Newsroom Pro 7 things: Peters meets both sides for 30 minutes each; Rod Oram's column; Weekend Reads

National MP Jian Yang leaves a parliamentary function for new and returning MPs following the election Photo: Lynn Grieveson

1. EPA's approach under review

Rod Oram has taken a look in his column this week into the controversy around the Environmental Protection Agency’s ruling that the ingredient used in Roundup was unlikely to be carcinogenic.

He finds concerns about the EPA’s approach on the glyphosate issue have sparked an official review, which has been confirmed by Sir Peter Gluckman when talking to Rod.

Rod also talked to Jacqueline Rowarth, the EPA's chief scientist, about the approach being taken to assessing issues such as glyphosate.

Rowarth said the EPA is a world leader for its work on “net benefit” analysis on such environmental issues.

Broadly speaking this means weighing up the financial, health and environmental costs of a substance against its economic benefits. For example, Rowarth said, Roundup, and other forms are glyphosate, are highly beneficial to farmers because they reduce weeds and significantly increase crop yields.

"It’s a very difficult calculation," she said. However much economics goes into the analysis, “ultimately there is a final point that becomes subjective" about wider societal values.

Rod asked her exactly how that worked. "We’re trying to formalise that because more people are challenging decisions."

Those challenges have now sparked a review, which Rowarth was unaware of when Rod asked her about it.

Here's Rod's full column published first this morning on Newsroom Pro for subscribers.

2. Now the New York Times is on the case

Newsroom and the Financial Times published its joint investigation into the background in Chinese military intelligence of National list MP Jian Yang on September 13.

Since then, Winston Peters has called for an Inquiry and others have called on Yang to resign or be removed, but National and Yang are standing firm. He has continued to attend events with Chinese officials and is set to be sworn in again as an MP within weeks.

Now the New York Times has picked up on the story with its own reporting from China, the United States and New Zealand. It focused in particular on New Zealand's status as a member of the 'Five Eyes' intelligence sharing grouping led by the United States.

"While New Zealand is a small country, it is a member of the “Five Eyes” intelligence sharing partnership along with the United States, Britain, Canada and Australia. And so vulnerabilities in New Zealand’s government could have wider import," Charlotte Graham wrote, with reporting help from Xiuzhong Xu in Sydney and Chris Buckley from Beijing.

The article quoted Nicholas Eftimiades, a former officer with the Central Intelligence Agency, as saying PLA officers moved seamlessly between military and civilian assignments to include Chinese army units and work in the defense industry, think tanks and universities.

“Whether in uniform or not, these personnel are still actively engaged in espionage,” said Eftimiades, who also worked with the Defense Intelligence Agency in the United States.

Several China experts told the New York Times in interviews that it was not possible for people to willingly “leave” China’s Communist Party, as Yang said he had, unless they had been expelled from it. Yang has not denounced the party.

Chen Weijian, a member of the pro-democracy group New Zealand Values Alliance and the editor of a Chinese-language magazine, Beijing Spring, told the New York Times Yang was “very, very active” in New Zealand’s Chinese community.

“When he speaks, he speaks more as a Chinese government representative, instead of a New Zealand lawmaker,” Chen said.

Here is the full New York Times report.

3. 'We just can't win'

Newsroom's Sam Sachdeva reports Winston Peters held short meetings yesterday with Bill English and Jacinda Ardern (in that order) that aimed only to set out the procedure for future discussions, rather than start the substance of them.

However, as media laid down on the floor of Parliament House to watch who was heading into talks, the parties tipped their hand for the first time on the composition of their negotiating teams.

For National, English was joined by MPs Gerry Brownlee, Todd McClay and Steven Joyce - rumours of Peters wanting “utu” against the Finance Minister clearly not a deterrent - along with English’s departing chief of staff Wayne Eagleson.

For Labour, Ardern teamed up with deputy leader Kelvin Davis, finance spokesman Grant Robertson, chief of staff Neale Jones, former deputy prime minister Sir Michael Cullen, strategic adviser Mike Munro - the latter two both linked to Peters’ time in the Helen Clark-led Labour government.

Peters himself was flanked by MPs Ron Mark and Tracey Martin, chief of staff David Broome, and confidante Paul Carrad. (See Tim Murphy's September 28 profile of Carrad as the 'Winston-whisperer')

However, the NZ First leader has suggested that the composition of the negotiating teams could change depend on the area of discussion, with experts in different policy areas tagging in.

English did not talk to media, while Ardern said only that Labour’s talks were “positive” and “a great start”.

Peters told media the talks did not delve into policy, but outlined the structure and etiquette for future discussions, such as the location of talks and keeping them “fair, confidential and above board”.

