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Image: A metaphorical representation of how some businesses enjoyed the high trust model (Getty Images)
Image: A metaphorical representation of how some businesses enjoyed the high trust model (Getty Images)

The BulletinSeptember 17, 2020

The Bulletin: Reckoning comes for wage subsidy

Image: A metaphorical representation of how some businesses enjoyed the high trust model (Getty Images)
Image: A metaphorical representation of how some businesses enjoyed the high trust model (Getty Images)

Good morning and welcome to The Bulletin. In today’s edition: Reckoning comes for wage subsidy, house prices no longer tipped to fall, and second death in the same family from Covid-19.

It was a policy conceived in an emergency, was deployed rapidly, and prevented a total economic disaster from crashing over the country. But now serious questions are being asked about the wage subsidy, whether it was abused by some of those getting it, and what should be done about that now. To give some context around it, around 1,650,000 jobs were covered by the original scheme, and just under half a million covered in the extension. Stuff recently reported the views of an economist who said it had “completely masked” the state of the labour market, but that was sort of the point – it was always meant to prevent unemployment rates going over a cliff.

It was announced earlier in the week that the office of the auditor-general would be looking at the management of the scheme. In a release, the OAG said “our work will provide the public and Parliament with an independent view on how well the Scheme has been managed. We expect to identify the challenges in operating high-trust models and lessons for decision makers.”

Audits have been taking place of some claimants – see for example this One News story from July. And several hundred million dollars have been paid back. Many businesses who initially feared being wiped out by Covid-19 received the wage subsidy, only to discover that the hit to revenue was not nearly as bad as expected, so paid it back to the government. A disclaimer I should include here – the Spinoff was one of them.

But that point about high-trust models is a crucial one, because from one point of view, some massive businesses may have abused that trust. As Duncan Greive reported earlier this month, some major businesses have announced seriously massive profits for such a difficult year, all propped up by the fact that they got millions in wage subsidies. Regardless of what the OAG finds, it is unlikely to result in that money being paid back – rather it will just be a transfer of wealth from the public purse to large and profitable businesses.

Business leaders are now starting to speak out about it as well. I’d highly encourage you to read this devastating argument from Zuru co-founder Nick Mowbray, who puts into context how in his view some of the country’s biggest businesses abused the spirit of that trust. Here’s an excerpt:

In what world is it ethical for companies to take a government handout and then declare profits and pay dividends a few months later? Not only have they levied an enormous burden of debt on the country by needlessly taking borrowed money, but they have shamefully contradicted the way they usually behave when things are going well.

When times are good, these companies choose to privatise profits and keep their earnings for themselves. But as soon as things turn bad, they’re more than happy to take a government handout and socialise their losses, making it society’s problem. Only, these companies didn’t even make losses – they continued to make profits, and in some cases even increased them. Capitalism is not meant to be a one-way street. You shouldn’t get to take profits in the good times and put your hand out and have hard-working New Zealanders pay for it in the bad times.


House prices probably aren’t really going to fall after all, despite an economic crunch being seen in pretty much every other indicator. Interest has reported on comments from Westpac economists, who note that a combination of the recession not being as bad as expected and very low interest rates have forced a revision of the forecasts. That’s just swell for property investors, who will continue to make out like bandits as a result. Industry publication Good Returns reported last month that the market share of purchases being made by mortgaged investors was on the rise – to quote: “While mortgaged investors share of property purchases increased, existing owner-occupiers share of purchases dropped to 24% in July.”


A second tragic outcome for a family hit by the latest Covid-19 outbreak. Nigel Huirama Te Hiko, aged 54, has died in Waikato hospital after a long period in ICU. Stuff’s Florence Kerr described him as a revered leader and historian. He was in a coma when his brother Alan Te Hiko died of Covid-19. It brings the nationwide death toll to 25. In better news, health officials increasingly believe the Auckland cluster has been contained, reports Stewart Sowman-Lund.


The pre-election fiscal update (PREFU) has been released, showing a large increase in debt to GDP ratios due to the Covid-19 hit. Radio NZ has wrapped the reactions to it all from parliament, and what parties intend to do about it. In broad terms, the heart of the matter is spending and tax – Labour and the Greens argue that increases in both are necessary, to both cushion the blow and pay for the recovery. The other parties in parliament say spending needs to be cut back to avoid tax rises. In general terms as well, the long term outlook for the economy is pretty tough, even with a quarter of bouncing back now forecast.


Battle lines have been drawn up over the proposed spatial plan for Wellington. As the NZ Herald’s Georgina Campbell reports, there are now competing campaigns, particularly around the place of so-called ‘heritage suburbs’. One of those campaigns is being fronted by Isla Stewart, who wrote this piece for The Spinoff about the need for much more urban density. The context of it all is the massive projected growth for Wellington, with as many as 80,000 more residents expected in the next 30 years.


The Māori Party wants to see an end to expulsions of students under the age of 16, reports the NZ Herald. A wildly disproportionate number of these exclusion cases are Māori kids, and co-leader Debbie Ngarewa-Packer says this often puts them on a pathway towards gangs and prisons. The policy package also calls for 25% of educational funding to be put into Māori models of delivery, and for much more primary school content to be taught in te reo.


