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Thursday’s Pro email:Reserve Bank Act reforms released

In the political economy and in business, Finance Minister Grant Robertson unveiled the second tranche of Reserve Bank Act reforms that will introduce deposit insurance and toughen requirements for directors and executives of all banks and deposit takers, including finance companies.

 A new Deposit Takers Act would be passed next year that pulls finance companies and other non-banks into the same regime as banks, and that allows the Reserve Bank to charge them levies to recover the costs of regulation, which would include on-site regulation. See more detail via Treasury in the cabinet paper on the Deposit Takers Act reforms, and cabinet paper on the Reserve Bank Act itself.

The details that stood out for me were the role of assessing climate change as a prudential regulatory issue and the cost recovery powers of the bank, which will help fund a significant increase in the number of bank regulators. The pulling in of finance companies, and the potential for their debentures to have deposit insurance, also stood out.

There's also more detail below in Marc Daalder's report. 

Watch out later today for the final main economic statistic of the year. Statistics NZ is scheduled to release September quarter GDP figures showing growth running at around 0.5 percent per quarter and over two percent for the year, largely due to population growth, construction spending and consumer spending.

We'll put out an alert to subscribers with those numbers. I'll attend the Stats NZ lockup for some end-of-year fun digging through the national accounts spreadsheets. 

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1. Tourism's environmental pain

Tourism is putting increasing pressure on the environment, after successive governments focused on growing the industry more than controlling its impacts, says a report released yesterday by the Parliamentary Commissioner for the Environment, Simon Upton.

As Newsroom's Eloise Gibson reports, Greenhouse gas emissions, crowding of popular destinations, issues with disposing of waste, and over-loading of wastewater treatment systems causing spills into lakes and beaches, are among the consequences of New Zealand's success as a popular travel destination. 

And despite concerns over the impact of flying in particular, tourist numbers are predicted to rise.

Some are asking if it's time to put caps on, for example, cruise ship visits.

See the full piece here on Newsroom Pro.

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2. Victim's families 'should have known visa rules'

As Newsroom Pro reported yesterday, family members who flew in to help those injured in the Christchurch attacks are now struggling with healthcare costs. But the Government says they should have known their visa conditions would leave them liable for the debts.

Minister of Immigration Iain Lees-Galloway said: “No matter what the circumstances are that they come under, I think they understand what they can expect when they're here on a visitor visa.”

“I think they need to plan accordingly.”

Tayyaba Khan, founder & CEO of the Khadija Leadership Network said Lees-Galloway had made a “naive assumption” that relatives of terror attack victims would have read the "fine-print" of their visa conditions in the immediate aftermath of the March 15 terrorist attack.
See the full story from Dileepa Fonseka here.

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3. Goodbye to a year of stagnation and tragedy

This is the time of year when columns like this usually nominate a politician of the year, writes Peter Dunne in his final column of 2019. He won't be doing that, because to do so would be to "perpetuate the myth of celebrity that has so trivialised politics in New Zealand and elsewhere in recent years".

"That mounting focus on the trivia at the expense of the substantial is contributing to much of the rising disillusionment across much of the world about the capacity of contemporary leaders to respond effectively to today’s challenges, like climate change," he says.

Instead Peter looks back at the year - and the sad realisation that is was a rather unsatisfactory and unsettled year, dominated by awful tragedies and missed opportunities.

See the full column here.

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4. Tougher banking regulation on the way

Finance Minister Grant Robertson has announced plans for tougher regulation of banks and their executives by mid-2020.

One of the major changes will be to increase director and executive accountability.

Banks would also be required to take out deposit insurance covering at least $50,000. This means that if a bank goes under, its customers would each be able to recover $50,000 or the full amount of their deposit if it was under $50,000.

See the story here on Newsroom Pro.

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5. Milestones

Testing on the way - Police will be given new powers to conduct random roadside 'spit testing' to detect and prosecute drugged drivers in order to save lives. Associate Transport Minister Julie Anne Genter said last year 95 people were killed in preventable crashes where the driver was found to have drugs in their system that could impair driving. The change will allow Police to test drivers for the presence of drugs and impairing medication anywhere, any time, just as they can for alcohol. The threshold for a criminal offence will be aligned with that for alcohol. This means a blood test that identifies impairing medication or drugs at or above an amount equivalent to the criminal drink driving limit (80mg of alcohol to 100ml of blood) will result in a criminal offence. The devices used will initially test for THC, methamphetamine, opiates, cocaine, MDMA (ecstasy), and benzodiazepines.

Pardoned - 
103 years after his death, Tūhoe prophet Rua Kēnana has been officially pardoned and has received and official apology with the passing of the Te Pire kia Unuhia te Hara kai Runga i a Rua Kēnana: Rua Kēnana Pardon Bill in Parliament yesterday. Rua Kēnana was wrongfully arrested when 70-armed police invaded Maungapōhatu in 1916. Kēnana was cleared of all charges but then imprisoned on an earlier charge of ‘moral resistance’ for the illicit sale of alcohol months earlier. 

Under review - The Law Commission has announced the terms of reference for its reviews of the law of succession (the system of rules that governs who gets a person’s property when they die) and of the laws relating to class actions and litigation funding.

