The Kākā by Bernard Hickey

Mōrena. Long stories short; here’s my top six things to note in Aotearoa’s political economy around housing, climate and poverty on Tuesday, August 27:

* Chris Hipkins says Labour is revisiting its decades-long and bipartisan commitment to Government spending and debt being less than 30% of GDP.

* Economists overseas are also challenging the austerity thinking of the last 40 years designed to reduce the size of Government.

* In solutions news, electricity gentailers face competition from lines companies.

* In the quote of the day, Antonio Guterres tells Simeon Brown that restarting oil and gas drilling was ‘signing away our future.’

* Charts of the day maps out the effects of intergenerational wealth transfer.

* Climate graphic of the day projects from a Trump-led America run along Project 2025 lines might mean for climate emissions.

(There is more detail below the paywall fold and in the podcast above for paying subscribers.)

The Top Six on Tuesday, August 27

1. Another chink of light in the fiscal rules debate

Hipkins suggests releasing 30/30 shackles on Govt’s share of GDP

Regular readers of The Kākā will know I think the effectively bi-partisan approach by National and Labour over the last 30 years to run Budget surpluses and to keep both the size of Government spending each year and public debt below 30% of GDP has been disastrous and is unsustainable.

It has driven an intergenerational transfer of wealth from the young to the old through the tax system and housing market, and created a $100 billion infrastructure deficit, thanks in part to unfunded, unplanned and unacknowledged population growth of 1.5% to 2% per annum through migration of mostly temporary workers.

There has been some tweaking at the edges from both in either direction, but essentially that has been their joint approach since 1990. National aimed to run surpluses and get gross debt under 20% of GDP through the 2010s. Labour committed to the same in 2017, although then-Labour Finance Minister Grant Robertson tweaked that to keeping net debt under 30% of GDP, although that included the NZ Superannuation Fund on the assets side of the net debt calculation with about 15% of GDP. National have just committed to getting net core crown debt under 40% of GDP and within a range of 20-40% of GDP, along with getting core Crown expenses under 30% of GDP. Neither have changed much from that 20-30% range for debt and 30% for spending.

I have argued both of those limits are simply not sustainable already for our current social contract with Government around NZ Super and publicly funded health and education, let alone in the longer run with an ageing population. That’s because of structurally faster health and education spending than GDP growth all over the world, and because of past underfunding of investment and maintenance. Other developed countries with proper public services have expenses to GDP shares closer to 40-45% of GDP and debt to GDP of closer to 80% of GDP. We’re currently at 33% for expenses and 45% for net core crown debt, although bizarrely, the current definition doesn’t include the NZ Super Fund so the apples-with-apples comparison with Labour’s 30% cap is around 35%. Basically, they’re the same at 30%.

Up until now both National and Labour have had essentially the same rules and approach, which they and Treasury would argue is driven by the ‘principles of responsible fiscal management’ in the Public Finance Act (1989), which Treasury has interpreted as meaning net debt must stay between 20-40% and budgets must be balanced over time.

Here’s the current Government’s strategy, as detailed in Budget 2024’s Fiscal Strategy section.

Here’s Robertson’s fiscal strategy in Labour’s pre-election pitch last year, summarised as:

“to achieve an OBEGAL surplus across the forecast period and to keep net debt below 30 percent of GDP.”

Robertson also argued last year Labour was projecting the size of Government annually would fall below 30%, implying Labour agreed with National’s approach to the size of Government.

Is there real change in the wind?

It’s very early days, but Labour is turning its mind to whether that 30/30 rule works. Leader Chris Hipkins gave a speech to LGNZ’s conference on Friday that headlined his promise not to force councils to do things without Government funding, but it also included an intriguing suggestion Labour was revisiting the fiscal rules.

Here’s excerpts from his speech (bolding mine):

“We need an honest conversation between central and local government about how we are going to pay to fix up our infrastructure, and central government walking away from that conversation is an abandonment of their responsibilities.

“An honest conversation would force all of us to face up to some inconvenient truths. For four or five decades now we’ve run down our assets and under-invested in growth. Blaming today’s local government leaders for that conveniently ignores the role central government has played in setting the rules of the game.

“Big investments take time to show results. I stand by the investments made and the ones we were yet to make in the future of our country. I wasn’t interested in prioritising investments that I could be guaranteed to cut the ribbon on. We need to think longer term when it comes to investing in our future as a country.” Chris Hipkins speech to LGNZ conference

Hipkins said central Government couldn’t keep loading ever more onto councils.

“We need to make some big calls, and these big calls need to be backed by proper investment. That simply won’t happen if we continue to constrain Government spending to such a narrow percentage of GDP.

“We must have the realistic and adult conversation about borrowing. Borrowing for day-to-day consumption isn’t something we should do, if avoidable. Particularly not for tax cuts. An exception perhaps being a global and deadly pandemic.

“But borrowing to fund investment in infrastructure and assets for the future is something a government shouldn’t be so afraid to do.” Chris Hipkins speech to LGNZ conference

Hipkins said Labour had been working on a sustainable funding model for councils and both parties should work towards that.

2. ‘What if we discarded fiscal rules to invest in health?

That’s the question economist Mariana Mazzucato posed yesterday in this video:

“What if” we abandoned false fiscal constraints, and actually invested in what matters? Listen to the video I did for the WHO report on the Economics of Health for All.” Mariana Mazzucato.

3. Solutions news: Finally, lines companies can compete

One of the things announced yesterday by Energy Minister Simeon Brown and PM Christopher Luxon to improve the electricity market was to allow lines companies to compete properly with the gentailers. The details haven’t been decided, but this would allow businesses that already have capital and some connection to customers to give the gentailers a run for their money.

Currently lines companies can’t own generation of more than 50 MW on their own networks and can’t own more than 250 MW connected to Transpower’s network.

4. Quotes of the day

‘Hey, Simeon. This guy Antonio from the UN wants to have a word…’

“When governments sign new oil and gas licenses, they are signing away our future.” UN Secretary General Antonio Guterres in a speech yesterday to the Pacific Islands Forum meeting in Tonga, where Foreign Minister Winston Peters was in attendance.

PM Christopher Luxon arrives at the Forum today after last night announcing with Energy Minister Simeon Brown the early resumption of issuing permits in a post-Cabinet news conference.

Asked by journalists about New Zealand’s decision to resume issuing permits for offshore exploration and if he had spoken to Luxon about it when he visited New Zealand last week, Guterres said: “The only thing I can tell you is that the oil and gas that will be discovered from now, I am absolutely sure it will never be used.” Via NZ Herald’s Adam Pearse

5. Charts of the day

What intergenerational wealth transfer from the young to old looks like

6. Climate graphic/chart/pic of the day

‘Drill, baby, drill’

The best of the rest

Top Six Scoops and Deep Dives for Tuesday, August 27

* What would happen if Methanex left NZ? Eloise Gibson

* Goldsmith told fishing lobbyists Foreshore and Seabed law change would reduce claimable amount from 100% to 5%. Te Aniwa Hurihanganui

* No increase in funding for RSE inspectors in 17 years as scheme quadrupled to 20,000 and complaints about abuse surged Gill Bonnett

* Te Whatu Ora diverts digital upgrade funding to payroll system Phil Pennington

* Lives set to be translated into long-term assets and liabilities Danyl McLauchlan

* Hundreds of homes in development not connected to sewerage RNZ Checkpoint

The Kākā’s journal of record for Tuesday, August 27

* Climate: Minister for Energy Shane Jones announced the Labour-led Government’s ban on new offshore oil and gas exploration permits would be reversed by the end of 2024. Cabinet has also agreed to remove barriers to importing LNG, to potentially increase access to contingent hydro storage, and to enable electricity lines businesses to own more generation assets.

* Climate: RMA Reform Minister Chris Bishop and Energy Minister Simeon Brown announced a series of reforms meant to ease the consenting process for renewable energy projects, including increasing the default consent duration for renewable energy projects to 35 years. A bill would also be introduced to enable an offshore renewable energy regime.

* Work & Income: The Court of Appeal ruled in favour of Uber drivers who have been arguing they were misclassified as contractors. The CTU and Labour called on Workplace Relations Minister Brooke van Velden to abandon her plans for contractor reform designed to overrule the court the rulings. RNZ, NZ Herald

* Economy: The Auckland Business Chamber's latest business confidence survey found 66% of NZ businesses reported negative confidence and 56% reported under-performance against expectations.

* Economy: Inland Revenue announced a new tax Bill’s introduction to the House. The Bill’s proposals include implementing the OECD's crypto-asset reporting framework, setting out tax relief measures for "future emergency events", and allowing people under 16 to enrol in KiwiSaver.

* Renewable Energy: The Environmental Protection Authority (EPA) announced an independent panel using Covid fast-track legislation had consented an additional nine three-bladed wind turbines up to 162m tall to be added to Te Rere Hau Wind Farm near Palmerston North. NZ Windfarms and Meridian agreed last year on a 50-50 joint venture costing up to $600 million to add 39 new turbines generating up to 170 MW. The other 30 turbines are already consented.

Finally, some fun things

Cartoon of the day

Timeline-cleansing nature (action) pic

‘Rhubarb, rhubarb, rhubarb…’

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 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:

* Scientists are not entirely sure why sea surface temperatures have been accelerating so quickly over the past year, at the same time as air surface temperatures.

* A study on the effects of storms in the Southern Ocean has found they are triggering an outgassing of carbon dioxide, which may affect their ability to absorb carbon in the future. Nearly half of all current ocean carbon uptake is believed to occur in the Southern Ocean.

* Another study in the journal Nature found that marine heatwaves caused by climate change are triggering low-oxygen extreme events. “[O]ur findings suggest the ocean is losing its breath under the influence of heatwaves, potentially experiencing more severe damage than previously anticipated.”

* Finally, another study has found that just 1.5°C of subsurface ocean warming triggered repeated Antarctic Ice Sheet (AIS) collapses during the Pliocene, a period considered a good analogue for current and future sea level. These AIS collapses contributed up to 25m of sea level change.

* Understanding why oceans are ‘weirdly hot’ at the moment, the subject of this analysis in NPR, has enormous consequences for what we might expect in the future. A possible link to shipping pollution is gaining credence.

* Energy think tank Ember’s 2024 Global Electricity Review shows the meteoric rise of solar capacity, but also highlights the fact that related efficiency gains would be much higher if they were being built in sunnier countries. This suggests that OECD countries should invest more in climate financing for solar installations in developing countries, while focusing on demand-side reductions in fossil demand at home (although that’s not exactly how Ember put it).  

(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. Scientists stumped over sea surface temps

A series of big papers on ocean heating has come out in the past few weeks, likely in response to the past year’s record mean ocean surface temperatures.

