Good morning and welcome to The Bulletin. In today’s edition: How the budget has been received, Auckland light rail on hold, and more media merger shenanigans.
So that’s what it looks like when Grant Robertson decides to open the purse strings. The relatively cautious spending of his previous budgets has been replaced by an absolute avalanche of new money, largely fuelled by taking on debt. The government’s unofficial name for this budget – the ‘rainy day budget’ – is a fair assessment of it, because economically it is pouring out there. So what was in this budget, and how has it been received?
The top line of it all is a $50bn ‘Covid Response and Recovery’ fund, some of which has now been allocated, and some that remains to be spent. The exact distribution of it is a bit fiddly, but Toby Manhire has broken it all down in a digestible form. One particularly big-ticket spending item is the extension of the wage subsidy, which will be continued in a more targeted fashion for a further eight weeks after the first round finishes. Along with that, there’s business support and finance guarantee schemes, more for infrastructure, plans to build 8000 new state houses, and on top of the recovery fund the now-standard annual extra billions for health and education. Duncan Greive has reported on the reaction from business, and Josie Adams has covered the views of the unions, around the general direction of what has been announced.
In terms of other notable sectors that have been severely impacted by the Covid crisis, we’ve had a crack team of reporters taking the mood of several. Catherine McGregor has found deep disappointment in the tourism sector about what has been announced, with industry leaders and operators saying the rescue package is disproportionately small compared to the income the sector was bringing in this time last year. Jihee Junn has looked at hospitality, where there is an increasing amount of confidence in getting through the winter. And Michael Andrew has spoken to small business operators in both industries – strangely enough, the tourism people in that story are hopeful, and the hospo folks are a bit disappointed. There’s a range of views out there, in other words.
One of the really interesting (and contested) areas is the environmental spending that has been included. More than a billion dollars will go towards a plan to create thousands of ‘nature-based’ jobs, particularly in the regions. But at the same time, Stuff reports there has been criticism from environmental groups that climate change hasn’t really been at the forefront of this budget – at a rare moment in time when the sort of spending to really do something about emissions would have been politically possible.
The reactions have been coming in thick and fast from sector groups and commentators, and as our Spinoff Roundtable shows, there are plenty of areas that are still lacking. Among the important criticisms that are covered: Public health consultant Gabrielle Baker says there will continue to be large discrepancies in the treatment of Māori in the health system. University of Auckland associate professor Nicola Gaston sees a missed opportunity to support science, research and innovation – particularly in failing to send a signal to the scientific world that their work is valued and worth persevering with. Dr Samantha Murton says GPs have so far been left hanging, despite being on the front lines of the fight against Covid-19. Action Station director Laura O’Connell Rapira sees misplaced priorities in the increased spend on defence and prison beds, and a continued failure to acknowledge the Crown’s Te Tiriti o Waitangi obligations. Many more views are canvassed in that piece, and it’s well worth working through them.
To my mind, the best area of the budget by far was the big spending on retraining and restoring adult education. The total package came in at around $1.6 bn, is heavily aimed at those who will fare worst in the recession, and for many who have lost their jobs in the recent wave of unemployment it will be a godsend. Newshub reports that the construction and trades training industry are thrilled with it, too. Speaking personally, I’ve felt very lucky to continue having a job through all of this, knowing that I work in a stupidly precarious industry. And the knowledge that I wouldn’t necessarily end up unable to find anything else if I did lose my job is a huge morale boost. Recessions can ruin lives, and this spending could mitigate a lot of that. Having said that, the lives of current tertiary students won’t necessarily be made any easier by this budget, writes Annabel McCarthy for Salient.
And there has also been criticism from advocates about the lack of support for beneficiaries and migrant workers, reports the NZ Herald. Those are two groups who have been hit hard by the last seven weeks, and continued tough times are likely. There has been just a small increase in benefit levels this year, but nothing further was announced yesterday – and the vast majority of recommendations from the Welfare Expert Advisory Group continue to gather dust.
It is for these sorts of reasons that the budget can’t really be called transformational – it might address the immediate emergency, but it is much more difficult to say that it will do anything to alter the economic structure of the country. That’s the main thrust of this insightful op-ed from Stuff’s Henry Cooke, who notes that there have been no changes to the tax system, and no new entitlement programmes. Importantly, there also hasn’t been a return to the short-sighted politics of austerity. But with Grant Robertson arguing that the crisis and the budget offered a chance to “build back better” and “hit the reset button”, one has to ask – has that really happened here? Writing on Radio NZ, political scientist Bryce Edwards has also described it as lacking in vision.
Politically, the taking on of more debt has dominated criticism from the opposition. Justin Giovannetti covered the debate in parliament after the budget was read, with National leader Simon Bridges attacking what he saw as poor prioritisation of spending. Act leader David Seymour called for an approach based on cutting taxes and regulations to spur economic growth, rather than borrowing to fund spending. And NZ First leader Winston Peters made a typical budget speech packed full of personal attacks, including one very extended diversion to criticise comments made by former MP Maurice Williamson several decades ago.
