In today's email we look at the issues that any new Government will have to address .. when we finally get one.
1. Four days of NZ First talks, and counting...
The New Zealand First caucus and board wrapped up a fourth day of Government-deciding discussions last night without any conclusion and will start again this morning.
New Zealand First put out a brief statement shortly after 4pm yesterday, saying it expected the meeting to go on for several more hours.
The meeting broke up shortly after 6 pm without any further statement and Peters eluded reporters in the Bowen House and Parliamentary complexes.
As we reported yesterday, National and Labour have yet to have negotiations with Winston Peters about ministerial portfolios or the exact type of Government he and New Zealand First might prefer. That could range from a full coalition to sitting on the cross benches with agreements to support the Governing parties (or abstain) on confidence and supply votes.
Bill English said yesterday last week's discussions had purely been about policy and he noted his own caucus and executive would also have to endorse any decision. On the Labour and Green side, their respective boards and caucuses would also have to endorse any decision, adding yet more days to the process.
Peters said on Thursday he expected a Government to be decided by the end of this week. He had originally said in late July he had expected a decision by October 12, which was last Thursday.
Given the latest meeting without a conclusion, and the need for further discussions on the key issues of ministerial portfolios, we will be lucky to have a Government by this Sunday.
2. Ardern confident this morning
Jacinda Ardern did her usual Tuesday morning round of television and radio interviews and said she was "absolutely" confident in Labour's position.
"We're still going through a process, but we have every reason to feel confident or at least as confident as the other party involved," Ardern told Duncan Garner on Newshub's AM show.
She brushed aside speculation that an apparent wink she gave at the end of a video on youtube over the weekend meant she thought Labour would be selected. She said it was a unintended facial tick.
"I've got a tick, which obviously now everyone knows. I didn't actually even realise that I'd winked, but my father confessed to me last night that sometimes he has a tendency to do it too so I think I've got some kind of genetic issue there, which now the whole country knows about," she said.
Ardern also confirmed English's comments that the discussions with Peters had only been about policy.
"It should be heartening to people that in these discussions, parties have been focused on the ideas that they want to deliver to New Zealanders, rather than simply the positions they might get out of an arrangement," Ardern said.
She denied New Zealand First had all the negotiating power.
"There's been a lot of commentary around how this is something that somehow the major parties are 'lap dogs' of the situation. I really push back on that," she said.
"In these negotiations we have it within our power to say that these are the things that we're willing to talk about and compromise on, and these are the things that we are not."
Ardern told Susie Ferguson on RNZ's Morning Report the discussions had not been around ministerial roles, and would eventually have to go there.
"Discussions have been dominated by areas of consensus, agreement, disagreement on the issues that matter and it hasn't been a discussion or negotiation that's been dominated by what particular roles individuals will play," she said.
"We have been entirely focused on policy."
There would also have to be discussions about the form of Government, and what form of assurance was given to the Government about confidence and supply.
"The Governor-General of course cannot confirm that a government's been able to be successfully formed unless she can see that there is the confidence of the House behind that agreement," she said.
"So that means knowing that there's either confidence and supply or a coalition agreement or some iteration that demonstrates that the votes are there for a government to be formed.""
3. A growing to-do list
Luckily for the Government and the rest of us, there hasn't been a crisis or existential pressing issue that needed an active Government to deal with it through executive or legislative action.
That wasn't the case in 2008 when the Global Financial Crisis was in full crisis mode and the Government had to put a bank deposit guarantee in place under urgency. Or in 2011, when the Government was wedged between major earthquakes that required a decisive cabinet.
But there is a growing list of things any new Government needs to deal with, and plenty for officials to work on during the interregnum.
Newsroom's Sam Sachdeva has taken a look at the 'big five' on that list, starting with the TPP and migration.
4. First, the TPP
Making a call on the fate of the controversial free trade deal is where the clock is ticking the loudest.
The 11 countries that have forged ahead after the United States’ withdrawal are likely to hold a final round of negotiations at the end of October, before a TPP “summit” is held at the Apec summit in Vietnam come mid-November.
