The politics of money
Adrian Orr’s fate as Reserve Bank governor may be decided by next year's election result, while a story last night hinted at the government moving to challenge the dominance of the retail banks
Mōrena and welcome to The Bulletin for Wednesday, November 9, by Anna Rawhiti-Connell. Presented in partnership with Z Energy.
In today’s edition: New Zealand allocates $20m from existing fund to address climate loss and damage; public service pay freeze may be over; appeal by terrorist a “blatant attempt to retraumatise the Christchurch victims”; but first, the Reserve Bank and retail banks caught up in eye of inflationary and very political storm
Reserve Bank governor Adrian Orr and finance minister Grant Robertson (Photo: Getty Images)
Boring by design
It’s fair to say that monetary policy is usually pretty boring and partially invisible to most people, most of the time. The Reserve Bank and indeed its governors are meant to be kind of boring and partially invisible by design. In 1986, Roger Douglas resolved to “Muldoon-proof” the Reserve Bank after Robert Muldoon cycled through four governors between 1975 and 1984, and lost the Bank and Treasury’s confidence after ignoring their advice. Wonderful reminder of the times via this James Robert Lynch cartoon. The role of the Reserve Bank and its independent, seemingly apolitical status has been tinkered with over time but since the 1989 Reserve Bank Act, the Bank has had operational autonomy on monetary policy.
National party “appalled” by Adrian Orr’s reappointment
That independent status is why it's very unusual for the opposition to express such strong feelings about the current Reserve Bank governor, Adrian Orr, who was reappointed for a second five-year term yesterday. The National Party’s finance spokesperson Nicola Willis said the party was “appalled” by the decision. National, Act and the Greens have been calling for an inquiry into economic decision-making during the pandemic. The appointments are made for five years to keep them distinct from our three-year election cycles but it means Orr could, hypothetically, serve under a National government.
Orr’s fate could end up being decided by pinnacle of political process, the election
The Herald’s Thomas Coughlan has an excellent piece of analysis (paywalled) that outlines why this is very unlikely to happen and how Orr’s fate as governor of an apolitical entity will, somewhat ironically, be decided by the very political process of the election. Coughlan also writes: “The depoliticisation of central banking has served its purpose over the past three decades of keeping inflation low and stable. Should they wish to maintain their defence of that system, our politicians might wish to consider the ways they mollify the side effects of the Reserve Bank’s actions, primarily New Zealand’s unstable housing market and the looming unemployment shock.” The inflationary environment has made monetary policy very visible and highly political. Infometrics chief forecaster Gareth Kiernan thinks we’re 60% of the way to wage-price spiral induced hyperinflation and “economic Armageddon”.
Is the rubber about to hit the road on open banking?
The retail banks have also been caught up in the monetary policy fallout, having benefited from the property boom that many lay at the feet of monetary policy decisions. That also took on a political tenor after Monday’s criticism of banking profits by the prime minister. Stuff’s Luke Malpass described them as “vague bank-bashing”. The Herald’s Liam Dann does think bank profits are too high (paywalled) and evaluates three possible solutions. One of them is open banking, which, low and behold, Newshub broke a story about last night. A source has told them the government may make an announcement as early as this week on open banking. Forbes has an explainer on what that is. It’s US-centric but should give you a good idea if you’re unfamiliar. Keep in mind it's likely to take years to implement.
Introducing Porn Week
Porn is easier to find than avoid these days. Most young people stumble across it, yet no one is really talking about it. Netsafe knows that people want more – and better – information and conversations about porn.That’s why they’ve joined the Spinoff and the Light Project to present ‘Porn Week’, signposting you to all the tools you need: because we need to talk about porn. Find Porn Week content on The Spinoff, and visit Netsafe's Porn Week website for more. (Sponsored)
New Zealand allocates $20m to address climate loss and damage in developing countries
The dominant theme to emerge so far from COP27, after negotiators successfully got it on the agenda on Sunday, has been compensation for climate loss. A report presented at the climate conference yesterday estimates developed nations will need $3.3 trillion (NZD) a year by 2030 to help cut their emissions and cope with the effects of climate breakdown. The New Zealand government has announced a dedicated allocation of NZ$20m in climate funding to address loss and damage in developing countries, becoming the third country to do so. It’s pertinent to note this is not new funding, but comes from a $1.3b aid fund announced last year. Pacific Islands Climate Action Network spokesperson, Lavetanalagi Seru said it was welcome but “is still only a drop in the ocean.”
