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The Kākā by Bernard Hickey
Hosted by Bernard Hickey · EN
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Bernard's Chorus: Why so relaxed Minister?
3d ago00:17:01Tap to summarizeToday in the news from Aotearoa and elsewhere about our political economy around housing, climate and poverty:* Tax Minister Simon Watts says he doesn’t have a view about the fairness of global tech giants arranging their finances so they don’t have to pay $600 million per year in taxes in New Zealand, Jenée Tibshraeny reports this morning for the front page of the Weekend NZ Herald-$ (See more below in Today’s Top Six Pick n’ Mix & in Front Pages in the Early Bird.)* The Government’s over-arching aim to reduce state spending to below 30% of GDP is behind the lack of funding for about 80 new abuse-in-care claims coming through each year. Julia Gabel had the scoop for NZ Herald last night. (See more below in Today’s Top Six Pick n’ Mix.)* That same sinking lid policy, which is framed as being focused on squeezing more value from the same money by reducing back office staff rather than front office staff, is responsible for Oranga Tamariki being short of 180 social workers, which in turn means they’re not turning up to crucial regular meeting with whanau, Police and others, as Phil Pennington reported last night for RNZ. (See more below in Today’s Top Six and Poverty Picks n’ Mixes.)* Consumer confidence is closely inversely correlated with CPI inflation and petrol price inflation. Consumer confidence is also correlated with confidence in any Government, as expressed in polling on questions about whether the country is on the right track or wrong track. That polling is often a leading indicator of support for the main governing party. (See more below in Chart Pack of the Day.)(This email and the video above is a sampler for all free subscribers. A much more detailed version went earlier as the Early Bird to paying subscribers, who also have access to a live recording of my Dawn Chorus video above. Please join us as a paying subscriber to support my work and get much more detail in the Early Bird posts and below the paywall fold)My Picks n’ MixesToday’s Top Six* Scoop by Jenée Tibshraeny for NZ Herald-$ (front page lead): ‘I don’t have a view’: Revenue minister deflects fairness query on big tech firms’ tax ‘According to a “conservative” estimate by Tax Justice Aotearoa, New Zealand missed out on more than $600 million of tax revenue from eight of the biggest tech companies over the past five years.’* Scoop by Julia Gabel for NZ Herald: Abuse in care: Officials estimate up to 80 new claims a year under expanded redress system ‘Officials predict up to 80 additional abuse in care claims for redress could be lodged each year as the Government expands the state system to include more contemporary claims of abuse. Advice prepared for the minister in charge of the scheme, Erica Stanford, and obtained by the Herald under the Official Information Act, includes warnings from officials to ensure the right level of funding is provided for these additional claims. Stanford’s office said funding decisions were still being considered by ministers. Officials, in their advice to her, said extending the system would require reallocating existing Crown Response Funding as the Finance Minister Nicola Willis did not invite a bid for additional money in the latest Budget. The Ministry of Health and Health NZ also did not have funding available from baseline for these additional claims.’* Reportage by Torika Tokalau for LDR/RNZ: Church’s plan for low-cost cafe to feed hundreds shunned by locals* Deep-dive by Phil Pennington for RNZ: ‘A risk to life’: Social workers called out for no-shows on keeping kids safe ‘Oranga Tamariki’s new CEO said earlier this month it was 180 social workers short and staff shortages were hampering efforts to hit targets responding to urgent concerns over children.’* Op-Ed by Otago Uni Associate Professor Bernardette Jones for The Waikato Times-$: The health system failed an 11-year-old child at every step, and two reports fall short of saying why ‘What neither report does is ask whether this child’s status, as Māori, as disabled, as autistic and as non-verbal, shaped what was done to her, and neither analyses the obligations owed under Te Tiriti o Waitangi or under the United Nations conventions on the rights of the child, of persons with disabilities, and of indigenous peoples. The statutory iwi Māori partnership board for the region, Te Tiratū, was not consulted in the inquiry at all.’* Op-Ed by AUT’s Sarah Maessen, Bridget Dicker & Heather Hutchinson for The Conversation: Time is critical when someone’s heart stops – portable defibrillators could save more lives ‘More lives could be saved if community responders were equipped with portable automated external defibrillators (AEDs) to get treatment to patients sooner.’Scoops & Breaking News this morning* Scoop by Hanna McCallum for Newsroom Pro-$: Australian firm advises Stanford on ‘winning hearts and minds’ of NZ teachers* RNZ: National election policy announcement expected as party gathers for AGM‘National leader Christopher Luxon is expected to announce an election policy, which RNZ understands will be in the economic space.’* Investigation by Katie Harris for NZ Herald-$: ‘Culture of fear’: Leaders quit, probe at hockey association over alleged staff conduct* Reuters: Lebanon ceasefire agreed after US-Iran talks in Switzerland scrapped* Reuters: Iran’s Revolutionary Guards set up covert Iraqi cells to attack Gulf neighborsThank you to all paying subscribers who tuned into my live video! Join me for my next live video in the app. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe
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The Weekly Hoon: Calling for a new RONS' suspension; Golden Mile decision; Religion's role in the Ukraine war;