As Sam has already noted, the election result means the parliamentary majority for the TPP has been lost, with Labour, the Greens and NZ First all opposed to at least some aspects of the deal.
A Labour-led government will face the greatest challenges regarding the TPP, with a decision required within weeks.
Can they win some last-minute concessions to allow a ban on foreign home buyers, or remove some of the most questionable aspects of the investor state dispute settlement (ISDS) mechanism?
If not, does New Zealand withdraw from the deal and hope to re-enter later under more favourable conditions, or does it swallow a dead rat and hope the benefits to businesses outweigh the negatives?
A National-led government will have problems of its own, however: while it doesn’t require a parliamentary majority to sign off on the deal at Apec, it will need to make sure it has the numbers to pass any enabling legislation that’s needed.
5. Then there's migration
There's almost certain to see significant changes to New Zealand’s immigration policy, given it was a lynchpin of NZ First’s campaign.
Peters has been steadfast in his belief that net migration levels need to be slashed to between 10,000 and 15,000 (it was 72,100 for the year to August).
Making a change of that magnitude, or something close to it, will require some drastic changes in policy.
Peters has indicated cuts could be made to international student numbers, as well as low-skilled workers - although he has pledged to “hold the line” in essential industries like farming while young Kiwi workers are trained up.
It’s an area where Labour has some common ground with NZ First: the party has pushed for cutting numbers by between 20,000 and 30,000 through limiting student visas, post-study work visas, and normal work visas.
National may find it harder to shift course: Bill English and his ministers have repeatedly backed high migration levels as underpinning a strong economy, although Immigration Minister Michael Woodhouse announced in April the introduction of salary bands for both skilled migrants applying for residency and people applying for temporary essential skills visas.
Industries which rely on migrant workers, such as the aged care sector, are already bracing for changes, as Newsroom's Shane Cowlishaw has reported.
6. Housing and regional development too
Two areas that officials will be working on with a series of 'second-guessing' style policy options to work on before the Government is formed are housing and regional development.
NZ First wants a ban on foreign ownership of land as well as a comprehensive register, and Peters has confirmed the issue came up during coalition negotiations.
Labour leader Jacinda Ardern has said she wants to ban foreigners from buying existing houses in New Zealand by Christmas through an urgent law change, which would require some significant work by officials.
There’s also the issue of how NZ First’s and Labour’s policies would impact free trade deals such as the TPP, which include non-discrimination provisions.
National has been more in favour of foreign investment, but is unlikely to have opposed any changes as a bottom line.
Then there is the broader issue of housing affordability, with both National and Labour having promised to build tens of thousands of houses and free up more land for development.
National’s special housing areas have not succeeded as hoped, with 98 affordable houses built in the Auckland Special Housing Areas, according to an Auckland Council Planning Committee report on the SHAs (Page 131).
With housing one of the hot-button issues during the election campaign, the next government will be expected to get on top of it quickly.
Regional Development will also be at the top of the policy proposal hit list.
Peters has campaigned to create regional funds to receive the GST paid by international tourists - called “Royalties for the Regions” - as well as moving the Port of Auckland to Northport near Whangarei, which could cost billions.
One of the oft-floated suggestions has been that Peters could pick up a new “Minister of Regional Development” role, giving him wide-ranging powers to deliver on his promises to rural voters and fund a range of infrastructure projects.
That could require the establishment of a new ministry, or simply working within an existing department, but either way there’s likely to be a significant workload for the next government.
Finding the money to fund an array of regional development projects will also be a challenge for the next Finance Minister, given lower than expected surpluses meaning both National’s and Labour’s books are relatively tight.
7. Coming up...
Statistics New Zealand is scheduled to report September quarter inflation figures at 10.45 am today. Economists expect a 0.4 percent figure for the quarter and 1.8 percent for the year.
8. One fun thing
Now for something completely off the political track, and something that has nothing to do with Trump.
A German Tourist, tweeting as 'I am Germany' put this out yesterday.
"I took hundreds of photos while living in NZ. This one is still one of the funniest. Spotted in a public toilet."
It appealed to the 14 year old in me.
Have a great day -- another one without a Government. It hasn't been that bad. ;)