The Kākā by Bernard Hickey

TL;DR: The economy and housing market is sinking into a longer recession through the winter after a slump in business and consumer confidence in the March quarter, driven partly by abrupt freezes in Government funding for housing, transport, school and hospital investment.

That happened as an average of 166 New Zealand citizens left the country every day during those 90 days, which was up 54% from a year ago. They were replaced by almost the same number of people with temporary work and student visas from India, the Philippines and China.

Here’s my top six ‘pick ‘n’ mix’ of links to news, analysis and opinion articles, announcements, official reports, reviews and research in the last 24 hours or so to 8:59 am on Wednesday, May 15:

* Stats NZ reported yesterday a record-high 52,496 New Zealand citizens left the country permanently in the year to the end of March. That equates to about one full A320 leaving each weekday, with just over half of those citizens going to live in Australia. They were replaced by people on temporary work and student visas (with work rights) from India, the Philippines and China, in that order.

* Meanwhile, Australia included a A$300 discount off each household’s power bills and A$325 discount off each small business’ bills in its Budget last night, along with a 10% increase in subsidies for nearly one million renters. It also confirmed tax cuts and a A$32 billion plan to build 1.2m houses over the next five years. Australia's Treasury said the Budget’s measures would take half a percentage point off inflation. Economists said the Budget would not force the Reserve Bank of Australia to hike in response.

* In another indication of Aotearoa Inc’s ‘housing market-with-bits-tacked-on-economy sinking into a deep freeze, REINZ reported yesterday the market was subdued in April, with rising inventories of unsold homes, falling prices in both Auckland and beyond, and rising numbers of days to sell.

* Consenter-in-waiting Shane Jones didn’t declare a dinner at which he suggested an executive from coal mining company Stevenson Group approach a Cabinet colleague to enter the Government’s fast-track consenting regime, David Williams reported for Newsroom yesterday. He reported this morning that Bathurst Resources CEO Richard Tacon and Federation Mining VP Simon Delander were also at the undeclared meeting. Jones said the lack of declaration was a mistake.

* There was no business case or reliable forecasts behind the Government's announcement last week of $1.9 billion of spending on a mega-prison, Laura Walters reported yesterday for Newsroom. (Link updated)

* Environment Canterbury has reported more than half of the wells monitored in its annual survey last year showed nitrate levels were likely to be increasing, with water from 35 of the 349 wells having nitrate levels above the maximum acceptable value for human health. South Canterbury has the highest incidence of bowel cancer in New Zealand. Bowel cancer causes the second-most deaths from cancer each year, as this Vic Uni paper shows. The news comes after Selwyn District Council started investigating spending over $400 million to move away from nitrate-contaminated drinking water. The Press-$$$ Keiller MacDuff

(Paying subscribers can see more detail and analysis below the paywall fold and in the podcast above. We’ll open it up for public reading, listening and sharing if we get over 100 likes)

News links elsewhere from Aotearoa’s political economy

The top six:

* Climate: Hazard-prone development likely under fast-track law, insurers and engineers warn RNZ Kate Newton

* Scoop: Fist bumps and a ‘stoked’ minister: Inside the fast-tracking of a DJ’s passport NZ Herald Azaria Howell

* Climate: East Coast mayors hold out hope for Budget as rebuild bills mount Newsroom Emma Hatton

* Scoop: New misc­ondu­ct alle­gati­ons at EY, inve­stig­atio­n launched. The ‘Big Four’ accounting firm plagued by workplace culture problems has another problem to deal with Stuff Paula Penfold

* Cost of living: Reserve Bank accused of harming bank competition. The central bank got a mauling at the Commerce Commission’s banking market study conference, accused of stifling competition to the big four Australian banks. The Post-$$$ Rob Stock

* Op-Ed by Consumer Advocacy Council chair Deborah Hart in The Waikato Times Electricity sector at another crucial crossroads. Should we continue with increasingly unaffordable and unreliable electricity, or reform the market settings?

Best of the rest:

Housing, Transport, Infrastructure & Population

Holiday park brought by Kāin­ga Or­a for $4.15 million still vacant four years later. A former lodge and holiday park was sold for $4.15million four years ago. After it was briefly used as a quarantine facility it has sat vacant. Stuff Hamish McNeilly

The Block NZ gets the chop, houses sit empty RNZ

Homeless camp at Dunedin’s Oval visited by govt officials ODT-$$$ Mary Williams

Deep-dive: Part 1 - Supercharging social housing BusinessDesk-$$$ Nikitin Sallee

Deep dive: Part 2 - Private profit could fuel social housing boom BusinessDesk-$$$ Nikitin Sallee

Auckland's new electric ferries to roll out next year 1News

Some residents welcoming an end to free parking in Auckland CBD. It's "not realistic" to have a free public car park outside apartments, says the chairperson of a city centre residents' group. 1News

Climate, Energy & Environment

Resi­dent­s return to floo­d-hit Auckland neig­hbou­rhoo­ds. Some streets in Māngere have been like ghost towns since last year’s floods, but are slowly coming back to life. Stuff Torika Tokalau

Inequality, Poverty, Cost of living & Migration

Auckland rang­atah­i create space for at-risk homeless youth. When The Front Door opened on K Rd this week, a dream became reality for a group of young people seeking to make life better for others. Stuff Karanama Ruru

Health, education and justice

Government rejects plea to reduce salt in food. Researchers recently measured almost 7000 products on our supermarket shelves and found two thirds exceeded safe limits for salt — increasing the risk of stroke 1News Thomas Mead

Global salt benchmarks could help save many Kiwi lives ODT

Access to life-changing MS drug ‘snatched away’ by staff shortages. Bruce Street is eligible for a treatment that could help slow the progress of his MS, but because he lives in Canterbury, he can’t get it. The Press-$$$ Kristie Boland

Politics, Government, Councils and Te Tiriti

Ministry already preparing to hire consultants to do work of axed staff RNZ

Up to 35 public schools to become charter schools, will be exempt from phone ban RNZ

Govt ends funding to Christchurch Call, which will continue as a charity. RNZ

Christchurch mayor wants council to restore Dux de Lux building. Phil Mauger said the Dux de Lux “is heritage all day long”, and the council should fund the quake-damaged building’s repair. The Post-$$$ Tina Law

Alternatives to Aurora sale raised ODT-$$$

Business, Economics and Geo-politics

‘Glacial’ pace towards open banking criticised. Current open banking progress a “roadmap to Botswana”, Commerce Commission told. The Post-$$$ Rob Stock

Every household to get $300 credit for energy bills as government vows move will reduce inflation ABC Australia

What's in the budget for businesses? A lot, for those who can engineer a 'Future Made in Australia' ABC Australia

Biden sharply hikes US tariffs on an array of Chinese imports Reuters

Georgian parliament passes 'foreign agent' bill amid protests Reuters

A US-China EV trade war threatens Biden's clean-car agenda Reuters

Opinion links

Interviews, Op-Eds, Editorials and Columns

Column by Tova O’Brien in Stuff: The cont­radi­ctor­y message on charter school. National has been steadfast in its view that all kids should gain the same “non-negotiable knowledge and skills”, but ACT's charter schools are carving out loopholes.

Column by Audrey Young for NZ Herald: State schools 'converted' to charter schools? Brace for controversy.

Op-Ed by renewable energy developer Jevon Carding in BusinessDesk-$$$: Big rewards for solar pioneers Lodestone Energy

Op-ed by Joseph Stiglitz in The Washington Post: Time is up for neoliberals. Democracy requires a new, progressive capitalism.

Op-ed by Auckland Uni’s Jodi Gardner in The Conversation: Why power should be subsidised for struggling households

Chart of the day

Tough times for retailers and hospitality

Cartoons of the day

‘Just triple the hourly rate’

Digging a deeper hole

Stick of the day

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

TL;DR: An unseasonally early icy blast at the same time as some long-overdue maintenance almost caused Aotearoa-NZ’s electricity system to black out this week. That’s because a quadropoly of gentailers have prioritised paying dividends from their rising profits and adding debt over investing in 1.5 GigaWatts of new wind farms that were already consented over the last decade.

Official inquiries, the OECD, consumer and worker advocates, and countless frustrated and/or failed independent electricity retailers have called on the Government to break up or regulate the quadropoly in a way that would create much more competition and restrain the super profits, super dividends and under-investment. That extra competition would, in turn, spark innovation by new competitors to grow and match electricity demand with supply in the right places. That would both avoid blackouts and help transition away from coal, gas, diesel and petrol use to an (almost) fully renewable electricity and transport systems that cut living costs and are much more resilient to climate extremes and geopolitical drama.

Yesterday I spoke to Rewiring Aotearoa CEO Mike Casey and Octopus Energy NZ Chief Operating Officer Margaret Cooney about the current state of our electricity market and what could be done to fix it. Our conversations are included in full in the video above, and audio podcast above, which is available to all.

Casey talked about how he earned extra money by exporting power into the grid at sky-high prices from the solar panels and batteries he installed to fully electrify his cherry orchard in Cromwell. Cooney talked about how Octopus Energy UK pays customers to reduce demand and uses automation to match supply and demand. She also talks about a way to make the market more competitive and viable for independent retailers buying from the wholesale market.

(Paying subscribers can see more detail and analysis below the paywall fold and in the video above. The audio version is available immediately to all subscribers. We’ll open it up for public reading, listening and sharing if we get over 100 likes.)

An explainer: why we almost blacked out and how to fix it

So what actually happened this week?

