In today's email, the coalition negotiation meetings wind up but we need to wait a bit longer for a new Government, we look into whether Housing NZ is paying an Irish company $1b for prefab homes, and examine the challenges and opportunities posed by new developments in food technology.
1. Decision could drag until Oct 21
Winston Peters finished the policy side of his government-forming negotiations with Bill English and Jacinda Ardern yesterday, but signaled a final decision on who would be in Government may not be made until next Sunday -- nine days after his initial deadline.
Peters had already missed his own self-imposed limit (writ day on October 12) for deciding on governing arrangements. He said yesterday travel arrangements for his board and a funeral meant that a board decision was possible some time between Saturday and Tuesday.
"It depends on the logistic availability of the board, which could be Saturday, Sunday, Monday," Peters said earlier yesterday.
"People do have to come from all over the country," he said.
Late on Thursday evening, Winston Peters confirmed policy discussions with the major parties had finished, pronouncing himself "very pleased" at the end of talks.
The NZ First caucus would have an all-day discussion on Friday to address the policy offerings from both sides, with portfolios and ministerial portfolios yet to be discussed - although Peters said that could take place via text messages and phone calls, rather than further face-to-face meetings with Bill English and Jacinda Ardern.
Peters has said the NZ First board will be presented with “both options” for government and be asked to reach a decision that a large majority can support.
"We are doing the best we can in the way we can best organise it ... this country is the same size as Japan. The same size as the UK. We are not a little island nation. It takes people time to organise things, particularly since we are coming up to Friday, Saturday and Sunday."
Asked about the earlier October 12 deadline set on July 25 in an interview with Newsroom, he said: "I just couldn’t make it, I’ve got no regrets about that at all.”
However, he made a new commitment at the end of the day - albeit one easier to achieve - when he said we would know the next government by the end of next week.
"Now would you write that on the wall please?" he added, chuckling.
Peters said he was pleased the policy part of the discussions were finished and that discussions about portfolios would not take long.
"We're finished," Peters said.
"All the policy stuff is finished. I'm very pleased that we've actually got it finished. We've got a seriously comprehensive dossier for both sides and there's some fiscals to be shared to make sure that we do agree.
"But the substantive part of the discussion… has been done. The issue of portfolios does not take long at all in these sorts of talks. It's the substance that takes time."
2. That'll be easy peasy then
Peters was satisfied he had finished the hard part, but there remain quite a few hurdles to jump through yet.
They include: Peters and New Zealand First MPs agreeing on portfolios with National and Labour; Bill English and Jacinda Ardern securing the agreement of the Labour and National caucuses and boards/executive councils; and James Shaw securing the agreement of 150 Green delegates.
Somehow, the back and forth of those negotiations will have to happen by phone or text message between Peters and the other parties.
He will have to have his phone charger on hand over the weekend.
The early signs are that he and we could all be in for a hectic few days full of confusion and miscommunications and brinksmanship.
For example, returning from his last meeting with National, Peters was asked why the Board were not able to make it to Wellington earlier and to clarify his statements about the possibility some of them may have to attend a funeral.
Slightly flustered, he replied that he had not said that they were attending a funeral, but it might be a reason.
"I can’t know everything, all the time, about everything that’s happening around the country, surely you understand that?"
We're beginning to understand.
3. $1 bln worth of Irish pre-fabs?
Newsroom's Sam Sachdeva reports an Irish company is rumoured to be in the box seat to provide thousands of prefabricated houses to Housing New Zealand - leading to fears Kiwi businesses may be left out in the cold.
A Fast House employee has said the firm is “close to finalising” a deal - but Housing NZ has refused to comment on its discussions with the company.
Labour housing spokesman Phil Twyford told Newsroom he had heard from sources in the construction industry that Housing NZ was close to signing off a deal with Ireland-based Fast House.
The deal, to provide 3500 panelised houses over several years, could be worth about $1 billion, Twyford estimated.
He said it was hard to understand why Housing NZ would turn to an offshore supplier instead of local businesses, who could ramp up their production to meet demand.
“There are New Zealand companies who are gagging for orders of that magnitude.”
Twyford said he was not opposed to using foreign companies for any housing contracts, but believed the only thing holding Kiwi suppliers back was a lack of scale that the rumoured deal would provide.
“This is precisely the kind of opportunity the government has to grow a better and more competitive industry.”
Pamela Bell, the chief executive of industry organisation Prefab NZ, had also heard rumours of a potential deal between Housing NZ and Fast House and said her organisation had been advocating for the abilities of local businesses.
“In New Zealand there is inherent capacity and capability - some of it is visible and some of it is not visible.”
Bell said Housing NZ was “making all the right moves” in expanding its use of innovative designs like prefabricated housing, but it was important to focus on local economic development.
“We really need to try and look at this all holistically and with a longer term vision for growing our skills development and regional development; those things are really important for our construction industry to morph and change and become more valuable to New Zealand.”
John Arnold, a New Zealand-based sales agent for Fast House, told Newsroom the company was “close to finalising” a deal with Housing NZ.
However, Arnold said he could not comment about any discussions without Housing NZ’s approval.
