Newsroom Pro's 8 things at 8: NZ First confirms foreign ownership in deal talks

In today's email we look at what is on the table in the ongoing coalition negotiations.

1. Foreign ownership on the agenda

Not that there should have been much doubt, given the manifestos of New Zealand First, Labour and the Greens, but Winston Peters confirmed yesterday that foreign ownership rules were firmly on the agenda in the ongoing talks about forming a Government.

"These talks are about a change in the way this country is run. Both economically and socially," Peters told reporters between talks yesterday. He had been asked about the ongoing takeover of ANZ's UDC Finance by China's HNA.

"The extraction of our ownership to a foreign interest, whether it be from a present foreign interest or another foreign interest, it's the continuing story of this country's decline since 14 July, 1984," he said.

"Nothing has changed - but these talks are about a change. There is nobody in the Press Gallery that would not think foreign ownership is not part of these talks."

For emphasis he added when asked about whether foreign ownership was being discussed, he said: "Have you got that? It is a yes."

Peters campaigned for a ban on foreign purchases of farmland and residential land, and a foreign ownership register. Labour and the Greens campaigned for restrictions on foreign buying of land. National has opposed further restrictions, but has suggested in the past that a stamp duty could be applied to foreign buyers in a way that did not infringe on free trade agreements with Korea and Taiwan.

Peters held two meetings with National and one with Labour, although he pledged to have a delayed meeting with Labour at 9.30 am this morning.

2. Sticking to the deadline

Peters continued to stick to his self imposed deadline of Thursday for a decision on forming a new Government. Up to four meetings are planned for today, including two each with National and Labour.

"We have got two days to go yet before we know the outcome," he said yesterday.

"What we said we would do by the 12th of October we are setting out to do. What we are trying to do is ensure that we give all sides in this negotiation a fair hearing, and vice versa."

Elsewhere during the day's negotiations, Labour added David Parker to its team and New Zealand First added Shane Jones.

Also, Labour held a two hour meeting on its own with the Greens.

"We're talking about what it takes to form a government - everything that involves putting together a government, so it's broad ranging, it covers all the bases, and it's going very well," Shaw said after the discussions with Labour.

He said clean rivers, climate change and poverty were high on the agenda.

"I don't think it's going to come as a surprise to anybody the things the Green Party is putting forward. We campaigned on those things and that's what we're looking for," he said.

Peters indicated he had no expectations of meeting the Greens.

"How many times do I have to point out to you, from a long way out before the election, and since it, that we will be negotiating with first, the National Party and the Labour Party – not necessarily in that order – and that, that would be our sole set of discussions. Not more than that," he said when asked if he would meet the Greens.

3. RBNZ on the table too

Also as expected, Winston Peters appeared to confirm that the Reserve Bank Act and monetary policy were being discussed.

Asked if his earlier comments about changing the economic direction of New Zealand meant the Reserve Bank was being discussed, he said: "Well, it's a brilliant question but I can't possibly tell you the answer to that because it's confidential."

Bill English said during the campaign he would not let Peters anywhere near monetary policy and has ruled out the Finance Minister's job for Peters.

Labour has also ruled out Peters as Finance Minister, but has indicated a willingness to consider moving to a dual mandate of low inflation and full employment, rather than the current focus on low inflation alone. New Zealand First wants to pursue a Singaporean model for monetary policy that targets a currency level rather than an interest rate level, but that is seen as off the table by the two major parties.

4. Fuel tax hikes?

Newsroom's Shane Cowlishaw has the scoop this morning that the Government is considering increased fuel taxes as one way to pay for a gap in Auckland Transport funding and to pay for new Roads of National Significance.

Shane reports National announced plans in August to build ten new roads of national significance at a cost of $10.5 billion. It is also facing a significant cost in meeting its share of the Auckland Transport Alignment Project (ATAP), an agreement between the Government and Auckland Council to develop the city’s transport system during the next 30 years.

Before the election Labour announced it would introduce a 10 cent regional fuel tax in Auckland if elected to help meet transport costs, suggesting the Government was itself already modelling a nationwide fuel tax increase to pay for its new motorways.