The oceans play a significant role in stabilising earth’s climate, absorbing heat from global warming, but also feeding that additional energy into stronger storms, that intensify more quickly. Any change in the capacity of oceans to absorb heat has big implications for the rate of global warming. According to a blog on pbsnc.org,

It’s likely the warmer Earth and air temperatures are contributing to the warmer ocean temperatures, but scientists don’t know precisely why sea surface temperatures have climbed so high so fast. 

While air temperatures are warmer, water has a greater capacity to absorb and store heat. In fact, the ocean has absorbed about 90% of the heat created by global warming. 

“It takes a lot of heat to raise water’s temperature, and I do fear there may be something else going on that is causing a long-term change in sea surface temperatures we hadn’t predicted,” said John Abraham, a professor at the University of St. Thomas, who studies ocean temperatures. 

Far from being immune to this, sea temperatures in some areas around Aotearoa New Zealand have been outstripping global average temperatures three-fold, as we reported last month. Data from Stats NZ show coastal water temperatures increasing 0.19-0.34°C per decade. This would have contributed to the strength of Cyclone Gabrielle last year.

2. Storms tipping the carbon scales

A study on the effects of storms in the Southern Ocean, of which there are many, has found that they trigger a release of carbon dioxide.

In addition to absorbing 90% of earth’s heat, oceans also take up 25% of the excess carbon dioxide released into the atmosphere by human activity and nearly half of this carbon uptake is believed to occur over the Southern Ocean. To date, the exchange of carbon between the atmosphere and ocean, particularly in this region, has not been well understood.

The finding that “storms tip the scales in the air-sea exchange of carbon in the Southern Ocean” in a process known as outgassing, is critical to modelling the ocean’s ability to absorb carbon and to predict the effects of climate warming in the future.

3. The ocean is losing its breath

Another study, published in the journal Nature, found that marine heatwaves caused by climate change can trigger low-oxygen extreme events.

Oxygen levels in seawater are a crucial element in sustaining biological survival. It is known that warming oceans are losing oxygen, primarily due to human activity. 

According to the study authors “[O]ur findings suggest the ocean is losing its breath under the influence of heatwaves, potentially experiencing more severe damage than previously anticipated.”

Source: The ocean losing its breath under the heatwaves

4. Insights from the far distant past

Another big study this month has found that just 1.5°C of subsurface ocean warming triggered periodic marine ice sheet collapses in Antarctica during the Pliocene era, contributing up to 25m of glacial-interglacial sea level change.

On the basis of CO2 concentrations and global temperatures, the Pliocene is believed to provide a good comparison for current and future sea level and climate and is thus important for modelling the impact of Antactic Ice Sheet (AIS) dynamics on sea level projections. That puts the speed of ocean warming we are currently seeing into perspective.

5. The role of shipping in heating the sea

Understanding why oceans are ‘weirdly hot’ at the moment, the subject of this analysis in NPR, has enormous consequences for what we might expect in the future.

One leading explanation is that the reduction in pollution from ships is playing a role.

This is a core element of James Hansen’s claim, outlined in the paper ‘Global warming in the pipeline’, which suggests that climate scientists have been underestimating climate sensitivity and that an acceleration in heating is occurring.

Another recent study supports his contention that reductions in ship sulphur emissions since new regulations came into force in 2020 have accelerated global warming. Hansen famously warned that “under the present geopolitical approach to GHG emissions, global warming will exceed 1.5°C in the 2020s and 2°C before 2050”. The evidence is continuing to stack up in favour of his view, with ocean heating providing a critical element.

Some climate scientists, according to an article in Bloomberg, are now expecting temperature spikes that set new records to occur more frequently in future, with bigger jumps from one high to the next. Erich Fischer, a climate scientist at ETH Zurich was lead author of a paper in 2021 that predicted “record-shattering extremes, nearly impossible in the absence of warming” that proved almost immediately prophetic.

As new extremes arrive, Fischer predicts previously rare high-end temperatures will become more commonplace. A 1-in-1,000-year heat wave any time between 1951 and 2019 will have shifted to a 1-in-100-year event by around 2020, according to his study. That not-so-unusual heat wave will move again to a 1-in-40-year event in the mid-2020s.

6. The Ember report: air con boom and solar inefficiencies

Demand for air conditioners is contributing to an anticipated surge in energy demand in 2024 according to energy think tank Ember’s annual Global Electricity Review.

Demand for key electrification technologies that replace fossil fuels with electrification, in particular EVs and heat pumps, have contributed 27% of total demand growth in 2023. These contribute to a net decrease in energy demand due to their greater efficiency and also to a decrease in CO2.

The 72 TWh of additional demand from EVs in 2023 was enough to displace over 260,000 barrels of oil equivalent per day, had it been burned in ICE vehicles. This is comparable to Australia’s total gasoline consumption in 2021. The 100 TWh of additional demand coming from the new heat pump sales in 2023 would have required around 300 TWh of gas, if burned in a conventional boiler to produce the same amount of heat. This is similar to the total gas consumption of France. As the world continues to electrify, the efficiency gains will mean that less overall energy is needed, even as demand for electricity increases.

If that was all that was happening, we could bank it alongside a reduction in fossil fuel use. However, 28% of electricity demand growth was from air conditioning and data centres. That net new energy demand has contributed to a result in which fossil fuel use continued to grow last year.

Finally, the following chart from Ember shows the massive off-take in solar energy that occurred in 2023, more than half of which was driven by China. Capacity additions were 76% higher in 2023 than in 2022, which was itself a record year. Interestingly, solar generation was below expectations because much of the new installed capacity has occurred in countries with less sunlight.

Those countries with the most to gain from solar capacity are lagging. For some, the reason is ideological and policy-driven, in others the lack of climate financing, technology transfer and other de-risking mechanisms are curtailing potential for development. Africa, for instance, has one-fifth of the global population and has huge solar potential but is attracting just 3% of global energy investment, according to Ember’s review. Meantime China is producing an oversupply of modules that is likely to continue into 2024,

 “China’s need to find new export markets is a tremendous opportunity for countries around the world to take advantage of how cost competitive and available solar is compared to other generation sources.” (p.36)

That combination of factors means that the biggest potential efficiency gain from installing solar capacity would be if OECD countries contributed more climate financing toward installations in the developing world. This would also have the benefit of contributing to sustainable development and reducing global inequity, both of which are critical to achieving climate targets. A focus on demand-side policies to reduce energy demand in the OECD would enable a faster, more efficient and equitable transition.

Some headwinds include grid congestion, which is creating major bottlenecks, with a lack of suitable connection points for solar (requiring investment in new transmission capacity), and curtailment is expected to increase in China and California due to insufficient storage. The latter might put at risk the below projection from NGO Land Art Generator, which creates a very visual picture of the potential shape of future electricity generation in California.

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

The podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night features co-hosts Bernard Hickey and Peter Bale talking about the week’s news with:

* The Kākā’s climate correspondent Cathrine Dyer on the latest science of changing sea temperatures and how most of the solar generation installed is too far north;

* Robert Patman on the latest from Ukraine, Gaza and AUKUS II;

* Dr Jamie Shea from Chatham House on Ukraine’s surprise incursions into Russia, plus AUKUS II; and,

* Major Electricity Users Group (MEUG) director John Harbord on the electricity crisis.

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.

(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

Mōrena. Long stories short; here’s my top six things to note in Aotearoa’s political economy around housing, climate and poverty on Friday, August 23:

* Medical specialists have called for an independent inquiry into health funding, warning $1.4 billion of cuts by Health NZ commissioner Lester Levy will cut into the bone of a health service underfunded for decades.

* New research shows elderly poverty now rising in New Zealand at the fastest rate in the world as two decades of falling home ownership rates drive up housing costs much higher than NZ Superannuation was designed for.

* In solutions news, Habitat for Humanity unveils 22 new warm, dry homes in Whangārei.

* In quote of the day, Tama Potaka says he doesn’t know where 200 tamariki have gone after they were removed from emergency accomodation in motels.

* In chart of the day, inflation is falling globally in line with oil prices.

* In our climate graphic of the day, China’s coal-fired electricity generation has fallen for three months running for the first time since Covid as its massive rollout of solar, wind and batteries begins to take up the load.

The Top Six for Friday, August 23

1. ‘The $1.4 billion of health cuts will cut into the bone’

Specialists call for health funding review in Medical Journal article

The Association of Salaried Medical Specialists (ASMS) called in a NZ Medical Journal article published this morning for a full inquiry into health funding levels. They argued real funding per capita continued to fall below the OECD average and $1.4 billion of spending cuts by new Te Whatu Ora-Health NZ boss Lester Levy would be cutting into the bone of health services.

“There is an urgent need to open an independent inquiry into how we fund our health system. This includes accounting for the true cost of health services—and the economic gains New Zealand would realise if health was viewed as an investment in our people.” ASMS’ Virginia Mills, Lyndon Keene, James Roberts and Harriet Wild in a paper titled: The cost of everything and the value of nothing: New Zealand’s under-investment in health

2. A wave of renting pensioners is arriving

After years of warnings, falling homeownership is now hitting over 65s

For years, economists and advocates for pensioners have warned that the slump in home-ownership rates among the young would inevitably cascade into a massive problem with elderly poverty because NZ Superannuation is designed for couples who own their own homes. It is set at a level that is financially comfortable for those living in a debt-free home, but is not enough for renters. Until recently, those proportions of over 65s renting was significantly lower than for working age people.

But if you say this for long enough, then eventually the young people age into people over the age of 65. It is one of those profound moments where the unsustainability of housing unaffordability comes home to roost.

BERL Economist Urvashi Yadav has published a note showing the emergence now of this bow wave of elderly poverty. It’s titled: Home ownership and unequal ageing.

“Early signs of the impending crisis are already visible. The housing register, which reflects the excess demand for public housing, shows the extent to which this need is growing within the older population. The number of older applicants increased by 215 percent between 2015 and 2024, the fastest increase amongst all age groups. Exacerbating this issue is the mismatch between the type of homes the older population needs, i.e., smaller houses, and what is available. Just 11 percent of the public housing stock and 13.6 percent of the private housing stock are made up of one-bedroom homes, while 50 percent of the people on the housing register require a one-bedroom home.” BERL Economist Urvashi Yadav

“NZ Super is an important lifeline for a large number of older people. 60 percent of seniors either rely solely on NZ Super or have only a little more. But the universal, flat-rate design fails to account for distributional impacts, and more older people are slipping into poverty. In 2020, 16.8 percent of people over 65 were living in poverty. For women, this was even higher at 20.1 percent. New Zealand had the largest increase in income poverty for older people in the OECD between 2000 and 2020. The rate fell by 0.8 percent in all of the OECD on average.  