A Housing NZ spokeswoman refused to answer questions about the organisation’s discussions with Fast House, but said it had “signalled to our industry partners” that it was moving away from a project-by-project contracting model to multi-year deals.
“When Housing NZ is ready to establish multi-year supply arrangements, we will be required to run an open market process to appoint parties, regardless of whether they are domestic or offshore.”
The spokeswoman said Fast House was not a current member of its open panel of prefabricated and modular housing providers, which were chosen on a project-by-project basis.
4. Synthetic foods are coming. Are we ready?
New Zealand's chief scientist says synthetic foods pose a real threat to agricultural exporters, but better regulation of genetic modification could create an equally large opportunity, Newsroom's Lynn Grieveson reports.
Speaking to the NZBio Conference in Wellington yesterday, the Prime Minister's chief science advisor, Sir Peter Gluckman, said the main threat to New Zealand's economy was from synthetic milks, such as the yeast-based milk created by San Francisco company, Perfect Day.
"I think if there is an existential risk for New Zealand, this is where it lies," he said.
"My gut feel is that it is a real challenge. The environmental numbers associated with these technologies are such that it will have a major impact, perhaps not in the next five years, but in the next 10 to 15 years, particularly if the impact of climate change continues to grow and the world becomes more conscious of the need for everybody to be responding to it."
Perfect Day claims that, compared to cow's milk, its milk can be produced with 65 percent less energy consumption, 84 percent less greenhouse gas emissions, 91 precent less land and 98 percent less water consumption.
"It has a longer shelf life, there's no cholesterol, no lactose, no antibiotics, no hormones," Gluckman said. It can also be used to make cheese, yoghurt, cream, and replace milk powder.
"The health claims that have been traditionally associated with 'natural milk' are not going to stand up, in my judgment, against these kinds of claims," he said.
"They rely on the insertion of GM algae produced caseins and proteins to give the taste that cow's milk has. So there is a GM component in the most 'cow's-milk-like' artificial milk."
Gluckman said New Zealand had to make decisions in the next few years about how to react to the market disruption synthetic foods would inevitably cause.
One option was to stay focused on current traditional production, hoping to ride out the shift in consumer attitudes around climate change, not just in Europe, but also in Asia.
"Or should we stay GM-free and focus on producing high-end ingredients for the production of synthetic milks which are made elsewhere, say in Singapore?
"Or should we invest in a full product chain and make the products here, thinking about the reality that if you did this well, the potential for market differentiation is very high," he said.
Gluckman went to explain how New Zealand needed to revisit its regulations banning the development, importation or releasing of genetically modified organisms without the approval of the Environmental Risk Management Authority if it wanted to take that third option.
See Lynn's full article on the issue at Newsroom Pro, where it was published first yesterday.
5. 'Open your eyes to create a legacy'
Rod Oram writes in his column this week about a growing mood at the top levels of New Zealand's business community for any new Government to create a climate commission and take sustainability seriously.
Those calling for change include Air New Zealand's Christopher Luxon and Sir Rob Fenwick.
Fenwick, in particular, had a very direct message for those in National hoping for a record fourth term.
"This will be a very critical term for the centre-right. If they ignore the election noise on the environment, which was louder than the 1972 election when the issue was Lake Manapouri, there will be a lot of anger,” he told Rod.
"If they want their fourth term to be a legacy one, they will need to open their eyes and take their lead from the public."
See Rod's full weekly column here on Newsroom Pro, where it was published this morning. It is not available publicly until Sunday.
6. Numbers of the day:
Down 0.2 percent - Statistics NZ reported food prices fell 0.2 percent in the month of September, largely due to a 7.4 percent fall in vegetable prices. Food prices rose 3 percent in the year to September, in large part because of higher dairy product prices and butter in particular. Milk prices rose 8.0 percent over the year, while cheese prices rose 8.6 percent. Average butter prices rose 59.4 percent over the year to $5.55 per 500g block. Seasonally adjusted food prices rose 0.5 percent in September as fruit and vegetable prices rose 0.4 percent.
Down 3.3 points – ANZ’s monthly Roy Morgan survey of consumer confidence found a fall in the index to 126.3 in October from 129.6 in September. But ANZ said confidence remained near record highs despite a slower housing market, softer spending growth and election uncertainty.
"Sentiment is elevated, and increasingly diverging from hard spending data, which has been fairly ho-hum in recent months,” said ANZ’s Sharon Zollner. "While weaker housing is tricky, there are treats too: the labour market and household income growth are strong, and political horse-trading seems unlikely to result in fewer fiscal lollies."
7. Coming up...
New Zealand First is holding its caucus meeting today. A New Zealand First board meeting is possible any time before Tuesday.
National and Labour caucuses and executives will then need to meet. The Green Party's delegates would also have to ratify any deal remotely.
It could be a very long weekend.
We will be lucky to have a Government in place by this time next week.
8. One fun thing
One of my favourite twitter follows is GCSB Intercepts. I'm glad to see our electro-spooks are having fun listening in to Winston Peters' comments too:
Have a great weekend. Weekend Reads will be back next weekend. Hopefully after we have a Government.