Newsroom Pro's 8 things at 8: The whisky cabinet

Jacinda Ardern's whisky cabinet could be cleaned out after the election. Photo: Shane Cowlishaw

In today's email we find out what prompted Metiria Turei's benefit fraud revelation, look into what is happening with wages, and peek into a potentially signficant drinks cabinet.

1. Jacinda's whisky cabinet

Newsroom's National Affairs Editor Shane Cowlishaw interviewed new Labour Leader Jacinda Ardern in her Parliamentary office yesterday and was invited to take a look at her drinks cabinet.

This may seem irrelevant, but the cabinet may get a good workout in the days between September 23 and October 12 when Winston 'kingmaker' Peters gets to decide who will be in Government. He famously cooked up a deal with Jim Bolger late at night in the first MMP election over glasses of whisky.

Ardern was asked in her first press conference what she had to say to Peters. She replied: "I like single malts."

As can be seen above, she has a few choices for the New Zealand First Leader if he comes calling.

Shane tweeted the picture out
and asked Winston Peters what his favourite was.

Peters tweeted in response: "Glenfiddich, The Laphroaig is a bit peaty for me!!!!"

2. 'At some point, I'll make a mistake'

Ardern's honeymoon is still in full swing and the spotlight was firmly on her yesterday with a debate over whether she will have a family and whether anyone has the right to know.

But as she acknowledged to Shane, at some point in the next eight weeks she will make a mistake and that will be a test of her leadership and whether the centre-left can win the confidence of enough voters to topple National.

“Inevitably, at some point, I’m going to make a mistake. Newsflash, here and now, I will make a mistake. But the test of anyone’s leadership is how they then manage it in the aftermath,” she said.

“I’ve been around politics long enough to know that these things are tidal and so for every day you might have that might feel positive there will be another day that will be hard or rocky, so never take anything for granted I guess, because politics is a hard environment.”

Ardern was coy about what policy changes, if any, she might decide on in the next 24-48 hours, but she did say she expected Andrew Little would take over her Justice portfolio.

See Shane's interview here on Newsroom Pro, where it was first published yesterday.

3. The origin story of Metiria's big shift

For more insight into what's driving the Green side of a potential Labour-Green Government, Tim Murphy's piece from a Green Party event in Auckland on Tuesday night is an eye opener.

Tim reports on how co-leader Metiria Turei's decision to unveil her benefit fraud to spark a debate about the social welfare system has surprised many, including some supporters. That decision has transformed the balance of support on the centre-left of politics in the last month and was arguably the final nail in Andrew Little's coffin.

He relates Turei's description of one encounter that explains her reasoning and her passion for the change of direction.

She talked about a chat she had with a taxi driver on a Christchurch service station forecourt in the wake of her revelation.

Why, he asked, had she made that confession? Why had she told her story now and not before?

"He was really suspicious that it was nothing more than a political ploy and it was manipulation," Turei told about 370 people at the Mt Eden War Memorial Hall.

"I said to him," she started, but was briefly overcome with emotion and had to gather herself, voice cracking: "I said that for 15 years I've been in this job, 15 years we've been talking about the poverty our country faces. We've been talking about child poverty, kids going to school hungry. We've had research paper after research paper, Members' bills, government bills, proposals, campaigns and rallies.

"And, nothing has changed. In. All. That. Time.

"It has got worse since I started, After all this time of trying to make these changes and all the things we've tried to do, we've not been able to make that change.

"The only thing I have left to offer is my story about my life and my baby's life. Maybe by offering my story to the country then maybe we have a chance to make things change."

Turei told the crowd: "Les, bless him, he was fantastic. He was, like, 'That makes sense to me. You should tell more people that'."

See Tim's article in full over at Newsroom.

4. Real wage growth stalls

One of the government's constant themes in the last couple of years has been that nominal wage growth has been low, but real wage growth has been higher since 2008 than in the previous nine years under Labour, which is true.

However, Treasury's Budget forecast of just 0.6 percent real wage growth in total over the next four years has reignited the debate about real wages, particularly now annual CPI inflation has perked back up to just under two percent in the last couple of quarters while wage growth is stuck under two percent.

That debate intensified yesterday with Statistics New Zealand reporting yet another set of moderate wage growth figures that showed the real wage growth of recent years has stalled, as would be expected given virtually no productivity growth in recent years.

In the last set of jobs figures before the election, Statistics New Zealand reported surprisingly weak jobs growth and still-subdued wage growth in the June quarter.

Unemployment edged lower, but only because of a reduced labour force participation rate, and real private sector wages fell 0.5 percent on an annualised basis.

