Shane Jones finishing up a press conference at parliament last year (Photo: Getty Images)
Shane Jones finishing up a press conference at parliament last year (Photo: Getty Images)

The BulletinApril 17, 2019

The Bulletin: Harder look coming for Provincial Growth Fund

Shane Jones finishing up a press conference at parliament last year (Photo: Getty Images)
Shane Jones finishing up a press conference at parliament last year (Photo: Getty Images)

Good morning, and welcome to The Bulletin. In today’s edition: Harder look coming at the provincial growth fund, rents in Auckland City way up this year, and the long hunt for Louisa Akavi unpacked.

The Auditor-General will be placing an increased focus and scrutiny on the spending of the Provincial Growth Fund, reports Business Desk. There will also be a review of the MBIE department responsible for monitoring and evaluating the PGF proposals. It’s a sign that there are increasing concern among the country’s governance watchdogs around problems that have emerged from specific projects, and the A-G wants to know if the systems by which the money is distributed are to blame.

After the announcement, one of the things recalled by National’s Paul Goldsmith, and quoted by Stuff, was NZ First’s Shane Jones declaring “to the victor go the spoils.” It’s a line that really captures the essence – both for the party and for their voters – of what some love and some absolutely hate about the fund. There have started to be some successes out of it (more on that below) and more than a few debacles as well. It’s not like NZ First explicitly campaigned on the specific provincial growth fund during the election, but they certainly signalled a similar policy direction, and they did well electorally outside the big cities. But it’s also an idea that makes a lot of observers deeply uneasy, raising the spectre of what in the US is called pork-barrel politics for some reason – basically wasteful but targeted spending for votes. It certainly wouldn’t be the only time a New Zealand First MP has faced such accusations.

On the job creation numbers, have they been fudged or overstated? Back in February, economist Eric Crampton cast a skeptical eye over Provincial Growth Fund job figures, publishing his thoughts on the Offsetting Behaviour blog. One argument that he made was that the headline point of the fund shouldn’t necessarily be short term job creation – in his view it works alright if the aim is to use it as a way of getting infrastructure and consequent economic development to areas that need it. He recently had it confirmed that job creation figures “are the sum of the lower bounds of estimates provided by the grant applicants.” That doesn’t make the numbers that have been published look particularly robust, and so we can’t really say for sure how many have been created.

And the counting of jobs matters, especially in a political sense. Everyone can understand the life-changing impact of getting a job when there hadn’t been any around before. And while there are obvious party political elements to that, one reported effect allocation of money has had on towns is a sense that they haven’t been forgotten by the rest of the country. That’s certainly what comes out of this Radio NZ report into the town of Minginui, where a tree nursery was allocated $2 million a year.

There have been successes, some of them covered in this RNZ Insight piece shared a few days ago. The examples are anecdotal, but they add up, and paint a picture of smart, hardworking people in the provinces making the most of a change in fortune. But anecdotal might not really wash with the Auditor-General, who tends to require a higher standard of scrutiny.

Rents are way up for the year in the Auckland central city, reports the NZ Herald, and up across the board for the city. Between January and March the average for the city was up just under 10%, a rapid increase that is tipped to continue with increasing pressure for space from America’s Cup syndicates. Rises have generally been higher for smaller places. It comes around the same time as the market has stalled for house sales, down 18.8% year on year.

The hunt for captured Red Cross nurse Louisa Akavi has been going on behind the scenes for years now. Some of the details in this story by the NZ Herald’s David Fisher are remarkable, in that it shows the effort the government and Defence Force have gone to, to try and get her home. It also outlined the likely possibilities of what has happened to her, including that she may still be in captivity with the few ISIS leaders still on the run.

There’s a rather dramatic front page of the Waikato Times today if you’re a member of the Waikato District Health Board. Health minister David Clark is threatening to sack the lot of them, and has given them two weeks to come up with a reason why he shouldn’t, or else they’ll be replaced by a commissioner. Then again, DHB chair Sally Webb told the paper it was probably fair enough. If a commissioner is appointed, it will mean legislation will be needed to cancel the upcoming DHB election for the region (remember DHB elections happen at the same time as local government.)