“Given that the primary objective of the NZ Super is to “protect from poverty in old age”, the current design is rapidly failing to meet this intended goal. Te Ara Ahunga Ora — Retirement Commission assessed that New Zealand currently compares well to other OECD countries on elderly poverty but points out living in owner-occupied homes is a key factor, and there is a “risk of increased elderly poverty if home ownership amongst pensioners decreases.” This is a “risk” that is materialising at an unprecedented pace.” BERL Economist Urvashi Yadav

3. Solutions: Building warm, dry homes

Habitat for Humanity opens 22-unit project in Whangarei

4. Quote of the day

Cognitive dissonance

“No, I’m not worried that some are now homeless. But I am worried about the emergency crisis that is housing across the country. They are under no obligation to tell us. And to be fair, I don't think we want the government knowing where every single person lives every single night, every single day,” Social Housing Minister Tama Potaka telling Stuff’s Glenn McConnell that he did not know where 20% of the 1,000 tamariki moved out of motels this year were now living. About half had moved into Kāinga Ora homes and 30% were now in private rentals.

5. Chart of the day

Inflation is down all over the world, after the oil price fell

6. Climate graphic/chart/pic of the day

Some good news

The best of the rest

Top Six Scoops and Deep Dives for August 23

* Politics Scoop: Shane Jones calls judge ‘communist’ in meeting with seafood lobby over Māori rights. Stuff’s Tova O’Brien

* Climate Deep Dive Pine forestry good for land and wallets RNZ’s Eloise Gibson

* Urbanism Deep Dive: Who killed the Johnsonville mall? The Spinoff’s Joel MacManus

* Op-Ed by immigration advisor Ankur Sabharwal Immigration New Zealand cracks down on visitor visa applicants. Stuff

* Infrastructure Scoop Limited engagement with iwi on Three Waters replacement NZ Herald-$$$’s Azaria Howell

* Electricity Interview: Shane Jones threatens to end Electricity Authority if it doesn't 'man up' RNZ’s Alexa Cook

The Kākā’s Journal of Record for August 23

* Infrastructure: Local Government Minister Simeon Brown announced the launch of a 'regional deals' framework for long-term infrastructure projects based on local government meeting certain negotiated outcomes. RNZ, The Post-$$$

* Housing: RMA Reform Minister Chris Bishop announced a second RMA Amendment Bill enabling "four packages of reforms," while legislation to eventually replace the RMA was being developed. The Bill includes reforms meant to enable cities to "expand outwards at the urban fringe," new rules requiring councils to enable mixed-use development, and reforms to enable the Government's Electrify NZ and Going For Housing Growth policies.

* Electricity: Transpower announced hydroelectric generators would be able to access contingent storage if necessary to alleviate electricity supply risks from historically low lake levels. RNZ, NZ Herald

* Child poverty: Minister for Social Development Louise Upston announced that the five-member Children and Young People's Commission would be replaced with a single Commissioner.

* Climate: Stats NZ reported greenhouse gas emissions fell in most NZ regions in 2023, with Waikato emissions down due to less coal and natural gas use to generate electricity, and from the end of oil refining in Northland.

* Poverty: The Public Health Communication Centre reported perinatal mortality hasn't fallen for 15 years, with Māori, Pasifika, Indian, and socioeconomically-deprived babies being more likely to die during or shortly after birth.

Finally, some fun things

‘Dude who took a limo ride across the street wants councils to stop wasting money’

Even ‘Dead Boat Bay’ looks good on a day like this

Mā te wa

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

Mōrena. Long stories short; here’s my top six things to note in Aotearoa’s political economy around housing, climate and poverty on Thursday, August 22:

* PM Christopher Luxon appeared to torpedo his own ‘Government of Infrastructure’’s agenda for ‘Going for Housing Growth’ with an angry rant of a speech telling mayors and councillors they would have to build half the infrastructure to deal with rapid population growth without any more Government cash.

* Those councillors and mayors were shocked at the tone of the speech, which had been flagged as a plea for partnership and a promotion of ‘city deals’ where Government and councils work together.

* In solutions news, electricity economists have called for market reform and a subsidised mass rollout of cheap rooftop solar and batteries to add generation supply and storage to a system under intense stress from a lack of past investment and a dry winter, which climate change will make more regular.

* In quote of the day, Wellington grandee John Allen hit back at the PM at the conference, saying: “You don't line by line cut your way to a better country.”

* In chart of the day, Shamubeel Eaqub finds a surprising surge in the number of adult children living at home with their parents, partly because of worsening housing affordability.

* In our climate graphic of the day, Our World in Data points out global wildfire damage exploded to a record-high in August, with Africa the main source, including 6% of Angola’s land area and 2.5% of the Democratic Republic of Congo’s land area burning in just one week.

The Top Six for Thursday, August 22

1. PM lectures councils on white elephants & distractions

Luxon offers ‘city deals’ with one hand, slaps councils with other hand

PM Christopher Luxon delivered an angry lecture of a speech to the nation’s mayors and councillors at the annual Local Government NZ conference in Wellington yesterday, choosing to attack councils for their ‘white elephants and non-delivery’ and telling them the Government would not help them build infrastructure for fast-growing cities with ‘cold, hard cash’.

It was a strange decision, given councils will be paying for, planning and building at least half of the infrastructure the Government needs for its ‘Going for Housing Growth’ strategy and to make its promise of being the ‘Government for Infrastructure’ a reality.

Here’s a few excerpts from Luxon’s speech (bolding mine):

“We’re doing our part. And I believe it’s time for local government to do theirs.

“Ratepayers expect local government to do the basics and to do the basics brilliantly. Pick up the rubbish. Fix the pipes. Fill in potholes. And more generally, maintain local assets quickly, carefully, and cost effectively. 

“But nothing in life is free, and ratepayers expect to pay for it in exchange. But what they don’t expect to pay for is the laundry-list of distractions and experiments that are plaguing council balance sheets across the country.” PM Christopher Luxon in a speech to LGNZ’s annual conference.

He then chose to attack Wellington City Council for its spending on the new Takina conference centre, where he was speaking.

“The building we’re in today is a classic example. With pipes bursting and other infrastructure under pressure, Wellington City Council decided to spend $180 million of ratepayers’ money on a convention centre, which, according to public reporting, is now losing money.

“It looks very nice, and it’s very nice that politicians like us have another expensive room to deliver speeches in, but can anyone seriously say it was the right financial decision or the highest priority for Wellington given all of its challenges?

“Ratepayers are sick of the white elephants and non-delivery. So, my challenge to all of you is to rein in the fantasies and to get back to delivering the basics brilliantly.” Christopher Luxon

Referring to calls from councils for capital and funding help for infrastructure to deal with population growth enabled by the Government’s migration policies, Luxon lashed back:

“I have to be honest with you – the previous government might have taken that approach, but the party is over. There is no magic money tree in Wellington, thanks to the previous government's economic mismanagement and vandalism.

“Shifting your costs onto taxpayers doesn’t save anyone any money. It means ratepayers pay more tax, and are left with less of their own money, to meet the cost of a slightly smaller rates bill. 

“Or it means we spend less on health and education so that councils can avoid tightening their belts exactly as Kiwi families, businesses and central government have had to do across New Zealand. 

“Yes, I’m sure that will be very popular among councillors, who want to spend money without raising rates to pay for it. But if any of you think those will be the terms of a regional deal, it’s time to come back to reality. 

“We do want to work closer together – and there will be new revenue tools for councils, where that makes sense – but the days of handouts are over.”

Luxon went on to say Cabinet was investigating placing revenue caps on councils’ non-core activities, as is done in some Australian states. After telling them he wouldn’t help with funding and that they were useless, he asked for their help.

“In conclusion, we want a productive and constructive relationship with local government – one that enables your growth and development and gives you the tools you need to pay for it. 

“In central government, we’re getting on with the job. We're stopping wasteful spending, shifting money from the back office to the frontline, setting clear delivery targets and expectations, prioritising what to do and what not to do, and letting Kiwis keep more of what they earn.  My parting message: it’s time for you to do the same. 

“Go line by line, stop the wasteful spending, remove the bureaucracy, focus on better customer service, and end the projects that aren’t delivering value for money. I’m confident that working together, we can achieve a lot for New Zealanders – better infrastructure and more resilient communities, all at an affordable price for ratepayers.” Christopher Luxon 

2. It went down like a cup of cold sick

Mayors and councillors hit back at rant

Councillors and mayors in the room were palpably shocked at both the tone and the content of the speech. Wellington Mayor Tory Whanau responded shortly after in a LinkedIn post:

“The speech missed the opportunity to talk about how we solve our shared problems, and instead punched down, telling us to ‘tighten our own belt’ before asking for central government support.

“Rates have jumped up across councils all over the country, whether they be left-leaning, right-leaning or otherwise. This synchronised rates rise has not happened in a vacuum.

“For decades, and I mean decades, Councils in this country have had very limited scope to raise revenue to provide the critical services that make our towns and cities tick. Our two main options have been user fees and rates.

“Rates, because it is politically difficult to do otherwise, have been kept artificially low for years. This has meant the appropriate investment in key infrastructure, like our pipes for example, has been kicked along to the next council and the next.

“Barking at us that we need to be better is tired and unhelpful and doesn’t solve our shared problems. Lets work together.” Wellington Mayor Tory Whanau via LinkedIn.

Wellington Regional Councillor Thomas Nash tweeted:

“I try to be constructive and measured in my criticism of Ministers so it truly pains me to say this, but the Prime Minister’s speech to local government just now was one of the most mana diminishing, paternalistic and visionless speeches to a group of people I have ever heard.

“He did not acknowledge Wellington’s Mayor or Chair or mana whenua who had welcomed him and others into the whare and then went on to insult the whare he had been welcomed into. Just astonishing for the Prime Minister of New Zealand in 2024.

“He announced his plan to introduce performance targets for councils seemingly without realising that council LTP processes already do that job and are far more stringent and transparent on asset management, financial strategy, etc than anything central government agencies have.

“He offered no positive vision whatsoever for the future of the country or for local government, simply talking down to the hundreds of people elected by their local communities with “I know best” criticism punctuated by vague references to regional deals and revenue tools.” Thomas Nash via X

3. Solutions: ‘Roll out solar with your ears pinned back’

Electricity economists call for reform and mass solar rollout

The Government is pushing ahead with plans to import LNG and build new gas-fired electricity generation that could take several years and hundreds of millions of dollars, but others are calling for faster, cheaper and more effective interventions.

Auckland University Energy Economics Professor Stephen Poletti, Victoria University Professor Bruce Mountain and Victoria University Scholar Geoff Bertram yesterday published a joint Op-Ed via The Conversation titled: NZ’s electricity market is a mess. Rolling out rooftop solar would change the game.