4d ago00:59:50Tap to summarizeThe podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night featured co-hosts Bernard Hickey and Peter Bale talking with regular guests Cathrine Dyer from Wellington and Robert Patman from Dunedin about geopolitics, the economy, climate change and politics.This edition also included discussions with special guests:* Transport analyst Connor Sharp talking about Greater Auckland’s call for the Te Hana to Warkworth section of the Northland RONS to be rescoped; and,* Public Theologian and Civic Technologist Brittany C Farbo on the role of religion in the Ukraine War and Russia’s attacks on churches in Ukraine.This week:* Bernard, Peter and Cathrine talked about Wellington’s Golden Mile decision and South Dunedin’s attempts to deal with climate retreat.* Then Bernard and Peter talked with Robert about the Iran conflict MOU.* Bernard and Peter then talked with Britt about Ukraine.* They finished with a chat with Connor about the RONS and transport policy.The Hoon’s podcast version above was recorded on Thursday night during a live webinar for over 200 paying subscribers and was produced and edited by Simon Josey. Peter Bale will be back next week.The Hoon won the silver award for best current affairs podcast in last year’s New Zealand Podcast awards. (This is a sampler for all free subscribers and anyone else who stumbles on it. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing in full. Remember, all students and teachers who sign up for the free version with their .ac.nz and .school.nz email accounts are automatically upgraded to the paid version for free. Ngā mihi nui.Bernard This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe
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When a lobbyist jumps the species barrier into journalism
1w ago00:26:02Tap to summarizeThis is a free preview of a paid episode. To hear more, visit thekaka.substack.comHere’s this morning’s top news from around Aotearoa and elsewhere about our political economy around housing, climate and poverty.* The Lead: New Zealand’s most prominent lobbyist and former National Party staffer, Matthew Hooton, has been named to edit the Capital’s daily newspaper and New Zealand’s longest-running Sunday newspaper. * The Sidebar: Hooton was a prominent back-room figure in Nicky Hager’s books about political influence and skulduggery on the right of politics, Hollow Men and Dirty Politics. Hooton now says ‘with a glint in his eye’ he wants to take the opportunity to ‘make a difference’ in solving the country’s ‘entrenched, fiscal, poverty, race relations, climate and infrastructure crises’ by broadening and sharpening the editorial focus of The Post-$ & The Sunday Star Times.* The Bottom Line: New Zealand also has an entrenched problem of revolving doors and opaque connections between the sources of power outside Parliament and the Beehive, and those working inside it and its ministries. Hooton’s appointment, albeit spectacular and unexpected, is the latest in a long list of figures in one role jumping the species barriers without any guardrails or speed limits, including Cabinet ministers in both Labour and National Governments going almost immediately into key roles in the private and public sectors. * Chart of the Day: The ratio of houses for sale to houses sold in any one month has blown out from two-to-one in the middle of the Covid housing boom to nine-to-one in May, when both sales volumes and prices fell again in REINZ data published yesterday.* Scoop: Health Minister Simeon Brown has sacked the Medical Council’s top leaders over what he described as their ‘political direction’ around Treaty issues, Andrea Vance reports this morning for The Post-$. It’s also now in Stuff (See more below in Today’s Top Six and Scoops)(Paying subscribers can see more below the fold and in the Dawn Chorus video and podcast above, along with getting the Early Bird email with the morning’s scoops, front pages, key articles and cartoons.)“ ‘I hope it unsettles a few,’ he says with a glint in his eye”I have always enjoyed talking on occasion with Matthew Hooton and regularly read his columns, although I take them with a few more grains of salt than I take with other political columnists, often because they’re already much spicier. He’s an enthusiastic type who loves the stories and the players in New Zealand political economy as much as any other tragic politico, and he’ll often surprise you with a fact or perspective that adds to the wider picture.But he is not a journalist or editor with an ingrained reluctance to favour one side over another, nor someone who is wary of using their own power in case it hurts people. I’ve also been on the other side of some in his circle of politics’ instincts to ‘win,’ and to do whatever it takes for his side to win. Anyone who has read his emails and quotes divulged in Nicky Hager’s books Hollow Men and Dirty Politics will know what I mean, although I also sense he has changed and matured from those days. So when I read yesterday he had been appointed the Editor in Chief of The Post and the Sunday Star Times, I was gobsmacked. He’s never worked as a journalist or editor, has never run a large team of journalists and editors, never run a publishing business, and is not universally popular or trusted in many places in politics and the media. It’s what I call the Koru Lounge society of New Zealand.But more importantly, Hooton embodies a particularly New Zealand problem in our political economy: a vagueness and opacity around how power is obtained, who has it and how it is used. It’s what I call the Koru Lounge society of New Zealand. It is a network of connections and tribes that appoint each other to boards, award contracts and do deals behind closed doors, often when the door should be much more open.Hooton is not unusual in jumping from one part of the governing apparatus to another. He’s been a National Party staffer. A corporate PR employee (for Fonterra). A PR agency owner. A representative for another country in New Zealand (Mongolia) and a connector between other players in this gossamer web of how things actually get done in New Zealand.He’s not the first political player to jump sides in recent years, without the sort of stand-down periods or registers required in other countries. Other big species-barrier jumps in recent years include:* Kris Faafoi’s move from being a Labour Cabinet Minister into the top job at the Insurance Council; * John Key’s leap from being PM to being a director at Air NZ and director of ANZ Group;* Judith Collins’ move from being a National Cabinet Minister to being President of the Law Commission; and,* Don Brash’s jump from being Reserve Bank Governor to National Party leader and then ACT Leader.This sort of ‘celebrity’ editor appointment has happened overseas, but not in a market with newspapers in monopoly positions in their cities. That non-partisan nature of editors of New Zealand newspapers has been a common thread through the history of our media, especially since the newspaper industry settled into two groups that carved the country up into a series of regional monopolies. Hooton himself was enthusiastic yesterday about being offered the role by Stuff owner Sinead Boucher, and already eyeing up the prospects to reset the agenda. Here’s Hooton quoted in Stuff by Lloyd Burr:“It’s an opportunity you can’t turn down and it’s an opportunity to make a difference. New Zealand has major entrenched problems that have been emerging over at least 20 years which the political and business classes have struggled to develop a coherent solution for.”How does he reckon his new role will go down with those political and business classes?