Employment fell by 4,000 or 0.2 percent during a quarter when economists had expected a rise of 0.7 percent. Private sector ordinary time average hourly earnings, which is one measure the Government and economists look at, rose 0.8 percent for the quarter and was up just 1.2 percent from the same quarter a year ago.

Given Consumer Price Index inflation of 1.7 percent in the June quarter, that meant private sector real wages fell 0.5 percent on an annualised basis. Combined private and public sector wage inflation matched CPI inflation.

The New Zealand dollar fell half a cent to 74.2 US cents after the result as financial markets priced in the prospect of continued low inflation and interest rates for longer.

ASB's economists shifted their forecast for the first Official Cash Rate hike out to February 2019 from November 2018.

The Reserve Bank itself forecast in May that it did not expect to increase the OCR until late 2019 and economists said after the jobs figures that its caution looks increasingly justified, given the subdued wage growth, a softer than expected housing market and a four percent rise in the New Zealand dollar since May. The Reserve Bank's next set of forecasts are due next Thursday.

Statistics New Zealand reported there were 2.535 million people employed during the quarter, down 0.2 percent from the March quarter and down from quarterly growth rates of 1.1 percent and 0.7 percent in the previous two quarters.

It was the first quarterly drop in employment since the September quarter of 2015. However, jobs growth over the year was 76,000 or 3.1 percent. Most of the jobs growth over the year happened in Auckland (35,700) and the Waikato (14,200). There was net migration of 72,300 in the year to June, which drove most of the 87,000 increase in the working age population.

Unemployment fell by 3,000 or 0.1 percentage points to 4.8 percent in the June quarter and was down from 5.1 percent a year ago. This was the lowest unemployment rate since the December quarter of 2008. But the fall in the June quarter was largely due to a surprising 0.6 percentage point fall in the participation rate to 70.0 percent.

This meant the number of people in the labour force fell by 7,000 and the number not in the workforce rose by 26,000. The working age population rose by 20,000 in the quarter and this was the first quarter since September 2015 that jobs growth was below employment growth.

5. Numbers of the day:

327,000 - The number of underutilised people, which includes those who are unemployed and available for a job, unemployed but unavailable for a job, or underemployed, fell 13,000 in the June quarter to 327,000 or 11.8 percent of the labour force.

84,000 - The number of 15-24 year olds not in employment, education or training (NEETs) fell 12,000 to 84,000 in the quarter, with the NEET rate falling to 11.1 percent from 12.7 percent.

5.1 percent - Average hourly ordinary time ordinary earnings for the combined public and private sectors was 0.6 percent for the quarter and 1.6 percent for the year. However, gross weekly earnings, which include earnings from working more hours and more people working rather than simply hourly wages, rose 1.5 percent to $1.8 billion in the quarter and were up 5.1 percent to $7.07 billion a week over the last year.

$1.9 billion - The potential economic benefits estimated in an NZIER Study for EMA Northern of reducing congestion in Auckland's transport system.

6. Quotes of the day:

Helen Clark giving advice to Jacinda Ardern when asked via twitter if she had any for the new Labour leader:

"Ignore the sexist attack and get on with the job."

Health Minister Jonathan Coleman in Parliament when asked by David Clark why Health Ministry CEO Chai Chuah had told DHBs they could keep $38 million that was wrongly allocated in the Budget:

"Actually, all the reports on this have been purely anecdotal, and, quite frankly, I have not bothered having that conversation with him because I have been very focused on making sure that the error is corrected, which it has been. You have got to remember it is a fraction of less than one percent of the total budget."

Chai Chuah commenting on a Deloitte report into the error that was released late yesterday:

"I have apologised to the Minister of Health and the health sector for the error and provided an undertaking that we will learn from this and fix it."

7. While you were sleeping

US President Donald Trump looked set overnight to try to shift the focus overseas, with plans being developed to launch a pre-emptive trade strike against Chinese intellectual property theft.

Axios reported Trump preparing to direct the U.S.Trade Representative to "self-initiate" an investigation of China under section 301 of the 1974 Trade Act, which could result in either a new WTO dispute between the U.S. and China or unilateral retaliation by the Trump administration that could include tariffs.

Meanwhile, RealClearPolitics' poll of polls measure of Trump's approval rating fell to a fresh record low of 38.2 percent. Also, he signed a bill toughening sanctions on Russia.

8. Some fun things

Jacinda Ardern gave Mark Richardson short shrift on TV3's AM programme yesterday on the issue of whether she will start a family (Ardern's partner is radio and television presenter Clarke Gayford.)

Rod Emmerson's cartoon this morning caught the mood nicely.

I enjoyed watching Dunkirk over the weekend, so this Private Eye front cover on Brexit tickled my fancy.