“To alleviate the energy supply shortfalls primarily attributable to low rainfall, we suggest rapidly expanding cheap solar photovoltaics (PV), specifically rooftop solar for ordinary households. Our soon-to-be-published research suggests such capacity can be expanded quickly and cheaply.

“Based on the Australian experience, we estimate modest subsidies for the capital cost of installing solar rooftop systems would add the equivalent of 700 megawatts a year (2% of the total) to the electricity supply. This significant new supply will reduce electricity prices.” Poletti, Mountain and Bertram via The Conversation

4. Quote of the day

A riposte to the PM from one of Wellington’s grandees

“You don't line by line cut your way to a better community. You don't line by line cut your way to a better country.” WellingtonNZ CEO John Allen in a keynote address yesterday at the LGNZ conference

5. Chart of the day

What happens when housing becomes more unaffordable

“I had not expected the largest growth to be in households with adult children. There are many good reasons, including the recent pandemic, high rents and house prices, and maybe the family home is much larger and nicer than a flat (if you can find one, rental availability is at historic lows).

“Anecdotally, some adult children move back to the family home to save a deposit to buy their own home (saving on rent, which is a pragmatic version of the bank of mum and dad, for those mum and dads who can’t stump up big amounts towards a house deposit for children).

“Also, some incidence of separations (median age of separation is 45 for women and 48 for men) leading to adult children living with parents, at least for a period of time.” Independent Economist Shamubeel Eaqub via LinkedIn

6. Climate graphic/chart/pic of the day

One of the feedback loops

“This August saw an abrupt increase in the area burned by wildfires, with most of this rise coming in a single week. This global weekly burn rate was 64% higher than any previous week during this period. This data comes from the Global Wildfire Information System.

“This dramatic rise was mostly driven by severe wildfires in Africa, where approximately 22 million hectares burned in a week, accounting for around 80% of the global burned area.

“Two countries have been particularly hard-hit — Angola and the Democratic Republic of Congo — where 6% and 2.5% of the total land area have burned in just one week.” Computational Neuroscientist and Data Journalist Veronika Samborska via Our World in Data.

The best of the rest

Top six scoops and deep dives for August 22

* Health scoop: The tobacco lobbying plan that worked RNZ’s Guyon Espiner

* State care interview: 'Fundamental problems' at Oranga Tamariki, warns Ombudsman NZ Herald-$$$’s Nick Jones

* Politics news: Winston Peters casts doubt on PM's position on Treaty Principles Bill RNZ’s Jo Moir

* Poverty deep dive: Benefit cut after one missed appointment RNZ’s Amy Williams

* State care interview:Couple from 'reverse uplift' speak out for the first time Te Ao with Moana

* Justice deep dive: Fairness and equity in the police force RNZ/Newsroom’s The Detail with Sharon Brettkelly

The Kākā’s Journal of Record for August 22

* Justice: An independent panel set up by Police Commissioner Andrew Coster and justice campaigner Kim Workman in 2020 and chaired by AUT Professor Khylee Quince published its phase one report on Understanding Police Delivery, which found Māori men were more likely to be stopped, tasered and prosecuted and made 40 recommendations. RNZ

* Economy: CoreLogic's August Housing Chart Pack showed that 27% of NZ property purchases were by first homebuyers in July, 5% above the long-term average. Economist Kelvin Davidson says first homebuyers are taking advantage of low deposit lending allowances being offered by banks, with two in every five getting into the property market with a less than 20% deposit.

* Economy: Infometrics released its Quarterly Economic Monitor report showing evidence of an "economic crunch", including job declines in seven of 16 regions. Chief executive Brad Olsen said lower interest rates throughout next year as signalled by the Reserve Bank would lay the foundations for economic recovery.

* Economy: Commerce and Consumer Affairs Minister Andrew Bayly announced that the Government has placed property developer Du Val Group's entities into statutory management to protect its investors and creditors from further losses. Bayly said the decision follows a recommendation by the Financial Markets Authority based on its ongoing investigations. 1News, Interest, NZHerald

* Climate: The Environmental Protection Authority declined fast-track consent for a wind farm in Waiuku, arguing that the project application was rushed and would impact threatened birds and bats. The decision panel said it didn't take account of concerns raised about the effect of the wind farm on property values.

* Economy: FIRST Union urged the Government to act to protect workers following Winstone Pulp International (WPI)'s announcement that it may permanently close the Karioi Pulpmill and Tangiwai Sawmill due to high electricity costs. Activity at the pulpmill and sawmill paused in the first week of August, with WPI warning that around two hundred and thirty jobs could be cut. Newsroom, 1News

Finally, some fun things

Cartoon of the day

‘So sad’

Timeline-cleansing nature pic:

Our front garden’s first spring flower

Mā te wa

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

Mōrena. Long stories short; here’s my top six things to note in Aotearoa’s political economy around housing, climate and poverty on Wednesday, August 21:

* Winstone announced yesterday it would close its pulp mill and sawmill near Ohakune permanently because wholesale electricity prices tripled since July 1, costing 230 jobs and escalating a nationwide manufacturing and exporting crisis.

* New profit margin data published by the Electricity Authority shows the gentailers (including the big four of Contact, Genesis, Meridian and Mercury) made a combined $512.4 million in profits in the six weeks since July 1.

* The gentailers, including the 51%-state-owned Genesis, Meridian and Mercury, paid out four dollars in dividends for every dollar in investment in new generation in the decades since the part-privatisation of those three gentailers in 2013, leaving the market short of electricity in a situation where gas supplies run short and a dry winter empties hydro lakes, as has happened this winter.

* Aotearoa’s industrial power users last night begged households to turn off their lights, turn down their heat pumps and not charge their cars to help keep pressure off the system (and prices), while Contact and Mercury set dividend payouts of $508 million and said the market was working to solve the crisis.

* A Goldman Sachs analysis of productivity has found New Zealand performed the worst of any developed economy in the last four years, per worker and per hour.

* Sea temperatures in the Gulf of Mexico, where many hurricanes emanate, yesterday hit an all-time record high of 21% above averages for the last decade.

The Top Six short stories longer for August 21

1. Factories closing after electricity price shock

Pulp and timber mills shut after tripling of power prices in six weeks

The Malaysian-owned Winstone Pulp International (WPI) announced yesterday it would close its Karioi pulp mill and Tangiwai sawmill near Ohakune permanently because wholesale electricity prices have tripled to over $600/MWh since July 1, costing 230 jobs and escalating a nationwide manufacturing and exporting crisis.

“We can’t pass these increases on to our customers because this is an NZ issue, and we sell into a commodity market where the price is the price. For comparison, our overseas competitors are paying between NZ$60 to NZ$100/MWh this month. It’s a challenge we’ve been grappling with for years, but the mountain keeps getting higher.” WPI CEO Mike Ryan told BusinessDesk-$$$’s Oliver Lewis

This follows temporary closures by Japan’s Oji of its pulp plants at Whirinaki near Napier and in Auckland’s Penrose last week, and fears other large manufacturing and meat processing operations may close soon.

Unions fear a cascade of job losses.

“WPI have warned that around two hundred and thirty directly-employed jobs could be cut as a result of the possible closure, but there would be further job losses for adjacent staff like contractors and even bigger losses for the wider Ruapehu community, where these mills are the lifeblood of the local economy.” FIRST Union organiser Liam Malone statement.

2. While gentailer profits explode with prices

Profit margins total $512.4 million in just six weeks

This week the Electricity Authority began publishing weekly data on wholesale and retail revenues for the electricity gentailers, allowing it to calculate their individual and collective profit margins.

The initial data released showed revenues and margins for the six weeks from July 1, over a period when wholesale prices tripled to as high as $674/MWh, as gas shortages, low hydro lake levels and strong demand saw marginal prices explode. Marginal prices for marginal generation, often by coal, gas and diesel generation from ‘peaker’ plants, are then applied to all generation units, including from hydro and wind, which have no marginal costs.

The combined profit margins for the gentailers for the six weeks was $512.4 million.

3. So how did this happen?

Investors & finance ministers opted for dividends, rather than new plants

The gentailers, including the 51%-state-owned Genesis, Meridian and Mercury, paid out four dollars in dividends for every dollar in investment in new generation in the decades since the part-privatisation of those three gentailers in 2013, leaving the market short of electricity in a situation where gas supplies run short and a dry winter empties hydro lakes, as has happened this winter.

Both Labour and National Governments have benefited from the dividends paid for their 51% stakes in the gentailers, making the underinvestment and deliberately scarce supply situation a type of extra tax on consumers and producers, as detailed in this updated analysis by 350Aotearoa, NZ CTU and FIRST Union titled: Generating scarcity: how the gentailers hike electricity prices and halt carbonisation.

This is the key chart showing what happened. PPE stands for Plant and Property Expenditure, which is the gentailers’ description for investment and maintenance of plant, so this figure over-estimates investment in new generation as it includes maintenance of existing generators.

Meanwhile, Contact and Mercury published annual profit results on Monday and Tuesday, including combined dividend payouts of $508 million. Their CEOs said the electricity market was working fine and the Government shouldn’t intervene.

Commenting on strong profit results

“This year, under a market-led system, we have been able to manage that (reliable supply). Yes, spot prices have been high, but few have been exposed to those.” Mercury CEO Vince Hawksworth via BusinessDesk-$$$. He was referring to retail customers not paying the much higher wholesale prices. Yet.

“Our investments are paying dividends, but obviously, a volatile market requires a fair amount of hard work and creativity to navigate successfully.” Contact CEO Mike Fugue in Contact’s profit statement

Commenting on talk of price caps and Government intervention

“Politicians don't make necessarily well-reasoned, instantaneous market interventions and it's important that everyone just stays calm and lets the investment flow because that investment is what ultimately will solve this issue

“Unfortunately, power stations don't get built according to the electoral cycle. We're encouraging the politicians to keep their hands in their pockets. Don't fiddle with the market.” Mike Fuge via BusinessDesk-$$$ last Monday.

Contact made a profit of $15.4 million in the seven days before he made this comment, EA data showed.

