Wednesday’s Pro email: Robertson set to launch $10b package
In the political economy, all eyes today will be on Treasury and Finance Minister Grant Robertson when he releases his "significant infrastructure spending package" at 1pm today with the Half Yearly Economic and Fiscal Update (HYEFU).
Robertson has room under his own rules to borrow up to $15 billion to bring forward various short to medium term projects, but most see the number somewhere in a range of $5-10 billion. That's simply because of capacity constraints and the relatively short term nature of the projects, which may or may not be identified today. See more below from Dileepa on which projects could be bought forward.
Meanwhile, Green Co-Leader James Shaw told members in an email the party had dropped its commitment to the Budget Responsibility Rules for next year's elections, saying they "limited the Government's scope for change."
"Especially in light of what we know now about the infrastructure deficit, but also because of the changing economic conditions and opportunities, we require a new approach," he said.
"The arbitrary debt and spending targets, are not appropriate and have limited the Government's scope for change. Our new policy reaffirms our commitment to moving beyond GDP, focusing on wellbeing, and building a strong public sector. Next year we'll be developing this further and putting it in front of New Zealanders as a clear set of fiscal plans that build on environmental, social and economic sustainability."
The question is what debt limit or levels should Labour and the Greens talk about. The median debt of other AAA countries of around 50 percent of GDP (vs New Zealand's 20 percent) would be my suggestion. That would give scope for $100 billion of borrowing in today's dollars over the next 10-20 years to invest in affordable housing and public transport infrastructure.
Elsewhere in the economy, business and investing, Tower CEO Richard Harding announced he would resign next year to rejoin his family in Australia after turning around the insurer's profits by raising premiums to match earthquake risks. Vodafone also launched its 5G network in Wellington.
1. Wishlist for a multi-billion infrastructure spend
Roading and rail should be at the core of a major Government infrastructure announcement.
That’s the argument economists and people in the infrastructure industry are making ahead of a spending package announcement by Finance Minister Grant Robertson.
ANZ Economist Miles Workman bets the package, to be announced at 1pm today will fall within the range of $5 billion to $15b, while Infometrics Economist Brad Olsen puts an upper-limit of $10b on his estimate of what the spend might be and said the projects on the infrastructure roster would likely be split between short-term ones - that could be completed within a two year period - and medium term projects that would take a minimum of four years to finish.
2. New 'election hack' offence recommended
A long-awaited report into New Zealand’s election processes has recommended a number of changes to protect our democracy from the threat of foreign interference.
Parliament’s justice committee has been working on its inquiry for nearly 18 months, with its work overtaken in part by Justice Minister Andrew Little’s law changes under urgency last week.
But as Newsroom Pro’s Sam Sachdeva reports, the committee’s work goes well beyond Little’s narrow tweaks, recommending a specific offence for anyone hacking a computer system with the intent of affecting an election result.
It also suggests a number of potential solutions to the loophole that lets foreign-owned by New Zealand-registered companies donate as much as they like to parties or candidates, and proposes a crackdown on foreign state ownership of media outlets aimed at diaspora in New Zealand.
And in a sign of the rancour that has accompanied the inquiry, both the Government and National have taken shots at each other over recent revelations which are alleged to be outside the spirit of the law.
You can read more here on Newsroom Pro.
3. In Madrid, Shaw struggles for global carbon market
The 2015 Paris agreement mandated the creation of an international market for carbon credits but came with precious few details. Now, the signatories to the accord have gathered in Madrid to hash out what such a market will look like, reports Marc Daalder.
At the previous annual climate summit in Katowice, Poland, delegates created a rulebook setting out the details and guidelines for every article of the Paris accord but one: Article Six, which calls for a global carbon market. Countries came painstakingly close to settling that issue as well, cutting the number of disagreements in draft documents from 391 on the first day to 132 on the last.
But by the time countries met for a gathering in June 2019, they had retrenched to their previous positions and started with a document with 672 disagreements.
Now everything is once again up for debate, but Climate Change Minister James Shaw wants to see the delegates come away from COP25 with a finalised rulebook for Article Six.
See the full story here.
