Finance minister Grant Robertson with the 2019 Budget (Hagen Hopkins, Getty Images)
Finance minister Grant Robertson with the 2019 Budget (Hagen Hopkins, Getty Images)

The BulletinMay 30, 2019

The Bulletin: What to watch for on Budget Day

Finance minister Grant Robertson with the 2019 Budget (Hagen Hopkins, Getty Images)
Finance minister Grant Robertson with the 2019 Budget (Hagen Hopkins, Getty Images)

Good morning, and welcome to The Bulletin. In today’s edition: What to watch for on Budget day, education minister gets brutal heckling from teachers, and Wellington mayor throws support behind trackless trams.

“Don’t tell me what you value, show me your budget, and I’ll tell you what you value.” So goes the quote often attributed to former USA Vice President Joe Biden. Today, with the release of the government’s first ever wellbeing budget, and second budget overall, we’re going to get a really good chance to see what they really value.

One of the most credible criticisms made of this government to date is that they haven’t spent in a way that would be really transformational. They’ve held tightly to the Budget Responsibility Rules, thrilling credit rating agencies but disappointing many of those that put them into government. The NZ Herald’s Simon Wilson (paywalled) has a great piece outlining ten litmus tests that he’d look at to see where the government is placing value. I can’t say I agree with all his suggestions, but the point is that he is dealing with both big and small ideas, and big ways to change the country, rather than tinkering and kicking problems further down the road.

A major area where this will be watched is in mental health spending. And with the government’s response to the mental health inquiry report yesterday (key points of that response are here) on common theme that has emerged is that much of what has been accepted will now require hard cash to be put in. Many of the recommendations that were accepted were only done so “in principle” rather than in practice – health minister David Clark went on Checkpoint to discuss what that meant, and he said that it would take time to build up the systems to do those. Mental health is also one of the five main areas the government plans to prioritise in this Budget, along with child poverty, moving to a low emissions economy, lifting Māori and Pacific incomes, and some impenetrable waffle around digital innovation.

But as for other questions, plenty still remain. Will there be significant boosts in funding for subsidised dental care? Funding for paramedics beyond that one-off boost announced earlier in the month? More of the welfare report recommendations getting picked up? Money that could break the deadlock with teachers? Budgets don’t contain nearly as many surprises as they once did, but there is still room for a few today.

Finally, you’re probably wanting an update on the leak, or hack, or whatever it is that happened. Well, Radio NZ reports Treasury have confirmed that material was discovered through exploiting a feature in their website’s search tool. Police have concluded that the law hasn’t been broken, and aren’t planning any further action.

According to NZ Herald journalist Jason Walls, National leader Simon Bridges will address media this morning about how they came to possess the information that they then released to media. They continue to vehemently deny any sort of hacking of Treasury, and the government are even denying that they ever even accused National of hacking – whether the latter is true is in the eye of the beholder, I suppose. Opinion writer Brigitte Morton says National have achieved something remarkable here, by completely demolishing what the government wanted to be talking about this week.

In the meantime while you wait for National’s presser, have a read of this wonderful piece from BusinessDesk’s Pattrick Smellie, republished on the NZ Herald (paywalled.) He used to be the press secretary for Roger Douglas, and has told the story of how he once blundered massively and leaked the Budget in 1986. I’m a product of the rapid online news cycle, and it’s a fascinating glimpse into how political communications used to work once upon a time.

Massive teacher strikes took place yesterday, with tens of thousands taking to the streets. One News had a live blog running, and reports that the response education minister Chris Hipkins received was absolutely brutal – he was called out by demonstrators on the parliamentary forecourt, and then heckled when he did front. For his part, Mr Hipkins says the teacher shortages and pay in the sector is something the government is trying to address over time. For a reminder of the conditions teachers are currently operating under, read Toby Morris’s excellent edition of the Side-Eye comic from December last year. There’s every chance more strikes could be coming this year.

Wellington mayor Justin Lester has thrown his support behind trackless trams, rather than light rail, reports Stuff. It’s a cheaper option, and could be built more quickly, and he says there’s a possibility Wellington would end up being the last city to build a light rail network in the world if they chose that option. It’s a big question for the city, which is getting increasingly densely populated.

Rates rises in the wider Manawatū part of the Horizons region have been kept under 5%, but it has come at the cost of freshwater protection funding, reports Stuff. The money would have gone towards grants to help farmers fence and plant along waterways – a key mechanism for both protecting and cleaning up streams and rivers. That was controversial around the Council table, with some councillors hitting out at the decision.

The Reserve Bank is currently doing analysis on the future of cash, reports Interest in this short but fascinating piece. Though some in the community remain heavily reliant on cash, overall use is declining, and with that comes the possibility that some places will stop accepting it. Strangely though, the overall amount of cash in circulation has continued to increase, and currently sits at about $6.5 billion worth of coins and notes.

Some truly incredible political machinations are going down in Papua New Guinea at the moment. RNZ Pacific has been following the story of PM Peter O’Neill’s resignation closely, but it could well be that little about the government will actually change. A bunch of MPs defected, but now appear to have returned to the government ranks. Earlier in the week parliament nearly came to blows over an attempt to crowbar the speaker out of his position.

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Sharing $85 billion isn’t an easy task (image: Toby Morris).

Right now on The Spinoff: Don Rowe writes about deaths on Everest, and what it says about how we value sacred spaces. Murphy writes about the Rainbow tick, and whether it’s more about box-ticking than anything else. Accountant Murray Brewer writes about the ‘tax empathy gap’ and why there has been such an extreme reaction to suggestions like the CGT. Avi Duckor-Jones, former winner of Survivor NZ, compares that experience to being a teacher. And Maria Slade reviews a new book about the collapse of South Canterbury Finance, and what hasn’t been learned from it.

Today’s feature is about carbon credit offsetting, and how the system isn’t necessarily working as many wish it would. It comes from ProPublica, who say many of the tree-planting and anti-deforestation schemes are little more than scams. After you read it, also consider reading this critique of it, which picks out some of the details while hammering home the message that planting and protecting trees is still really important. Where there’s agreement though is that it underlines how the only real solution to rising carbon emissions is to cut carbon emissions. Here’s an excerpt:

In case after case, I found that carbon credits hadn’t offset the amount of pollution they were supposed to, or they had brought gains that were quickly reversed or that couldn’t be accurately measured to begin with. Ultimately, the polluters got a guilt-free pass to keep emitting CO₂, but the forest preservation that was supposed to balance the ledger either never came or didn’t last.

“Offsets themselves are doing damage,” said Larry Lohmann, who has spent 20 years studying carbon credits. While we’re sitting here counting carbon and moving it around, more CO₂ keeps accumulating in the atmosphere, he said.

It’s “the worst possible idea — except for everything else,” said Timothy Searchinger, a Princeton researcher who studies land use and climate change. “If we had enough money, it could probably help a lot.”

The Northern Stars have pulled off a dramatic upset win against one of the great netball dynasties. Maia Wilson proved to be the difference as the youngest side in the competition went to Invercargill and tipped up the Southern Steel in the ANZ Premiership elimination final, by a margin of 56-53. The Stars will now play the Central Pulse in the grand final on Monday night – and there’s some good news on this, they’ve found a venue! You might remember earlier in the season all the potential arenas for the Pulse were booked up, but then the fixture was moved to a day later. It’s at Te Rauparaha Arena in Porirua, and is already sold out.

From our partners: A two-tier system of energy use is developing, with those on high incomes much more able to reduce their bills than households on lower incomes. Vector’s Chief Risk and Sustainability Officer Kate Beddoe outlines what the company plans to do about that.

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