Transpower warned on Thursday of potential blackouts on Friday morning because an unseasonal cold snap was happening at the same time as long-planned and overdue maintenance, along with a lack of gas supplies. It asked both households and industrial users to voluntarily reduce their use of power. It also worked with some lines companies to directly switch off hot water cylinders through a system known as ‘ripple control’. Meanwhile, wholesale prices rose as much as 50-fold from $270 per MegaWatt/hour to $5,000 per MegaWatt/hour (27c per KiloWatt hour to $5 per KiloWatt hour) on Wednesday and Thursday, also discouraging those industrial users with prices based off wholesale prices.

That plea and the above market signals worked, at least for yesterday morning. Transpower said yesterday about 260 MegaWatts worth of demand had been reduced, which is equivalent of the demand of a city as big as Hamilton.

But the broader problem remains of why we don’t have enough generating capacity, batteries and demand management tools to make a cold snap at the wrong time of the year business as usual.

Why didn’t the gentailers build more capacity?

In my view, it’s because the industry is not competitive enough to allow innovative new entrants to come in with new ideas and technology, and because the big four gentailers were able to take advantage of their super profits to hand over big dividends to shareholders, especially the biggest one: the Government under both flavours of politicians. Here’s a summary of what went wrong with electricity industry deregulation and privatisation over the last 30 years, via Paul Fuge at ConsumerNZ.

Here’s what happened to generation capacity, dividends, capital returns and investment. The prioritisation of dividends and the stagnation of generating capacity was especially pronounced from 2013 to 2021.

Did consenting issues stop them from investing?

‘No’ is the clear answer. There are currently 1.551 GigaWatts of wind projects already consented, according to NZ Wind Energy Association data. That’s 60% more capacity than is already built and would be enough to replace all the coal and gas currently still be used. Many have been consented and ready to go for a decade.

Some generators have argued wind and solar are not as reliable or as immediate a source of electricity as coal and gas, and therefore they cannot be like-for-like or useful substitutes. That is true in a world without batteries, but that is rapidly changing.

So how do we fix this?

Some investors and independent electricity players who have been frustrated with waiting for a competitive market to be developed have recently started using plummeting prices of solar panels and batteries to build grid-scale solar farms and batteries.

Here’s a couple of examples:

Lodestone Energy has already built three solar farms, including this one most recently in Northland. It plans to build 320 MegaWatts of capacity, which would be enough to power 50,000 homes.

In March this year, WEL Networks and Infratec opened their 35 MW battery at Rotohiko near Huntly, which is connected to the Transpower grid and has 16 battery modules, eight inverters and four transformers. It can then charge the batteries when power prices are cheap and then sell it at peak times to make a profit.

It depends on the Government

Energy Minister Simeon Brown blamed the previous Labour Government’s decision to block new exploration for oil and gas, but the true blame is closer to home. Treasury has demanded high dividends to ensure deficits and mortgage rates are as low as possible.

There are no moves afoot to direct the gentailers to increase investment, or to either structurally separate or force transparency from the gentailers about what their retail divisions pay their wholesale divisions for power. The current limits on lines companies retailing power is also keeping the competition wolves from the gentailers doors.

Until independent retailers believe the wholesale market is fair and reliable and the Government encourages and incentivises households and businesses to ‘go electric’, it will be hard to introduce the sort of innovative tech and systems to roll out substantial solar and battery networks.

Mā te wā

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

TL;DR: The podcast above of the weekly ‘hoon’ webinar for subscribers features co-hosts Bernard Hickey and Peter Bale , along with regular guest Robert Patman on geopolitics, and special guest Jesse Richardson from A City for People on a big victory for YIMBYs in Wellington this week.

The six things that mattered in Aotearoa’s political economy that we wrote and spoke about via The Kākā and elsewhere for paying subscribers in the last week included:

* Housing: In a big win for YIMBYs over NIMBYs in the nation’s capital, Housing and RMA Reform Minister Chris Bishop approved almost all of the Wellington City Council’s recommended zoning changes to allow many more apartments and townhouses in its inner-suburbs. He went even further on densification than the council by allowing six-storey apartments in Kilbirnie, but decided not to strip the derelict Gordon Wilson flats of their heritage status. See Thursday’s email.

* Poverty: Associate Education Minister and ACT Leader David Seymour announced the continuation of the Healthy School Lunches Programme known as Ka Ora, Ka Ako for two years, but with cheaper packaged food for intermediate and secondary school kids at lower decile schools, rather than hot meals. He said it would save $107 million. See Thursday’s email.

* Tax: Finance Minister Nicola Willis announced in her first pre-Budget speech in Wellington an expansion and renaming of the Social Wellbeing Agency (back) into the Social Investment Agency. She also said the Budget would include “meaningful, but modest” tax cuts that would increase the take-home income of 83% of New Zealanders over the age of 15 and 94% of households.

* Climate: A cold snap increased power demand and forced Transpower to warn of potential shortages this morning. Wholesale prices leapt 50-fold. Meanwhile, Genesis Energy is resuming coal imports because of gas shortages and a lack of investment in the last decade by (mostly) state-owned gentailers who have prioritised high profits, high dividends and capital returns over investment in (already consented) wind farms. See Thursday’s email.

* Poverty: MSD cut funding for budgeting services, debt restructuring advisors and helping Christchurch attack survivors, surprising those working with poor families stuck with loan shark debt and survivors struggling to rehabilitate. Willis confirmed in her speech this week the Government had found $1.5 billion of savings to help pay for lower taxes for landlords. See Thursday’s email.

* Climate Minister Simon Watts announced this morning the Government had agreed that Parliament’s Finance and Expenditure Committee would conduct an inquiry into climate adaptation. This followed the Environment Committee’s inquiry into climate adaptation last year, which reported back in February.

What we talked about on ‘The Hoon’ on Thursday night

In this week’s podcast above of the weekly ‘Hoon’ webinar for paying subscribers at 5pm on Thursday night:

* 5:00 pm - 5:20 pm - Bernard Hickey and Peter Bale opened the show with a discussion about climate change, school lunches, woke sushi and Christopher Luxon’s very, very bad week.

* 5:20 - 5:50 - Peter and Bernard talked with Robert Patman about the latest moves in Gaza and a growing lack of confidence in US leadership.

* 5:40 - 6:00 pm - Peter and Bernard talked with Jesse Richardson from

A City for People on a big victory for YIMBYs in Wellington this week .

The Hoon’s podcast version above was produced by Simon Josey.

(This is a sampler for all free subscribers. Thanks to the support of paying subscribers here, I’m able to spread the work from my public interest journalism here about housing affordability, climate change and poverty reduction around in other public venues. I’d love you to join the community supporting and contributing to this work with your ideas, feedback and comments.)

Other things I did elsewhere

I produced an episode of When The Facts Change via The Spinoff, including this interview with Otago University public health Professor Nick Wilson on the true costs of tax cuts paid for with higher tobacco taxes.

The Government has repealed various smoke-free measures to ensure it keeps collecting $1.2 billion a year in tobacco taxes, in order to pay for tax cuts already being delivered to landlords. But an economic analysis done by Wilson and colleagues found keeping the smoke-free measures would have made consumers $51 billion better off by 2050 through earning more and spending less, which would more than offset the $19 billion net losses of the Government, given less tobacco tax and more pensions spending because more people will live longer and past the Super age of 65.

We also produce this 5 in 5 with ANZ daily podcast and Substack for ANZ Institutional in Australia, which you can sign up to via Spotify and Apple and Youtube for free.

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

TL;DR: Ratings agency Standard & Poor’s is pushing back hard at suggestions from Local Government Minister Simeon Brown and Mayor Wayne Brown that carving Watercare out of Auckland Council can be done easily and cheaply without clear guarantees on the new Watercare bonds from the Government or Auckland Council.

Industry sources have told me Watercare would get a BBB+ or A- credit rating at best under the proposed structure, even with a ‘nod and a wink’ from the Crown that it would rescue Auckland’s water network if push came to shove. This means the Government and Council are loading up an extra 50 to 100 basis points in borrowing costs onto the nation’s key infrastructure provider in the economy’s growth engine.

Over many billions of dollars of borrowing, the costs would mount up to tens of millions of dollars a year and the unnecessarily low credit rating would also restrict Watercare’s ultimate scale of the borrowing because fund managers don’t have much room for BBB bonds. They will happily fund billions of AA bonds that the Council could issue, let alone the AA+ bonds the Government could sell.

To add to the financial pain, those costs are essentially unnecessary insurance premia to pay for the short-term and very political figleafs of keeping high credit ratings for the Council and Government themselves for now, and politicians being able to disavow responsibility for high water charges increases in future.

In my view, that’s an expensive and unnecessary ‘nod and a wink’ that delays and restricts the amount of house-building needed to cope with previous fast population growth, let alone likely growth. The Government and Council would be achieve a lot more in a shorter period and with much less cost by simply borrowing off their own balance sheets. At worst, Auckland might lose a notch on its credit rating and increase its borrowing costs by 5-10 basis points, which would add about $2 million a year in interest costs.

Messrs Brown and Brown are choosing political figleafs now in exchange for loading up tens of millions in extra interest costs on Auckland ratepayers, while also delaying and downsizing the amount of house-building possible in future decades. It is the exact opposite of the Government’s stated aims of controlling inflation in basic living costs and ‘Going For Growth’ on housebuilding.

(Paying subscribers can see more detail and analysis below the paywall fold and in the podcast above. We’ll open it up for public reading, listening and sharing if we get over 100 likes)

Brown figleaves to cost Aucklanders tens of millions

The much-trumpeted deal to carve Watercare out of Auckland Council and soften this year’s water charges hike from 25.8% to 7.2% risks costing Aucklanders tens of millions of dollars a year extra in interest costs over the longer run, all to allow the Government and Council to say publicly they aren’t guaranteeing the debt and allow politicians to disavow responsibility for new and/or higher water charges.