“I’d hope that the powerful institutions of New Zealand - whether that’s the government, the opposition, union bosses, business leaders, sports administrators, or arts administrators - are a little unsettled by the appointment,” he says with a glint in his eye.He told Lloyd he didn’t plan any radical changes for The Post:“There will be some changes and we will move fast,” Hooton says. “But I suspect they’re going to be ones that the existing team and the existing readers would say ‘Yes, that’s that’s the way to go’.“This isn’t some turnaround or fix it job. This is an acceleration job,” he says. “We’re not going to take a position on certain things, but we’ll have broader, more rigorous, and challenging content”.He did describe his areas of interest though, where change was needed.“We have six crises. We have a productivity crisis, a fiscal crisis, a crisis of entrenched poverty, a race relations crisis that’s growing, a climate crisis, and an infrastructure crisis. They are in many ways all linked, and they all need to be resolved,” he says.So what does Nicky Hager think?I reached out to Nicky to see what he thought of Matthew’s appointment. He was surprised, but could see logic of what he described as a bold appointment.“I think he’s one of the more interesting people in politics,” Nicky said.“There’s a chance he could do something interesting there, or a chance it could all blow up,” he said.Nicky made a point of saying Matthew was not a racist, when some others in his circles on the right of politics were. He also saw Matthew as different to the likes of Cam Slater, a key protagonist in Dirty Politics, and as having changed over the years.For more detail on Hooton’s involvement in Dirty Politics and The Hollow Men, here’s Adam Dudding’s piece from 2014 in Stuff and a Hager Op-Ed in The Spinoff from 2017.My Picks n’ MixesToday’s Top Six
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The Weekly Hoon: An amazing SpaceX IPO; NZ's $6.5b emissions credits bill; Auckland's de-intensification & Labour's fare cap policy
2w ago01:01:58Tap to summarizeThe podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night featured co-hosts Bernard Hickey talking with regular guest Cathrine Dyer from Wellington about geopolitics, the economy, climate change and politics.This edition also included discussions with special guests:* BusinessDesk-$ podcaster and Listener tech columnist Peter Griffin on SpaceX’s float and what it means for RocketLab; and,* Former NZ Herald-$ columnist and former Metro, Cuisine & Consumer magazine Editor Simon Wilson on Auckland Council’s housing de-intensification vote and Labour’s $20 fare cap policy this week. Simon has just launched his substack; Hopetown by Simon Wilson. I highly recommend subscribing.This week:* Bernard and Peter began the show with their three news items of the week, including Peter pointing to the Maggie Haberman & Jonathan Swann scoop in the New York Times-$ (gift link) about Donald Trump’s Epstein files mess and Bernard pointing to the self-firing of CBS’ 60 Minutes host Scott Palley.* Bernard, Peter and Cathrine talked about Treasury’s advice to the Government that it might have to buy up to $6.5 billion worth of climate emissions credits on onshore markets or from other Governments because New Zealand is on track to miss its Paris Accord commitments, which are now hard-coded into our trade agreements with the EU and UK.* Then Bernard and Peter talked with Simon and Peter about SpaceX, RocketLab, Auckland housing and Labour’s new transport policy.* Peter finished with Donald Trump’s ‘I Love Inflation’ quote as the ‘skateboarding dog’ item.The Hoon’s podcast version above was recorded on Thursday night during a live webinar for over 200 paying subscribers and was produced and edited by Simon Josey. Peter Bale will be back next week.The Hoon won the silver award for best current affairs podcast in last year’s New Zealand Podcast awards. (This is a sampler for all free subscribers and anyone else who stumbles on it. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing in full. Remember, all students and teachers who sign up for the free version with their .ac.nz and .school.nz email accounts are automatically upgraded to the paid version for free. Ngā mihi nui.Bernard This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe
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Here's the devil in our housing inflation detail
2w ago00:26:54Tap to summarizeHere’s the key news in Aotearoa’s political economy over the last day or so around housing, climate and poverty, along with analysis and detail in the video and podcast above, and in the PDF of the presentation attached below, for paying subscribers:* The Lead: Watercare published new maps this morning detailing where new housing can’t be built in and around Auckland because of staged investment plans, soon after hiking its development contributions and network connection charges. The maps, fees and charges impose the ultimate limits on real housing capacity in Aotearoa’s fastest-growing city, above and beyond the district plans fought over between the Beehive and councils. * The Sidebar: These maps and fees set the marginal cost of new housing and control the supply of housing coming onto the market, effectively setting a floor that elevate under prices right across the market. They are the mechanism setting the economic growth rate of New Zealand Inc and determine both who pays for infrastructure and who captures the land valuation upgrades from development.* The Bottom Line: The shift to front-loading the capital costs of new development onto the marginal buyer of homes, rather than spreading it across existing taxpayers and ratepayers, has massively increased the marginal cost of new housing over the last 30 years, which in effect has increased the cost of all new houses. This shift in infrastructure funding onto future generations has delivered a $1 trillion windfall capital gain that was not taxed into the laps of landowners. The ongoing lack of value capture rates also means the private beneficiaries of land up-zoning don’t pay for the capital costs that enable that new development.