4.NZ 22nd country country to launch 5G
New Zealand is now the 22nd country to have 5G, after Vodafone NZ launched the wireless service in partnership with Nokia in parts of Wellington, Auckland, Christchurch and Queenstown on Tuesday morning.
Attending the launch was Police Chief Information Officer Rob Cochrane who recently, like me, visited Italy and Germany, where Vodafone has already rolled out 5G, and observed how police in those countries are using the technology.
"You can talk about it, but until you actually see it, it's hard to picture how it's going to be useful in a policing context," he said, adding that the possibility of streaming high definition, 4K video to command centres would "actually make a huge difference to how we police".
A Green win - The Green Party has received a second round of concessions from Labour on the Government's returning terrorists bill. A new Supplementary Order Paper will guarantee legal aid to people subjected to a control order regime and will mandate that the law be reviewed in two years' time. Newsroom reported last week that the Ministry of Justice floated using the legislation to impose a media gag on suspected terrorists.
The cost of redefining "a veteran" - The Government is costing out the scenarios for updated definitions of "veteran" following a report by the Veterans’ Advisory Board. The Board was asked to look at who should be considered a veteran and how their service should be recognised. It has recommended that all who have served should be considered veterans, and should receive services and support, on the basis of need, if they have been injured or made ill by their service in the armed forces, irrespective of where that service took place. Veteran's Minister Ron Mark said that "would be a substantial change to the current situation in New Zealand and ... there are a number of implications to be worked through.The total number of current-definition veterans is unknown but is commonly estimated to be somewhere between 35,000 to 40,000 veterans. We estimate that the adoption of our proposed definition would see around 120,000 ex-service members reclassified as veterans, at an additional cost for support and services under current settings of around $144 million per year.."
Signing up - NZX's Wealth Technologies business is partnering with Saturn Advice, taking the first step toward a services agreement under which NZXWT will provide custody and operational services. Saturn Advice joins Craigs Investment Partners on the new NZXWT platform - with Hobson Wealth Partners due to be migrated over the next year. NZXWT currently has more than 20,000 portfolios being managed through the new wealth management platform.
Treasury and Finance Minister Grant Robertson will release their Half Yearly Economic and Fiscal Update at 1pm.
Hallenstein Glasson AGM, 10:00 AM, Christchurch
Stats NZ releases Electronic Card Transactions for November at 10.45am.
Education and Workforce Select Committee reviews the Education (Vocational Education and Training Reform) Amendment Bill and hears a petition
Finance and Expenditure Select Committee reviews the Arms Legislation Bill and Taxation (KiwiSaver, Student Loans, and Remedial Matters) Bill and considers RBNZ’s November Monetary Policy Statement
Governance and Administration Select Committee receives briefings on the annual reviews of the Department of Internal Affairs, Office of the Ombudsman, Ōtākaro Limited and Department of the Prime Minister and Cabinet, reviews two bills and hears a petition on making March 15 a National Day of Prayer and Reflection
Health Select Committee receives briefings on the annual reviews of three District Health Boards and considers the Mental Health and Wellbeing Commission Bill and the Smoke-free Environments (Prohibiting Smoking in Motor Vehicles Carrying Children) Amendment Bill
Social Services and Community Select Committee receives briefings on the annual reviews of the Ministry of Social Development, Oranga Tamariki, Sport and Recreation New Zealand and the Office of Film and Literature Classification, hears two petitions and considers the Rates Rebate (Statutory Declarations) Amendment Bill and the New Zealand Superannuation and Veteran’s Pension Legislation Amendment Bill
Regulations Review Select Committee meets
(Detailed Select Committee schedules can be found here)
Britain goes to the polls for its general election
Westpac Group AGM, 10:00 AM, Sydney
[RESCHEDULED] Parliamentary Commissioner for the Environment Simon Upton was to release a report on the environmental impacts of tourism, now delayed until December 18
RBNZ releases annual Trade-Weighted Index numbers
Stats NZ releases its Food Price Index data at 10.45
Economic Development, Science and Innovation Select Committee receives briefings on the Provincial Growth Fund and annual reviews of the Commerce Commission, New Zealand Tourism Board and AgResearch
Foreign Affairs, Trade and Defence Select Committee receives briefings on annual reviews of the Ministry of Foreign Affairs and Trade, the Ministry of Defence and the New Zealand Defence Force
Justice Select Committee receives briefings on annual reviews of the Privacy Commissioner and the Crown Law Office
Primary Production Select Committee receives briefings on OSPRI, vocational training in agriculture and the annual review of Land Information New Zealand
Transport and Infrastructure Select Committee receives briefings Wellington buses and on annual reviews of the New Zealand Transport Authority and the Ministry of Transport and hears two petitions
(Detailed Select Committee schedules can be found here)
Sanford AGM, 2:00 PM, Auckland
A 15 percent tariff hike by the United States on Chinese imports is due today, unless a new trade deal can be done.