The deeper failure is that these extra costs will have been paid unnecessarily, especially from a taxpayers’ point of view. That’s because in reality, the Government would be forced bail out Watercare anyway. As it stands, the key ratings agency Standard & Poor’s is already pushing back at the vagueness of the Government’s position behind Watercare, saying that without a proper assurance the new carved-off Watercare would have a much lower credit rating than the Council’s AA rating and the Crown’s AA+ rating.

Sources close to the process have confirmed Watercare might get a BBB+ rating or A- rating at the very best, even with a ‘nod and a wink’ from the Government. That would impose an extra borrowing cost over and above regular Government AA+ bonds or Auckland Council AA bonds of at least 50 to 100 basis points.

Local Government Minister Simeon Brown and Auckland Mayor Wayne Brown trumpeted their deal on Sunday to carve Watercare’s assets out of Auckland Council as a win-win-win for ratepayers, taxpayers and the growth aspirations for Aotearoa’s biggest city and its economic (and housing) growth engine.

They said it would break the shackles on Auckland’s borrowing limits, dramatically reduce this year’s water charges increase and mean the Council and taxpayers would not have to guarantee Watercare’s bonds. It was also seen as a template for other councils to do the same thing. What’s not to like?

The trouble is that combination of lower water charges inflation, more borrowing and no formal guarantees of ratepayer or taxpayer bailouts is an impossible trinity without some sort of implicit reassurance or comfort for ratings agencies and bond investors given by the Goverment that means there is effectively a guarantee anyway.

The real problem is this ‘nod and a wink’ from minister of the day is not being clarified and won’t be clear until legislation is written later in the year.

Strategic ambiguities abound

I asked Simeon Brown’s office, Wayne Brown’s office and Standard & Poor’s for clarity on what form the guarantee or assurance would take.

The Browns said in their announcement on Sunday that: “International credit ratings agency S&P Global Ratings has determined the model would mean Watercare’s borrowing is considered separate from Auckland Council for credit rating purposes.”

Simeon Brown went further in a news conference (bolding mine):

“What has been tested with S&P is effectively a model whereby the council remains the owner, the council continues to control Watercare through appointments and setting the statement of intent and direction, but the council is no longer able to provide financial support to Watercare.

“Watercare will be legislated as having responsibility for delivering water and wastewater to Aucklanders rather than Auckland council and the Crown will also be legislating that any loans entered into by Watercare must include a disclosure that they’re not guaranteed by the Crown.” Simeon Brown

Really?

Sources close to Auckland Council suggested on Sunday that the lack of a formal guarantee could be replaced by type of ‘nod and wink’, described thus: “Central Government would be under no legal obligation to rescue the entity, but would be able to do so if it chose.”

What might S&P think of not having a guarantee?

I asked and they wrote back with the following (bolding mine):

“Any legislative changes that prohibit Auckland Council from providing financial support to Watercare may greatly limit the risks posed to the council by Watercare from a credit-rating perspective. Doing so, however, means the credit quality of Watercare would likely be much lower than Auckland’s AA rating. An entity such as Watercare can't borrow on terms as competitive as the council can unless it's part of the council or at least backstopped by the council.” S&P spokesman via email

So how much lower would the rating be? Sources familiar with the details of local government credit ratings said a BBB rating was likely with no assurance of Crown support, with a possible one or two extra notches to BBB+ or A- with a ‘nod and a wink.’

So was this the only choice for Auckland Council, Watercare and the Government?

There’s been a lot of chatter about how there was no way for Auckland Council or Watercare to borrow more because the Council was up against its debt ceiling of 280% of revenues. I’m told that’s not true because Watercare could have borrowed more through the Local Government Funding Agency (LGFA), but only if Auckland Council agreed to a one-notch credit rating downgrade.

S&P made clear that such a downgrade would only increase the Council’s costs by 5-10 basis points or less than $2 million per year. In previous years council officials have warned a downgrade for Auckland Council would force a sovereign downgrade, but S&P and others have rejected that.

In eseence, Brown and Brown are choosing an option that avoids rating downgrades that might prove politically embarrassing or increase mortgage borrowing costs nationally (but only marginally). They are also able to distance themselves from decisions made by Watercare and other water providers to increase and/or impose water charges.

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

TL;DR: The podcast above of the weekly ‘hoon’ webinar for subscribers features co-hosts Bernard Hickey and Peter Bale , along with regular guests Robert Patman on Gaza and AUKUS II, and Cathrine Dyer on climate change.

Special guest Craig Renney talks about public sector job cuts this week and the Government’s big investment freeze at the end of the podcast.

The six things that mattered in Aotearoa’s political economy that we wrote and spoke about via The Kākā and elsewhere for paying subscribers in the last week included:

* Housing: A global survey by the Royal Institution of Chartered Surveyors (RICS) found surveyors in Aotearoa-NZ reported sharp contractions in activity and expectations for infrastructure and public housing in the March quarter because of project cancellations and funding freezes for councils by the new Government. See Thursday’s email.

* Economy: Business confidence fell across the board in April, falling in some areas to levels last seen during the lockdowns because of a collapse in construction activity after the new Government froze or reversed spending decisions on water, housing and transport investment. A drumbeat of state sector job losses and austerity rhetoric has further chilled retail spending and the housing market. See Wednesday’s email.

* Politics: A 1News-Verian poll showed the collapse in business, consumer and voter confidence about the country’s direction in March and April has translated into the worst polling performance for any first-term Government since the introduction of MMP in 1996. See Monday’s email.

* Housing: The Government’s hopes landlords would fund the building of new homes for rent and reduce rents from better after-tax returns from their existing rentals are falling on deaf ears, a survey landlords found this week. Investor intentions to build or develop new homes hit a record low in April, while more than 80% plan to increase rents in the next 12 months, back at pre-election levels. See Monday’s email.

* Cost of living: Bus and train fares for teenagers jumped this week because of Government public transport funding cuts, adding to the inflation pressures generated by double-digit hikes in council rates, again because of Government funding freezes and cuts. The Government has also imposed road user charges for electric vehicle owners and has promised to reintroduce prescription fees, all of which are contributing to inflation pressure and keeping mortgage rates high for longer. See Monday’s email.

* Politics: Labour called on PM Christopher Luxon to stand down Winston Peters as Foreign Minister after statements Peters made on RNZ about former Australian Foreign Minister Bob Carr. In Parliament yesterday, after David Parker raised Peters’ description of Carr as “a puppet of China”, Peters then doubled down and referred to an AFR article that described Carr as a ‘pawn’ of China. Luxon said he thought Carr would see it as the usual ‘rough and tumble’ of politics. We discuss this in the podcast above from 30mins to 40mins.

What we talked about on ‘The Hoon’ on Thursday night

In this week’s podcast above of the weekly ‘Hoon’ webinar for paying subscribers at 5pm on Thursday night:

* 5:00 pm - 5:10 pm - Bernard Hickey and Peter Bale opened the show with a discussion about the economy and foxes.

* 5:10 pm - 5:20 pm - Peter and Bernard talked with Cathrine about fresh revelations Big Oil is deliberately blocking a transition to carbon zero, as detailed in her weekly climate news wrap published yesterday.

* 5:20 - 5:50 - Peter and Bernard talked with Robert Patman about a growing debate about whether Aotearoa-NZ should join AUKUS Pillar II, along with news yesterday Winston Peters faces defamation accusations from Bob Carr.

* 5:40 - 6:00 pm - Peter and Bernard talked with Craig Renney about the job cuts in Wellington, the Government’s budget choices and a lack of investment.

The Hoon’s podcast version above was produced by Simon Josey.

(This is a sampler for all free subscribers. Thanks to the support of paying subscribers here, I’m able to spread the work from my public interest journalism here about housing affordability, climate change and poverty reduction around in other public venues. I’d love you to join the community supporting and contributing to this work with your ideas, feedback and comments.)

Other things I did elsewhere

I produced an episode of When The Facts Change via The Spinoff, including this interview with Auckland University’s Deborah Levy about a paper she co-wrote on the growing financialisation of holiday homes in Aotearoa.

We also produce this 5 in 5 with ANZ daily podcast and Substack for ANZ Institutional in Australia, which you can sign up to via Spotify and Apple and Youtube for free.

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

TL;DR: Here’s the top five 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 experts are demanding the UN’s Food and Agriculture Organisation (FAO) retract a seminal food systems transition report recently presented to the world at COP28, saying that it ‘seriously distorts’ their work and misrepresents the scientific consensus on the value of shifting to plant-based diets.

* This follows a series of earlier reports suggesting that the FAO has been compromised by livestock industry lobbyists and political interference.

* It also follows successful efforts in 2022 by some countries, including Aotearoa New Zealand, to have the IPCC water down the language and omit advice to transition to plant-based diets from the influential ‘Summary for Policymakers’ version of their climate mitigation report.

* As the livestock industry’s approach to the transition is increasingly being compared to that of fossil fuel interests, pressure is heating up for that sector. A key report has just being released in the US, resulting from the Senate Budget Committee’s investigation into climate delay caused by fossil fuel interests.

* Meantime, a key EU nature restoration law is near collapse as farmers protest the bill throughout Europe. Leading biodiversity researchers argue that farmers must be brought along in partnership if the effort is to succeed.

* Adam Tooze covers a disastrous year for development finance in his substack Chartbook, as both money and materials pour out of the Global South, and into the Global North, in support of wealthy countries’ carbon transition.

(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.)

FAO under pressure over food report

Academic experts Paul Behrens, an associate professor at Leiden University and Matthew Hayek, an assistant professor at New York University, claim the UN Food and Agriculture Organization (FAO) has ‘seriously distorted’ their work to underestimate the effects of reduced meat and dairy intake on mitigation of agricultural emissions.