* The Quote of the day is from Auckland Mayor Wayne Brown, who engaged in some light trolling this week when suggesting the location for some high-rise apartments in the Epsom electorate: “Just next door to where Mr Seymour lives would be a really good one. I’m thinking of a 10-storey building there.”* The Scoops of the day are from Kate Newton at RNZ, who reported this morning on how official advice that the Government’s plan for an LNG import terminal was ‘low value’ was redacted, and that Treasury had estimated it could cost up to $6.5 billion to pay for the overseas carbon credits New Zealand needs to honour its Paris Agreement commitments.* The Chart du Jour shows how Watercare is expecting to increase its capital expenditure by around 60% in the next five years to over $1.6 billion a year, with more than half of that funded from profits and infrastructure growth charges front-loaded into the prices of new homes, rather than through debt paid for by all of Auckland’s residents. (See chart below and in the video above.)Paying subscribers get the full Picks n’ Mixes below and access to Substack Live Chorus sessions, along with the PDF of the presentation used in the Substack Live attached below. If we get more than 100 likes I’ll open it up for the public.NZ Inc’s growth limit and windfall capital gains in map formIt is the chart that shows the scene of an intergenerational wealth crime.This map is arguably the most important tool for understanding how fast New Zealand can grow, who is about to make massive (tax-free) windfall capital gains on land values, and why New Zealand housing will remain among the most expensive in the world. In effect, it explains why a collective decision to shift capital investment costs for new public water, transport and power networks to new generations of home buyers, rather than spread it across all taxpayers and network users, has unleashed over $1 trillion worth of tax-free capital gains onto the generations that owned residential land since 1990.It is the chart that shows the scene of an intergenerational wealth crime. The lines on the map are in effect the chalk outlines of the body of the New Zealand economy’s productive potential.Too much sprawl and not enough densificationStepping back, it’s worth explaining how this map came to be and what it shows. The red and orange bits are the places Watercare has determined, sensibly, that are too expensive to provide drinking, waste and storm water networks for. It means those landowners can’t expect zoning upgrades any time soon that would deliver spectacular capital gains.The dark green areas are also limited. Surprisingly, the ‘hole in the donut’ of the 10km radius around the CBD is listed as for limited development, in part because of the restrictions imposed on development in the Auckland Unitary Plan and the soon-to-be-passed Plan Change 120. Ideally, most housing development would be in intense apartment developments closest to the CBD, and in particular the City Rail Link stations and key bus routes. The lines on the map are in effect the chalk outlines of the body of the New Zealand economy’s productive potential.Yet, as this chart showed in the Plan Change 120 debates earlier this week, barely 25% of Auckland’s new housing capacity is expected to be within that 10 km radius because of the limits on multi-story developments in the leafy suburbs of Ponsonby, Grey Lynn, Herne Bay, Mt Eden, Epsom, Parnell and Remuera. Development has instead been forced outside the ‘donut’ into places such as Avondale, Onehunga, Glen Innes and the Te Atatu Peninsular. Landbankers and Landlords have captured NZ Inc.Developers and land owners pore over these maps to work out where they can capture the windfall gains in land values, which are still not taxed from a capital gains point of view or a value capture rating point of view. Landbankers and Landlords have captured NZ Inc. They are aided and abetted by owner-occupiers who don’t like to be taxed to pay for new infrastructure, but are happy to benefit from land value appreciation caused by restricting investment and pumping up the population.How could it be done differently?There used to be another way water infrastructure was funded and rolled out, which allowed new housing (and therefore all housing) to be cheaper. Existing landowners paid high income taxes to pay for the interest costs on the public debt taken on to fund the new suburbs and motorways and schools and hospitals funded by councils and the Government. That changed in the reforms of the late 1980s, which took the view that either there wouldn’t be new population growth to build new infrastructure and housing for, or the costs should be borne by new residents (ie someone else). It was the ultimate choice of a selfish generation who engineered a wealth windfall double whammy: low taxes because they didn’t pay for new infrastructure, and high land price appreciation because the high cost of new infrastructure inflated the marginal cost of each new home, which translated into higher housing costs.I’d recommend the interview below and Katie’s deep-dive for more information on how Watercare funds, plans and limits the growth of Auckland. To be clear, I’m not suggesting Watercare is doing anything wrong in its own right. It is working within the frameworks set by the last 30 years-worth of politicians and voters who have accidentally-on-purpose engineered the wealth transfer, and who now don’t know how to reverse it without damaging the untaxed capital gains they’re now relying on to fund their retirements and their childrens’ deposits.Chart du Jour: Profits and charges to fund the investmentToday’s Top Six Pick ‘n Mix* Scoop by Michael Morrah for NZ Herald: Watch: Inside the ‘chronically full’ neonatal ward where babies fight for life* Deep-dive by Katie Bradford for NZ Herald: Why some Auckland suburbs are now ‘closely monitored’ for development* Scoops by Kate Newton for RNZ: Officials redacted advice showing ‘low need’ for LNG imports; Government facing up to $5 billion bill over carbon credits, Treasury reveals* Scoop by Jenee Tibshraeny for NZ Herald-$: NZ’s largest insurer exposes new customers to bluntest risk-based pricing* Hayden Donnell for The Spinoff: A battle over the bare minimum at Auckland Council* Op-Ed by Rosie Gallen on her substack: Emergency housing and the politics of disappearance. Fewer motels, but where did the insecurity go?Scoops & Breaking News* Alice Peacock for Newsroom Pro-$: <a target="_blank" href="https://newsroom.co.nz/2026/06/11/minister-pushes-netflix-and-disney-for-financial-data-as-govt-m...