So after all that, what happens next? There is still an enormous pile of money to play with, if Grant Robertson deems it necessary. The $20bn remaining in the recovery fund doesn’t necessarily have to be spent – it has been made clear that it isn’t a target to get through it all. And as Bernard Hickey at Newsroom writes, there is likely to be much more debt taken on, in a way that is actually fairly safe for the country’s financial position. So it is fair to say that this probably won’t be the last set of spending announcements we see this year. With an election coming up, those wanting something different out of this budget have a clear opportunity to demand it.
A bit of housekeeping: There won’t be a ‘From the Friday files’ today, because there are already too many vegetables on the plate from all the budget coverage. That’ll be back on Monday. And for those Spinoff Members hanging out for the Bulletin World Weekly, that will be happening later today, also as a result of doing lots of budget coverage yesterday.
Auckland’s light rail has been put on hold, and may not ever get rolling, reports Thomas Coughlan for Stuff. The reason given by the government is that the full focus is currently on fighting Covid-19, but come on, that doesn’t really wash given how many delays the project has already seen. Transport minister Phil Twyford says there is still a commitment to see it through – at this stage, there still has to be a decision on who will get the contract to build it. For those keeping score at home, the first stage of construction was originally meant to be completed by next year.
More media merger shenanigans played out yesterday, and again through the pages of various leading publications. The NZ Herald reports that its parent company NZME will be taking Stuff’s parent company Nine to court, in a bid to enforce exclusive negotiating rights over a sale. And on the other side, Stuff’s political editor Luke Malpass unloaded on NZME in a way that we very rarely see in New Zealand – it was a totally brutal column, packed top to bottom with harsh insults for their rivals.
The story of PPE for staff in Waitakere Hospital’s Covid ward is one that has been something of a weeping sore in the health system’s response. Simply put, Newshub put the issue on the agenda, and an investigation has now found that what was available to staff wasn’t good enough. The nursing staff themselves have been issued high praise for their work in that investigation. But the Waitematā DHB has apologised for failing them, which resulted in several becoming infected with Covid-19.
One of the interesting financial phenomena of the lockdown has been new investors getting amongst the sharemarket. As Interest reports, the Financial Markets Authority is warning them that the results could go very badly for them. Of course, the amount of money they might lose is theoretically fairly small – the period has seen a massive increase in the number of trades, but a massive decrease in the average value of each. But the data shows that more often than not, such investors have been spinning the wheel and coming off on the wrong side of these sorts of bets.
A correction: Yesterday’sBulletin referred to the cost attached to a trial of facial recognition software, obtained under the OIA by the Taxpayers Union. That $700,000 cost actually referred to a different trial of facial recognition software by the police. The cost of the Clearview AI trial is not yet clear. Apologies for the confusion.
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Right now on The Spinoff: Emily Writes has a great and mostly serious piece about the industries that will see a big post-lockdown boom. Andrew Geddis picks over the legislation to enable level two, and finds that while it is overall necessary, there are deep flaws. The Rugby Unwrapped podcast returns for another episode, this time about how rugby needs to learn how to learn from other codes. Charlotte Muru-Lanning looks at a stoush over racism in the food world, and what it shows about how people discuss such issues. And Tara Ward dives deep on why the weatherman on Breakfast did an update in a dinosaur suit.
It’s still too early to draw firm conclusions about Covid-19 infections leading to a troubling new syndrome seen in children. However, there are clearly some connections which researchers are frantically trying to figure out the meaning of. This piece from Vox goes into what is so far known for sure about the condition being described as similar to Kawasaki disease. Here’s an excerpt:
Despite having studied Kawasaki disease for decades, researchers still don’t know exactly what triggers it. Even before Covid-19, a working hypothesis has been that a runaway immune response — possibly combined with a genetic predisposition — brought it on. Previous research had even looked for evidence of other coronaviruses in Kawasaki patients, but overall the evidence was generally only weakly correlated.
The new patterns emerging in places with severe outbreaks of Covid-19, however, are significant. And even though the Italian study was small, the researchers noted that the rate of Kawasaki-like cases at their hospital in the outbreak center of Bergamo had jumped 30 times to their usual rate in the month they studied.
The timing is also interesting to researchers. “If you look at the curves, Covid-19 has plateaued, but there’s an exponential rise in this secondary type of shock syndrome,” Jane Newburger, a cardiologist at Boston Children’s Hospital, said in a release. “It is even possible that the antibodies that children are making to SARS-CoV-2 are creating an immune reaction in the body. Nobody knows.”
With the impending return of rugby, there has been a glaring lack of kōrero about one half of the game. As Stuff’s Marc Hinton writes, the resumption of women’s rugby has been largely ignored by the sport’s bosses, even though the domestic competition was gaining strength and the national rep teams are champions. Players, like Wellington’s Alice Soper, have been starting to make noise about it too. Hinton argues that it’s all very well to have talked the women’s game up in the past when times were good – now it really matters that NZ Rugby continues to stand by women in bad times.
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The Spinoff Weekly compiles the best stories of the week – an essential guide to modern life in New Zealand, emailed out on Monday evenings.