In this morning's email we detailed the challenges facing Jacinda Ardern and her team as they flew to Asia for Apec and the East Asia Summit.
1. Jacinda's first big international test
Jacinda Ardern heads to Asia for her first major trip as Prime Minister this morning when she flies out of Wellington on the RNZAF 757 with the official party up the front and the media at the back.
Newsroom's Sam Sachdeva, who is going on the trip, reported yesterday the fate of the TPP is shaping up as a big test for her Government, and in particular whether Ardern is able to obtain any concessions on the Investor State Dispute Settlement clauses.
It may even cause tension in the coalition, with the chance Labour may need National to help pass changes through Parliament. National said yesterday it would vote for the TPP if the Greens would not support it.
Yet the TPP is far from the only challenge Ardern and her team will face, Sam wrote in his piece published first on Newsroom Pro.
Victoria University's Robert Ayson argues the deal will be quickly overshadowed by the complexities of the US-China relationship, with a solution to North Korea and China’s activity in the South China Sea set to be the main topics of discussion at EAS.
“What the region thinks about the US role and what it thinks about China’s role and how it thinks about how those two are going to get on or not, and how engaged [Donald] Trump’s going to be really in the region and what Xi [Jinping]’s approach to the region’s going to be now that he’s consolidated his power - those are the big questions, so the TPP is not the big be-all and the end-all."
One quick note for Governmental trainspotters. Kelvin Davis will be the Acting Prime Minister while Ardern and Deputy Prime Minister Winston Peters are both away at Apec, according to the ministerial list.
2. The new Government details its plan
Parliament was formally opened yesterday with the centrepiece 'Speech from the Throne' delivered on behalf of the new Government by Governor General Dame Patsy Reddy.
The speech itself included no new policy announcements, but is a useful touchstone on the Government's agenda and approach.
These opening two paragraphs summarise the plan for the next three years:
"This government is committed to major investments in housing, health, education, police, and infrastructure. The Government will protect the environment, create more jobs and lift the incomes of families to reduce child poverty, while running surpluses and paying down debt," Reddy said.
"In the last nine years, New Zealand has changed a great deal. Ours is a great country still. But it could be even greater. In our society today, no one should have to live in a car or on the street. No one should have to beg for their next meal. No child should be experiencing poverty. That kind of inequality is degrading to us all."
The next set-piece of note was the first Parliamentary clash of Prime Minister Jacinda Ardern and Opposition Leader Bill English.
It was a feisty affair with Ardern hitting back after Tuesday's Parliamentary chaos for the Labour-led Government when it caved in to a National demand for bigger select committees to avoid a vote against new speaker Trevor Mallard.
The former Government looks set to use its status as the biggest Opposition in the history of MMP to frustrate the new Government's attempts to get legislation through Parliament. There are early signs the Government may use its numbers to filibuster bills in the debating chamber and in select committees. Its size means that five of the select committee chairs are National MPs.
Ardern said in her Address in Reply speech she understood the Opposition's desire to oppose the Labour-led Government and defend National's record in Government.
"I would simply remind them that in defending their record they must also defend record homelessness. They must also defend dirty rivers and lakes. They must also defend inequality, and yes, child poverty," she said.
"So, by all means, defend the record of the last nine years, while we get on with fixing it."
She also hit back at National's initial claims that checkout operators would pay for the free tertiary education of others through their taxes.
"At what point did the Leader of the Opposition lose his ambition for New Zealanders, that that checkout operator themselves could not aspire to go on to tertiary education? At what point did that checkout operator themselves not have children that they have aspirations for, too?
"I can tell you that on a checkout operator's wages you'd be hard-pressed to save for the fees required. This Government has aspiration for the checkout operators of New Zealand. We are proud of that, and we stand by them. I say to those checkout operators, having been one myself: "You too could become a Minister of Finance or indeed the Prime Minister of New Zealand."
Ardern also hinted in her speech that the new Government had found problems left behind by National in the school properties portfolio, and in other areas.
"Since coming into Government, I and my Ministers have been briefed by officials on almost every issue you can imagine, and I must say, at times, it has been sobering," she said.
"It is clear from these briefings we are facing almost a decade of chronic under investment, and it is also clear that it is far worse in some areas than we even imagined. The chronic under investment means our hospitals and our schools are groaning under the pressure of a growing and ageing population.
"It means our roads are gridlocked and we've inherited a widening gap between what needs to be spent, for instance, on public transport and roads, and what has been set aside by the previous Government."
3. 'Don't fritter away our good work'
Bill English called on the Government in his Address in Reply speech not to fritter away the gains of previous years and reiterated National would actively oppose Labour's agenda in Parliament.
"It is absolutely clear already that the speed and complexity of the Government's programme is going to require strong parliamentary scrutiny, if only to save the Government from itself," English said.