Calls are being made for the finance minister to loosen the purse strings, but he’s not budging, reports Interest. Grant Robertson is holding firm to the Budget Responsibility Rules, despite ratings agencies and plenty of economists saying there’s more room to move. The 2019 Budget, to be released on May 30, has now been signed off, but of course there’s another budget where a bit more stimulus spending might happen next year.

There have been a couple of interesting takes on the recently announced changes to overseas investment rules. One News reports water bottlers are in the sights of the government with regards to the changes, which aim to both cut red tape to streamline the process, but also put in place an additional ‘national interest’ test. Over on Politik, that is also raising fears of far more politicisation of OIO decisions. Notably over this term in government, minister Eugenie Sage last year said that her hands were tied by the existing rules, and she had to approve a water bottling expansion that she personally didn’t support.

Scientists are warning the survival outlook for seven of New Zealand’s most threatened species is bleak, reports Newsroom. Some are more high profile than other – Māui Dolphin and the Hihi bird being among them. But all of the declines indicate an uncomfortable truth, that we’re pushing these species out of their habitats, and don’t know the full consequences for the ecosystems as a result.

Advocates want changes to the NZ Super scheme to reflect the increasing disparity between retiree homeowners and renters, reports Stuff. Basically Super payments are calculated on the assumption that recipients are homeowners – for an increasing number (and look for this to get much more pronounced in future decades) that’s not the case any more. That can have severe effects on the quality of life people have in old age.

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The UK has lessened the bite of predatory lenders by curbing interest rates. (Photo: Getty.)

Right now on The Spinoff: Kate Sutton asks why NZ isn’t making the same moves against loan sharks that the UK is. Global director of buildings for BECA Mark Spencer speaks to the For Auckland podcast about the construction industry, how it is broken, and how it can be fixed. Maria Slade analyses an upcoming element of the Budget which could give cash-strapped firms looking to expand some hope.

Also, this piece by Katie Meadows is a must-read for pretty much anyone who has ever watched reality TV. It’s about the increasing psychological grubbiness of Married at First Sight Australia, and the effect that has on both contestant and audience. A few years ago now it was the intelligent, insightful writing about culture that made me want to read more of The Spinoff, so it’s fantastic to see writers from the next generation coming through with the chops to do those sorts of pieces.

The biggest single-day election in the world is taking place today, with Indonesia going to the polls. The Atlantic has an excellent rundown on the sheer logistics of getting through 245,000 candidates, 20,000 races and 193 million registered voters. It’s mostly free and fair, but there are some issues with vote buying and other irregularities. Corruption and domination by political elites is also an ongoing problem. There’s an excellent analysis on Radio NZ outlining the challenges their democracy has.

Not everyone in the country agrees that the elections are legitimate at all. Radio NZ reported last month that some West Papuans were urging a boycott of the election, on the grounds that they want independence from Indonesia. There has been a long running struggle over the issue, with violence sometimes breaking out.

Should we care about Indonesia’s election? Absolutely. As Jordan King wrote on The Spinoff earlier in the year, the country is growing rapidly in all of population, economic clout and regional influence. He argues that New Zealand needs friends who also place value on democracy, and Indonesia has certainly come a long way since the dictatorship of General Suharto. Then again, one of the leading presidential candidates today is Suharto’s son in law, former Lieutenant General Prabowo Subianto.

The campaign went into a quiet period in the days leading up to the election, reports the Jakarta Globe. President Joko “Jokowi” Widodo will be heading to Saudi Arabia, for the umrah in Mecca. Prabowo Subianto will be meeting support party leaders and attending a wedding. The results will take a while to come in, but it’ll be worth an update when they do.

With Mark Rudan definitely out, who will take over at the Phoenix? Stuff’s Phillip Rollo has cast his eye over six leading contenders, with a few names that might be familiar to the casual fan. Des Buckingham, the current U-20s All Whites coach, is certainly a leading one, and repeated caretaker Chris Greenacre could also get the nod for real. Rudan himself has just a few more games, which will almost certainly include a playoff, but it may not be a home playoff now after a run of poor form.

From our partners: Climate change has already affected how electricity gets delivered to customers, and it’s only going to get more challenging. Vector’s Chief Networks Officer Andre Botha outlines what the lines company is doing to respond.

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