsoft was actively pursuing deals, valued between USD$35 billion to $75 billion annually, with the fossil fuel industry to sell its AI for the purposes of optimising and automating drilling to maximise oil and gas production. According to journalist Karen Hao (who supplied a gift link to the article on Linkedin):

“Microsoft isn’t a company that exists to fight climate change, and it doesn’t have to assume responsibility for saving our planet. Yet the company is trying to convince the public that by investing in a technology that is also being used to enrich fossil-fuel companies, society will be better equipped to resolve the environmental crisis. Some of the company’s own employees described this idea to me as ridiculous. To these workers, Microsoft’s energy contracts demonstrate only the unsavory [sic] reality of how the company’s AI investments are actually used.”

Several ex-employees revealed their years-long internal battle to hold Microsoft accountable and to stop it from from using its AI to help fossil-fuel companies in a story that was jointly published by Grist and Drilled earlier this year. In it, they said:

“It’s true that Microsoft is taking numerous steps to address the sustainability of its own operations. But for years, the company has also furnished fossil fuel giants with cloud computing services and specialized software tools powered by machine learning and AI in order to streamline and automate their operations. These digital technologies help companies discover oil faster, squeeze more from existing wells, and boost productivity across their operations in order to stay cost competitive in an age of cheap renewable energy. The digital services market for oil and gas is “immense,” as a 2020 report by oil industry analysts at Barclaysput it, with the potential to unlock $150 billion in yearly savings for producers. 

Over the past seven years, Microsoft has announced dozens of new deals with oil and gas producers and oil field services companies, many explicitly aimed at unlocking new reserves, increasing production, and driving up oil industry profits.”

4. A non-stop stream of non-solutions

George Monbiot calls the non-stop stream of non-solutions ‘perceptionware’, whose main purpose is to create the impression of action, even if that action will never scale up to a solution.

The latest in a long line of such non-solutions is an Italian scheme to dig up long-sequestered carbon dioxide in the form of limestone to make quicklime (a massively carbon polluting process), to then make bicarbonates to pour into the ocean, supposedly in order to ‘enhance’ oceanic carbon uptake. That and other cool ideas are described by Michael Barnard in Cleantechnica.

Meantime, one of the world’s largest proposed direct air capture (DAC) projects, known as Project Bison has collapsed. The project, proposed by a technology start-up backed by the Biden administration, had planned to remove five million tonnes of CO2 annually by 2030. The company, CarbonCapture, claims that it was unable to secure enough clean electricity to run the project. Ironically, the competition for electricity is coming primarily from tech companies who are investing heavily in schemes like CarbonCapture’s in an effort to offset their own increasing emissions.

5. Database of climate projections opens to the public

The Environment Ministry has opened up detailed climate projections by NIWA to the public. Anybody can visit the public database to view detailed information on drought, rainfall, wind and temperature projections under different greenhouse gas scenarios,

The move was welcomed by the Sustainable Business Council, which said getting access to robust climate data could be a challenge.

Many large companies now have to publish reports to investors on how different climate scenarios might affect their business.” RNZ

6. Chart of the Week:

The following chart from the IPCCs AR6 WGI report for policymakers (p.18) shows how every additional fraction of a degree of warming increases the frequency and intensity of extreme heat, precipitation, and drought.

Ka kite ano

Bernard and Cathrine

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