This echoed his comments last week that: "It's not our job to make this place run for a minority government."
English again accused Ardern of allowing Australians free tertiary education in New Zealand from early next year at the same time as threatening retaliatory action against Australians on fees. He questioned whether poorer young people wanted to pay to educate richer ones.
"I hope the Government enjoys explaining to the checkout operators and the truck drivers why they are paying more when the tax cuts are abolished—are paying more—to make tertiary education cheaper," he said.
English said Wellington's bureaucrats would now feel more comfortable that a Labour Government would spend money on problems and not hold them accountable.
"Right now there are public servants all around Wellington putting their feet up on their desks, leaning back on their chairs, and thinking, 'Thank God we don't have to think about what we actually achieve any more. All we've got to do'—this is what they're thinking—'is keep the Minister happy'," he said.
"Shovel the money out the door and it doesn't matter too much what actually happens, because the Government has already said it doesn't want to know."
English also pushed back at reports that Labour would drop National's Social Investment Policy, describing Labour's social policy as 'pre-internet.'
"These are people who haven't thought about it," he said.
"They'll be held hostage by lobbyists and laziness, and so many vulnerable New Zealanders need us to keep their feet to the fire."
4. The baby-whispering Parliamentary Speaker
Another feature of the opening day of the new Parliamentary term was the involvement of babies.
New Labour MP Willow Jean-Prime became the first MP to breast-feed her baby in Parliament.
She later handed over three month old Heeni for the new speaker Trevor Mallard to look after during the debate under urgency of the new Government's plan to extend Paid Parental Leave to 26 weeks from 18 weeks.
National ended up supporting the bill, but opposed the use of urgency to pass the bill.
The Government said Paid Parental Leave had gone through the select committee system before when then Labour MP Sue Moroney's private member's bill was first voted down at the third reading and then vetoed for fiscal reasons by then Finance Minister Bill English.
The video of the debate over Paid Parental Leave where Mallard is shown cradling Heeni during the debate is here at the end of Jenny Salesa's speech.
5. The future of work
Yesterday I spoke at a Work in Progress conference in Wellington on the future of work in the fourth industrial age.
Newsroom's Shane Cowlishaw also attended through the day to hear the latest views on the future of work and how policy makers might respond or anticipate those changes..
He reported software developer Sam Jarman saying 30-40 percent of current jobs would disappear over the next 30 years, with more going over the following decades.
See Shane's full report here on Newsroom Pro for more details, including the debate over a Universal Basic Income.
6. Briefly in the political economy...
In the first signs that the Paradise Papers leak is extending to our shores, the New Zealand Superannuation Fund said yesterday it had been advised by IRD that one of the fund's subsidiaries had been mentioned in the documents obtained from Bermuda law firm Appleby.
It said it had used Appleby for advice on local Bermudan law advice about re-insurance contracts and defended its location of funds in the tax haven.
"The use of collective investment funds domiciled in locations such as the Bermuda and the Cayman Islands is legal, common and widely considered best practice portfolio management," the Fund said, adding that it complied with all its tax obligations internationally and was fully transparent with the IRD.
ASB reported its latest quarterly Housing Confidence Survey found home owner expectations about house price inflation had fallen for a fifth consecutive quarter to a six year low. Inflation expectations in Auckland fell to an eight year low.
ANZ reported its monthly inflation survey found underlying ex-housing prices rose 0.2 percent in October from September and were up 1.0 percent from a year ago, which was the highest in three years. "We can see some inflation murmurings, but it’s patchy and hard to draw any firm conclusions," ANZ's Cameron Bagrie wrote.
ANZ reported its monthly Truckometer measures of light and heavy truck movements in October found an improvement in heavy traffic that suggested an improvement in December quarter GDP. However, light traffic was a touch weaker, although was still on an upward trend and suggested solid momentum in the economy.
7. Coming up...
The Reserve Bank is expected to hold a news conference later this morning to discuss its decision (just announced) to hold the Official Cash Rate at 1.75 percent and the release of its November Monetary Policy Statement.
The Reserve Bank left its forecast for the Official Cash Rate unchanged from its last Monetary Policy Statement in August, with no rate hikes expected until late 2019 or early 2020 at the earliest.
Apec and East Asian leaders will hold summits in Vietnam and the Philippines over the next week. Newsroom will be reporting from the summits over the next week.
8. One fun thing
The sad demise of the 'first cat' Paddles triggered an unfortunate outburst on twitter from Gareth Morgan yesterday, which in turn sparked some comment.
Rob Hosking: "Well, I suppose Gareth's given new meaning to the term 'dead cat bounce' ....ok, too soon. Too soon."
Ben Wilson: "NZ is up shit creek without Paddles."