According to a report in The Guardian, the academics are calling for the FAO to retract its report, saying it contains systematic errors, lacks transparency and misrepresents the scientific consensus on the value of shifting diets. Pointing to previous reporting, they claim that the FAO has a pattern of misrepresenting the science on dietary shifts.

Behrens posted on LinkedIn:

The FAO presented the first instalment of its roadmap for food systems to achieve zero hunger without breaching the 1.5˚C climate change threshold at COP28 in Dubai. But now Behrens and other academics whose work is covered by the FAO have published an article in the journal Nature Food (paywalled) publicly and explicitly  criticising the work. Specifically, they point to the report’s failure to highlight the need to reduce industrial animal agriculture.

“The first instalment of FAO’s roadmap is a welcome step in charting a course towards a zero-hunger, climate-compatible food system. However, several areas for improvement can be identified with regard to both process and substance: the roadmap does not describe how interventions were selected; it does not provide a quantification of the expected environmental benefits of these interventions; it does not include a list of authors and reviewers or details about its review process; and it omits key interventions with demonstrated potential to improve environmental and health outcomes — notably, reducing animal-sourced food production and intake.”

Lobbying & money back agribusiness interests

Ahead of the FAO’s roadmap being published in December last year, the Guardian reported on conflict between the FAO and some of its ex-officials who claimed that the leadership of the organisation censored and undermined them as they attempted to highlight the role of livestock methane in causing climate change.

“Several former staff members compared the power of the agribusiness lobby over FAO policy to that of the oil and gas giants on energy policy. As Green put it: “It is all about money, similar to the fossil fuel industry.”

Between 2012 and 2019, “the lobbyists obviously managed to influence things”, Holstein said. “They had a strong impact on the way things were done at the FAO and there was a lot of censorship. It was always an uphill struggle getting the documents you produced past the office for corporate communications and one had to fend off a good deal of editorial vandalism. You had to accept relatively small steps forward in changing the narrative on livestock.”

The climate impact of food systems received unprecedented attention at the latest COP, and the number of meat and dairy lobbyists attending the meeting exploded in response, to more than three times that of the previous year. According to a subsequent virtual panel of U.S. livestock bosses, reported on by Desmog, they left the meeting satisfied that the industry’s prospects remained positive under the UN’s food and climate plan.

Don’t say ‘plant-based’

The dietary role of meat and dairy is clearly of enormous consequence in New Zealand. In 2022, the Intergovernmental Panel on Climate Change (IPCC) released its Working Group III report on mitigation. The report made clear that switching to plant-based diets is one of the most effective demand-side measures that can be taken to reduce emissions and is also one of the most effective individual actions that individuals can take.

However, during the IPCC summit, at which country representatives approve, line-by-line, the influential Summary for Policymakers Report, a group of representatives from countries that are high producers of meat and dairy worked to water down the language. According to a Newsroom article at the time,

“Coverage of the negotiations by the Earth Negotiations Bulletin – the only media outlet permitted to attend the event – makes clear that New Zealand argued against the use of the term “plant-based” in favour of “sustainable healthy diets” in at least two sections of the report’s summary.

Both dealt with reducing demand for products of high-emitting activities. The first, on how products are presented to consumers, saw “plant-based foods” replaced with “balanced, sustainable healthy diets”. India and Kenya joined New Zealand in removing the reference to vegan and vegetarian diets, while Germany unsuccessfully opposed the measure.”

Research has shown that countries with highly polluting sectors that are also highly trade exposed are likely to hold less cooperative positions in global climate agreements. In other words, the characteristics of the agriculture sector in Aotearoa-New Zealand very likely produces substantial downward pressure on the country’s overall ambition in international climate negotiations. It has also been suggested that climate policy within countries is driven much more by conflicts between more- and less- ambitious domestic sectors over who should bear the costs of the transition, than it is by concerns about the level of action being taken by other countries in the international sphere. Despite this, the study suggests that policymakers will still often rationalise policy choices by referencing the lack of mitigation action in other countries.

The dark PR of big tobacco, big oil, big meat and dairy

Another piece of research featured in the journal One Earth found that the livestock industry was resisting food system transformation using instrumental power and that public funding for food producers was going predominantly to animal farming, while new alternative technologies were being largely ignored.

Despite the urgency to increase food system sustainability, policies failed to address the environmental impacts of animal-based technologies. Powerful vested interests exerted their political influence to maintain the system unchanged and to obstruct competition created by technological innovations.

The approaches being used by meat and dairy industry interests are increasingly being compared to the actions of fossil fuel interests. To understand how powerful industries protect their interests and promote climate disinformation, journalist Amy Westervelt explores the history of the PR industry on her excellent media website Drilled.

“In addition to the violent crackdown on campus anti-war protests we’re seeing across the U.S. this week, there’s also another fossil fuel disinformation hearing happening in Washington, D.C. today, which means another round of social media posts and articles using the phrase: “Big Oil is copying Big Tobacco’s playbook.”

It’s a similar playbook, true, but that’s because Big Oil and Big Tobacco have used the same PR firms for more than a century. To understand some of the tactics and narratives lawmakers are digging into today, it helps to understand how and why the PR industry was created, and how it has expanded to include everything from corporate-sponsored university research and elementary school curricula to statecraft.”

That fossil fuel disinformation hearing follows the release of a joint staff report by the Senate Budget Committee, as they act to revive the House Oversight Committee’s investigation into climate delay caused by fossil fuel interests.

The report details some of the internal documents obtained under subpoena from big oil. The documents from Exxon, Shell, BP, Chevron, the American Petroleum Institute, and the Chamber of Commerce are being released as part of an upcoming hearing titled “Denial, Disinformation, and Doublespeak: Big Oil’s Evolving Efforts to Avoid Accountability for Climate Action.” Some highlights of the report were posted on LinkedIn this week by Aria Koralovich, a senior investigator at the Senate budget committee,

One of the big revelations has been the academic-industry partnerships that have developed between Big Oil and world-leading research institutions, as they worked together to provide, in the words of a Shell representative, “thought leadership and research into technology that could underpin the role for gas.” Similarly, such academic-industry partnerships are being unveiled at prestigious research institutes currently focusing on carbon capture and storage (CCS), in another tactic designed primarily to delay the phaseout of fossil fuels.

There’s more just in on this topic from Drilled: Research or Lobbying? New Documents Reveal What Fossil Fuel Companies Are Really Paying for at Top Universities  A new batch of subpoenaed documents show what fossil fuel companies are getting for their university research donations.

Protests push biodiversity deal to verge of collapse

 Other news this week highlights the complexity of addressing the environmental impact of the agriculture industry.

Leading biodiversity researchers fear that a new EU nature restoration law will fail unless farmers are brought into partnership. The proposals are on the brink of collapse after months of farmer protests across Europe. Some member states have already withdrawn support for the legislation, according to The Guardian.

“In an open letter, leading biodiversity researchers from across the world said that efforts to restore nature are vital for guaranteeing food supplies – but farmers must be empowered to help make agriculture more environmentally friendly if the measures are to succeed.

The letter, signed by researchers from the University of Oxford, ETH Zurich and Wageningen University, reads: “At no point in history has there been more pressure on farmers. They are responsible for feeding an ever-growing population. And now we want them to save us all from the global climate and biodiversity crises, at the same time as market forces keep making the financial situation harder.

“We desperately need land to support a resilient agricultural sector. We need our policies to empower farmers to be the heroes we need them to be. But to do this, we are also going to need to save space for nature.”

The sad state of sustainable development finance

In the energy industry, the phase-in of renewable energy supply has needed to climb beyond the elbow of the new technology ‘S-curve’ before it was even possible to begin a meaningful conversation about phasing out fossil fuels. In the agriculture industry, there will likewise need to be a significant expansion of investment in both alternative protein technologies and regenerative farming approaches before we are likely to see any traction in the conversation about reducing dietary meat and dairy. At this stage, such investment is relatively small and limited to the private sphere.

US based political-economic historian Adam Tooze has an excellent article on his substack Chartbook this week, about the state of development finance and efforts to mitigate the climate crisis while assisting poor countries to adapt. The most salient point was summed up in a single graph, showing money pouring out, rather than in, to the Global South, from the Global North in 2022-2023.

“What this shows is that money, both public and private, did not flow into the developing world but flowed out on a huge scale.”

Summarising the state of sustainable development finance, Tooze says

“What the shock of last year proves beyond question is that we don’t have a system that works and merely needs tinkering reforms. The status quo is from the point of view of the developing world profoundly dysfunctional. At moments of global stress it compounds disadvantage and entrenches underdevelopment and it does so to the tune of hundreds of billions of dollars. At the macro level, with regard to the most basic questions - how much? to whom? when? - the system is simply not working.”

As a reminder, he points out that global leaders have, for the last several years, promised to accelerate climate financing for the developing world to the tune of trillions of dollars per year. The realisation that finance would reverse course and flow back into the developed world during times of trouble, alongside the millions of tonnes of material resources that flow every year from the Global South to the North to support the carbon transition of developed countries, exposes the profound failures of the current global economic system.

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

TL;DR: These are the six things that stood out to me in news and commentary on Aotearoa-NZ’s political economy at 9:06am on Monday, April 29:

* The Lead: A 1News-Verian poll published last night showed the collapse in business, consumer and voter confidence about the country’s direction in March and April has translated into the worst polling performance for any first-term Government since the introduction of MMP in 1996. The previous worst was the National Government in 1991 in the lead-up to Ruth Richardson’s Mother of All Budgets. (Paying subscribers can see more detail and analysis below the paywall fold and in the podcast above.)