4. Quote of the day

‘Please turn off the lights so we can keep the factories running’

“I suggest if there's any load that you don't need to use through peak, so the morning and the evenings if you can delay things - those who've got the ability to charge electric vehicles, or (use) the dishwasher later in the day to do that, keeping the temperatures of the heat pump at a reasonable sort of 21C to be healthy, keeping lights off in offices in places where you aren't. So ideally we want to avoid this because it's such an essential for homes and businesses to have electricity.” Major Energy Users Group (MEUG) director Karen Boyes via RNZ

5. Charts of the day

NZ productivity was worst in the world since 2019

6. Climate graphic/chart/pic of the day

Record high heat in the place hurricanes come from

The best of the rest

Top six scoops and deep dives for August 21

* Housing scoop: Minister not seeking answers over where kids went after emergency motels. The Government celebrated a milestone of getting 1000 children out of emergency housing, but can’t say where one in five went to. Stuff’s Glen McConnell

* Climate deep dive: Utter joke': Govt abandons building sector climate-change regulations BusinessDesk-$$$’s Cecile Meier

* Health deep dive: Woman faces 14-hour round trips to doctor as shortage bites RNZ’s Peter de Graaf

* Climate interview: Government moves to raise carbon price, says petrol will only rise 3c a litreRNZ’s Eloise Gibson

* Health explainer: St John workers on strike: The funding fight around the ambulance service1News’ Anna Murray

* Housing deep dive: Nine-year battle over whether Auckland house is a ‘boarding house’ Stuff’s Marty Sharpe

The Kākā’s Journal of Record for August 21

* Climate: Climate Change Minister Simon Watts announced that the number of Emissions Trading Scheme units available between 2025 and 2029 will be reduced from 45 million to 21 million to push up the carbon price. ANZ said that since the changes were announced, the spot price for carbon had risen roughly $5.

* Economy: The Commerce Commission recommended a suite of changes to increase competition in the banking sector after its market study characterised NZ's banking sector as a "two-tier oligopoly." Recommendations included Government actions to ensure open banking is fully operational by 2026 and that Kiwibank becomes a more disruptive competitor.

* Economy: Nicola Willis & Andrew Bayly announced that the Government will act on all 14 of the Commerce Commission’s recommendations for the banking sector, and have asked Treasury to engage with Kiwibank's parent company over raising new capital. Willis says she will take the proposals to Cabinet no later than December. RNZ

* Economy: The Electricity Authority began releasing weekly data on energy margins generators are making when selling into the wholesale market.

* Health: University of Otago Wellington research published yesterday found 901 deaths, 1250 cancers, 29,282 hospitalisations, and 128,963 ACC claims were attributable to alcohol in 2018.

* Housing: The Real Estate Institute of New Zealand reported that property sales increased to 5,806 in July, up 14.5% from July a year ago and up 19.7% from June. The median price fell 2.2% to $753,000 in July a year ago and the same amount month on month.

Back on track?

“There has been downward pressure on prices in most parts of the country this year and sales volumes have been lower than average as the cost of living, concerns around job security and interest rates challenge many people in New Zealand. However, it seems this sentiment is beginning to change. The slight decline in interest rates in July, and a belief that there are more to come, appears to have encouraged buyer activity, as reflected in the increase in sales.” REINZ CEO Jen Baird

Finally, some fun things

Cartoon of the day

‘No food & shallow breathing only’

Timeline-cleansing nature pic:

Land coral

Mā te wa

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

Mōrena. Long stories short; here’s my top six things to note in Aotearoa’s political economy around housing, climate and poverty on Tuesday, August 20:

* The Human Rights Commission reports Aotearoa’s biggest visa scheme for temporary migrants “may be enabling potential human trafficking, with signs of systemic migrant exploitation and modern slavery”.

* A international report calling for a ‘feather-light’ Spanish-style wealth tax on the richest 0.5% has found it would raise US$2.1 trillion per year globally and NZ$6 billion per year in Aotearoa.

* Ecotricity is now offering a 21c/unit repurchase rate for rooftop solar power stored in batteries at peak times.

* In a speech at Turangawaewae, Tuku Morgan accused the coalition Government of Christopher Luxon and an (absent) David Seymour of being a wrecking ball setting back Maori progress by 50 years.

* A major report on health and safety has found the annual cost of workplace accidents and illnesses at $4.9 billion in 2023, up from $4.3 billion the previous year, while Aotearoa’s fatality rate remains significantly worse than Australia’s.

* A massive and record-high heat dome over Antarctica has shunted cold and wet air up to us in an extreme event made more likely by accelerating climate change.

The Top Six short stories longer for August 20

1. This is not who we think we are

Damning reports from HRC and Public Service Commission ignored

The Human Rights Commission (HRC) yesterday released a report into the new Accredited Employer Work Visa (AEWV) scheme that has been the main source of the surge of over 200,000 migrants on temporary work visas into Aotearoa over the last couple of years.

It follows a barely-noticed report from an independent review by the Public Service Commission to the Government in February of the AEWV scheme, and the Government’s changes to the scheme in April, which have done little to change the exploitative nature of this temporary worker migration.

Here’s the Commission's outgoing Equal Employment Opportunities Commissioner Saunoamaali’i Dr Karanina Sumeo expressing grave concern in the HRC report about what has not been done to improve the scheme (bolding mine):

“What we heard goes beyond bad employer conduct and raises real concerns that the AEWV scheme may be enabling potential human trafficking, with signs of systemic migrant exploitation and modern slavery.

“The independent operational review in February outlined many instances of migrant exploitation, including reports that migrant workers were being forced to work illegally as part of organised crime networks. However, the policy settings contributing to exploitation were not part of the review and the changes made in April did not address the underlying human rights risks.” Saunoamaali’i Dr Karanina Sumeo in the HRC release.

The report itself detailed the following from workers it spoke to:

* being scammed out of tens of thousands of dollars by unethical recruiters, losing their job immediately on arrival and then working in the construction sector, often for free on “unpaid trials”. They also obtained paid employment working long hours for well below the minimum wage.

* having to live in crowded, unhealthy, unsafe housing or campgrounds and not having enough money for healthy food.

* being scared to raise breaches of minimum entitlements and fearing losing their employment and immigration status. Workers described feeling bonded to their employer, with one worker calling the visa their “handcuffs”.

* their families at home being left in debt to pay unethical recruiters and/or being threatened because they were unable to make the required repayments without the employment that was promised.

* lack of action on complaints of migrant exploitation made to Government agencies. Many who experienced exploitation had not made complaints, and some expressed a lack of faith in the relevant authorities.

In my view, the fundamental reason for these temporary migrant schemes is to avoid a real conversation about population growth because firms in favour of the schemes say the migrants are only temporary and therefore infrastructure does not need to be built. That ignores the fact people need homes to live in while they’re here, roads to drive on or buses to travel on and can get sick or injured (see Chart of the Day).

It also assumes the most awful thing: we want people to come and work for us, but the moment there’s a downturn or it gets awkward and expensive, we expect them to just leave, and if they don’t, we’ll kick them out. It means we do awful things where we allow migrants to settle in, often on temporary visas rolled for over a decade, and then kick them out when they need to use a hospital or break a minor.

It’s our churn and burn economy writ large.

2. Solutions: ‘Adopt Spain’s wealth tax’

Tax Justice Network reports Spanish-style tax could raise US$2.1 trillion

The international Tax Justice Network released a report yesterday detailing how countries who adopted Spain’s ‘feather light’ wealth tax on billionaires could raise a collective US$2.1 trillion per year in taxes globally, and US$3.6 billion (NZ$6 billion) if applied in Aotearoa.

It modelled a progressive wealth tax of between 1.7% and 3.5% on the richest 0.5% of the people in 173 countries, including ours, and including the (minimal) effects of migration of the wealthiest and their wealth.

I’ve attached both the full report, the numbers in PDF and the spreadsheet here.

3. Solutions: Finally, a higher solar re-purchase rates

Ecotricity announced yesterday a 21c/unit repurchase rate at peak times from retail customers producing solar electricity with a battery on its plan.

4. Quote of the day

‘We will not go quietly into the night.’

“We have watched the Māori wrecking ball roll back 50 years,” Tainui iwi Chair Tuku Morgan said yesterday at the Koroneihana at Turangawaewae yesterday of the coalition’s agenda. He referred to the dismantling of the Maori Health Authority and legislation to force votes on Maori wards on councils.

“We will not go quietly into the night.Act’s real agenda is to de-Māorify this country.” Via NZ Herald’s Joseph Los’e

5. Chart of the day

Dying to go to Australia

6. Climate graphic/chart/pic of the day

Where this cold snap came from

The best of the rest

Top six scoops and deep dives for August 20

* Greenwashing deep dive: Fonterra accused of greenwashing to impress big foreign buyers RNZ’s Farah Hancock

* Baby uplift investigation: Apology after autistic mum's baby taken - but it's too late to get him back NZ Herald-$$$’s Nick Jones

* Housing deep dive: How well does the law protect tenants from 'bad' landlords John Campbell for 1News’ Fair Go

* Health deep dive: 'Transformational shifts' in healthcare put at risk by reset RNZ’s Phil Pennington

* Immigration graphic explainer: Time for a grown-up conversation about immigration FT (gift)’s John Burn-Murdoch

* Interview with AAAP’s Brooke Pao Stanley Administering poverty via E-tangata’s Teuila Fuatai

The Kākā’s Journal of Record for August 20

* Climate: The Environmental Protection Authority released data identifying Fonterra as the largest emitter for 2023-24 among participants in the Emissions Trading Scheme, responsible for nearly a fifth of net emissions. Agriculture was responsible for 49% of ETS participant emissions. Newsroom

* Economy: The Business Leaders’ Health and Safety Forum released a report finding that the cost of work-related serious injuries, fatalities, and health issues in NZ rose 11.4% since last year to $4.9 billion. A halving in NZ's workplace injury rate since 2000 was attributed to fewer minor injuries, whereas serious injuries rose 20% since 2014, and our workplace fatality rate remains 60% higher than Australia’s and over 500% higher than the UK’s. RNZ, NZ Herald

* Climate: The Green Building Council released an analysis of Ministry for the Environment and MBIE forecasts finding that an increasing shortage of natural gas will push up power prices in the coming years unless the Government acts to reduce demand. The Council adds that heating in buildings can be electrified, and the Coalition could reduce demand through the Warmer Kiwi Homes programme and restoring Government Investment in Decarbonising Industry funding.

* Poverty: Te Kāhui Tika Tangata Human Rights Commission set out recommendations for improving the Accredited Employer Work Visa scheme, which it found is being misused to recruit workers to exploitative or non-existent jobs. Recommendations include ending the tying of visas to specific employers, implementing minimum ethical standards as a prerequisite for employer accreditation under the scheme, and running meaningful business checks. RNZ

* Economy: BNZ's Performance of Services index for July found service sector activity was up 3.9 points from June, but remains below levels seen during the GFC. SEEK NZ's Employment Report for July found job ads increased by 3% in July for the first time since January, with increases in retail, hospitality & tourism, and Government & defence jobs responsible.

* Economy: AUT Professor of Economics Tim Maloney published a predictive model which suggests unemployment may have already reached 4.8%.