This excellent local reporting is being shared entirely for the headline alone: Hooning disturbing the peace, reports the Wairarapa Times-Age. Hoons are out and about in Masterton, they’re hooning around, and they’re disturbing the peace. In all seriousness though, it looks like some nasty damage has been done to Queen Elizabeth Park, which is very sad to see. Bloody hoons.


Got some feedback about The Bulletin, or anything in the news? Drop us a line at thebulletin@thespinoff.co.nz

(Photo: supplied)

Right now on The Spinoff: Intelligence expert Paul Buchanan writes about the Chinese spy database, and how it is little different in spirit to those run by other countries. Susan Wardell analyses some uncomfortable truths about who gets medical crowd-funding, and who doesn’t. Tax expert Geof Nightingale lashes Labour for their unimaginative and weak efforts to make the tax system more progressive. On a similar note, Justin Giovannetti answers a range of questions around how the tax system works. Leonie Hayden reports on protests in Avondale aiming to save some old native trees. Māori language revitalisation expert Dr Rachael Ka’ai-Mahuta explores what lessons can be learned here in Aotearoa from the current explosion in popularity of Korean culture. Sherry Zhang writes about an attention grabbing New Zealand instagram-news account that has gone global. And Alie Benge reviews the insightful take on obsessive love in Rose Matafeo’s Netflix show Horndog.


For a feature today, a dramatic piece about the oil and plastic industry overhyping the benefits of recycling. The article from NPR has been widely shared since being published, because it gets to the heart of something a lot of people probably instinctively felt, but didn’t know for sure. Here’s an excerpt:

NPR and PBS Frontline spent months digging into internal industry documents and interviewing top former officials. We found that the industry sold the public on an idea it knew wouldn’t work — that the majority of plastic could be, and would be, recycled — all while making billions of dollars selling the world new plastic.

The industry’s awareness that recycling wouldn’t keep plastic out of landfills and the environment dates to the program’s earliest days, we found. “There is serious doubt that [recycling plastic] can ever be made viable on an economic basis,” one industry insider wrote in a 1974 speech.

Yet the industry spent millions telling people to recycle, because, as one former top industry insider told NPR, selling recycling sold plastic, even if it wasn’t true.


In sport today, a much funnier piece about an issue that has dominated the back pages over the last week. Hayden Donnell has looked at the failure of the government to make it possible for the Rugby Championship to go ahead here, and writes that while public health is somewhat important, clearly rugby is much more so.


That’s it for The Bulletin. If you want to support the work we do at The Spinoff, please check out our membership programme

Photo: Getty Images
Photo: Getty Images

The BulletinSeptember 16, 2020

The Bulletin: Competing education policies presented to voters

Photo: Getty Images
Photo: Getty Images

Good morning and welcome to The Bulletin. In today’s edition: Competing education plans in focus, Māori Party push for greater prominence for te reo, and hundreds of prominent New Zealanders in Chinese intel database.

We’ve now had both major parties come out with the education policies they’ll take into the election. As always, it’s likely to be an area of debate between them, given the share of government spending that goes towards it, and the importance voters place on it.

We’ll start with Labour’s plan: Much of it has been rolled out over the course of the term already, reports Stuff. But there’s a bit of targeted give and take in it. On the one hand, the school lunch system would be expanded, and pay parity for ECE teachers would continue to be a focus, with $600 million allocated. There would also be continued efforts to reform vocational tertiary education. However, we got confirmation that the fees free programme would be paused in its current state – it was already an expensive one, and the spending is probably harder to justify amid the Covid crunch. Nor will the postgrad student allowance be brought back – a 2017 election promise that never came to fruition.

For National, a $1.9 bn over four years package was put together, with Radio NZ reporting it will focus on “learning support, teacher aides, and new special character schools”. Those character schools would include kura kaupapa and charter schools, which would be brought back – likely to the delight of the Act party. In keeping with National’s philosophical position around support being targeted rather than universal, there have also been policies announced around reducing barriers to support for those kids with “learning, disability, behavioural, health and other challenges.”

Because they represent a lot of teachers on the front lines, it’s worth checking out what the NZEI union had to say about the plans. Bear in mind that while the organisation is officially non-aligned, their preferred policy outcomes tend to line up with Labour a lot more than National, and read accordingly. On Labour, they celebrated the commitment to ECE pay parity, saying it was a “huge win” for the sector. And on National, they welcomed aspects of the plan, but tempered that praise with criticism of the party’s previous stint in government.

Meanwhile, NZ First put out a press release also attacking National’s record on education in government, and talking about what they’d achieved over the term.  And if you want to see what every party is putting forward in the field of education, I once again invite you to check out Policy, where you can compare them all.


The Māori Party has unveiled a te reo policy that includes changing the country’s name to Aotearoa by 2026, reports One News. They would also push for places to return to the original te reo names, make te reo and Māori history a core part of the education curriculum, and require state funded broadcasters to have basic fluency – I can think of a few who’d have no problems here, and a few who really would. Candidate Rawiri Waititi said the plans were about elevating te reo to its “rightful place” in New Zealand’s culture.