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Auckland chooses high house prices & low GDP
2w ago00:13:24Tap to summarizeHere’s the key news in Aotearoa’s political economy over the last day or so around housing, climate and poverty, along with analysis and detail in the video and podcast above, and in the PDF of the presentation attached below, for paying subscribers:* The Lead: Auckland Council opted last night to recommend its two least intense housing supply plans for local boards to consider, which its economists advised would mean Auckland’s house price inflation would be 4-6% higher and its economy would be $3.9 billion smaller than if they had chosen two other plans that allowed up to an extra 600,000 homes to be built.* The Sidebar: Politicians and the voters they serve are simply responding to the taxation and investment settings in our political economy that benefit the largest number of voters, given landowners vote at much higher rates in local elections than renters. Those settings (no capital gains tax and the 30/30 fiscal rule) mean the safest and highest returning investment after leverage and tax for any household is in leveraged residential land. These settings also mean both central Government and councils restrict infrastructure investment and maintenance to repress state spending and debt below the arbitrary level of 30% of GDP, while also encouraging strong population growth from migration to boost GDP and taxes. * The Bottom Line: The combination of underinvestment in infrastructure and housing in combination with high population growth helps reinforce the ‘success’ of these settings, amplifying spirals ever higher for land values and ever lower for productivity growth. Little will change without those tax and fiscal settings changing, in my view.* The Quote of the day is from Auckland Councillor Shane Henderson, who argued in the meeting last night for the plan to add the most housing: “I don’t understand why we have these conversations all the time and we don’t see enabling housing as an opportunity, as a chance for more economic activity, for diverse beautiful neighbourhoods that more people can enjoy.”* The Scoop of the day is via Charlie Mitchell for The Press-$ about how Children’s Minister Karen Chhour expensed $16,686 for parking at Auckland Airport over nearly nine months.* The Chart du Jour shows how the two plans chosen by the Auckland Council last night will see around 75% of new housing built more than 10km away from the city centre. (See below and in the video above)Paying subscribers get the full Picks n’ Mixes below and access to Substack Live Chorus sessions, along with the PDF of the presentation used in the Substack Live attached below. If we get more than 100 likes I’ll open it up for the public.Landlord Nation wins again in latest Auckland housing voteLast month New York’s new Mayor Zohran Mamdani cited the extra housing supply enabled by Auckland’s 2016 Unitary Plan as one of the shining lights his city should emulate when trying to use a supply shock to improve housing affordability. After last night’s decision, he may not want to include Auckland on his shining light list. The Auckland Council decided against recommending two options for housing densification that would have increased the city’s housing capacity by as much as 600,000 to 2.0 million. Instead, they chose the two least intensive options that are likely to limit supply to around 1.4 to 1.6 million. This was after the Government decided earlier this year to slash its original Plan Change 120 capacity from 2.0 million to 1.4 million.It could have been worse. Putting forward two options, including a slightly more intense one, allows the possibility of one with a slightly higher capacity than 1.5 million, albeit still with most new housing only possible outside a 10km radius of the CBD. (See chart of the day below)Here’s the four options: the Council chose to present options A and B to local boards. This came after the council was advised Option or Scenario D would generate lower house prices and up to an extra $3.9 billion in economic value from more homes and productivity.How did this happen?It’s another win for Landlord Nation and reinforces the powers in a political economy dominated by the twin incentives of a lack of a capital gains tax and fiscal rules that push constantly for less public investment and maintenance in infrastructure, combined with ever-higher population growth.Chart du jour: Choosing sprawl in a mapToday’s Top Six Pick ‘n Mix* Scoop by Charlie Mitchell for The Press-$: What one minister’s airport parking bill reveals about MP spending* Scoop by Joel MacManus for The Spinoff: Government spending $300k per year on unused limos for former PMs* Deep-dive by Glenn McConnell for Stuff: ‘Mayhem’: Police and social workers raise alarm about government cuts hitting kids* Deep-dive by Mandy Te for Interest: IAG NZ advocates 15-year roadmap to reduce NZ’s natural hazard risk* Op-Ed by Te Pāti Māori for Stuff: Te Pati Maori: Whānau are navigating a fuel and cost of living crisis in addition to a public health system that requires urgent transformation* Column by Henry Cooke for The Post-$: Becoming a politician could ruin your life, but it does pay wellScoops & Breaking News* Justin Hu for RNZ: Bid to strip Auckland housing plan to bare minimum defeated* Andrew Bevin for Newsroom Pro-$: Freightways warns new levies ‘significantly distort’ courier market to favour NZ Post* Lillian Hanley for RNZ: ‘Constitutionally abhorrent’: Expert reveals his advice to govt on climate law change* Reuters: Trump says Iran downed Apache helicopter, US must reactThe Rest of the Picks n’ MixesTimeline-cleansing nature pic: Rustic charmKa kite anōBernardPS: Here’s the presentation I used above in PDF form.Download This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe
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Protest growing against Govt's disability cost-cutting bill
2w ago00:15:12Tap to summarizeThis evening I spoke with I spoke with Victoria Coleman about the Disability Support Services Bill, which will gazump a court ruling that parents working as carers are full-time employees of the Government.Victoria works full time as a carer for her son, who has autism, Down Syndrome and two rare bowell disorders. She is campaigning against the Bill and has launched a petition against the bill.“It will wipe out 40 families’ court cases. They are extinguishing live court cases They have used that as a smokescreen for an almighty power grab. So they’ve gone, we’ve got this massive fiscal risk, let’s wipe that out, but let’s also grab all the power we can get over these vulnerable people.” Victoria ColemanThank you to everyone who tuned into my live video! Join me for my next live video in the app. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe
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Scoop: NZ Govt has more assets than debt
2w ago00:20:49Tap to summarizeHere’s the key news in Aotearoa’s political economy over the last day or so around housing, climate and poverty, along with analysis and detail in the video and podcast above, and in the PDF of the presentation attached below, for paying subscribers:* The Lead: The Government has convinced the nation that a scary ghost story about public debt from the days of Rob Muldoon and Ruth Richardson is still real, even though the Government’s assets are now worth far more than its debt. That debt is also not vulnerable anymore to the exchange rate and interest rate risks that made it so risky in 1980s and early 1990s. That’s because the debt is issued at fixed interest rates in New Zealand dollars, often to local fund managers and banks. It used to be in foreign currencies on floating rates.* The Sidebar: Auckland Council is expected to debate a range of housing intensification options later today in response to the Government’s latest downsized ‘Plan Change 120.’ Earlier this year, Housing Minister Chris Bishop slashed planned housing expansion to 1.4 million from an initial 2.0 million after a backlash from National MPs in Auckland’s suburbs who feared the extra supply would reduce land value appreciation. Councillors are expected to opt for the least ambitious proposal, which Council Economist Gary Blick has estimated would produce the least economic gains from productivity ($700 million) and reduce house price inflation by only 1-2%. The most economically ambitious but least politically popular option for capacity of 2 million homes would generate $3.9 billion of gains and reduce house price inflation by 5-8%, Blick has advised the Council.* The Quote of the day is from Donald Trump to the FT-$’s Ed Luce, about how Benjamin Netanyahu will have to accept any deal the US negotiates with Iran: “He won’t have any choice. I call the shots. I call all the shots. He doesn’t call the shots.” Shortly after his comments, Netanyahu launched retaliatory strikes on Iran, which had itself retaliated against Israel’s resumed strikes on Beirut.* The Scoop of the day is via Andrea Vance for The Post-$ on how PM Christopher Luxon’s office found receipts for Briscoe’s purchases in the private emails of its staffers, but not the briefing sent by Fonterra and Z Energy to the gmail account of the PM’s then-Chief Policy Advisor Matt Burgess.* The Deep-dive of the Day article is an interview with Val Adams by Michael Morrah for NZ Herald about the number of children suffering from illness because they lived in damp and cold housing, or are just plain homeless.* The Chart du Jour shows how Singapore has a gross debt to GDP ratio more than three times higher than New Zealand, but, like New Zealand, it also has massive publicly owned assets in the form of sovereign wealth funds. Unlike Singapore, which built its economy and society on a massive stock of easily available and affordable public housing, New Zealand is now reducing public funding for housing at a time 33,000 children and 57,000 women are homeless, arguing its debt is more of a threat than homelessness and the misery (and public health, justice and education costs) it produces. (See below and in the video above)Paying subscribers get the full Picks n’ Mixes below and access to Substack Live Chorus sessions, along with the PDF of the presentation used in the Substack Live attached below. If we get more than 100 likes I’ll open it up for the public.Why are National (& Labour) so afraid of an old ghost story?The Government is betting its political future and the nation’s economic future on a story that seems intuitively right to many households and has gone unchallenged in our public debate.The story is that New Zealand’s public finances are in deep