Finally, some fun things

Cartoon of the day: ‘Making the boat go faster’

Timeline-cleansing nature pic:

‘It was worth it to get the stick’

Mā te wa

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

Mōrena. Here’s my top six things to note in Aotearoa’s political economy around housing, climate and poverty on Monday, August 19:

1. When the myopia of cutting now is more expensive

How Oranga Tamariki’s night of the long knives is counter-productive

The last week has been dominated by Oranga Tamariki contractors telling media about how they were being told without warning or reason that their funding was being cut, often with hours notice and well after the expiry of previous contracts.

Children’s Minister Karen Chhour lashed back at them on Friday, describing them as ‘disgruntled’ providers, many of whom had built up surpluses from past funding. In business, that would be described as a profit. No Early Childhood Education or aged care providers would have their funding cut because they made a profit.

The reckless way the funding was cut seems counter-productive, at best, given the long-term costs of having to put kids in state care if these privately run social service providers shut down. Here’s an examples va RNZ’s Maia Ingoe yesterday (bolding mine):

E Tipu E Rea, a Ngāti Pāoa whānau services provider, supports parents as young as 16 and their tamariki. Chief executive Zoe Whitika-Hawke said the group's work was critical as it prevented the need for Oranga Tamariki uplifts.

"We work to support their needs so that they can be the best parents they possibly can be, and there's no threat of their baby being uplifted. House them, make sure they're on the way to getting jobs, making sure their mental health is fine to be able to think of their future and their baby's hauora, so they don't have to end up with Oranga Tamariki intervention.

"We think about it in return on investment framework, which the government's really keen on. We actually save them money, because stare care is expensive."

This is a social service provider using the Government’s social investment approach. Was any analysis done on the ‘investment returns’ and opportunity costs of these cuts?

2. Turning up the burn in our churn and burn economy

Govt expands RSE scheme, cuts wages and increases worker costs

Last week, the Government increased the size of the Recognised Seasonal Employer (RSE) scheme for temporary foreign fruitpickers and cut wages by 10% to minimum wage for workers in their first three years in the scheme. It also allowed orchardists and contractors to increase accommodation costs for workers by 15%.

The scheme is a key part of our ‘churn and burn’ economy that encourages employers to use low-paid temporary migrants to expand their businesses, and avoid having to invest in technology to improve productivity. Spare cash can then be best used to buy more land, leverage it up, and make tax-free capital gain.

Here’s outgoing EEO Commissioner Saunoamaali’i Dr Karanina Sumeo, saying she was concerned about the changes:

“We want to ensure workers are treated fairly so I am concerned to see that the requirement to pay above minimum wage is only for experienced workers, protections for minimum hours of work have been reduced, and a pause on charging accommodation costs to workers has been lifted.

The Commission reviewed the RSE scheme in 2022 and found human rights issues affecting these workers including insanitary and cramped living conditions, unfair deductions from their wages, and poor access to health care.

“In October 2023 the Ministry of Business Innovation and Employment (MBIE) undertook their own policy review which made strong recommendations to protect the human rights of RSE workers including increased pastoral care, standardising wage deductions, and increasing accommodation standards.

“It is concerning to see an increase in the number of workers who can come to Aotearoa New Zealand when these basic human rights protections have not been implemented.”

3. Solutions: ‘Money too tight to fix black mould’

Again, the myopia of cutting funding on health and housing spending is on display in this piece last night from RNZ’s Phil Pennington, quoting Associate Defence Minister Chris Penk as saying the Government couldn’t afford to fix the mouldy houses that most defence staff at Linton report having to live in.

Penk told RNZ the government was exploring options. However, "we are operating in a fiscally constrained environment and the level of investment required is significant", he added.

Perhaps a more whole-of-government approach to analysing the solution might find the black mould costs the Government more in the long run through visits to A&E by children and their families living in these homes, and worse.

4. Quote of the day

Ready. Fire. Cut.

“We've got over 90 years of institutional knowledge between the counsellors and the social workers and community resource workers, we're really, really good at what we do. There's a loss of institutional knowledge across the sector.

“Where are these women going to go? It's going to put massive pressure on other community agencies and government agencies.” North Shore Women's Centre GM Tracey Swanberg via RNZ after Oranga Tamariki stopped its funding in June. It had provided about 30% of the centre’s funding.

5. Chart of the day

Worth asking for a special deal on a 1 year fixed rate

6. Climate graphic/chart/pics of the day

It seems awfully wet lately

When dark blue means very, very wet

Here’s NIWA Climate Scientist Ben Noll with another angle on climate change:

“About 70% of the planet experienced above normal atmospheric moisture during July 2024. This was associated with flooding in Texas, Vermont, parts of Mexico, Japan, Taiwan, Philippines, North Korea, China, India, Nepal, Pakistan, and Sudan. The streak of record moist months continued even as La Niña's cooler water built in the Pacific.

“This moistening trend is just as important as the warming trend as it relates to the potential increase in flood frequency and/or intensity into the future. Events like Debby contribute to this trend.In my opinion, this moistening trend is just as important as the warming trend as it relates to the potential increase in flood frequency and/or intensity into the future.

“The globe has now set atmospheric moisture records for 13 consecutive months, with the streak starting in July 2023. This has influenced an increase upper decile (top 10%) rainfall events over the last year. The moistening trend is indeed having an impact on the weather that we are experiencing.” Ben Noll via X

The best of the rest

Top six scoops and deep dives for August 19

* Infrastructure deep dive: Learning on the job: What the PM will take away from a day in Sydney RNZ’s Lillian Hanley

* Health scoop: No new mental health beds since new government took office. Sunday Star Times-$$$’s Amelia Wade

* Health deep dive: Telehealth a ‘fantastic tool’, but not a solution for struggling GPs The Post-$$$’s Mariné Lourens

* Aviation scoop: Whistleblowers warn CAA’s new approach could lead to more aviation accidents NZ Herald’s Michael Morrah

* Housing news: ‘It is fraud’: Students kicked out after spike in out-of-zone parents sending kids to school NZ Herald-$$$’s Cherie Howie

* Climate scoop: Government told to reduce household gas usage to save industry NZ Herald’s Thomas Coughlan

The Kākā’s Journal of Record for August 19

* Poverty: The Human Rights Commission warned that the Accredited Employer Work Visa (AEWV) scheme may be enabling human trafficking and systemic migrant exploitation. A Commission review from late 2022 found many migrants had paid thousands for non-existent or short-lasting jobs. It recommended employers be required to provide settlement support for migrants, and that visas should not be tied to a specific employer. RNZ, NZ Herald

* Poverty: Kaihautū Tika Hauātanga Disability Rights Commissioner Prudence Walker said the Government is scaling back Whaikaha, the Ministry for Disabled People before giving it the chance to demonstrate success. She added that the Ministry of Social Development, which will take back responsibility for disability support services, isn't specifically designed to meet the needs of disabled people.

* Te Tiriti: The Waitangi Tribunal released a report characterising the Treaty Principles Bill as part of an "alarming pattern" of the Crown using parliamentary sovereignty against Māori. It warned that the Bill would "limit Māori rights" and "access to justice" by reducing the constitutional status of Te Tiriti, and called for it to be abandoned. RNZ

* Corruption: The Helen Clark Foundation released a report warning that NZ is "slipping" on international measures of corruption, with economic inequality increasing political access for wealthy party donors. It recommended that NZ regulate lobbying and implement various measures to increase transparency around political donations. RNZ, 1News, NZ Herald

* Transport: Transport Minister Simeon Brown announced a new $1.3 billion road policing programme to increase roadside alcohol and drug testing. The programme will up the target for breath tests from 3 to 3.3 million per year, with 65% of tests to be undertaken during high risk times. NZ Herald, Stuff

* Human Rights: Justice Minister Paul Goldsmith appointed Dr Stephen Rainbow as the new Chief Human Rights Commissioner, Dr Melissa Derby as the new Race Relations Commissioner, and Dr Gail Pacheco as the next Equal Employment Opportunities Commissioner. Rainbow formerly chaired the LGBT phone support service OutLine and has faced criticism over allegedly transphobic and pro-Israel Facebook comments. RNZ, NZ Herald

Finally, some fun things

Cartoon of the day: Hamish Orr

Timeline-cleansing nature pic

After the storm

Mā te wa

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.

I got up yesterday morning to write my usual end-of-the-week reflections of the six main things that happened in our political economy in the last week or so, and why they mattered.

Lately, my daily emails and weekend ‘soliloquies’ have become laundry lists of policy vandalism, where I point to the most obvious announcements from the National-ACT-NZ First Coalition Government that are set (usually) to worsen Aotearoa’s already awful housing, climate and poverty situations.

It has begun to feel overwhelming, enervating and ultimately destructive. The Government is continually flooding the zone and it feels like the best I can do is to document the obvious and avoid drowning in a cascade of memes and lizard-brain-thinking dressed up as policies. It is exhausting and infuriating.

I keep wanting to send every member of the new Cabinet a copy of Thinking, Fast and Slow, the book by Nobel Prize-winning behavioural scientist (and economist) Daniel Kahneman about how reactive, short-termist decisions driven by our base emotions of fear, anger, greed and resentment are often bad decisions. And that we’d all be better off if we took some time to look at the evidence, park our ingrained assumptions and heuristics, and find some long-term solutions that can live and be trusted through multiple terms of Government.

For example, just in the last week:

* Associate Housing Minister Tama Potaka announced on Sunday the Government had removed 1,000 children from living in motels, but couldn’t say exactly where (or whether) they had found new homes, given the Government has halved funding for new social housing and stopped Kāinga Ora building new homes;

* Transport, Energy and Local Government Minister Simeon Brown announced on Monday he was pushing ahead with congestion charging to pay for more motorways, but didn’t also announce a ramping up of public transport or any fair transitional help for drivers in poorer working and non-working families who don’t have alternatives;

* Social Development and Employment Minister Louise Upston announced on Monday the imposition of tougher sanctions on unemployed and sick people who don’t turn up for job interviews or make themselves available for work, but couldn’t say exactly what would happen to those people when their incomes were cut;

* Immigration Minister Erica Stanford and Foreign Minister Winston Peters announced on Wednesday the Recognised Seasonal Employer (RSE) scheme for temporary foreign fruitpickers living in sheds and hostels would be expanded by 1,250 to 20,750 for this coming season, wages for fruitpickers with less than two years experience would be cut 10% back to minimum wage, and employers would allowed to start increasing accommodation costs by 15% or $15 a week, whichever was the lesser.

