No ifs, buts Orr maybes - Reserve Bank makes itself clear
Political volleying on cyclone recovery spending provided a reminder we're in an election year while the Reserve Bank didn't mince words on where it stands on how we'll pay for it
Mōrena and welcome to The Bulletin for Thursday, February 23, by Anna Rawhiti-Connell. Presented in partnership with Z Energy.
In today’s edition: immigration minister urgently looking at RSE scheme tweaks; deputy prime minister heads to Pacific Islands Forum; Efeso Collins has decided to put his name forward for selection for the Green Party; but first, Reserve Bank remains focused on inflation
Reserve Bank Governor, Adrian Orr
Tax, cut or borrow
Finance minister Grant Robertson has said it will be a matter of weeks and not months before we know how much cyclone and Auckland flood recovery is going to cost and how we're going to pay for it. It’s not a concrete timeframe and Robertson has said he isn’t going to play the “rule in, rule out” game in the interim but any indication that it might not drag on will be a relief. At times, yesterday’s Question Time sounded a lot like it did before the events of the last month complete with typical election year exchanges about cost-of-living, taxation and non-delivery. RNZ’s Jane Patterson and Russell Palmer have a good run down of what happened which I recommend because there was a lot of verbal volleying. Summarised, the government is faced with the choice of tax, cut or borrow to fund the recovery and the opposition is pressing Robertson to rule out a new tax.
Reserve Bank delivers wake up call
As Question Time played out, Reserve Bank governor Adrian Orr made the central bank’s position very clear. Its focus is still on getting inflation down. As Stuff’s Luke Malpass writes it was a wake up call for politicians of all stripes. In short, Orr indicated that reprioritisation of spending and a new form of revenue (like a tax or levy) would make the job of getting inflation down easier. Politik’s Richard Harman goes one further on succinctly distilling the bank’s view as expressed by Orr: “Raise taxes or I will raise interest rates”.
We shouldn’t assume “we can build our way out of crises we ourselves built in the first place”
All this spending talk is really about identifying what actually needs to be done and how it will get done. There is no question about the need to spend on recovery. Longer term infrastructure investment is needed but it’s also a politically useful thing to talk about. It alludes to tangible things voters will be able to see and a sense of government doing big things. Te Whatu Ora chair Rob Campbell suggests we should make sure the why, what for and what if questions get asked before we “build, baby, build” and not assume “we can build our way out of crises we ourselves built in the first place.”
Central government will need to trust local communities
BusinessDesk’s Dileepa Fonseka (paywalled) points out that government capacity is already stretched and that funnelling everything through central government leads to bottlenecks. “Central government is going to have to trust local communities with more than just ferrying food and shovelling dirt,” he says. There’s something about that line that really nails the slight whiplash I felt as we got rocketed back to Wellington this week. After a week or so of very intense focus on parts of the country beyond our big cities and the many small but cumulatively impactful efforts of local communities, it felt a bit like “big cogs turning” and “business as usual” again.
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Minister looking at RSE scheme changes
As Newshub’s Amelia Wade notes, the Regional Seasonal Workers (RSE) scheme is fairly regimented and not simple to tweak. Immigration minister Michael Wood is now reviewing whether he needs to make some changes to the scheme. With cyclone damage to farms and orchards in the Hawkes Bay, the work RSE workers from the Pacific Islands were relying on is in jeopardy. Immigration NZ has clarified that it is within the scope of the RSE scheme for employees to be asked to “undertake appropriate clean-up activities at their employer’s properties” but that moving to fill up gaps at different orchards and vineyards around the country will require a variation to their visas.
Deputy prime minister heads to Fiji today
Carmel Sepuloni will be the first deputy prime minister of Pacific Island descent from New Zealand to attend the Pacific Island Forum Special Leaders’ Retreat in Nadi. Stuff’s Anna Whyte spoke to her ahead of the trip where climate change and Japan’s plans to release treated, but still radioactive, wastewater from the Fukushima nuclear power plant into the Pacific Ocean will be on the agenda.
Click and collect
Heavy rain watches in place for Hawkes Bay from 10am today
Cyclone Gabrielle worsens Gisborne's housing crisis
Milestone for progressing the restoration of Auckland’s St James Theatre reached (paywalled)
Kaipara mayor once again takes issue with karakia at meeting
The food truck in Dunedin that sells $4 meals has become very popular and has moved into a permanent premises - and now they’re giving food away for free
Got some feedback about The Bulletin, or anything in the news? Get in touch with me at thebulletin@thespinoff.co.nz.
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Hayden Donnell talks to Efeso Collins about why the former Auckland councillor has decided to put his name forward for selection to the Green Party list. Shanti Mathias looks at how international charities are responding to – and shaping the world's perception of – the Turkey-Syria earthquake. Chris Schulz explains how the humble transistor radio became the year's must-have tech item. Alex Casey and I have some handy climate resources to show the Maureen Pugh in your life.
Sporting snippets
Alice Soper with everything you need to know about Super Rugby Aupiki 2023, which kicks off this weekend.
Too many poorly handled incidents, broken relationships and a lack of trust - Gregor Paul on New Zealand Rugby (paywalled)
BusinessDesk’s Trevor McKewen on Silver Lake (paywalled), who have an 8% stake in New Zealand Rugby and a 14.54% stake in the outfit that owns Manchester City - the football club under investigation for financial breaches