National denied this, saying there were no plans for a fuel tax and pointing the finger at Labour as the party that wished to raise taxes.
But, according to documents released to the Greens under the Official Information Act, the Government appears to have at least been considering the possibility.

The documents reveal Transport Minister Simon Bridges requested information from the Ministry of Transport on options for funding the ATAP shortfall and state highways.

With the revised funding gap for ATAP now estimated at $5.9b following new population growth projections, the Government’s share will be between $1b and 2.1b.

In a May memo, the Ministry advised of several options available to plug the ATAP gap, including raising fuel taxes by 1 to 2 percent, delaying major projects or using more Crown funding.

A later briefing in July followed a request from Bridges for advice on the funding implications of delivering “nationally significant urban corridors in Auckland over the next decade”. One of the new roads of national significance is the $1b Mill Rd corridor in south Auckland.
A redacted graph is included in this briefing that appears to outline petrol excise duty alongside the consumer price index.

In a separate document of internal Ministry analysis, however, a similar graph is un-redacted and models a five cent fuel tax increase in 2018, followed by increases between 10 to 20 cents over the next decade.said foreign ownership issues would be part of the talks.

See Shane's full article published first on Newsroom Pro.

5. A notable ACC court case

Newsroom's Tim Murphy reports this morning on a potentially precedent setting court case on ACC law in the Court of Appeal.

He reports a woman who gave birth after a failed sterilisation operation has lost her bid to force the Accident Compensation Corporation to pay her because child care obligations mean she cannot work.

However she persuaded the President of the Court, Justice Stephen Kos, that her ongoing 'incapacity' rather than the strict 'injury' of being pregnant should have qualified for ACC. He was a dissenting minority view as two other judges ruled her injury ended soon after giving birth.

Her lawyers suggested in the Court of Appeal hearing that if her bid for compensation failed she could take her case for damages directly against those responsible for the failed sterilisation operation.

The woman, whose name is suppressed, was paid ACC during the pregnancy because of the failed operation but after it was cut and she was told she could work she challenged it in the district court. A judge supported her case there, the corporation appealed and overturned it at the High Court but the woman took the matter to the Court of Appeal. Its rejection means she will not be paid ongoing compensation to look after the child.

See Tim's full article here on Newsroom.

6. Milestones

8,010 - The NZX 50 closed up 32.9 points at a record high 8,010 yesterday, suggesting the stock market at least is not that concerned about a potential change of Government. It is up at record highs along with other stock markets benefiting from the prospects for solid global growth and continued low interest rates. The NZX 50 has risen 20 percent over the last year, although the NZX Main Board remains worth only $128 billion. That is less than half nominal GDP.

New Zealand's housing market is valued at $1.03 trillion, which is eight times the value of the listed stock market and 3.8 times GDP. America's housing market is worth about 1.6 times GDP and is worth about the same as the US stock market.

70.53 USc - However, the New Zealand dollar hit a five month low yesterday of 70.53 USc and is down from as high as 74 USc just before the election, although a firmer US dollar and rising expectations of US interest rates are also a factor.

7. Coming up...

Winston Peters and his New Zealand First negotiating team meet Labour's team at 9.30 am this morning. He is expected to meet up to twice each with Labour and National today in what he has said is the second to last day of talks before a decision by New Zealand First's caucus and board, potentially on Thursday.

8. One fun thing

Republican Senator Bob Corker gave an interview to the New York Times yesterday that was stunning in its brazen honesty about Trump and suggests that Republicans may be losing patience with their President.

The NYT piece makes clear Corker is no random critic. He has played golf with Trump and was briefly courted as a potential vice presidential running mate. He said Trump was treating his office like a reality television show and risked setting the nation on "on the path to World War III"

Earlier, after a twitter exchange with Trump, Corker tweeted this:

"It's a shame the White House has become an adult day care center. Someone obviously missed their shift this morning."

This tweet from former US Federal Attorney for New York Preet Bharara is also direct:

"The evidence shows: Donald Trump cannot retain an ally, keep a promise, uphold a principle, maintain a story, change a mind or show a heart."