Toby Manhire reports from parliament 

After a bumpy ride in parliament yesterday, Christopher Luxon got back to his own, well, bread and butter in the House of Representatives today, lobbing a series of spending and tax focused questions at Chris Hipkins, who was undertaking his first Question Time as prime minister.

Asked to assess the inflationary impact of increased government spending, Hipkins said, “economists of course will argue about this at great length, but the reality is we have supported New Zealanders through a difficult set of economic circumstances.” Challenged on his own previous commitments, when state services minister, to reduce spending on consultants, Hipkins said he remained of that view, but that the Covid response required extra resource and extra capital investment had required the use of more contractors. If the Auckland light rail scheme is on the brink of abandonment, Hipkins gave no hint of that, saying it was a “once in a generational investment” that Auckland desperately needed.

Finance minister Grant Robertson deflected questions from his National counterpart Nicola Willis, as well as from media on the way into the debating chamber on whether a “cyclone tax” was being considered, saying, “it is the responsible thing to do to consider the options on how we will pay for the government’s share of the recovery … No decisions have been taken.” He told parliament it was too soon to know what the rebuild would cost, but it would be “considerable” and “in the billions of dollars”.

Green Party co-leader James Shaw asked whether Hipkins could promise not to follow earlier governments in responding to a crisis by “kicking climate action down the road”. Hipkins said climate action was integral to the response, but that “I am not going to provide a running commentary on previous governments.” To jeers from across the house, he added: “Except when I want to.”

As was widely predicted, the official cash rate has been bumped up 50 basis points by the Reserve Bank.

That takes it to 4.75% – the highest it has been since the end of 2008.

“The Committee agreed that the OCR still needs to increase… to ensure inflation returns to within its target range over the medium term,” the central bank said in a statement. “While there are early signs of price pressure easing, core consumer price inflation remains too high, employment is still beyond its maximum sustainable level, and near-term inflation expectations remain elevated.”

The Reserve Bank said noted that the recent severe weather across the North Island was expected to increase inflation and disrupt production in the near term. “Significant economic losses have resulted from these storms. The best contribution monetary policy can make right now is to free up resources elsewhere in the economy by slowing demand through higher interest rates,” the bank said. “This will also limit further increases in the cost of living over the medium term.”

With the media understandably focused on the extreme weather in recent days, the news that New Zealand has been hosting a royal visit may have passed you by.

A princess has been in the country, visiting sites of cultural and historical importance, while also reinvigorating their nation’s connection to Aotearoa. An early itinerary revealed the princess, accompanied by her husband, was set to visit Wellington for a series of official meetings, before heading north to take in the sights of Hamilton. 

But one all-important item kept off the public itinerary can now be revealed. The Spinoff can confirm Sweden’s Princess Victoria made an unplanned royal visit to Eagle Bar on Auckland’s Karangahape Road on Saturday.

Witness Ben Blackwell told The Spinoff he was first alerted to the princess after spotting “the buffest guy” with an earpiece. “A couple sitting behind us stood up and whispered to me, yes that is the princess. We cheers-ed her [and] I said ‘we love Sweden’ and then we continued dancing.”

While he was “too shy” to ask for a photo, he captured a candid shot of the Royal flanked by her guards.

As for the choice of Eagle Bar, Blackwell agreed it was a slightly unusual location to spot a princess. “I was like man, wonder why they chose to come here,” said Blackwell. “No one else in the bar seemed to notice at all though, and honestly after the amount of cocktails I’d had, I was impressed I managed to as well.”

The bar’s staff, however, were less surprised, confirming the visit and saying the princess came to party with the crowd following Pride Festival celebrations. “We’ve always suspected our little bar was fit for a Queen!” said spokesperson Kurt. “We’ve actually been a bit of a K Rd hotspot this summer as Jason Momoa also dropped by a few times while he was in town.” 

It’s not believed – though it cannot be ruled out – that Princess Anne, the other Royal visitor to our shores in recent days, spent time at any bars or clubs during her tour.

Auckland Council’s chief executive Jim Stabback has resigned and will leave the post within the next six months.

Stabback has held the role since September 2020, helping lead the council through the pandemic, an election and the recent severe weather.

Mayor Wayne Brown said the announcement was shared with the council’s governing body today. “This is arguably one of the most challenging and rewarding leadership roles in New Zealand’s public sector, and I respect Jim’s decision to step down for personal reasons,” Brown said.

“This follows lengthy deliberation, and the process has been handled professionally and respectfully. Jim will continue to lead council and deliver on our commitments to Aucklanders, and help us transition to new leadership.”

A search for a successor will begin soon.

This year’s Budget will be unveiled on Thursday, May 18, the finance minister has announced.

Grant Robertson said the annual budget will be delivered “in the shadow of Cyclone Gabrielle” and will be, unsurprisingly, focused on the cost of living and recovery from the recent severe weather events.

“We are committed to working with local communities to get affected families, farmers and businesses back on their feet and their regions back moving. The economic and fiscal impact is not yet fully known, but we know the rebuild will be in the billions of dollars,” said Robertson.

“The government has taken action quickly to provide certainty and assurance in these early stages of the recovery and further support is coming.”

Citing the decision to extend fuel tax cuts and the half price public transport scheme, Robertson said the government would be considering further support for families.

Today’s OCR announcement, which most economists expect will result in a 50 basis point increase to 4.75%, may not bring further home loan interest rate rises. As Stuff’s Susan Edmunds reports, ASB senior economist Chris Tennent-Brown says it would take a really strong statement from the Reserve Bank about the likelihood of future OCR increases to drive any increase.

Kiwibank’s Jarrod Kerr is still calling for the Bank to postpone an OCR hike this time around until the next meeting in April in the wake of the cyclone. Tennent-Brown says it’s a case of “damned if you do and damned if you don’t” for the Reserve Bank.

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Christopher Luxon has condemned comments made by one of his own MPs, saying that she gave a “shocker of an interview”.

The National Party leader’s return to parliament this week has been largely overshadowed by Maureen Pugh’s climate change comments – something he wouldn’t have been wanting the day after parliament resumed for 2023.

Pugh, who is a list MP based on the South Island’s West Coast, yesterday said she was still waiting for “evidence” that man-made climate change was real. In the aftermath of Cyclone Gabrielle, those comments appeared even more out of touch than they would have usually. They also prompted an all time great Newshub report that aired last night.

Pugh later walked back her comments, basically saying she misspoke and did believe in climate change (both natural and human-influenced). RNZ’s Guyon Espiner said the retraction looked like a “hostage video”.

Speaking to Newshub’s AM today, Christopher Luxon said he met with Pugh in person. “[I] said you can’t be living in the 21st century and deny that human induced climate change is real,” the National leader said. “I also gave her a reading list to make sure she fully understands the science.”

Luxon repeatedly said his MP gave a “shocker” of an interview and had “expressed herself really poorly”. He also said he was part of the “coaching process” that got her to retract and clarify her position on climate change.

Asked whether there was anyone else in his caucus that was questioning the scientific consensus, Luxon said no. “Everyone is united in the position. I’ve been very clear since taking on this role that climate change is real.”

Pugh appears to be safe in Luxon’s caucus, at least for now. Luxon told RNZ that Pugh was a “great local MP” and expressed his confidence in her.