trouble again and that the Government has no choice but to ‘cut its cloth to fit’ and ‘tighten its belt’ to avoid the wrath of ‘bond market vigilantes’ deciding that our debt is too high and we can’t pay our bills. These investors would, in theory, sell New Zealand Government bonds, pushing up interest rates for everyone and wrecking the economy. The slightly less scary version is that New Zealand needs to have a much bigger ‘buffer’ of ‘rainy day’ funds in the form of low Government debt just in case we have an earthquake or bad storm. This story depends on the idea that we are small and a long way from the centre of capital so we ‘naturally’ are more vulnerable to a bond market revolt.Versions of this story are now so ingrained in the collective psyche of Treasury officials, politicians from both National and Labour, and the media, that the latest telling of the story to argue for job and welfare cuts has been largely accepted. Without any challenge. The Post-$ and The Press-$ accept it, as does The NZ Herald-$, 1News and RNZ. ‘There is no alternative’Luxon and Finance Minister Nicola Willis have repeatedly argued they inherited a ‘set of books in a mess’ and, like any family or business, have had to ‘clean up the mess,’ through spending restraint. They pointed at the end of 2023 to Government Gross Debt rising by over $100 billion to $220 billion is six years, and that the interest bill had risen to $8 billion a year — more than it cost for Police and Corrections. This sounds unsustainable and bad, with no alternative to spending cuts.Surely, they argued, any household or business would make ‘tough decisions’ to ‘balance the books’ urgently to avoid being cut off by the bank? This has been an easy story to tell New Zealanders because we have been told for so long that we’ve been here before under Rob Muldoon in the wake of big Budget deficits and borrowing to fund Think Big in the early 1980s and in 1990 when BNZ was collapsing and needed rescues from the Government and National Australia Bank. The suggestion is the books are again in just the same sort of ‘mess’ and voters and opinion-makers in media and the bureaucracies have found it easy to take the short cut to believing this same ghost story. On both the left and the right. Foundational for the ‘Third Way’The most famous anecdote from the Clinton-Blair-Clark ‘Third Way’ era comes from Bill Clinton’s election-winning campaign advisor James Carville, who said after bond investors sold bonds and forced up interest rates that:“I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter, but now I want to come back as the bond market. You can intimidate everybody.” Carville in 1993 to the Wall Street Journal.It represented a shibboleth of modern politics: that no matter what voters or politicians wanted, the bond markets would always decide based on what they believed was financially sustainable because these ‘bond vigilantes’ were the most powerful force in the political universe. If they ‘voted’ against a Budget they could force up interest rates that would soon turn into higher mortgage rates, an economic downturn and inevitably the end of a Government.Liz Truss, the lettuce and the UK ‘gilt’ market revoltThe latest example of the ghost story turned real that story tellers point to is the bond market revolt that effectively ended Liz Truss term as UK PM in the last week of September 2022 after just 45 days in the job. The story goes that Truss proposed a debt-funded tax cut, which was rejected by bond investors, who pushed up interest rates sharply. Her political supporters then jumped ship, apparently proving again the potency of the bond vigilantes. Aside from the murky role of the Bank of England in not intervening immediately to stabilize the market when most other central banks would have, Truss’ situation was quite different to New Zealand’s in 2026. Britain’s Government debt-to-GDP ratio at the time was 102% of GDP and Britain does not have a sovereign wealth fund. New Zealand’s Gross Debt to GDP is barely 40% of GDP and, most importantly, it has total assets of $611 billion, as well as total liabilities of $426 billion. That means the Government has a current net worth of $185 billion and it is forecast to rise to $207 billion by the middle of 2030.Would you leave kids homeless when you were worth $207 billion?It’s astonishing that the asset side of the equation is ignored in the debate, especially when any household-type analysis would definitely include the assets. It would also focus on the affordability of the interest costs. The full story is also not being told on interest costs. The oft-cited $9 billion figure is also a gross figure that doesn’t take into account either interest receipts the Government gets or the dividends it receives each year from state owned enterprises and others.For example, the Government reported in its Crown Accounts last week that interest costs were $8.5 billion in the 10 months to the end of April this year, while interest receipts and dividends were $6.2 billion. That means the net interest costs of $2.3 billion represent barely 2% of the Government’s revenues over the same period.Would you leave your kids homeless with interest costs of 2% of income?Just imagine telling your neighbour that your debt was so worrying that you were prepared to leave your kids homeless and sick li...