Hundreds of prominent New Zealanders have appeared on a massive Chinese intelligence database, reports Stuff. They include people from a range of fields, but in the case of politicians listed also include family members. The section of the database on NZ is actually comparatively light – the whole list is understood to include more than 2 million profiles. At this stage, there doesn’t appear to be confirmation that anyone who appeared on the list has actually been targeted by any Chinese intelligence operation – or perhaps more importantly, no suggestion that they’ve been corrupted.


Botany MP Jami-Lee Ross has pulled out of the race to win back his electorate. The NZ Herald reports the Advance NZ co-leader will instead run on the list only, and Ross says he believes the party will make it into parliament through his co-leader Billy Te Kahika Jr winning Te Tai Tokerau off Labour’s Kelvin Davis. Despite being the incumbent, Botany was not looking good for Ross – National’s new candidate in the basically safe seat is former Air NZ boss Christopher Luxon, and the party’s pollster David Farrar ridiculed Ross’s announcement by saying he was polling at under 2% in the seat. Meanwhile, the Public Party component of Advance NZ appears to have benefitted from a donations loophole in electoral law, by building up a massive warchest while not being a registered party – and therefore having no obligation to report the money, reports Stuff’s Matt Shand.


We’re likely to see some pretty gnarly economic numbers come out on Thursday this week, but as always, the detail will be crucial. Interest’s David Hargreaves has looked at a range of forecasts around the June quarter GDP figures, which could end up showing the biggest drop on record. However, it’s not all bad news, because the worst of that drop may already be behind the economy, and the September quarter figures are expected to show a big bounce-back. That perhaps sums up one of the limitations of using GDP as a measurement – useful as it is as a topline number, it doesn’t really get onto the ground of how people are feeling about their economic positions.


This is a story that’s really rarking up primary industry people on twitter right now: Stuff reports David Parker has told a chamber of commerce meeting in Southland that industries that rely on overseas workers simply won’t be able to import people, and will have to compete for labour instead. The point out of it that is really interesting – he got into a debate with his hosts about whether there is a ‘’short-term market gap” for labour right now, or whether there was a “medium-term market aberration” caused by high levels of immigration.


Bus drivers are stoked at a move by the government to subsidise pay packets to bump them up to a living wage, reports Stuff. It follows years of disputes and strikes of various intensities for the essential workers. Previously most driver jobs paid little more than the minimum wage, despite high levels of responsibility involved in the work. Organisers at FIRST union say the move will help keep experienced drivers behind the wheel.


Got some feedback about The Bulletin, or anything in the news? Drop us a line at thebulletin@thespinoff.co.nz

Image: Tina Tiller

Right now on The Spinoff: Ben Thomas analyses the approach taken so far by the Judith Collins campaign. Áine Kelly-Costello writes about reckoning with disability after becoming a Covid long-hauler. Duncan Steel explains just what might be going on (that we know about) in the clouds around Venus. Josie Adams writes about a twitter bot aiming to take a stand against online abuse of women politicians. Madeleine Chapman’s back with another week of political commentary through memes.

And something to watch, and something to listen to: On the Rag returns with an episode about why some believe it isn’t socially acceptable for women to be angry. And Gone by Lunchtime is looking at the absolute middling centrism being offered by our two major parties.


For a feature today, a look at the (draconian) ways land management disputes are solved in a different country. The Asia Sentinel has reported on an incident in Vietnam, in which farmers who were having their land confiscated by the state decided to fight back, only to find themselves facing extremely severe sentences. There’s no particular relevance to New Zealand from this story, I just think it’s a well-told bit of world news. Here’s an excerpt:

The guilty verdict was no surprise. This was a show trial ordained and orchestrated by the institutions of the Vietnamese state. Prisoner after prisoner uttered virtually identical confessions: “I apologize to the families of the police officers who were lost; I thank our teachers in the prison who taught us how we erred; I thank my lawyers but now no longer need his services; and finally, I ask for a lighter sentence.”

The regime in Hanoi takes a dim view of the agrarian protests. In party doctrine and Vietnamese law, the land belongs to the people and the state manages it on their behalf. If farmers persist in asserting their right to till plots of land when the party/state has decreed some other use for it, even if they only insist on being paid what it is worth, they risk being labeled “rioters and terrorists,” forcibly removed, and in exemplary cases, prosecuted.


In sport, there will be a Bledisloe Cup in New Zealand after all. I personally think Scotty Stevenson’s call last week about the games going to Australia was right on the money at the time, but it turns out the PMs of both countries got together and thrashed out a solution, reports the NZ Herald. Not only that, New Zealand’s quarantine rules have been tweaked to allow the Wallabies to tune up. I mean, you’d think both political leaders would have more important things to be worrying about, but apparently not. The games will be played on Sundays, so won’t clash with the election.


That’s it for The Bulletin. If you want to support the work we do at The Spinoff, please check out our membership programme