Finance minister Grant Robertson (Photo: Kiwirail)
Finance minister Grant Robertson (Photo: Kiwirail)

The BulletinDecember 12, 2019

The Bulletin: Bittersweet stimulus for spending advocates

Finance minister Grant Robertson (Photo: Kiwirail)
Finance minister Grant Robertson (Photo: Kiwirail)

Good morning and welcome to The Bulletin. In today’s edition: Capacity constraints loom large in spending stimulus, pilot speaks out about slow Whakaari recovery efforts, and carbon monoxide levels are high.

The fundamentally conservative approach of finance minister Grant Robertson has continued, even as he has moved to loosen the purse strings. The top lines of the Half Year Economic and Fiscal Update are covered here, and more details of the $12 billion boost towards in infrastructure can be found here. A huge chunk of it will be going towards road and rail, along with school and hospital upgrades, and $200 million has gone towards decarbonisation of public buildings. The exact specific projects haven’t been revealed yet.

So, could more have been borrowed and spent? Many commentators say yes. Business Desk’s (paywalled) Pattrick Smellie notes that under these plans, net Crown debt will peak at 21.5% of GDP – way below even the upper limit of the self imposed budget responsibility rules target range. The NZ Herald’s (paywalled) Liam Dann agrees, saying “it doesn’t actually shift the dial much from a macro-economic point of view.” And politically, there is clearly plenty of public appetite for more spending, as this One News survey showed – on the question of what should be done with the existing surplus, just 21% opted for either saving it or tax cuts, with the rest opting to spend it on exactly the sorts of things this announcement has targeted.

But the problem is, simply making the money available doesn’t make projects happen. The constraints on capacity right now are phrased beautifully in the Business Desk piece – “like trying to stuff a marshmallow in a piggy-bank, the economy’s capacity to absorb more capital projects is limited.” The angle is picked up much more explicitly by Politik, who notes that the current high levels of immigration will need to be maintained if capacity is to be improved (and that in turn means more infrastructure pressure, more need for housing and so on.)

Robertson has put this funding towards capital projects (one-off spending) rather than operational spending. So those who were hoping for an economic stimulus to take the form of massive increases in benefit levels, for example, are out of luck. That probably also reflects a wider fiscally conservative approach, given the various economic headwinds and pressures that have been talked about all year still exist, and Robertson will be wary of ongoing commitments when projections for future tax revenue growth are coming down.

Perhaps the best way of underlining just how conservative this all is can be found in the reaction from credit rating agencies. Interest reports they barely blinked at the idea of the Crown borrowing more, with no change at all to the country’s credit rating. But one area it might have an impact will be on interest rates. They’ve been coming down this year as governor Adrian Orr tried to stimulate the economy through monetary policy – now with a bit more spending on the table, economists have suggested there’s much less need for them to be repeatedly cut again.

Should rescuers have gone back to Whakaari/White Island right after the eruption? One of the pilots who was able to bring people back before being told to stand down says yes, more should have been done, telling Newstalk ZB that he has also been ready and willing to go now to recover bodies. But the decision isn’t up to him – the police say they intend to go back, but for now have declared that it is simply too dangerous. Increased volcanic activity has been detected, and there is a very real possibility of another eruption. I’m absolutely not criticising the pilot here, but I must wonder what media figures calling for a faster recovery would say if further lives were lost in the effort.

There’s way more carbon monoxide in the air than normal right now, because of the Aussie bushfires, reports the NZ Herald. Levels of the gas peaked last week at more than twice their normal concentration, according to NIWA monitoring. The situation is unusual in how relatively prolonged the carbon monoxide spikes lasted, but it is unlikely that there will be health effects as a result.

A short story to share here, but one with huge importance for a well-informed public: Radio NZ reports the chief ombudsman is launching a fresh investigation to see if government departments have improved their compliance on the Official Information Act. Since the last one was done in 2015, it’s fair to say there have been plenty of complaints that access hasn’t in fact improved. It’s important to remember that by law and by right, information held by government departments should be accessible by the public. If you’ve ever been given a run around by a government department on an OIA, and want to see loopholes closed, now would be a great time to contact the ombudsman.

This is an interesting piece on how the Defence Force are preparing for a world of climate change, from Stuff’s Thomas Manch. A major part of that, obviously, is going to be a major stepping up of operational capability to deal with disasters. But they’re also looking at ways to cut their own emissions, which you could consider to be a small contribution now towards an easier job down the road.

