In today's email we look into the launch of the new Social Investment Agency.
1. 'Skunkworks phase is over'
It could either become the most important agency within Government, acting as the 'brain' of its social investment approach overseeing $50 billion of social spending. Or it could last 11 weeks and be gone by Christmas after a change of Government.
The new Social Investment Agency was launched in Wellington yesterday by Prime Minister Bill English and the newly minted Social Investment Minister Amy Adams.
"The skunkworks phase is over. This is when we go mainstream. This becomes business as usual," English told an audience of CEOs, policy analysts and media in the new agency's offices on Lambton Quay.
He said if the Government was re-elected in 11 weeks time he expected the social investment approach to be rolled out and become world leading, with the agency becoming the 'brain' of the approach.
Then English and Adams cut a celebratory cake for the cameras. The cake had lines of binary computer code on it. For a bit of fun, have a look at this twitter conversation where coders attempt to read the code on the cake and find some bugs.
For a fuller description of the current state of play on the Government's social investment approach, here's an 11 minute presentation given by the agency's acting chief executive Dorothy Adams at an August 2016 event hosted by the Centre for Social Impact.
Adams is a key player behind the scenes of the social investment approach, having headed up the agency's predecessor unit within the Ministry for Social Development. Prior to that she led MSD's data, analytics and evidence hub.
The formal announcement of the opening of the agency is here.
2. Targeted investment in yachts
At his post-Cabinet press conference yesterday afternoon, English confirmed the Government would put $5 million towards Team New Zealand’s defence of the America’s Cup after its victory in Bermuda.
While the National-led government has been a reluctant funder of Team NZ in the past, English and his Cabinet decided to stump up the cash to help the team retain key members before a challenge in 2021.
In a press release before English’s press conference, Economic Development Minister Simon Bridges cited the half a billion dollars of extra economic activity generated at both the 2000 and 2003 America’s Cup regattas in New Zealand.
English told media the most likely venue in New Zealand was Auckland, and he believed any government funding should be contingent on the regatta taking place in the country.
"The defenders as I understand it have decided the finals will be here...certainly we are working on the assumption that they will be here."
However, New Zealand will also host Apec in 2021, providing an added complication which would need to be planned around.
3. 'Trump taskforce' tapers off
Making sense of new President Donald Trump’s Twitter activity is a tall ask, as I mentioned in yesterday’s email.
Until recently, it was a task that fell to the Ministry of Foreign Affairs and Trade’s “Trump taskforce”.
Formed in early February after the Government was wrongfooted on the impact of Trump’s “Muslim ban”, the taskforce was meant to provide 24/7 information on the comings and goings of the new administration.
However, documents obtained under the Official Information Act by Newsroom’s Foreign Affairs and Trade Editor Sam Sachdeva have revealed the taskforce was quietly shuttered in May, with an Mfat spokeswoman saying it was always meant to be temporary.
Here’s Sam’s full story on Newsroom Pro, including some snippets from the reports produced by the taskforce.
4. Equal pay bids surging
Newsroom's National Affairs Editor Shane Cowlishaw took a deeper look yesterday into the various pay equity claims coming forward in the wake of the mega-deal agreed earlier this year with aged care workers.
They're now coming thick and fast, including one yesterday via the PPTA for part time high school teachers. Wage inflation has been one of the missing links in the long and ongoing period of economic growth, but widespread lifts in wages for lower-waged women may have an impact.
Shane reports the PPTA case will trigger a pay equity claim for almost 3400 part-time teachers, who are predominantly female.
Mental Health Workers lodged a claim last month, while school support staff are negotiating with the Ministry of Health. Social workers and education support workers are also in talks, while the New Zealand Nurses Organisation has filed a pay equity claim with DHBs as part of collective bargaining.
To deal with future claims, the Government has drafted the Pay Equity Bill, which focuses on comparing wages in similar workplaces rather than across the board. Unions immediately raised concerns about the legislation, criticising its narrow focus, but that has not stopped new claims being lodged.
See Shane's story in full on Newsroom Pro, where it was published yesterday.
5. Quotes and numbers of the day:
Construction and building minister Nick Smith speaking in an interview with RNZ's Guyon Espiner this morning four years after the launch of his Housing Accord with the Auckland Council:
"The definition of affordability is in the eyes of the beholder."
Winston Peters speaking at the Grey Power Celebrating Age Centre in Hamilton yesterday, in which he attacked the Waikato Regional Council for "giving water allocation and trading rights to Waikato iwi":
"Those allocated water will see that clawed-back and given to Waikato iwi who’ll be free to use it as they see fit. This includes selling it back to those it was taken from, but of course, with a margin on top. The Sicilian mafia would be envious of such a protection racket as it is koha for consents."
7 percent - The current default discount rate used by Treasury to analyse public investment. It's a crucial determinant of the long term cost-benefit analysis done on projects. The higher the discount rate, the less likely a project is likely to be signed off.
Treasury issued this working paper by John Creedy and Hemant Passi yesterday, which compared different approaches to deciding on the discount rate. They concluded there was no objective way of doing it.
"Essentially the discount rate reflects how the government values the future when making decisions on behalf of society: value judgements and assumptions are necessary," they wrote.
16 weeks - The number of weeks worth inventory on the housing market in June, as measured by Realestate.co.nz. That's up from 11.9 weeks in June 2016. Chart below from ASB and Realestate.co.nz.
6. While you were sleeping
Tensions between America and China ramped up further overnight after it emerged the USS Stethem, a guided-missile destroyer, sailed within 12 nautical miles of the disputed Paracel Islands in the South China Sea. (Reuters)
China's Ministry of Foreign Affairs protested what it said was a "serious political and military provocation."
7. Coming up...
NZIER releases its June quarter survey of business opinion at 10 am today.
Social Housing Minister Amy Adams is expected to announce plans to build up to 330 new social, affordable and market homes in Lower Hutt later this morning. The Dominion Post was leaked the information yesterday. Labour has promised to build 400 new state and Kiwibuild houses in the Hutt. Adams' Crown Building Project plan in Auckland aimed to have 20-50 percent of its new homes as affordable.
The Reserve Bank of New Zealand publishes aggregate bank lending figures for May at 3 pm today.
The Reserve Bank of Australia publishes its latest monthly official cash rate decision at 4.30 NZ time today. It is expected to leave its rate on hold at 1.5 percent, although there has been growing signs from central bankers in Canada, Britain and Europe in the last week that they are preparing to tighten policy.
Fonterra's Globaldairytrade holds its fortnightly auction tonight and tomorrow morning.
8. One fun thing
Tweet of the day yesterday came from Dave Pell on the story about New Jersey Governor Chris Christie sunbathing on a beach with his family on the day he closed beaches to the public:
"Proof that you’re addicted to political news: They’re showing you pictures of Chris Christie on the beach and you still don’t turn it off."
Just one more thing. I have to correct yesterday's email. Chris Liddell is being paid US$30,000 per year for working in the White House, not US$20,000 as I reported yesterday. My apologies.