* Civil contractors report skilled construction staff are leaving for Australia because of the Government’s big freeze in capital spending decisions on state-backed or funded water, roading and housing projects. 1News Katie Bradford (See Quote of the day below the paywall fold)

* The Government’s hopes landlords would fund the building of new homes for rent and reduce rents from better after-tax returns from their existing properties are falling on deaf ears, this month’s survey of rental property owners by Tony Alexander has found. Investor intentions to build or develop new homes hit a record low in April, while more than 80% plan to increase rents in the next 12 months, back at pre-election levels. (See Charts of the day below the paywall fold)

* Te Pūtea Matua - The Reserve Bank of New Zealand yesterday warned in a pre-published special section of its half-yearly Financial Stability Report due tomorrow that banks needed to check the insurance arrangements for home buyers more closely because insurers had started raising prices or removing coverage from some homes categorised as high risk for earthquakes and flood damage. (See Map of the day below the paywall fold)

* The ministerial performance double-standard forced on PM Christopher Luxon by NZ First and ACT was underlined yesterday when David Seymour said any unilateral sacking by Luxon of an ACT minister would breach their coalition agreement. NZ Herald Adam Pearse

* Pharmac’s funding increase announced yesterday illustrated the intense structural pressures driving up the Government’s share of economic activity, which both parties are refusing to acknowledge or adjust for with their approach of forcing a sinking lid on the size of Government and net debt to keep it permanently below 30% of GDP. (See more detail in the footnote below the paywall fold)

(Paying subscribers can see more detail, analysis and links to documents and articles below the paywall fold and in the podcast above. We’ll open it up for public reading, listening and sharing if we get over 100 likes.)

The worst start for any Government in the MMP era

Now the collapse in consumer and business confidence has gone political.

I’ve documented in recent months a collapse in confidence about the Government’s direction in ‘right track-wrong track’ polls and in business and consumer confidence polls. These, at least initially, weren’t reflected in support levels for individual parties.

That lag ended last night when 1News-Verian published its latest poll showing the gap between the governing coalition parties (National/ACT/NZ First) and the opposition parties had not only closed up, but had gone negative.

The coalition’s collective support able to be represented in Parliament dropped from 50% in mid-February to 43% this week, due to three percentage points lost by National and ACT and NZ First’s drop below the 5% threshold. If these results were replicated in an election, Labour/Green/Te Pāti Māori would be on 48% to National/ACT’s 43%.

The poll also found support for new Green co-leader Chloe Swarbrick rose two points to 6%, putting her ahead of David Seymour on 5% and Winston Peters on 4%.

Charts of the day

Landlords pull back from building and eye rent increases

Independent economist Tony Alexander published the results of his monthly survey of over 300 rental property investors for Crockers yesterday, including detail on landlords’ intentions to build new homes and put up rents.

The Government has argued that reversing Labour’s interest deductibility changes would encourage more landlords to increase the housing supply and would suppress rental growth. The survey showed landlords’ intentions to build and develop new homes fell to a record low in April and that the share of landlords planning to increase rents had risen back to pre-election levels, despite confirmation from the new Government of the reversal of the tax changes, along with an acceleration.

Map of the day

Where risk-based pricing is hitting hardest

Quote of the day

‘Show us the money’

"What we're seeing is the immediate uncertainty is causing clients to defer or cancel contracts, awaiting some kind of certainty from the Government is really frustrating because we know there's a mountain of work to be done." Civil Contractors NZ CEO Alan Pollard via 1News

Cartoon of the day

Fast-track to where?

Timeline-cleansing nature pic of the day

Ooh shiny…but tasty?

Ka kite ano

Bernard

PS: I didn’t eat it.

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: These are the six things that stood out to me in news and commentary on Aotearoa-NZ’s political economy at 8:06am on Monday, April 29:

* The Lead: The Government's constant talk of inheriting a financial mess, its freezes on transport, housing and water project grants and decisions, and a cavalcade of state sector job cuts has unnerved businesses and consumers into snapping shut their own wallets. It’s a reversal from late last year, when spenders and investors had expected better things from a change in Government. (Paying subscribers can see more detail, analysis and charts below the paywall fold and hear more in my podcast above.)

* A coalition that prides itself on being a better economic manager than Labour is talking the economy into ever-deeper recession, as shown in collapses in business and consumer confidence in March and April, along with slumps in factory, services and construction activity reported in the last fortnight.

* Climate: The Government’s failure to assess whether the Fast-track Approvals Bill was consistent with the climate clauses in our recent free trade deals with the EU and UK and the Trans-Pacific Partnership should worry farmers, the Environmental Defence Society has warned.

* Health: Te Whatu Ora has confirmed it has ordered hospitals to urgently cut $105 million in costs in the next eight weeks to get former DHB budgets back into surplus, and ensure there are enough savings to pay for tax cuts in the May 30 Budget. Consultants from PwC are charging the Ministry for advice on the cuts. RNZ Phil Pennington

* Health: Ministry of Health officials advised the Government in February its initial plans to cut waiting lists for specialist appointments and surgeries could cost $723 million over two years. NZ Herald Sophie Trigger

* Politics: Former Green co-leader and retiring list MP James Shaw will give his valedictory speech on Wednesday. He admitted in an interview with Jack Tame aired yesterday on Q+A that he had come close to resigning as Climate Change Minister in the previous Labour-led Government because he didn’t think Labour was doing enough on climate and indigenous biodiversity.

(Paying subscribers can see more detail, analysis and links to documents and articles below the paywall fold and in the podcast above. We’ll open it up for public reading, listening and sharing if we get over 100 likes. Update: Achievement unlocked!.)

1: A dirge of austerity & uncertainty infects the economy

John Maynard Keynes, the godfather of modern macroeconomics, invented the term ‘animal spirits’ in his 1936 book, The General Theory of Employment, Interest and Money, to show how an economy had ‘moods’ that could be shifted by mere ideas or talk.

Right now, in Aotearoa-NZ, our ‘animal spirits’ are darkening towards a winter of discontent, thanks at least partly to a chorus of comments and actions from the Government this year about:

* inheriting a ‘financial mess/hole/click/train-wreck’ from Labour that meant it had to cut the size of Government (and pay for promised tax cuts);

* its immediate freezing of capital funding and decisions on state-backed water, transport and housing investments that had stopped construction sector planning, hiring and investing in its tracks; and,

* then an ongoing chorus of news about state-sector job cuts that has wrecked confidence in our capital city.

It’s almost been a lesson from an macroeconomics 101 class in how a Government can talk what had been a technical recession in the second half of 2023 into an extended and deeper one that could last through much of 2024. The Government’s own actions to push cost increases along to ministries and councils has forced them to ‘pass it on’ as inflationary increases in fees and rates. That has deepened the malaise as it dawns on homeowners that this is one of the factors holding mortgage rates high for longer.

It didn’t start out like this.

There was an initial burst of enthusiasm in November and December from business decision makers and consumers, who saw a change of Government as a circuit-breaker that would kick-start investing, the housing market and retail spending. But that surge ebbed away through January and February, before collapsing in March and April through a variety of leading indicators measuring confidence, new orders, building consents and retail spending.

Here’s those key measures in chart form:

Consumers less confident than during first lockdown and GFC

Consumer confidence collapsed after initial spike with new Government

Confidence in Wellington is even closer to late-2021 lockdown lows

Services, construction and retail business confidence slumped too

Leading indicators suggests deeper recession extending through 2024

Manufacturing outlook in recession too in April survey

Services sector contracting again in April survey

And we are special. It is just us going backwards

Quote of the day

‘The economy just came to a screaming halt’

“The fledgling improvement in the Performance of Services Index (PSI) earlier this year has come to a screaming halt. It is a pattern we have seen in a few indicators of late including last week’s PMI and QSBO. It raises the question that the economy may well be even weaker than is widely appreciated as well as questioning the timing of any recovery.” BNZ Senior Economist Doug Steel in his PSI note last week.

Cartoon of the day

Fast-track firestarters

Timeline-cleansing nature pic of the day

Autumn is coming

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

TL;DR: These are the six things that stood out to me in news and commentary on Aotearoa-NZ’s political economy in the two days to 6:06am on Thursday, April 25:

* Politics: PM Christopher Luxon has set up a dual standard for ministerial competence by demoting two National Cabinet ministers while leaving also-struggling NZ First and ACT ministers in place. His coalition partners already see Luxon as weak and not focused enough on the details. This reshuffle after just five months will reinforce Luxon’s own weakness in coalition relations and in his caucus.

* Climate: The low-investment approach adopted by both flavours of Governments means 26 reviews of failing emergency services have led to no-or-very-slow improvements that leave Aotearoa-NZ more vulnerable to extreme climate events. That’s because politicians find it easier to cut future spending and investing to deal with uncertain and yet-to-be experienced threats, than borrowing for current spending or cutting existing services.

* Transport: The Government is considering calls to put electronic monitoring devices in all vehicles to apply user charges at different rates per kilometre for travelling on different roads at different times in vehicles with different weights.

* Councils: Freezes in capital and operational funding to councils are cascading down to ratepayers in the form of rates increases and cuts to council programmes designed to boost tourism and other export revenues. Despite this, the Government has recommitted to doubling export revenues within 10 years and ministers have made 25 trips overseas in five months to promote exports.

* Housing: The Government’s blunt approach to spending and investment cuts has stopped the rebuilding of quake-prone apartments in Wellington dead in its tracks. The danger for the Government is its penny wise and pound foolish approach is compounding the damage in an economy in a technical recession. It also further erodes business and consumer confidence. Surveys showed confidence collapsed in March after an initial bounce in late 2023 on the Government’s promises to ‘get things done’. The coalition is now talking and freezing the economy into an extended recession, but with still-high interest rates.