The measles epidemic in Samoa is affecting the flow of seasonal workers to New Zealand, reports the ODT. That’s because of the pressure on the Samoan health system, and more strict health checks that are required. Of the total seasonal worker programme, Samoa provides a relatively large proportion of those who take up places. Meanwhile in the country itself, the epidemic continues – RNZ Pacific reports the death toll is now up to 71, with almost five thousand reported cases.

Here’s hoping for a speedy recovery for NZ First MP Shane Jones. Stuff reports he was taken to hospital yesterday after feeling very light-headed, and a Wellington Free Ambulance spokesperson confirmed that a person had been taken from parliament in a moderate condition. Party leader Winston Peters put it down to overwork, saying Jones had been run off his feet over the last month. In a nice bit of cross-party cooperation, Jones was helped by colleague Jenny Marcroft and National MP (and medical doctor) Shane Reti.

Say Something Nice about a Journo 2019: Today’s suggestion isn’t so much a specific journo (though Chris Morris features heavily) but rather a recognition of the people behind a publication. The ODT has been a bit under the pump recently, through no fault of the reporters, so I was thrilled that Pene got in touch with these specific pieces that he’s found valuable from them. It’s a great call about a mostly great paper with some great journalists. Here’s what Pene had to say:

“There have been some fantastic features in the ODT Saturday papers in the last year. For example, the What Lies Beneath feature just in last Saturday’s paper looking at the history of coal mining in the Fairfield area. The ODT’s Marked by the Cross series focused on historic sexual abuse at Catholic Schools and features following the conviction on the Skantha murder trial also come to mind.”

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Right now on The Spinoff: Fiona Fraser investigates why meatballs are all the rage in the Hawke’s Bay, in quite an oddly regionally specific way. Sam Brooks looks at what New Zealanders searched most on google over 2019. Leonie Hayden interviews a man who yells at women from out his car window. Leonie Hayden again has updated the list of where and how you can learn Te Reo for free or not much money. A Kiwi Battler recounts the harrowing day the Koru lounge stopped being able to serve booze.

Duncan Greive has launched a new podcast called The Fold, covering the NZ media industry. The first episode talks to Sinead Boucher, a former journalist who is now in a horrendously difficult job as the boss of Stuff.

Finally, our decade in review continues: Toby Manhire has covered 10 years in politics, defined and dominated by a few personalities that transcended their parties and policy platforms. And Alex Casey has put together the ultimate list of celebrities who defined the decade.

For a feature today, a delicate subject in the world of rubbish. Stuff have republished this thought provoking piece from The Conversation about waste to energy plants – which on the face of it are the most simple and obvious ways to get rid of all our trash. But on the other hand, there are complexities there that need to be factored in, and this piece explains them really clearly. Here’s an excerpt:

European countries were driven to waste-to-energy as a result of a 2007 directive that imposed heavy penalties for countries that did not divert waste from landfills. The easiest way for those countries to comply was to install waste-to-energy plants, which meant their landfill waste dropped dramatically.

New Zealand does not have these sorts of directives and is in a better position to work towards reducing, reusing and recycling end-of-life materials, rather than sending them to an incinerator to recover some of the energy used to make them.

Is New Zealand significantly worse than Europe in managing waste? About a decade ago, a delegation from Switzerland visited New Zealand Ministry for the Environment officials to compare progress in each of the waste streams. Both parties were surprised to learn that they had managed to divert roughly the same amount of waste from landfill through different routes.

In rugby, the coronation has been confirmed. One News reports Ian Foster has been elevated to the All Blacks head coach job, after a strange and convoluted process topick a successor to Steve Hansen. Scott Robertson, the only other realistic candidate in the end, will be sticking with the Crusaders. Foster has spent eight years as an assistant coach, and before that spent seven years coaching the Chiefs. There’s an excellent piece up on The Spinoff by rugby writer Jamie Wall, who reflects on how Foster could be a very different coach to the last one, and the very difficult situation he’s inherited.

And in basketball, a familiar face is also stepping up to coach the Tall Blacks. Former captain Pero Cameron has been appointed, reports Radio NZ, replacing Paul Henare on a short term deal. He’s got an immensely challenging job to deal with straight away, namely getting the Tall Blacks to the Olympics through the hard version of the qualification pathway. Cameron rose to prominence in New Zealand after captaining to Tall Blacks to 4th in the 2002 World Cup, and working as one of the team’s assistant coaches, also for the last eight years.

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Mad Chapman, Editor
Aotearoa continues to adapt to a new reality and The Spinoff is right there, sorting fact from fiction to bring you the latest updates and biggest stories. Help us continue this coverage, and so much more, by supporting The Spinoff Members.Madeleine Chapman, EditorJoin Members

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