In this morning's email, we looked in depth at the Reserve Bank review announced yesterday and at Winston Peters' fishing expedition for information on how his pension over-payments become public.
- A two-phased review
New Finance Minister Grant Robertson announced plans for a two-phased review of the Reserve Bank yesterday, but the more important decision has yet to be made on who will be the next Governor.
As expected, the review's first phase will look at including "maximising employment" as a dual mandate alongside price stability. It will also recommend changes to the decision making model for monetary policy to have a committee with external members make decisions.
Robertson has not specified a level for 'maximised employment', but has previously said he wanted unemployment to fall below four percent, as it did during the last Labour Government.
Treasury has previously estimated full employment at around 4.25 percent, while the Reserve Bank has not put a figure on that level and has been sceptical about being able to measure it.
The first phase would be led by Treasury and an independent expert advisory panel would be appointed by Robertson to "provide input and support" on both phases of the review. A bill to introduce the proposed changes to the Act would be introduced to Parliament "as soon as possible in 2018."
The second phase would see Treasury and Reserve Bank jointly produce "a list of areas where further investigations of the Reserve Bank’s activities are desirable." It would include the review of macro-prudential policy already scheduled for 2018.
But the bigger decision remained who will be Governor. As detailed yesterday, Robertson faces a tricky choice of whether to accept the board's preferred candidate or not.
- This term could get very ugly very fast
National scored its first big win of the new Parliament, after nearly derailing the appointment of Trevor Mallard as the new Speaker, Sam Sachdeva reports.
As part of the Commission Opening of Parliament, Mallard was due to be elected to the role without controversy.
However, the Opposition provided the first hint of what National leader Bill English meant by saying it was not its job “to make this place run”, when shadow leader of the House Simon Bridges asked for clarification on whether MPs who hadn’t been sworn in could cast a vote for the Speaker.
With that not being the case, and a handful of Government MPs away on leave, frantic discussions ensued between both sides of the House as the possibility of National’s Anne Tolley being appointed over Mallard reared its head.
A handshake agreement between Bridges and Leader of the House Chris Hipkins was reached and Mallard was appointed unopposed, in exchange for the Government agreeing to a compromise over the number of select committee places (National wanted 120 and the Government wanted 96, with 109 agreed as the middle ground).
It transpired that the Government did in fact have enough MPs to win a vote (58 to 56), which raised questions about whether its whips had failed to do their maths.
Hipkins claimed afterwards the Government was aware it had the majority, but wanted to avoid a vote as it would put a dampener on Mallard’s coronation.
However, English said the furore was National’s first win in opposition and a possible sign of things to come, while Bridges said he was pleased with the final result on select committees.
"It means we can scrutinise things...I think they've learned a lesson. I hope they've learned a lesson," English said.
- Winston's fishing expedition
Newsroom's Co-Editor Tim Murphy got a surprise visit to Newsroom's Kingland offices in Auckland yesterday. He was served with legal papers from Winston Peters' lawyers looking for information about Peters' pension overpayments.
Tim reports on Newsroom the papers, which appear focused on trying to find a privacy breach by Bill English and three of his ministers, were finalised and signed the day before the election. They follow Newsroom's exclusive report on the over-payment on August 28, and reports the previous day by Newshub.
That means Peters was negotiating to form a Government with someone he believed had committed a privacy breach. It does make you wonder whether there was ever a serious prospect of a National-New Zealand First Government.
Tim sees the legal action as a fishing expedition. Here's his full report on Newsroom.
- Airbnb vs Queenstown
Newsroom's new South Island reporter David William has been looking closely at the stoush developing between the Queenstown Council and Airbnb over restrictions on residential ratepayers offering their rooms and homes on Airbnb.
It is one of those sign of the time stories as the gig economy and the globalised international platforms clash with local laws and the stresses over wages and housing costs.
David reports today on Newsroom that Airbnb is pushing back hard at Queenstown's moves to charge ratepayers as if they were commercial ratepayers and restrict their use of Airbnb to central areas. He reported on Monday on the dangers of a crackdown.
- The new Parker doctrine on trade
Newsroom's Sam Sachdeva reports from his interview with new Trade Minister David Parker on his approach to trade agreements and the role of globalised capital.
Parker told Sam the Government would not shrink away from New Zealand’s leadership role on free trade - but it must be on our terms.
Before heading to Apec, Parker talked about taking on “the excesses of globalised capital” and avoiding a public backlash.
See Sam's full story here on Newsroom Pro, where it was first published yesterday.
- Briefly in the political economy...
The Serious Fraud Office announced it had ended its inquiry into Zespri's dual invoicing practices in China until mid-2011, "saying the conduct did not meet the high evidential standard for laying criminal charges."
Mercury Energy CEO Fraser Whinerayhttp://rba.gov.au/media-releases/2017/mr-17-23.html called in his annual meeting address yesterday for pricing reform on monopoly lines companies and warned some were encroaching into non-core areas such as car charging.
The Reserve Bank of Australia announced yesterday afternoon it had left its official cash rate on hold at 1.5 percent, saying wage growth and inflation remained low around the world. The decision was widely expected.
Saudi Arabia's newly empowered Crown Prince described Iran's actions in Yemen and in a attempted rocket attack on Riyadh airport as an "act of war against the Saudi Arabian kingdowm." (CNN)
- Coming up...
The Parliament for the new three year term will formally be opened today when Governor General Dame Patsy Reddy reads the speech from the throne outlining the Government's plans.
Trade Minister David Parker and Foreign Minister Winston Peters have already left to travel on Thursday to the Apec and East Asia Summits in Vietnam and the Philippines respectively from November 11 to 14. Jacinda Ardern flies out tomorrow morning on the RNZAF 757. 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 on 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.e
- One fun thing
The new Government and Auckland Council are looking at spending upwards of $6 billion over the next 10 years on three new light rail lines from the CBD to the airport, along the North Western Motorway and between Panmure and Manukau. Light rail isn't quite the same as a tram line, but it's not that different.
Here's a sobering map of the electric tram lines Auckland had from 1902 to 1956, before they were ripped up to accommodate the all-conquering age of the car...HT Ludo Campbell Reid.
Have a great day.