* Economy: The Government looks set to cut an $11.2 million industry support programme partly responsible for training software developers and marketers at 605 SaaS (Software As A Service) companies who generate almost $3 billion in exports per year.

(Paying subscribers can see more detail, analysis and links to documents and articles below the paywall fold and in the podcast above. We’ll open it up for public reading, listening and sharing if we get over 100 likes. Update: Achievement unlocked!)

1: ‘He lacks attention to detail and creates dual-standards’

PM Christopher Luxon announced a Cabinet and ministerial reshuffle yesterday that has created a dual standard of behaviour for National and non-National ministers. Having to reshuffle his first Cabinet after just five months further exposes what NZ First and ACT see as Luxon’s weaknesses: a lack of attention to detail and political inexperience.

Luxon stripped Melissa Lee of her media portfolio and demoted her from Cabinet, replacing her in Cabinet with Climate Change Minister Simon Court Watts and giving media role to Paul Goldsmith. He also took Disabled Services off Penny Simmonds and gave it to Louise Upston, but left Simmonds in Cabinet with her Environment and Tertiary Education roles.

Stuff Political Editor Luke Malpass highlighted both the tensions within the coalition and Luxon’s own weaknesses in the eyes of Winston Peters and David Seymour in a column published yesterday morning in The Post-$$$ before the reshuffle was announced (bolding mine):

While the National leadership is pretty aligned with ACT on the broader things the coalition needs to do for the country, NZ First is far more transactional. It is aligned with the parties on many matters, but is always keen to remind National that everything outside the coalition deal has to be negotiated. And Winston Peters is determined that NZ First will be re-elected to Government in three years.

Also, during the coalition negotiations, both smaller parties privately complained that Christopher Luxon could at times be a high-handed poor listener who tended to lecture others without being over the detail of policies or issues himself. That was fine once negotiations had concluded and the stress was over but at the time, it did cause both NZ First and ACT to talk and get to know each other more.

That is once again occurring as ACT and NZ First both privately chafe at being publicly rebuked by the prime minister for criticising the Waitangi Tribunal. Luke Malpass in The Post-$$$

NZ Herald Political Editor Claire Trevett highlighted the double-standard created by the demotions in a column in NZ Herald-$$$ (bolding mine).

Rarely have we seen such early demotions in a new Government. Luxon has set a bar for other ministers, who face a future of what Luxon called his “constant adjustments” approach.

Usually ministers are stripped of portfolios for a scandal, a breach of the Cabinet Manual, or telling a porky to the Prime Minister or the public. In some cases, it is for incompetence that was turning into a distracting mess.

There were elements of the latter in Wednesday’s reshuffle. However - at least in Simmonds’ case - there was also an element of a minister being shifted aside for simply being a bit average.

There is a bit of risk to Luxon in this approach: if you end up moving too many ministers around for shonky performances, it starts to look a bit chaotic.

Labour leader Chris Hipkins was quick to claim that it already was chaotic, although it has not reached that bar yet. Hipkins was also, rightly, quick to point out that Luxon will find it hard to apply the same standard to his coalition partners’ ministers in NZ First and Act. NZ Herald Political Editor Claire Trevett via NZ Herald-$$$

RNZ Political Editor Jo Moir also highlighted the double-standard now in place via RNZ (bolding mine):

Lee, for example, had been opposition spokesperson for Broadcasting and Media for six years and shouldn't have been surprised by any of the problems in her portfolio, which have all been long-signalled both in New Zealand and abroad.

Luxon would have had trouble dealing with this so cleanly if it was an ACT or New Zealand First minister at fault.

The frustration for some National ministers may be that they are thrown under the bus to disguise blockages caused by ACT and NZ First. Newsroom’s Laura Walters made that point: Melissa Lee’s media Hail Mary comes up short.

Newsroom understands Lee’s sacking from Cabinet came after another failed attempt at presenting a paper to Cabinet Committee. On April 8, Lee took a paper to Cabinet Committee – the third paper she had prepared since the February 28 announcement of Newshub’s closure.

Sources told Newsroom that Luxon – who is a member of the committee – believed the proposals in Lee’s paper did not adequately deal with the complexities of the issues facing the media industry.

Lee presented her first paper to Cabinet on March 4 – at Luxon’s request. It gave senior members the lay of the land, following the announcement of Newshub’s closure and the impending job cuts at TVNZ.

But things got rocky for Lee after she started proposing ways to fix these problems. Newsroom understands Lee got ahead of the Cabinet process when preparing her next Cabinet Committee paper and was ordered to carry out further consultation with coalition partners – specifically NZ First.

After almost a month of working with officials and consulting with coalition partners, Lee tried again. But she came up short. Her attempt to take a refreshed proposal to Cabinet committee on April 8 would have been a factor in Luxon’s Cabinet reshuffle. Laura Walters via Newsroom

Former National Minister Press Secretary Ben Thomas also pointed to the double standard, and the risk of overloading senior ministers, in his column for The Post-$$$.

This is another danger for Luxon. He can pick and unpick his National ministerial cohort at will, but his partners’ ministers are still off-limits. Setting wildly divergent expectations can look like hypocrisy (although it can also look like a sellable difference between allied parties jockeying for crossover votes in 2026).

Insiders say Simmonds has struggled with the workload across her portfolios, and that the disabilities carer payment changes were not the only significant official-led announcements that passed under her risk radar.

The question now is what becomes of the media portfolio, for an already laden Paul Goldsmith who is also juggling justice, state-owned enterprises, Waitangi Tribunal claims, and arts, culture and heritage. Ben Thomas in The Post-$$$.

Quotes of the day

Rolling and shuffling

“This is how I roll. This is how I lead. This is simply about me looking across my team, I want to make sure I've got my aces in their places.” PM Christopher Luxon in a news conference announcing the reshuffle.

And detaching?

“The wheels are falling off already.” Labour Leader Chris Hipkins in a news conference on the reshuffle.

2: More reviews can’t hide a remorseless sinking lid

RNZ’s Phil Pennington wrote a very useful backgrounder on Wednesday via RNZ on the latest inquiries into Aotearoa-NZ’s failing emergency management systems in the wake of Cyclone Gabrielle and Auckland’s Anniversary weekend floods last year.

It’s a detailed account of repeated failures by Governments of both flavours to invest in new technology for disaster management and 111. It also highlights the unpreparedness for future climate events, given Gabrielle was only a ‘moderate’ one. Pennington quotes NEMA in a BIM last November.

"While devastating to the communities involved, Cyclone Gabrielle can be considered as a moderate scale event when compared to what New Zealand could experience," the National Emergency Management Agency (NEMA) said in a briefing to the incoming minister last November.

"As seen with recent severe weather events, the emergency management system can be easily overwhelmed with a moderate scale event."

There are now at least 26 inquiries into how it was "easily overwhelmed", by cyclones Gabrielle and Hale, and by the Auckland Anniversary floods.

Most of these are by consultants working for Civil Defence and critical industries like telecoms. A glance through just 10 of the inquiries counts 600 pages of findings and advice, and more than 120 recommendations.

Many of them echo similar findings and advice from 2017, 2020 and other past reviews into emergency response shortcomings. Phil Pennington via RNZ

The lack of progress since 2017 reflects the low-investment approach now endemic across Government and business after 30 years of constantly pressing down on growth in Government spending to ensure spending, taxation and public debt stay under 30% of GDP, allowing room for capital gains to remain tax free and for ongoing increases in post-interest disposable income for home owners.

That’s impossible because rising inequality, healthcare costs naturally rising faster than GDP and ageing populations keep putting enormous upward pressure on the size of Government.

This sinking lid is constantly squeezing down and squashing investment and capital spending in particular because that is always the easiest to cut. Cutting public services already in existence today in the face of immediate opposition is harder than cutting future spending or preparing for future events, given future voters have no say in the decisions and can’t compete with the recency bias and status quo bias that dominates the thinking of most decision makers — consumers, voters, businesses, ministers and public servants alike.

The sinking lid problem is most evident in health and education, as these headlines from yesterday indicated:

Scoop by RNZ’s John Gerritsen.: Roles providing support for disabled kids among those proposed to be axed

Documents leaked to Gerritsen again expose the framing of back office vs front office as specious (bolding mine):

They showed the proposed loss of nearly 600 roles at the ministry in response to the government's order for a 7.5 percent spending cut will not fall evenly across the ministry's (MOE) divisions.

Among the hardest hit would be the Curriculum Change team, where nearly all jobs would be cut, and the division in charge of the Māori curriculum and te reo Māori, where most staff would have to reapply for a smaller number of roles.

One of the biggest divisions, Te Pae Aronui, proposed cutting more than 200 roles, saving $19 million a year. It said it had 705 positions and could disestablish 247, including 106 that were vacant, and after creating new positions would have a total of 489 staff.

The disestablished roles included people involved in work that helps schools with children with disabilities and with projects such as free school lunches that tackle inequities for Māori and Pacific children.

The cuts included all seven nutritionists or nutrition advisers and one food safety advisor understood to be involved in the free school lunch scheme, Ka Ora Ka Ako. The proposed new structure did not appear to include any nutrition or food safety roles.

News links elsewhere on this issue

Job cuts at Oranga Tamariki could mean return to ‘crisis system’. Former minister Tracey Martin warns “children will be worse off“ with law change at OT. Tova O’Brien interview via Stuff.

Leaked document reveals millions of dollars of cuts at Te Whatu Ora, by Newsroom’s David Williams.