* Disability Issues Minister Louise Upston announced on Thursday the only-just-formed Whaikaha-Ministry of Disabled People would be stripped of its service delivery function and budget and those would be dumped into MSD, which disability advocates described as a shocking attack their communities;

* Justice Minister Paul Goldsmith announced on Friday afternoon the appointment of Free Speech Union founding member Melissa Derby as Race Relations Commissioner to replace Saunoamaali’i Dr Karanina Sumeo, who has been acting Chief Human Rights and Race Relations Commissioner, and who as recently as yesterday expressed concern about the RSE scheme changes not addressing problems with worker welfare and low pay. Derby has spoken at anti-trans events and retweeted demands that trans people not be tolerated in society. Steven Rainbow was appointed as Chief Human Rights Commissioner. He has also supported anti-trans statements.

And those were just the formal policy announcements. All sorts of other issues arose this week, including:

* the PM saying he wanted a bipartisan policy to fix our infrastructure deficits, despite his Government ordering a halt to new infrastructure projects and completely overturning the previous Government’s policies on housing, transport and water;

* The Government barrelling ahead with plans to deal with a lack of renewable electricity generation by importing LNG and burning gas to generate power;

* The Health Minister denying budget cuts or hiring freezes, despite widespread reports of exactly those things from doctors and nurses, and that a halving of pay for locums led yesterday to the Bay of Islands Hospital at Kawa Kawa closing for nights and weekends, causing an overloading of admissions to A&E at Whangārei hospital to at least 150% capacity; and,

* It emerged the gun control minister regularly met with anti-gun-control activists, but had refused to meet with Police, who are responsible for running our gun control policies.

Finding a way to exit the flooded zone to make progress

For a few months I had hoped the dust would eventually settle from this onslaught of changes for the worse and that I’d get a chance to go deeper into the underlying problems with our housing, climate and poverty situations to suggest and test solutions in conjunction with our subscribers.

But I have begun to realise the constant barrage of outrages is not a bug within the current Government. It’s a feature. It is designed to distract, overwhelm and defeat those wanting to try or at least examine other policies, especially ones backed by actual evidence and that haven’t been tried before and failed before.

It dawned on me while listening to Juggernaut when Roger Douglas admitted the sheer speed and enormity of the changes he rammed through from 1984 to 1989 allowed much of it to pass without much opposition or real examination. We live daily now with the consequences of that onslaught. I was also reminded of Steve Bannon’s comment about how to drive through massive change:

“The Democrats don’t matter. The real opposition is the media. And the way to deal with them is to flood the zone with s**t.” Steve Bannon quoted by Michael Lewis in this Bloomberg(gift) article from 2018.

Disorientation is the aim, not necessarily persuasion with facts or evidence, or to even find the best possible policy. Chaos seems like both the strategy and the tactic of choice, not a state to be avoided.

This last week seemed particularly bad. The last straw was the Race Relations Commissioner announcement from Treaty Relations and Justice Minister Paul Goldsmith on Friday. It felt as if National has abandoned any pretence to centrism or commitment to doing the sensible thing to ‘reach across the aisle’ and maintain civility. It was as if the Government began to troll us. In other words, let’s do this outrageous thing just to see how just outraged the ‘woke left’ can get.

For the lols: trademarked by Topham Guerin.

This may seem an over the top reaction to some who have often seen National Governments as a bastion of stability and compassionate conservatism that has, eventually, embraced our nation’s foundation in Te Tiriti. After all, some of the best Treaty Settlement Ministers have been National Ministers, including Doug Graham and Chris Finlayson. It was National that formed a coalition with Te Pāti Māori and rolled out Whanau Ora. It was National and (an admittedly very-different) Te Pāti Maori that launched the long-running and successful Smokefree 2025 campaign.

It has become clear that this latest National-led government is very different from previous National governments.

So what now? Let’s restart The Kākā Project, but by 2026 for 2050

Before the last election we ran a bunch of articles grouped around the idea of The Kākā Project. This was an attempt to suggest and test policy alternatives to those being discussed by the main parties in the 2023 election. I hope it helped to lift our eyes over and around the ‘Overton Window’ of topics that are deemed legitimate to discuss and address some of our fundamental problems. The sheer volume of news in the wake of the election forced me to just cover the news.

Now I’d like to restart The Kākā Project well ahead of the 2025 Local Government elections and the 2026 General Elections. That gives us some time to address some fundamental questions in an open way and suggest and test a bunch of policy ideas that might help the wider debates in those elections.

Here’s what I’d like to do over the next two years and how I’d like to structure it, starting with an exploratory phase through the rest of 2024 that does the following:

* Asks six fundamental questions about what Aotearoa wants and how to get there;

* Discusses those questions and possible solutions with a range of people in a series of interviews and ‘Hoons’;

* Run a series of surveys of readers and subscribers to understand a wider view on the answers to these questions;

* Propose a draft set of options as a base for refining and testing them; and,

* Gathering and crystallising the views into a more refined set of policies by the end of 2024.

Then through 2025 I’d like to:

* continue thrashing out and tempering those aims, methods and policies through the process of covering the 2025 Local Government elections; and,

* finalising a set of coherent policies in an edited book and/or section of The Kākā that would be refined and finalised by the end of 2025.

Then during 2026, I’d like to:

* launch a section of this website and/or book for free to a wider public for discussion through public webinars, online surveys, articles and podcasts from early 2026, up to and including the general election of late 2026;

* the section of this website or book would be called The Kākā Project of 2026 for 2050 and include an edited summation of our exploration, the views of the people and subscribers we talked with, and the settled set of policies, as of the end of 2025; and,

* I would interview the party leaders and politicians through 2026 and cover their election positions and policies in relation to the policies outlined in The Kākā Project of 2026 for 2050 (TKP 26/50)

This is for debate purposes only, not for creating parties or politicians

Just to be very clear, this is not some attempt to become involved in the actual political process. I don’t have the will or resources or skills to do anything like that and I think I can be of more use just continuing to put out my emails and podcasts as part of my effort to cover Aotearoa’s political economy around the issues of housing, climate and poverty.

My idea of success would be to open the ‘Overton Window’ a little during those election debates of 2025 and 2026. The usual parties and candidates will do and say whatever they like about The Kākā Project of 2026 for 2050, or nothing at all, knowing that we are simply part of the debate, not a competitor or contestant, and that we come to chat with an open mind, a generous spirit and in good faith.

This will create a bunch of ideas and public resources that might help the debate.

Starting with six questions …

The six questions I’d like to pose to subscribers, general readers and interviewees over the rest of the year are:

* What population growth rate do we want on average over the next 25 years?

* What specific improvements on housing, climate and poverty do we want by 2050?

* What size and structure of Government spending and debt to GDP is needed to achieve those 2050 targets?

* What would an emergency response to achieve the housing targets look like?

* What would an emergency response to achieve the climate targets look like?

* What would an emergency response to achieve the poverty targets look like?

For the purposes of discussion and context, my answers in various forms would be something like:

* If we aim for our population growth rate to remain unchanged from its rate of the last 25 years at around 1.5% per annum, that would mean Aotearoa’s population would grow to 7.7 million by 2050, and 19 million by 2100. We are likely to increasingly become a climate refuge for a small portion of the richest 100 million people living within the overall population of 2 billion living in East Asia (China, India, Southeast Asia);

* I believe houses should cost no more than 30% of average equivalised household disposable income to live in by 2050, regardless of whether it’s owned or rented.

* Aotearoa should aim to reach net zero for climate emissions by 2050, as legislated for currently, with any offsets bought and created in Aotearoa at NZ$150/tonne of C02 equivalent emissions reduced and/or stored permanently, with a broad-based carbon and carbon equivalents tax on all gases rising in $5 per year increments from $50/tonne in 2030 to $150/tonne by 2050, replacing the ETS from 2030.

* I think we should hope that no one is in position to say in the Stats NZ Household Income survey they don’t have enough income for rent, food and electricity, and that no one is in a position to say in the survey their house has a major mould problem, or is a major problem to heat;

* The size of both central and local Government spending to GDP and net central and local government debt to GDP should be 45% of GDP on average in the 20 years to 2050;

* I want Parliament to enact emergency bipartisan legislation (The Aotearoa by 2050 Act (2026)) to create independent agencies answerable to Parliament to achieve the targets above by 2050, just as the Reserve Bank Act was legislated in 1989 and agreed by both major parties to independently achieve inflation of around 2%.

The sorts of policies that could achieve these aims include:

* Agreeing a broad-based and low-rate annual Aotearoa by 2050 levy on the value of residential-zoned land of 0.5% for occupied land, 1.0% for unoccupied homes on residential-zoned land and 1.5% for residential-zoned land that is not built on;

* Agreeing that Aotearoa by 2050 levy be used to achieve the Aotearoa by 2050 Act (2026), including paying for servicing the debt needed to build the necessary long-term water, housing and public transport infrastructure, as well as maintain the infrastructure;

* Agreeing the levy be used to ensure those infrastructure and consenting costs are paid for by the levy and the debt it services, rather than the individual home buyers, land owners, developers or councils, in order to dramatically lower the marginal costs of new homes, and the levy be used to prioritise the building of new homes and public transport networks that dramatically lower housing costs, gross climate emissions and the number of unhealthy homes;

* Agreeing that capital gains on real business values and non-residential-zoned land remain tax free and that savings cordoned off until retirement such as KiwiSaver funds do not pay tax on earnings while cordoned off;

* Creating a publicly-funded joint job, education, health, food, power, housing and income guarantee for 18-35 year olds, including volunteering and unpaid family caring and community work as choices in that guarantee, and agreeing that the current arrangements for NZ Superannuation of incomes indexed to average wages, no means testing or asset testing and no change in the age of eligibility of 65 also apply to the income guarantee and the age thresholds; and,

* Agreeing a fixed and progressive income tax scale for wages, salary, interest and dividend income of 25%, 30% and 35%, where the thresholds rise at the same rate as average incomes;

* Agree the GST rate be progressively reduced to 10% by 2050;

* Fixing rises in administered prices of Government and council services, including water, transport, rates, publicly leased land and other fees and charges to no more than 2% per annum until 2050; and,

* That the Government pay council rates on Crown land and rebate GST on rates back to councils.

Interviewing the experts, participants and politicians

I’d look to do individual interviews and arrange Hoons with a range of people through the rest of 2024 and until the local elections in late 2025, to discuss current issues and The Kākā Project of 2026 for 2050 (TKP 26/50), including;

* Mayors, councillors and council candidates from all councils and parties;

* Ministers, MPs and candidates from all parties in and out of Parliament;

* Home builders and Community Housing Providers currently building and/or managing more than 1,000 homes per year;

* Bankers, fund managers, insurers and regulators currently financing, insuring and regulating the building, renting and operation of those homes;

* Academics, consultants, planners, architects and economists working, researching and teaching on housing, climate and poverty; And,

* Authors here and overseas of books on economics, politics, housing, climate and poverty.