Offer made to some public service unions
A letter seen by Stuff from the Public Service Commission outlines that an offer had been made to “some” education and public service unions. The offer includes a $6k pay increase over two years. A pay freeze has been place for those in the public service earning over $60k since 2020, amid Covid-related belt-tightening by the government. It’s come under fire after it was revealed earlier this year that over 2000 public sector workers who earn over $100k got a payrise using an “exceptional circumstances” workaround. Data released in October showed there was a 17.3% turnover in the public service in the 2021/22 year. The average turnover the previous year was 10.5%.
Live at The Spinoff: Kiri Allan, Erica Stanford and Chlöe Swarbrick in conversation with Toby Manhire
Five years ago, in the lead-up to the 2017 election campaign, The Spinoff launched the Candidate Diaries series. The idea: ask a selection of first-time candidates angling for a place in parliament to write regular dispatches from the trail. We were delighted with the lineup – Kiri Allan of Labour, Erica Stanford of National and Chlöe Swarbrick of the Greens (NZ First snubbed us). Tomorrow night we'll be bringing the three MPs together to talk about their first five years in parliament with editor-at-large Toby Manhire. The conversation will be recorded live at an intimate event at The Spinoff offices in Auckland for a special episode of Gone By Lunchtime. If you're a Spinoff member and would like to be part of the audience, please email us today: members@thespinoff.co.nz (spaces are limited and will be allocated on a first in first serve basis). Not a member? Sign up here by making a donation of your choosing to gain access to events like this and much more.
“A blatant attempt to retraumatise the Christchurch victims”
The Guardian broke the news yesterday that the gunman who murdered 51 Muslim worshippers at two mosques in Christchurch in 2019 has appealed against his convictions and sentence of life in prison without parole. In a statement, the Federation of Islamic Associations of NZ said it was “a blatant and calculated attempt to retraumatise the Christchurch victims specifically and the nation as a whole” and “followed a similar pattern to Islamophobic terror attacks around the world”. Prime minister Jacinda Ardern said she will give the Christchurch mosque gunman “nothing”. The court is yet to decide if the appeal will be allowed to proceed.
Click and collect
National and Labour agree on something, compromising on Māori electoral roll options bill
Double digit declines in house values in main centres
Government to address what input Māori should have into immigration policy
Picking Qatar to host the World Cup was a mistake says Sepp Blatter (FIFA’s president at the time the decision was made)
Apparently we’re not exercising enough - New Zealanders, quite specifically. Going to throw it to M.A.S.H. and Father John Mulcahy here.
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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A sudden disability means Amanda Kennedy must now rely on public transport to get around – and living in West Auckland, it's worse than she could have ever imagined. For Porn Week, Shanti Mathias asks who owns all the porn on the internet. Emma Vitz looks at what the data shows about youth and porn. Chris Schulz answers all your questions about Rugby World Cup final tickets. Catherine McGregor reviews a very silly British TV drama.
Has Kane Williamson saved his best for tonight's T20 world cup semi-final?
SENZ’s Israel Dagg and Tony Kemp spoke to the Daily Telegraph’s cricket writer, Will Macpherson, who said Williamson’s position in the side should not be questioned, that his batting against Ireland the other day (61 off 35 balls) might just have got his tournament rolling and that he “wouldn't be surprised if he’s the guy who turns up” on Wednesday. Williamson has copped a lot of flak for his performance at the T20 World cup. The Blacks Caps play Pakistan tonight in the semi-final at the Sydney Cricket Ground. Play starts at 9pm.
“It’s a bit like watching your girlfriend kiss somebody else”
Thoroughly enjoyed this from Elle Hunt in The Guardian on how artists feel when their songs are used by politicians.
“At last year’s Conservative party conference, Friendly Fires’ song Blue Cassette played as Boris Johnson walked on stage to give his speech. The band responded on Instagram to clarify that their permission to use the track had not been sought: ‘If we’d have intended them to use it, we’d have named the track Blue Bunch of Corrupt Wankers’.”
Hunt did not speak to Marshall Bruce Mathers III or Katy Perry.
