Newsroom Pro's 8 things by 8 am: English says no to inquiry; teen pregnancy scheme fails

The Prime Minister says Nicky Hager and Jon Stephenson have been discredited. Photo: Lynn Grieveson

Today we see how Bill English has slammed the door on a "Hit and Run" inquiry, examine the odds on the Reserve Bank following its Australian counterpart in introducing limits on interest-only loans, and check out how the Government's attempt to fund more effective contraception for beneficiaries was a flop.

1. 'There will be no inquiry'

After suggesting earlier in the morning in his morning radio appearances that he was open to an inquiry into the 'Hit and Run' allegations, Prime Minister Bill English slammed the door shut on one at his post-cabinet news conference yesterday afternoon.

The difference was an extensive briefing from the Chief of Defence Force Tim Keating and a video of the August 2010 raid that he saw in between his media appearances and the news conference.

English was emphatic that the briefing and the video had convinced him there was no need for an inquiry and that the troops involved had taken extensive steps to ensure there were no unnecessary casualties.

"I was impressed by the restraint shown and the repeated reassurances that the action was being conducted in a way that would avoid civilian casualties and the destruction of property," he told the news conference.

2. 'Mapp and Hager were wrong'

English said the 'Hit and Run' book and its authors Nicky Hager and Jon Stephenson had been discredited by errors in the book about the location of the raid.

The Prime Minister said there was no credible evidence of civilian casualties and he trusted the Defence Force's video and process.

Hager and Stephenson have acknowledged the location detailed in the book was not correct, but are adamant that evidence about six civilian casualties is correct. Lawyers for the villagers have also alleged civilian deaths and have talked of taking the NZ Defence Force to court.

English also said Wayne Mapp was wrong to say the raid was 'a disaster and a fiasco' and that the former Defence Minister appeared to take the view after watching a Maori TV documentary, rather than relying on evidence gathered by the NZDF.

Hager described English's rejection of the need for an inquiry as an irrational response that helped the military bureaucracy avoid having to front up. He said the calls for an inquiry would continue to fester.

"It is the next step in a seven-year cover up," he said.

3. 'Justice not seen to be done'

The reaction to English's decision not to hold an inquiry was openly sceptical.

The news conference went on for nearly 40 minutes with all the discussion on whether the Defence Force's reassurances were enough to not have an independent inquiry. English was repeatedly asked about the video taken from aircraft, which is not being released, and whether it was complete enough to demonstrate that no civilians had been killed.

He would not say how much of it he watched or what was specifically in it, but said it was shot from several helicopters and aircraft in the area. He was challenged repeatedly on whether it was enough to confirm what had happened on the ground and whether it was able to confirm or deny civilian casualties.

The press reaction this morning was not friendly to English, or the Government.

The NZ Herald's political editor Audrey Young wrote that justice had not been seen to be done and that English had every reason to distrust the Defence Force's investigatory process.

"When those who are accused decide if there is a case to answer, justice is nowhere to be seen," Young wrote.

"Other arms of the state with immense and inherent power such as police, judges, and even spies are subject to independent scrutiny when complaints are made about them," she wrote.

"Bizarrely, English's answer to that inconvenient parallel was to claim that the Chief of Defence Force was independent because he had not been involved in the Afghanistan operation in question."

English was also challenged bluntly in the news conference by TVNZ's Corin Dann to explain the difference between the Police's need for an independent inquiry body and the Defence Force not needing one.

NewstalkZB's Rachel Smalley wrote an inquiry was necessary and made the point that a two-month inquiry was currently being conducted into the shooting of a dog at Auckland Airport.

"Should we not be investigating how a 3-year-old girl was shot dead while in her mother's arms in a small village in Afghanistan? What does that say about us? About you and me? Why are we horrified by the shooting dead of a dog, but not the killing of an Afghani toddler?" she wrote.

Her column was retweeted by the NZ Herald's Managing Editor Shayne Currie.

4. Interest-only lending limits here too?

The big news in Australia in recent days was APRA's decision on Friday to limit interest-only lending.

The obvious question is whether the Reserve Bank of New Zealand could do the same here.

Any similar limit on this side of the Tasman would significantly restrict lending to landlords in particular, but economists don't think New Zealand's regulator is looking at using the tool -- for now.

The Reserve Bank has already introduced Loan to Value Ratio (LVR) restrictions and is looking at whether to adopt restrictions on Debt to Income Multiples (DTIs).

Here's my full report on Newsroom Pro.

5. Could it happen anyway?

Even if the Reserve Bank says 'no' to interest-only restrictions for now, the big four Australian-owned banks could do it anyway.

The big four, ANZ, CBA, Westpac and NAB, introduced restrictions on lending to non-residents in Australia after a warning from APRA. The new policy restricted the banks from taking into account foreign income.

Their New Zealand units, ANZ, ASB, Westpac and BNZ respectively, then adopted the same policy here without public prompting from the Reserve Bank.

See more on that in our report.

6. A social investment failure

The Government has talked a big game in recent years about its various nudges and social investments to encourage people off benefits and intervene early to prevent multi-generational dependency.

One area where there has been some apparent success is in reducing teen pregnancy rates and reducing the number of young mums on benefits. There has been a world-wide reduction in teen pregnancy rates, but there have been reductions here too.

One tactic tried in the last four years was to encourage beneficiaries to take long-term and reversible contraception, known as the LARCs.

Our National Affairs Editor Shane Cowlishaw has the scoop this morning on how the $500,000 scheme launched in 2012 has failed miserably.

When introducing the fund, the Government estimated that up to 16,000 women would access the grant. But briefing documents released under the Official Information Act by the Ministry of Social Development (MSD) show only 795 grants were made from the fund over its first four years.

7. Why it failed

Shane also looks into why the nudge tactic failed.

MSD's documents showed the application process was time-consuming, complex and slow. It required multiple appointments with Work and Income and doctors.

Social Development Minister Anne Tolley told Shane: “I agree the process to receive financial support for LARCs is too convoluted, and I’ve asked the Ministry to do some work to simplify it.”

8. One thing from over the horizon

For those who try to keep an eye on China's teetering pile of corporate and shadow banking debt, there's been a slightly worrying development in recent days in an industry New Zealand has a big stake in.

China's largest owner of dairy farms, Huishan Dairy Holdings, appears on the brink of collapse after its share price fell 85 percent and one of its key executives went missing. It turns out it raised millions through shadow banks last year and has now defaulted on its interest payments.

This Quartz piece explains what is at stake and the concerns about the shadow banking system. This FT piece (for subscribers) also details the frantic efforts behind the scenes to stop private creditors from taking their own actions in the courts to freeze assets and block the efforts of officials to manage a bailout.