Over 300 health and safety issues found in school tech classes. Unguarded machines, faulty emergency stops and toxic fumes were just some of the issues discovered in 131 schools during a spree of WorkSafe assessments, by The Press-$$$’s Brett Kerr-Laurie

Op-ed by Lianne Dalziel in Newsroom: Lessons identified must become lessons learned for emergency preparedness

3: ‘Track every car for every metre to get perfect users pays’

The user pays push to pay for infrastructure makes sense to ‘manage demand’ and is a tempting way to avoid the Government borrowing from its own balance sheet, as this piece indicates: Govt looks at ways to pay for its long list of new roads.Fuel taxes could soon be gone and a new type of user pays system introduced for all drivers 1News. This bit was of particular note (bolding mine):

Infrastructure NZ now wants the Government to move faster in getting e-road units installed in all of the country's passenger vehicles — tracking which roads people use.

(CEO Nick) Leggett said it may "take a bit of time for Kiwis to get their head around it because it's new … But we know we can't keep having a free lunch." 1News

Congestion charging and road user charges are good at managing demand to avoid unnecessary overbuilding, but only work and are fair when alternative ways to get around cheaply are already there.

But this creates a risk of a consumer and voter backlash, and/or a deeply unfair transition to carbon zero that pumps up costs of living for those least able to afford it. It also pumps up inflation and keeps interest rates high for even longer, which also makes transport investment more expensive

4: Beehive’s cost-cutting keeps cascading down to councils

This paywalled piece by The Press-$$$’ Tina Law: Council forces investment company to cough up higher dividends is another indicator of the stress cascading down from the great investment and spending freeze of 2024.

Christchurch City Holdings Ltd (CCHL) chairperson Abby Foote told the council last week there is “no more money”. She said the company was not able to pay down debt, grow dividends to the council, invest in resilience and grow critical infrastructure.

“These things simply do not add up. We cannot do them all and this is what we have been saying for the last 12 months.”

She said the company was not able to pay down debt, grow dividends to the council, invest in resilience and grow critical infrastructure.

“These things simply do not add up. We cannot do them all and this is what we have been saying for the last 12 months.”

5. ‘Double your exports, but don’t expect help from us’

The Government and the PM talk a good game on exporting our way to higher incomes and relevance. Ministers have also also flown a good game, taking 25 trips overseas in five months, as The Post-$$$’s Thomas Manch reported. But the Government itself is cutting back on help for councils and industry at a more local level. One area of concern is in council support for local tourism businesses, as Hawkes Bay Tourism Chairperson (and former head of Tourism NZ) George Hickton told RNZ Checkpoint.

Hawke's Bay Tourism's website would shut down and all of its connections with local and national media would be severed, he said.

"We know that tourism in Hawke's Bay will start to deteriorate quite quickly. Without reminding people that we are an attractive destination, other regions will fill that slot." George Hickton told RNZ Checkpoint.

6. SaaS exporters fear cut to key training funds

Chris Keall reported for NZ Herald-$$$ that tech exporters are pleading for the Government not to cut an $11.2 million funding programme behind KiwiSaaS, which funds training for 605 companies that generate $3 billion of exports. They have written a letter to Technology Minister Judith Collins.

The insider said he feared KiwiSaaS could become “collateral damage” in the Government’s broad-strokes cost-cutting efforts, “when this is exactly the sort of thing they need to be doing to boost productivity and exports”. The average salary in the sector was $105,000, he said.

A spokesman for Collins said she could not immediately comment because she was travelling. Collins, who also holds the Defence portfolio, is set to attend Anzac Day commemorations in Belgium after an OECD conference in Paris this week. He could not immediately confirm if she had responded to the KiwiSaaS letter.

The pick of the links elsewhere in our political economy

Housing and transport

Paywalled column by Georgina Campbell in The NZ Herald-$$$ Devastating blow for apartment owners hidden in Govt announcement

Rotorua councillor hits out over homeless motels: 'They have taken us for fools', by Rotorua Daily Post-Local Democracy Reporter Laura Smith

Paywalled column by Virginia Fallon for The Post-$$$: A tiny victory for a mean neighbour. What sort of person dobs in their neighbour for living in an unconsented tiny house?

The tiny town where a thre­­e-bed home is under $300k.It’s as remote as can be, with a population of just over 2000, and a median house price of $190,000 by Stuff’s Kylie Klein Nixon. (Spoiler alert: It’s Murupara)

Poverty and inequality

'Dishonesty': 50k off benefits will include people who die, go to prison by 1News’ Felix Desmarais

Health, education and justice

'Serious public health issue': Concerns about nitrate levels in drinking water by RNZ’s Anna Sargent

Wages, income, tax and population

Foreign doctors struggle with Kiwi culture, Otago study finds. NZ Herald

Politics, Government and councils

Paywalled scoop by NZ Herald-$$$ Deputy Political Editor Thomas Coughlan: Questions over conflict of interest in fast-track case.

Scoop by Newsroom’s Emma Hatton: New emergency services radio network plans off-track

'They can stick their tax cuts', cancer patient, tells RNZ Checkpoint’s Lisa Owen

'Relentless, brutal but meaningful': Tory Whanau reflects on mayoralty and MP rumours, by NZ Herald’s Georgina Campbell from an interview

Cartoon of the day

Timeline-cleansing nature pic of the day

Surface tension

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

TL;DR: The six things that stood out to me in Aotearoa’s political economy around housing, poverty and climate from the last day included:

* A crescendo of opposition to the Government’s Fast Track Approvals Bill is growing beyond Parliament and including iwi, political columnists, editorial writers, legal scholars and campaigners who fear it gives three ministers more power than Robert Muldoon.

* A previously secret list of the projects invited to use the bill shows many have already been rejected in courts or already face local opposition.

* Even if it passes unscathed, the bill faces multiple legal challenges because opponents say it breaches other law such as the Zero Carbon Act and doesn’t comply with Te Tiriti.

* Directions from Te Whatu Ora to staff show the Government’s budget cuts to pay for tax cuts are indeed hitting front line services, despite assurances that only back-offices would be affected.

* Young renters are becoming more militant about rent increases and a lack of new housing supply across the developed world. The latest example is in Auckland where students have launched a rent strike against the Auckland University’s 8% rent hike last year.

* PM Christopher Luxon is facing push-back from business leaders and foreign affairs experts to his description of Aotearoa-NZ having been ‘closed for business’ and his Government’s preference to join Aukus II.

(Paying subscribers can see more detail and analysis below the paywall and in the podcast above. We’ll open it up for public reading, listening and sharing if they give permission by getting over 100 likes. Update. Achievement unlocked)

Crescendo of opposition to fast-tracking powers is growing

Opposition to the Government using its Fast Track Approval Bill is growing beyond Parliament in the form of legal challenges, tribunal hearings, non-political campaigns and appeals to trading partners who have written environmental and climate provisions into our free trade deals.

Editorial writers, columnists, Parliamentary Commissioners who are often sympathetic to the Government are also lining up to criticise the bill as over-bearing, undemocratic, arrogant, reckless and inviting corruption.

Here’s three examples, starting with this column by Political Editor Claire Trevett in the NZ Herald-$$$, which is titled : Arrogance and patchy sales job is turning Fast Track Bill into a problem for National.

The fast-track legislation is rapidly shaping up as a problem for the government. If the National Party part of that coalition government fails this test, it risks setting the tone for the rest of the term.

“There are signs the government is getting arrogant about it. The overall tenor of the ministers involved has been one of “trust us, we know what we’re doing”.

Bishop’s statement that the public would get the ultimate say on it at the ballot box in 2026 was one example. Simply saying you won the election, ergo you can do it, will only take your core supporters with you.

One of the perils every new government faces is finding that balance between moving on the mandate you manage to get on election day – and taking the public with you.

It is easy to over-estimate that mandate. Even pre-advertised change needs a strong sales job once it is happening, especially if it is quick and fast.

The fast-track legislation was only partly advertised in advance, during the election campaign. It certainly wasn’t advertised in the form it has ended up, with massive power given to ministers to sign off on projects with little nod to public input. Column by Claire Trevett

There’s also this editorial in The Press-$$$ this morning, titled: The fast and the furious. Who gains from the new Fast-track Approvals Bill?

More legislation has been passed under urgency by this Government than any other in the MMP era, while the public service that might offer advice or input is being steadily reduced.

Such an approach does not just endanger the threatened environments that house the blind frogs and multicoloured skinks Jones enjoys making fun of, but something that is just as fragile and treasured, which is democracy itself.

One submission from a respected New Zealand political scientist warns of the potential for cronyism, “clientelism” and patronage if this bill becomes law. There will be “an incentive for private interests, organisations and investors to develop strong relationships with the government of the day”.

There will be much less transparency and a greater chance of conflicts of interest. Such a system will also favour those who can afford lobbyists and other means of accessing political power.

In short, it will make New Zealand less democratic. It is a use of emergency powers for a time without an emergency.

We saw a similar concentration of executive power during the Covid-19 pandemic, although those responses were temporary and less far-reaching. It will be intriguing to observe whether the critics who so loudly accused the previous government of “authoritarianism” and even tyranny over its Covid policies will see the Fast-track Approvals Bill in the same way. More legislation has been passed under urgency by this Government than any other in the MMP era, while the public service that might offer advice or input is being steadily reduced.

Such an approach does not just endanger the threatened environments that house the blind frogs and multicoloured skinks Jones enjoys making fun of, but something that is just as fragile and treasured, which is democracy itself.

One submission from a respected New Zealand political scientist warns of the potential for cronyism, “clientelism” and patronage if this bill becomes law. There will be “an incentive for private interests, organisations and investors to develop strong relationships with the government of the day”.

There will be much less transparency and a greater chance of conflicts of interest. Such a system will also favour those who can afford lobbyists and other means of accessing political power.