I’ve enjoyed writing the above down on ‘paper’ and I welcome the thoughts of subscribers on the paid tier in the comments below or in the group chat. You can also message me directly on the app or just hit reply on this email.

This email and podcast was sent to all 21,500 free subscribers in full and is able to be fully shared, read and listened to.

Nga mihi nui and chocks away!

Bernard

PS: To do this consistently over the next couple of years, I’ll need to tighten up my daily emails and podcasts so please don’t be too surprised or disappointed if they’re shorter and less detailed. I’ll be dedicating more time to more detailed deeper dives, interviews and ‘Hoons’ for and about The Kākā Project of 2026 for 2050 from now on. If this is not what you want as a paying subscriber, please speak now or forever hold your peace.

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

TL;DR: Here’s the top 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:

* Two new academic studies attempt to pinpoint tipping risks. One modelled tipping risk from four interconnected tipping elements, based on current policy paths that overshoot 1.5˚C, and estimated the tipping risk to be 45% by 2300, even if temperatures are brought back below the target this century. Climate action this decade can have a significant impact on the level of risk, they say.

* Another study, yet to be peer-reviewed or published, modelled just one tipping element, the Atlantic Meridional Overturning Circulation (AMOC). Shockingly, it found a greater-than-even chance of an AMOC collapse before 2050. The impact of such a collapse would profoundly affect much of the Northern Hemisphere.

* Energy Minister Simeon Brown has offers up his grand plan for importing LNG that solves neither the immediate nor the long-term electricity supply crisis, while the country’s largest gas and energy customers, Methanex and Tiwai Point ramp down their operations (and their associated exports), to offset the short-term pain.

* Propublica has a great scoop this week, gaining access to training videos for The Heritage Foundation’s Project 2025 and its secret 180-day Playbook for getting an army of political appointees in place to fight the deep state and rapidly advance a right-wing agenda should Trump win the US election. The videos include plans to “eradicate climate change references from absolutely everywhere”.

(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. Some ‘hard to ignore’ research into the looming tipping points

In international science news, research attempting to pin down more specific information on tipping points and their timing is emerging.

An article published in Nature magazine says that if we were to follow current policies in place this century, which overshoot 1.5˚C, it would commit the world to a 45% tipping risk by 2300, even if the temperature is subsequently brought back below 1.5˚C. The tipping risk increases for every 0.1˚C of temporary overshoot.

The study uses an Earth System Model of four interconnected climate tipping elements. The paper emphasises that planetary stability relies on stringent emissions reductions in the current decade.

One particular tipping element (one of the four included in the modelling above) that has been receiving a lot of attention in recent years is the Atlantic Meridional Overturning Circulation or (AMOC), a vital system of currents in the Atlantic Ocean that have profound impacts on weather around the world.

2. When might the AMOC tip?

News about the AMOC has been increasingly concerning and a new, yet to be peer-reviewed study, is the most dramatic and worrying yet, suggesting that a tipping point may be much, much nearer than 2300. The research uses a state-of-the-art model that focuses specifically on estimating the likely timing of a collapse. The results suggest that the AMOC is more likely than not to collapse by 2050.

Like a conveyor belt, the AMOC pulls warm surface water from the southern hemisphere and the tropics and distributes it in the cold North Atlantic. The colder, saltier water then sinks and flows south. The mechanism keeps parts of the Southern Hemisphere from overheating and parts of the Northern Hemisphere from getting unbearably cold, while distributing nutrients that sustain life in marine ecosystems.

The impacts of an AMOC collapse would leave parts of the world unrecognizable.

In the decades after a collapse, Arctic ice would start creeping south, and after 100 years, would extend all the way down to the southern coast of England. Europe’s average temperature would plunge, as would North America’s – including parts of the US. The Amazon rainforest would see a complete reversal in its seasons; the current dry season would become the rainy months, and vice versa.

An AMOC collapse “is a really big danger that we should do everything we can to avoid,” said Stefan Rahmstorf, a physical oceanographer at Potsdam University in Germany who was not involved in the latest research.

The Southern Hemisphere would become warmer than currently predicted in the case of an AMOC collapse, as less heat would be transported northward.

Rahmstorf said that five or so years ago he would have agreed that an AMOC collapse this century was unlikely, though even a 10% risk is still unacceptably high “for a catastrophic impact of such magnitude.”

“There’s now five papers, basically, that suggested it could well happen in this century, or even before the middle of the century,” Rahmstof said. “My overall assessment is now that the risk of us passing the tipping point in this century is probably even greater than 50%.”

The pre-print (yet to be peer-reviewed and published) of the paper can be read in full here.

Specifically, it estimates the probability of an AMOC collapse before 2050 at 59 ± 17%. If the paper makes it through peer-review largely intact, it should cause a serious rethink of our global approach to reducing emissions as the scale of risk is almost unimaginable.

3. Markets can’t solve it, and the Govt won’t - but it WILL import more gas

Having cancelled the previous Government’s oil and gas exploration ban, Energy Minister Simeon Brown now wants to start importing LNG. That won’t solve the immediate crisis, of course. Or the long-term one, for that matter.

Brown has been quick to blame the previous government's ban on new oil and gas exploration for a shortage in gas to get us through the entirely predictable current dry year issue. But a great explainer in The Conversation by a group of Canterbury University academics points out that a record amount was spent on drilling new wells between 2020 and 2024. It just didn’t produce much new gas and now energy companies think there is less there than they previously thought.

This, combined with policies that change with each new government, means that energy companies will be slow to respond to the new policy regime while both gas and electricity markets lack the ‘confidence to move’. Another way to put it is that markets can’t solve the problem and Governments won’t. What a pickle.

According to The Conversation article,  every short-term solution involves a trade-off that impacts GDP (that shouldn’t be a surprise given how tightly correlated energy and GDP are). And that is what has eventuated with both Methanex (the country’s largest domestic user of indigenous gas) and Tiwai Point (the country’s largest renewable energy customer), both significant exporters, agreeing to ramp down their operations temporarily.

The option to strategically toggle production up and down to off-set variable energy availability is one that has been under-explored until now. The situation with Tiwai Point and Methanex has evolved almost organically, but should we put a tail on it and call it a cunning plan? Where are the feasibility plans for strategically over-building renewable energy alongside industries that can export embedded or stored energy in various forms? It’s not a new idea, but thus far lacks sufficient strategic governance to bring it about in a more intentional form.

Backing into Bernard’s call to exploit China’s cheap battery and solar production, Mike Casey this week made a case for a mini boom in distributed solar. Again, this requires strategic government action to ‘pull levers it’s just not pulling’. A more distributed energy grid would have the added advantage of building more resilience into a system that is facing increasingly strong and more frequent weather events. AND, in what would seem like something akin to magic at this point, it would tip the country into forward motion.

4. Project 2025’s anti-science plans

Shifting to news abroad – Propublica has a great scoop this week on the secret/not so secret Project 2025’s plan to train an army of political appointees who could ‘fight the deep state’ and accelerate a right-wing policy agenda under a future Trump presidency.

There have been increasing calls from Democrats for The Heritage Foundation to release the “undisclosed fourth pillar of the project called the ‘180-Day Playbook’”, which has so far remained secret. Propublica has gotten hold of a set of training videos for it, including one on climate change that features some extremely retro thinking:

In one video, Bethany Kozma, a conservative activist and former deputy chief of staff at the U.S. Agency for International Development in the Trump administration, downplays the seriousness of climate change and says the movement to combat it is really part of a ploy to “control people.”

“If the American people elect a conservative president, his administration will have to eradicate climate change references from absolutely everywhere,” Kozma says.

Despite Trump’s claim to have no connection to the project, Propublica found that 29 of the 36 speakers featured in the videos have worked for him in some capacity, in his 2026-27 transition team, his administration or his 2024 re-election campaign.

The Project’s known threats to science were outlined in a Scientific American article in July, that claimed the Project sought to  “sabotage science-based policies that address climate change, the environment, abortion, health care access, technology and education.

“...also mapped out in detail, is a plan to exert more presidential control over traditionally nonpartisan governmental workers—those Trump might describe as members of the “deep state,” or regulatory bureaucracy. For example, Project 2025 claims that the National Oceanic and Atmospheric Administration and other scientific institutions are “vulnerable to obstructionism” unless appointees at these agencies are “wholly in sync” with presidential policy. To that end, it would reclassify tens of thousands of civil service jobs as political positions that answer to the president.

“The independence of science is being attacked across the board in this document,” says Rachel Cleetus, policy director of the Climate and Energy program at the nonpartisan Union of Concerned Scientists.

“The importance of this science is that’s how we can ensure people’s health and the environment are being safeguarded.”

5. So what are health implications of climate change?

Another academic pre-print (yet to be peer-reviewed and published) makes one of the first systematic attempts to estimate the effects of climate change on human morbidity and mortality. The researchers calculate directly-attributable mortality between 2016 and 2023 as high as 271,000, although this figure encompasses only a small fraction of the presumed global burden given the lack of studies that address infectious and non-communicable diseases, or large-scale events outside of Europe or the US.

They suggest that the field of health impact attribution is “poised to explode in the next decade, putting unprecedented pressure on policymakers to take action for human health”. MedRxiv

6. The best (and worst) of the rest of the climate news

Among the many other interesting stories this week:

* A report has found that the UK’s Drax biomass power plant was the country’s largest carbon emitter in 2023, emitting more than the country’s largest remaining coal plant, despite receiving more than £7 billion in public funding subsidies available under the EU and UK Emissions Trading Schemes. The energy from biomass plants is considered renewable and their emissions don’t have to be reported as it is assumed that forest regrowth offsets the carbon dioxide produced. The plant’s own accounting relies on a significant contribution from Bioenergy with Carbon Capture and Storage (BECCS), although the CCS part is yet to be built. All of the IPCC’s Shared Socioeconomic Pathways (SSPs) that keep the world below 1.5˚C use BECCS as a negative emissions technology to reduce CO2 in the atmosphere and bring temperatures back down after overshooting the 1.5˚C target. Contention remains over the feasibility and scalability of those plans. Source: The Guardian

* Canada’s 2023 wildfires produced more CO2 emissions that would normally be expected over the course of a decade and were made three times more likely by climate change. Source: The Guardian

* More marine heatwaves, responsible for a damaging cascade of impacts across critical oceans species, are predicted for Aotearoa this summer. The Herald

* An opinion piece by Dan Hikuroa’s for The Herald argues eloquently for a shift in paradigms away from a mechanistic view of the world toward a kaitiakitanga paradigm that focused on being a good ancestor. He acted as an advisor for the producers of the play Scenes from the Climate Era, on at Tamaki Makaurau’s Q Theatre until 24 August. I’ve heard its excellent! The Herald

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