"Otherwise we might as well hire Westpac Stadium and turn on the lights and loud speaker and just go for it. We're not going to have that circus," Peters said.

He told media he did not know when the next conversations would take place, suggesting there was no guarantee the outcome of special votes would be known by Saturday afternoon (although the Electoral Commission has indicated it is on track to meet its 2pm deadline).

With pressure coming on Peters to go one way or the other, the NZ First leader said he was “between the devil and the deep blue sea” in terms of public opinion.

"We just can't win. You can't win with the public, you can't win with the media, you can't win with the commentariat and you can't win with the people who believe it's all about First Past the Post even though it's an MMP environment, and they just bang on day in and day out."

4. No more or less in the kitty for deals

Sam also reports the Treasury’s year-end financial statements delivered no real surprises yesterday, adhering largely to the figures in the pre-election fiscal update.

Treasury secretary Gabriel Makhlouf has also confirmed officials have offered information on costings to some political parties as coalition negotiations get underway – although he is staying tight-lipped on who has asked for figures.

Speaking to media, Makhlouf said the 2016/17 financial results were slightly better than the Prefu prediction, with the OBEGAL surplus $363 million higher than forecast.

However, that was largely due to some capital spending being delayed into the next financial year, particularly relating to school properties.

“While individual years may differ, the June 2017 results don’t indicate a substantial departure from what we said in our pre-election update.”

There was an OBEGAL surplus of $4.1b for 2016/17, compared to $1.8b in 2015/16.

Core Crown tax revenue rose to $75.6 billion in nominal terms (28 .2 per cent of GDP) on the back of an increase in employment and in taxes on corporate profits.

Core Crown expenses increased by $2.4b to $76.3b (28.5 per cent of GDP), due to increased spending from Budget 2016 and rising superannuation costs.

Net capital spending was $3.7b in 2016/17 and gross capital spending $6.8b, with $4.5b spent on buying physical assets such as school classrooms and another $1.5b going towards student loans.

Real GDP increased 2.7 per cent in the year to June 2017 – similar to the previous year – with growth in private consumption and residential investment thanks in part to strong population growth.

With rising export prices and falling import costs, nominal GDP increased 5.9 per cent in 2016/17, up from 4.2 per cent in 2015/16.

Net debt fell in nominal terms to $59.5b (22.2 per cent of GDP). The value of total Crown assets increased by $20.9b to $313.6b, with liabilities similar to last year at $197.1b – leading to a net worth of $110.5b (up $21.2b on 2015/16).

5. 'Perception matters'

Newsroom’s National Affairs Editor Shane Cowlishaw published a detailed story about the quiet sale of ACC’s disputes service FairWay Resolution to staff and claims of a conflict of interest this week.

It caught the eye of Labour’s Andrew Little.

The former party leader, now Labour’s Justice and ACC spokesperson, took umbrage at ACC Minister Michael Woodhouse’s opinion that moving the disputes system within the judiciary would not necessarily make it more independent.

In a lengthy statement
, Little said Woodhouse’s views were “outrageous” and if FairWay was to be relied on to do ACC reviews its contract should be with the Ministry of Justice.

“It’s a fundamental principle of justice that it not only be done, but that it is seen to be done. Perception matters. Having a private outfit with a commercial relationship with ACC to review its decisions (which, themselves, have financial implications for ACC) doesn’t, in my view, satisfy the basic confidence test.”

6. Weekend Reads

Most around the Parliamentary complex in Wellington won't have much time for reading on the weekend, but for the rest of us, here's a few longer reads on economic, political and social matters.

This New York Magazine piece from Max Read asks how can we be assured that Facebook is really safeguarding democracy for us and that it’s not us who need to be safeguarding democracy against Facebook. It's a useful look at some of the issues and the recent history.

ProPublica gives more detail here on how Facebook enabled advertisers to reach anti-semites.

Meanwhile, it turns out the posts made by Russian trolls who used Facebook to reach voters in the US Presidential elections may have been seen hundreds of millions of times, according to fresh research cited by the Washington Post.

This long read in the New York Times on how fake news turned a whole town upside is one of the best pieces I've read in a long time on the role of social media in our time. It is sobering, shocking at times, and just plain fascinating on how human beings interact these days.

In the wake of this week's news about a Queen Street foreign exchange broker, Ping An Finance, being fined $5.3 million for breaching money laundering compliance rules, here's a piece from Bloomberg on how money is still leaking out of China into global property markets is well worth reading.

7. Coming up...

Newsroom's Sam Sachdeva will be in an Electoral Commision media lockup on Saturday afternoon ahead of the 2pm release of the final election result after the special vote count.

We will publish the result on Newsroom Pro shortly after that.