In short, it will make New Zealand less democratic. It is a use of emergency powers for a time without an emergency.

We saw a similar concentration of executive power during the Covid-19 pandemic, although those responses were temporary and less far-reaching. It will be intriguing to observe whether the critics who so loudly accused the previous government of “authoritarianism” and even tyranny over its Covid policies will see the Fast-track Approvals Bill in the same way. Editorial in The Press-$$$

Thirdly, here’s Parliamentary Commissioner for the Environment Simon Upton in his submission on the bill:

Getting stuff done and doing things differently should not mean discarding the need for high quality information and a clear understanding of the costs as well as the benefits of proposed activities. The Bill does nothing to improve the parlous state of environmental information that afflicts resource management processes and imposes so much cost. On the contrary, its solution appears to be to limit the opportunities for environmental scrutiny.

I consider that it poses significant risks to the environment for the following reasons:

The environment does not appear in the purpose clause (unlike its predecessor the COVID-19 Recovery (Fast-track Consenting) Act 2020) so environmental impacts will carry less weight than claimed developmental benefits;

The Minister for the Environment is excluded from being either a decision maker or being consulted as part of the processes;

The time needed to verify and test the accuracy and completeness of environmental information is limited and there is no requirement to record gaps in information or uncertainty alongside the claimed benefits of projects;

Ministers subject to political lobbying are empowered to allocate public resources with potentially harmful environmental and health consequences;

Currently prohibited activities and projects that have already been declined on environmental grounds are potentially eligible for fast-tracking;

Excluding those who wish to raise environmental concerns that are wider than those of immediate landowners means that most environmental questions will not be asked.

The Bill lacks many of the environmental safeguards its predecessor legislation contained. Even the much-maligned National Development Act 1979 had more environmental checks and balances. Parliamentary Commissioner for the Environment Simon Upton in his submission

Pick of the links elsewhere on this:

How three men get unprecedented power from a coalition bill RNZ Farah Hancock

Minister accused of 'gaslighting' over Fast Track questions RNZ Farah Hancock

Projects previously blocked put on fast-track list

Chris Bishop yesterday unveiled a list of mining and farming projects he suggested apply to use the Fast Track Approval Bill That included plans for an open-cast coal mine, the seabed mining of phosphate on the Chatham Rise and salmon farms in the Marlborough Sounds, all of which have already been rejected by the courts. Others who hadn’t been invited and who would have faced challenges in hearings and courts are applying, including a gold mine in Otago.

Charlie Mitchell reported for The Press-$$$ on the background to the applicants declared in the list in this piece titled: ‘Fast track’ letters sent to miners, irrigators, and property developersAmong the companies told how to apply for ‘fast track’ consent are some with projects previously rejected by the courts

Among them was Stevenson Mining, which had its plans for a mine at Mt Te Kuha near Westport scuttled by the Environment Court last year. The company recently withdrew its appeal of that decision, seemingly in the hopes of submitting for fast-track approval.

Another was Chatham Rock Phosphate, which has long sought to mine rock phosphate from the seabed on the Chatham Rise, east of the South Island. The EPA rejected a previous consent application to do so. Other recipients included King Salmon, which had a proposal to farm fish in parts of the Marlborough Sounds thwarted by the Supreme Court in 2014, and National Steel, which has faced controversy for its Christchurch scrapyard near the the Ōpāwaho/Heathcote River.

Letters also went to companies with significant projects on the books in the South Island.

They included Amuri Irrigation Company, which has sought to expand irrigation in the Hurunui District; Far North Solar Farm, which has proposed the country’s largest solar farm in the Mackenzie Basin; Southern Parallel Campus Limited, which has proposed an equestrian centre at Lake Hood near Ashburton; and Santana, which wants to mine for gold in Central Otago. Charlie Mitchell reporting for The Press-$$$

Debbie Jamieson has more detail in her report last night for The Southland Times, published in Stuff.

The backers of two proposed Central Otago gold mines are hoping to be included in fast tracking legislation, avoiding onerous planning processes. Hawkeswood Mining Ltd, which is seeking consent for a mine in Miller’s Flat, near Roxburgh, appears to be facing an uphill battle for consents following planner’s recommendations to decline applications before the Central Otago District and Otago regional councils.

Meanwhile, publicly listed Santana Minerals presented a scoping report to the Australian Stock Exchange that indicated it could make revenue of $4.4 billion over 10 years, at a gold mine at Bendigo, near Cromwell. Debbie Jamieson via Stuff

Pick of the links elsewhere on this:

Otago gold mine and controversial mineral sands project on 'fast-track' letter list. Australian miners Santana and Tiga on long list of businesses to receive advice on fast-track consents from minister.The Post-$$$ Tom Pullar Strecker

Mining activity undertaken without consent ODT-$$$ Matthew Littlewood

The campaigners are lawyering up

One feature of the response to the Fast Track Approvals Bill is the planning for legal challenges as soon as the bill passes, along with challenging it using other bills, including various Tiriti o Waitangi clauses and the Zero Carbon Act.

The apparent failure in the bill and in the selection of projects of any consideration of the climate effect could be problematic. Climate Change Minister Simon Watts admitted to 1News’ Felix Desmarais in answering a Parliamentary written question from Green Co-Leader Chloe Swarbrick to having not sought any advice from officials on the climate effects.

There are Tiriti issues too, as detailed in this 1News report by Te Aniwa Hurihanganui.

Unlike the Covid-19 Recovery (Fast-track Consenting) Act 2020 or the RMA, the legislation doesn't include a treaty principles clause.

"The bone-chilling part of it is that it excludes hapū and iwi from having a substantive role in decision-making within the system to protect the environment," said Environmental consultant Tina Porou.

"Te Tiriti is a constitutional document. I has to be in every layer, it is in every layer, and to think you can remove those rights just by a pen is naive."

Iwi around the country, including Waikato and Ngāi Tahu, have publicly declared concerns around the Government upholding its commitment to Te Tiriti o Waitangi and treaty settlements.

The Fast-track Approvals Bill does have an overarching Treaty clause requiring "all persons exercising functions to act in a manner that is consistent with existing Treaty of Waitangi settlements".

That means developers would be unable to seek fast-track approval to build on land returned to iwi as part of settlements. 1News Te Aniwa Hurihanganui.

Pick of the links elsewhere on Tiriti and environment issues:

Lawyers, politicians battle over Waitangi Tribunal’s OT inquiry. The Children’s Minister is fighting a summons to appear at the Tribunal, while the Prime Minister is warning his ministers about ‘ill considered’ critiques Stuff Glenn McConnell

‘Hyp­ocri­tica­l and unfair’: Councils speak up on Māori wards plan. Stuff Karanama Ruru

Ministers accused of Cabinet Manual breach with threats to Waitangi Tribunal Newsroom Marc Daalder

Budget cuts hitting health frontlines

National assured voters that any cost-cutting to pay for tax cuts would not affect ‘frontline’ services. But it’s becoming clear the 6.5% and 7.5% cuts in departmental budgets demanded by Finance Minister Nicola Willis just before Christmas to help pay for Budget 2024’s tax cuts are indeed biting into frontline services.

This was clear in a letter from Te Whatu Ora management to staff, as cited in reports by RNZ’s Phil Pennington and Newshub’s Amelia Wade.

Te Whatu Ora orders staffing clampdown in bid to save money RNZ Phil Pennington

'Serious crisis': Health NZ directs hospitals to restrict roles, limit overtime in frontline freeze Newshub Amelia Wade

Pick of the links elsewhere in health, education & Government:

Mental Health Foundation to cut 18% of staff as costs rise. About half of the charity's income is from government contracts for providing health promotion resources, campaigns and programmes 1News

Push for govt screen rebate to fund Shortland Street RNZ

$12.1m already spent: Government storage facility project axed. The Department of Internal Affairs plan to build a storage facility in Levin has been cancelled Stuff George Heagney

Auckland students start rent strike

In a new sign of the activism brewing among young renters, Auckland University students have gone on a rent strike against an 8% increase last year.

Auckland Uni students announce rent strike over fee increase. An 8% increase in rent was announced last year, but Students for Fair Rent say it outstrips inflation, wage growth and average prices for Auckland Central. 1News

Pick of the links elsewhere in housing and transport:

Almost 300% increase in demand for social housing in Taranaki Stuff

Heritage ruling could block housing project. The Christchurch City Council wants to keep the old cottage, but the Carter Group says it threatens its major housing development The Press-$$$ Liz McDonald

Column by Sam Stubbs: Are we building the wrong homes to address our housing crisis? Data shows 55% of New Zealanders living in homes with one or two residents. That makes one and two-bedroom apartments and townhouses the homes in the shortest supply across NZ The Post-$$$

Why were 10 buildings removed from Wellington’s heritage list? The unassuming Kahn House – a private family home designed by a prominent architect – is one of the 10, and was left off the list after its owner warned the listing would be “catastrophic” for her family. The Post-$$$ Erin Gourley

Picton in limbo since Govt pulled pin on interisland ferry project Newshub Alexa Cook

The places where you're most likely to pass your driving test RNZ

Road-dominated $10b transport plan gets tick from Canterbury mayors RNZ

Luxon faces push-back on Foreign Affairs

PM brushes aside business comments - ‘We are open for business’. Christopher Luxon has swept aside concerns about the language he’s using to describe New Zealand as being open for business. Stuff

Editorial by ODT-$$$ Aukus a step too far?

Cartoons of the day

Ka kite ano

Bernard Hickey

Editorial by The Press-$$$

Statement by Chris Bishop Beehive.govt.nz

Fast Track Approvals Bill Legislation.govt.nz

PMQ 7047 Parliament.nz

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