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Accepting 57,000 homeless mums with 33,000 homeless kids 'tells us who we are as a society'
2w ago00:18:36Tap to summarizeI spoke with Victoria Crockford from the Coalition to End Women’s Homelessness this evening. She detailed the findings of the Coalition’s latest report, ‘Children and Young People Experiencing Homelessness,’ published today, including:* there are 33,000 children and young people experiencing homelessness and they face significantly higher rates of harm across multiple areas of their lives;* Children and young people experiencing homelessness are nearly three times more likely to have experienced abuse;* Young people experiencing homelessness are more likely to disengage from education and interact with the justice system;* Children under five experiencing homelessness are two times more likely to never have been enrolled with a Primary Health Organisation; * Children under five experiencing homelessness are 1.6 times more likely to never have been enrolled in early childhood education;* Children under five experiencing homelessness are significantly more likely to experience preventable hospitalisations, including respiratory illness and vaccine preventable disease; and,* Māori and Pacific children continue to be disproportionately impacted by homelessness and most of the tamariki are located in Auckland, Northland, or Gisborne.“What this research tells us about is who we are as a society, and I don’t think you can even read the headline and believe that enough is being done.” Victoria Crockford, co-lead of Coalition to End Women’s Homelessness.Thank you Kaimataara, Andrew Riddell, Max Du Frene, Alex Clarkson, and many others for tuning into my live video with VictoriaC! Join me for my next live video in the app. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe
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Why shops & bars are closing as spending 'recovers'
2w ago00:15:36Tap to summarizeHere’s the key news in Aotearoa’s political economy over the last day or so around housing, climate and poverty, along with analysis and detail in the video and podcast above, and in the PDF of the presentation attached below, for paying subscribers:* Households slammed by rampant electricity, fuel and government charges inflation are being forced to cut back on discretionary spending on going out, shoes, clothes and holidays, which is reflected in the latest card spending data for May.* Over half of the kids living in New Zealand’s poorest households are homeless, according to a new report this morning from the Coalition to end Women’s Homelessness.* The Quote of the day is the video above and presentation below is from a pregnant homeless woman on why she won’t disclose her pregnancy, quoted in the report.* The Scoop of the day is that $2.5 million a year is being paid to MPs for Wellington housing, as reported by Charlie Mitchell for The Press.(link below)* The Deep-dive of the day is about a five-year-old living in a cold garage in Auckland, as reported by Michael Morrah for NZ Herald (link below).* The Chart du jour shows a slump in Singapore petrol, diesel and jetful stocks in recent weeks.Paying subscribers get the full Picks n’ Mixes below and access to Substack Live Chorus sessions, along with the PDF of the presentation used in the Substack Live attached below. If we get more than 100 likes I’ll open it up for the public.Why shops & bars are closing despite a spending ‘recovery’Card spending bounced back slightly in May, but it’s not flowing through any spending recovery into shops, pubs and cafes because consumers are having to spend their repressed real wages on ‘essentials’ such as fuel, electricity, food and insurance where inflation has been higher than other goods and services.This chart from ANZ’s most recent card spending figures show the nominal growth in spending via cards on retail and everything else in the blue and the red is the real spending. Apart from fast food, which may be a substitute for groceries, discretionary spending has been weak for most of the last three years.We are back to the levels we were at just before COVID and for the last three to four years we’ve seen stagnating spending in real terms in non-grocery retail, hospitality, clothing, shoes and domestic holidays, despite real wages growth in most of that period. We have had some periods, 2023 and again this year, when we’ve seen real wage deflation. But wages have been growing at around 2 to 3%. We’ve had occasional spikes, but you’d think there’d still be some more spending. And we are, in theory, going into recovery. The oil shock out of the Strait of Hormuz is playing a role, but that is really just for a couple of months. I’m talking about a secular three to four year long recession in our retail, hospitality, and other discretionary spending. It’s down to fast growth in essentials inflation.Hospitality has edged up slightly, but again, it’s been very flat for the last three or four years, with spending in bars down by more.Its the items that aren’t discretionary that are hurting the most, including electricity, fuel, food and Government fees and charges.Today’s Top Six Pick ‘n Mix* Deep-dive by Michael Morrah for NZ Herald: Cold Auckland garage leaves disabled five-year-old at risk this winter* Deep-dive by Amelia Wade for The Post-$: More than 33,000 children are homeless in Aotearoa. Most are invisible in the data* Scoop by Andrea Vance for SST-$: The slash backlash: How forestry giants just softened post-Gabrielle environmental rules* Scoop by Charlie Mitchell for The Press-$: Rules permit speaker Gerry Brownlee to claim $237,000 for staying in his Wellington townhouse* Deep-dive by Lloyd Burr for Stuff: The Health of Nation: results are in, how do you compare? Nearly half have a long-term health condition, and for a quarter of them, it regularly impacts their daily lives. Stress, burnout, physical exhaustion and chronic pain is widespread, while fatigue and sleep problems are an issue for a large chunk of our population. A quarter claim their health is worse now than it was a year ago, with common health concerns including fitness and general wellbeing, weight management, aging, and mental health.’* Column by Hayden Donnell for The Spinoff: Austerity is for poor people, not politicians ‘Belt-tightening, as it turns out, is location-specific. It affects you if you’re in a state house. It doesn’t if you’re in the house of representatives.’Scoops & Breaking News* Thomas Coughlan for NZ Herald-$: Revealed: Labour fumes as Govt ‘secretly’ spends $1b from next year’s Budget* Marc Daalder for Newsroom Pro-$: Govt finds more Warmer Kiwi Homes savings as energy hardship spikes* Andrea Vance for The Post-$: Whistleblower complaint triggered integrity probe into Mt Messenger highway project* Sam Sachdeva for Newsroom Pro-$: ‘Slur on my reputation’: The spat behind housing boss exit* Jenna Lynch for Stuff: Off the transplant list and too sick to go on: ACT MP with kidney disease to step out of politics* Emma Gleason for The Spinoff: No one knows how many vape shops there are in New Zealand ‘They’re supposed to be highly regulated. So why can’t authorities provide a reliable figure?’* Harriet Laughton for The Post-$: Funding shake‑up puts strain on support for sexual‑abuse survivors* Reuters: Israel strikes Beirut despite truce, Iranian lawmker threatens to retaliate* AP: Israel strikes Beirut’s southern suburbs days after US-supported ceasefire dealThe Rest of the Picks n’ MixesCartoon of the day: Fairness, MPs & housingTimeline-cleansing nature pic: CarefulKa kite anōBernardPS: Here’s the presentation I used above in PDF form.Download This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe
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