Parliament will continue to sit until December 19
December 17 - ANZ AGM, Brisbane
December 18 - Stats NZ releases Balance of Payments and international investment position data for the September quarter
December 18 - Parliamentary Commissioner for the Environment Simon Upton to release a report on the environmental impacts of tourism
December 19 - Stats NZ releases GDP data for the September quarter
December 19 - Stats NZ releases Overseas Merchandise Trade data for November
7. My pick of the news links
Stuff: Whakaari/White Island tour operators 'can't waiver their way out of safety obligations'
Amelia Wade (Herald): First responder tells of horror 'everyone was horrifically burnt'
Herald: Fears mount for Australian family of four
John Anthony(Stuff): Whakaari: This is the family that privately owns White Island
Herald: How Auckland's Buttle family came to own island
Herald: Why were tourists allowed on unsettled island?
1News: 'Their visit turned to horror' – eleven Australians 'unaccounted for' in White Island tragedy
RNZ: Tourists were screaming, others were in shock - witness
RNZ: Prime Minister meets with rescuers of Whakaari / White Island survivors
RNZ: Why tourists were allowed on the island
RNZ:'Nothing can really prepare you for an eruption like this'
RNZ:Pilots 'saved the day' - observer
Oliver Lewis (Stuff): Whakaari/White Island: 'Fantastic team work' in treating severely injured patients
Thomas Coughlan (Stuff) Matthews affair shows our watchdogs are vulnerable to anyone and everyone
Henry Cooke (Stuff): Green Party scrap Budget Responsibility Rules
Tim Murphy (Newsroom.Pro): When blackmail doesn’t mean blackmail
Dileepa Fonseka (Newsroom.Pro): ‘Buyer’s remorse’ over auditor-general?
Businessdesk-paywalled: NBR column 'hyperbole' not defamation, court told
Damian George (Stuff): National MPs launch campaign to bring forward construction of an extra Mt Victoria tunnel
Susan Botting (Stuff): Northland environmentalists say 'no' to Auckland port shift
Rowan Quinn (RNZ): Climate change: Auckland Council outlines plan to cut own emissions
Debrin Foxcroft (Stuff) Home owners are becoming New Zealand's landed gentry, passing their wealth down
Statistics New Zealand: Tourism expenditure tops $40 billion
Interest: RBNZ to consult on new AT1 capital instruments in first half of 2020
Interest: Future sees local fiscal stimulus, extra bond supply and RBNZ on hold
Herald-paywalled: Fran O'Sullivan: Respect vital to oil wheels of any port move
Rob Stock (Stuff): Queen of cream: A2 chief executive Jayne Hrdlicka's 18-month reign
Susan Edmunds and Catherine Harris (Stuff): Tower boss quits after turning around $6.3m loss with risk-based insurance pricing strategy
Chris Keall (Herald-paywalled) 5G: The UFB fibre killer?
Tom Pullar-Strecker (Stuff): Vodafone turns on 5G mobile service in main centres, with $10 surcharge coming
1News: Physics prof rebuts concerns about new 5G network, which will start being rolled out in NZ this month
The Detail, Newsroom's daily podcast co-production with RNZ looks at the chief scientist's report on plastics Read more and listen here. iPhone users can subscribe here and Android users can subscribe here
8. One fun thing:
It's the words 'don't worry be happy' in video form (via Julia Macfarlane on Twitter)
Bernard, Lynn and the Newsroom Pro team.
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