In today's email we looked at how the new Government might deal with the issue of the Investor State Dispute Settlement (ISDS) mechanisms within the TPP.
1. Ambassadors working on side letters
Newsroom's Sam Sachdeva and I interviewed the new Trade and Economic Development Minister David Parker yesterday morning.
He has been busy finding a way for the new Labour-led Government to essentially have its cake and eat it too on its foreign buyers' ban and the Trans Pacific Partnership (TPP).
Parker managed to sidestep the issue with a neat shimmy through the Overseas Investment Act. Designating residential property as "sensitive" was the big news of the week and allowed the new Government to kill two birds with one stone -- quite a victory in its first week in power.
But the new Government's unhappiness over the Investor State Dispute Settlement (ISDS) mechanism still in the TPP remains a wrinkle. It wants to at least try to iron some of it out in talks next week around the Apec and East Asian summits in Vietnam and the Philippines.
But Parker may well have found a clever solution for that too.
Sam reports from the interview that Parker has asked New Zealand's ambassadors to push for individual side letters with others in the TPP 11 similar to the one New Zealand has with Australia. These side letters agree to suspend the ISDS clauses on a bilateral level.
The drive for extra side letters had not been successful so far, but New Zealand would continue to push the issue in the lead-up to Apec, Parker told Sam.
"We're not just attempting at the negotiations that are currently in Japan, but we’ve got our ambassadors in the home country of every TPP-11 country trying as well," he said.
2. ATAP renegotiation starts
Auckland Mayor Phil Goff met yesterday morning with Prime Minister Jacinda Ardern, Finance Minister Grant Robertson and Transport and Housing Minister Phil Twyford to discuss housing, the Port of Auckland and Transport.
They agreed on a "refresh" of the Auckland Transport Alignment Programme (ATAP), which plans transport infrastructure and operational spending over the next 30 years by both Auckland Transport and the Government. This confirms the renegotiation foreshadowed in yesterday's email.
Goff and his former Labour colleagues are clearly more sympatico than he was with National and Steven Joyce, both personally and on policy. Both the Labour-led Government and the Labour Mayor want to ramp up investment in light rail and find new ways to fund it. These include using a regional fuel tax, using targeted rates to capture value uplift around the new lines in Auckland and using the National Land Transport Fund, which has previously been used for roads and motorways.
Goff confirmed the Council was working on value uplift capture mechanisms, which may require legislative change by the Government.
"I'm really pleased the objectives of the Government are aligned with what Auckland Council believes are the critical priorities for Auckland," he said.
Goff later confirmed to me that the ATAP plan had a $6 billion funding gap over the next decade and that $19 billion worth of capital spending was planned over the next 10 years.
He highlighted the need for three major new light rail lines, including the CBD to the Airport line along Dominion Rd, the city to Westgate line alongside the North Western motorway, and a new line from Panmure to Manukau through Botany Town Centre and along Te Irirangi Drive.
These light rail projects would be done instead of the $1.8 billion East-West roading link, which was scrapped in the confidence and supply agreement with the Greens. Goff said other upgrades to the roads through Onehunga would instead be done to reduce congestion and cost over $300 million.
Goff was also hopeful of getting the regional fuel tax in place by July 1 next year to take over from the interim transport levy. The 10c/litre fuel tax would avoid the Council having to increase rates by 15 percent and cost the average family an extra $2.60 per week, he said.
3. Beehive debate over Auckland Port
Goff and Ardern were asked at a short stand-up news conference on the ninth floor of the Beehive about the Ports of Auckland's 30 year masterplan proposal released yesterday.
The plan would see an extra 13 metres added to the Bledisloe wharf for cars and Pacific trade through a piled structure, rather than reclamation. The Port would also put a car parking building and hotel on the wharf with a one hectare garden roof so it can handle extra cars.
The plan would also see Marsden Wharf removed (it is currently used for car storage) and the creation of a cruise berth on Captain Cook East. I'd recommend this Youtube video 'flythrough' to get a good and quick picture of the proposed changes. The plan would remove 1.275 hectares of old wharf and add 1.25 hectares of new wharf. The plan is aimed at having enough capacity for the next 30 years and having up to five million people in Auckland. After that, the theory is Auckland would need to move the port, possibly to Manukau or the Firth of Thames, as specified in a Port Future study last year.
The plan is much less intrusive on the harbour then a 250 metre extension and reclamation proposed in 2012, which led to widespread protests and an eventual court case blocking resource consents.
Ardern and Goff said they opposed expansion of the wharf and said the Port should wait for the result of the Upper North Island port study agreed last week under Labour's coalition agreement with New Zealand First.
"I welcome the fact that the Government has committed to an upper North Island port study," Goff said.
"It doesn't make sense for Auckland to make a decision in isolation to what the region and the country needs," he said.
"What we've got now is a study that will demonstrate what will work best for Auckland, for the region in the upper North Island, and for the country as a whole. I think that study is going to be the study that really counts for what we do in the future."
The regional port study is seen as a handy place to park Winston Peters' ambitions for a full shift of the Auckland Port to Northland, and to also park the Auckland Port's more ambitious plans for growth, which are unpopular in the leafier suburbs near the port.
It is both politically convenient and a good place to bring some rigour to the debate over a port move.