'Tis the season for appointments Antonia Watson has been appointed CEO of ANZ New Zealand, having acted in the role since May last year. Auckland Council has appointed Adrienne Young-Cooper as the new chair of Auckland Transport and Darren Linton as a board director starting from 1 January 2020. Phil Parkes has been appointed CEO of worksSafe. And Vince Hawksworth, currently chief executive of Trustpower, has been appointed CEO of gentailer Mercury, replacing Fraser Whineray in April next year.

Christmas present - The Government has announced an increase in the minimum wage to $18.90 per hour from 1 April 2020.

Real estate merger - The Commerce Commission has granted clearance for Property Brokers Limited to acquire the West Coast real estate business and property management business of Farmlands Real Estate.

Paying back
 - Campervan rental company Travellers Autobarn Limited has signed enforceable undertakings with the Commerce Commission and agreed to refund more than $40,000 to renters of campervans who paid for "liability caps".  The Australian-based business offered options for customers to cap their liability described as "$2500 Liability", "$1200 Liability", and "$0 Liability" in the event of damage to a hired vehicle, but the rental contract excluded the cost of damage caused in several situations, and consumers could be held liable for more than the capped amount described in the contract. The Commission’s investigation found several occasions where Travellers Autobarn used the exclusions to void consumers’ limitations of liability and hold consumers liable for significant damage costs over the capped amount.

Modernising censorship laws - Submissions have opened on the Films, Videos, and Publications Classification (Commercial Video on-Demand) Amendment Bill which aims to reduce the potential for harm to consumers from viewing inappropriate content.

Racing Industry Bill - Submissions have also opened on the Racing Industry Bill, which has a focus on "minimising harm from gambling, and the provision of a high-level overview of the industry that recognises its pivot to a more commercial orientation". 

Regulating water - Also open are submissions on the Water Services Regulator Bill, which proposes a new regulatory body to oversee the drinking water system.

It's medicinal - the regulatory regime covering the domestic cultivation and manufacture of medicinal cannabis has been established and will come into effect 1 April next year, with the first medicinal cannabis licences expected to be issued by mid-2020.

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6. Coming up

Today
Stats NZ releases GDP figures for the September 2019 quarter
Parliamentary Commissioner for the Environment Simon Upton will release a report on the environmental impacts of tourism

Friday
Napier Port Holdings AGM, 10:30 AM, Napier

Further Ahead
Enjoy the holidays!
Parliament will be in recess until February 11
February 18 
– Stats NZ will release population statistics for the year ending December 31
February 27 – ANZ will release its next Business Outlook Survey
March – Treasury will release its four-yearly Long-term Fiscal Statement
March 30 – Stats NZ will release estimated resident population from the 2018 Census

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7. My pick of the news links

Government/Politics
RNZ:Climate Change Commission: How it will work and the initial plans
Tom Pullar-Strecker (Stuff):Options to go to Cabinet after report finds Novopay needs fresh investment
Jo Moir (RNZ):'I'm surprised she was put there in the first place': Shipley's NZ-China Council departure
Catherine Harris (Stuff):Work on new Indian High Commission resumes after Ebert failure
Damien Venuto (NZ Herald):Revealed: How much businesses will pay to sell cannabis next year
Anuja Nadkarni and Susan Edmunds (Stuff):ANZ appoints Watson but critic says 'it would be better if new CEO wasn't from old guard'
Virginia Fallon (Stuff): Transmission Gully motorway 80 per cent complete, new footage shows
Jenée Tibshraeny (Interest): New law could see existing landowners levied to pay for local infrastructure
Conan Young (RNZ): NZ's fishing boats largely uncompliant with safety standards, TAIC suggests
Stephen Forbes (Stuff): Auckland Transport announces Adrienne Young-Cooper as new chairwoman
RNZ:Group of unlawful Chinese workers deported
Interest: Mortgage rate cuts haven't produced the expected rise in house sales
Steve Kilgallon (Stuff): The tipping point: why New Zealand is being flooded with smuggled cigarettes
Guyon Espiner (RNZ): Pharmac brand switch: Man driving through Waterview Tunnel blacked out
John Gerritsen (RNZ):Majority of fees-free students from higher decile schools
 
Economy/Corporate/Investing
Lois Williams (Stuff):Fletchers' construction delays on new Grey Hospital 'unacceptable'
Rob Stock (Stuff): $50,000 bank deposit insurance planned for New Zealand
 
Overseas
RNZ:Sir Ron Brierley charged with alleged possession of child abuse material - Australia media
Reuters: Pound set for biggest losing streak in nearly two years on renewed Brexit fears
 
Lunchtime Leanbacks
Danyl Mclauchlan (Spinoff): In the attention economy, bullshit wins, and you’re helping shovel it along 
Reuters: Special Report: FDA targets e-cigs that hook teens but don't help smokers quit
Emma Jacobs (Financial Times): Money, trolls, timewasting: the impact of social media on work

The Detail, Newsroom's daily podcast co-production with RNZ talks to the Trump critic targeted by library activists. Read more and listen here. iPhone users can subscribe here and Android users can subscribe here


Thursday: What’s on RNZ News at 8am – Dec 19
                  What's in the newspapers -Dec 19

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8. One fun thing:

This e-Christmas card from the Privacy Commissioner was one we loved. It looks like a Chris Slane special. He has done whole bunch on privacy.



Ngā Mihi

Bernard, Lynn and the Newsroom Pro team.

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