Experts who have looked at the issue tell me it would cost more than $10 billion to create the railway lines through West Auckland, to build 12-15 new rail tunnels, and then to build a huge new port in Northland. That port would block the roads between Northland and Auckland with car carriers and trucks, and would frustrate efforts to reduce climate emissions around the port.
The climate change implications of any port move could be a 'wedge' factor between the Greens and New Zealand First over the longer term.
4. National's minor reshuffle
Newsroom's Sam Sachdeva covered National's reshuffle of its portfolios yesterday, including Nick Smith's further demotion and a jump up the ranks for Judith Collins.
Smith was stripped fully of his housing roles and the environment role. He now has aquaculture and forestry.
Sam wrote in this comment piece published on Newsroom Pro that the reshuffle was a little underwhelming.
Granted, National leader Bill English may feel he has reason to retain confidence in his front-benchers; after all, as he keeps reminding us, National was and is the largest party in Parliament following the election.
Yet what was a chance for rejuvenation has resulted in most former ministers holding onto their main areas of expertise, with all other MPs except the first-termers picking up largely minor portfolios.
It feels like an attempt to mix continuity with change, similar to the needle English tried to thread when taking over from John Key as Prime Minister and placating restless backbenchers, Sam wrote.
One beneficiary of the reshuffle is Judith Collins, who has jumped from 16th to ninth in National’s rankings and picked up the transport portfolio - a particular focus for the new Government.
Collins’ resurgence may reflect a desire to keep her from fomenting mischief internally while in opposition, but it’s also an acknowledgement that her attack-dog approach may come in handy on the cross-benches (a fact English noted when saying: “I think Phil Twyford will find her way of business suits Opposition”).
Taking on Collins’ police portfolio is Chris Bishop, who may have considered himself unfortunate to miss out on a ministerial role last term.
Bishop turned Hutt South blue at the election, and has been elevated to a high-profile role taking on Police Minister Stuart Nash. Similarly, Todd Muller has picked up climate change and Crown/Maori relations rules, having been on the cusp of a ministerial position last term.
The full list is in Sam's article.
5. Will there be a new 'Winter of Discontent'?
Will Jacinda Ardern and Grant Robertson face a 'Winter of Discontent' like that seen in 2000 when Labour last won power?
In his weekly column published first on Newsroom Pro, Rod Oram compares now with then and assesses the risks in a world bound to see more shocks and crashes.
He is optimistic that business leaders are more open and resilient than they were in 1999 and 2000.
6. While you were sleeping
The Bank of England raised its official interest rate overnight to 0.5 percent from 0.25 percent. This was the first hike in 10 years, but it said it expected only gradual further increases as Britain gets set to leave the European Union. (Reuters).
US House Republicans unveiled the details of a massive tax cut package that includes slashing the corporate rate from 35 percent to 20 percent and removing an estate tax. (Reuters)
As expected, US President Donald Trump formally nominated Federal Reserve Governor Jerome Powell to be the next chair of the Federal Reserve Board of Governors to replace one-term chair Janet Yellen, who was appointed by Barack Obama. Powell, 64, is a lawyer and investment banker who is seen as a centrist and broadly supportive of the low interest rate policy adopted by Yellen. (Reuters)
China's airforce is practicing attacks on America's giant air base at Guam, the South China Morning Post reported US defence officials as saying.
7. Coming up...
Jacinda Ardern travels to Australia on Sunday to meet briefly with Prime Minister Malcolm Turnbull. This is her first overseas visit and meeting with a foreign leader as Prime Minister. She is expected to discuss the rights of New Zealanders in Australia, the situation on Manus Island and the upcoming Apec and East Asia Summit talks.
New Immigration Minister Iain Lees Galloway said this morning on RNZ that Labour's offer to take 150 of the 600 refugees stranded there was still on the table. Australia has previously rejected the offer because it fears the refugees will move to Australia once they become New Zealand residents.
The new Government will hold its second full cabinet meeting on Monday. Prime Minister Jacinda Ardern is expected to do the regular round of morning television and radio interviews and then hold a post-cabinet news conference in the afternoon.
The new Members of Parliament will be formally sworn in and the new speaker (expected to be Trevor Mallard) elected on Tuesday. The Parliament for the new three year term will formally be opened on Wednesday when Governor General Dame Patsy Reddy reads the speech from the throne outlining the Government's plans.
Ardern, Parker and Winston Peters are expected to travel late on Wednesday to the Apec and East Asia Summits in Vietnam and the Philippines respectively from November 11 to 14. Newsroom's Sam Sachdeva is travelling as media with the New Zealand group.
The Reserve Bank is scheduled to release its next Official Cash Rate decision and publish its next quarterly Monetary Policy Statement at 9am next Thursday. Economists expect it to leave the OCR on hold at 1.75 percent and make few changes to its outlook for interest rates remaining unchanged until late 2019.
8. One or two fun things
After another exhausting week of political change and action around Wellington, here's a few fun things to start your weekend.
This Onion headline and picture tickled my fancy: "White House Staff Frantically Shredding Trump Campaign Aides."
And it's great to see Rod Emmerson focused on the Jian Yang case with this cartoon. That was the other major development this week: the NZ Herald started reporting and commenting in detail about the case, which Newsroom broke in September in a joint investigation with the Financial Times.