This morning's email focused on the latest in international relations and finance.
1. Ardern's sick burn on Trump
Prime Minister Jacinda Ardern had seemed to have emerged unscathed from her encounters with US President Donald Trump over the last week, but there was one episode of playful banter where the Prime Minister teased the President about their relative popularities on election day.
Newsroom's Sam Sachdeva had a sit-down interview with Prime Minister Jacinda Ardern on the RNZAF 757 on the way home from Manila yesterday and has filed a detailed piece on her impressions and experiences in her first appearances on the biggest of global stages at the Apec and East Asia Summits.
In particular, she told Sam of an incident where she essentially teased US President Donald Trump about the fact there were huge protest marches when he was elected.
“I was waiting to walk out to be introduced at the East Asia Summit gala dinner, where we all paraded and while we were waiting, Trump in jest patted the person next to him on the shoulder, pointed at me and said, ‘This lady caused a lot of upset in her country’, talking about the election.
“I said, ‘Well, you know, only maybe 40 per cent’, then he said it again and I said, ‘You know’, laughing, ‘no-one marched when I was elected’.
“He laughed and it was only afterwards that I reflect that it could have been taken in a very particular way – he did not seem offended."
See Sam's piece here on Newsroom Pro, where it was first published yesterday.
2. Climate change and North Korea
Elsewhere in the interview, Ardern talked more about her vision of New Zealand as a foreign policy player, and referred in particular to North Korea and climate change.
She admitted to having big shoes to fill, with her discussions making clear the respect held for our country on the world stage.
“I’ve always known that to be true, but to see it enforced in these forums...is a real testament to the work that’s been done before, and the work all year round that our representatives do.”
During the election campaign, Ardern described climate change as “the nuclear-free movement of our generation”, providing a hint of how she wants to mix the old with the new in New Zealand’s advocacy.
“We have been strong advocates on issues like nuclear non-proliferation and that is as relevant now as it’s ever been, particularly when it comes to the Korean peninsula, and so playing a role in being consistent advocates, particularly from a position of always taking a really principled stance I think is important.”
At her speech to the Apec CEO’s Summit, Ardern spoke about climate change “lapping at our feet” in the Asia-Pacific, and she said it was an area where New Zealand could speak up for others who could be the worst affected.
“I wasn’t the only one [talking about climate change], but there weren’t many of us, and I do think it’s an issue that needs consistent advocacy because in some of those forums there’s an absence of the groups that are directly affected, but the overall Asia-Pacific will feel its impact hugely and yet have some of the most deprived populations in the world as well.”
3. Korean Kapa haka diplomacy for Winston?
Elsewhere around the summits, the comments from Winston Peters reported in yesterday's email about working with America on a special project has sparked all sorts of speculation.
Newshub and NewstalkZB have suggested Peters could become some sort of trusted but arms-length intermediary for negotiations between the United States and North Korea and could visit the pariah state.
Peters visited North Korea in 2007 when he was previously Foreign Minister and said in his first comments after being sworn in that North Korea was not an utterly hopeless case. Former National MP Ross Meurant has asked the Government for funds to help send a kapa haka group to North Korea and has suggested Peters could combine the trip with some diplomacy, Jo Moir reported.
Others have reported the special project involving Peters may be more connected to trying to resolve Myanmar's refugee crisis. The NZ Herald reported the project was unlikely to be North Korea based.
4. Nash "absolutely" working on online GST
There was a flurry of excitement yesterday morning around the long-stalled issue of charging GST on imports of physical goods bought overseas via websites for less than $400.
New Revenue Minister Stuart Nash told NewstalkZB the Government would "absolutely" extend GST to cover the import of both goods and services, sparking jubilation among retailers who have been lobbying for years for the change to create a level playing field.
The Government introduced the so-called 'Netflix tax' on online services imports last year, but the inclusion of GST on goods bought online from overseas is proving a much trickier prospect, given challenges around how and where the tax should be collected and policed.
Later in the day Finance Minister Grant Robertson stepped back somewhat from the "absolutely" commitment. He told reporters in parliament that Nash "means that we're working on it and he did say that we don't have the full process or timeline for that."
Nash's office also released an afternoon statement clarifying that the issue of GST on imports bought online would be included the Tax Working Group's mandate.
"Work is already underway on this issue and it will be incorporated into the working group's considerations, who will be given the ability to make an early recommendation on this matter as appropriate," he said.
That's a fair way away from "absolutely" widening the GST net to including goods imports.
5. Robertson rejects ANZ's debt view
The debate around the fiscal outlook in parliament yesterday focused on ANZ's view reported in Stuff that the new Labour Government would end up borrowing $2 billion more than it forecast before the election and that debt would be three percentage points of GDP above its planned debt track.
Robertson said in Question Time he disagreed with ANZ's forecast, which was actually released on November 7. BNZ was also cited in the Stuff report, but did not include specific forecasts. Robertson did not refer to BNZ.
"I have received a range of official reports, all of which show that it will be possible for us to meet our goals within our Budget responsibility rules, and I can assure the House that that includes a commitment to the goal of reducing net debt to 20 percent of GDP within five years," he said.
Robertson was also coy when challenged by National Finance Spokesman Steven Joyce in a later question about exactly how much debt would be issued by the new Government. He would not repeat Labour's pre-election forecast of an $11 billion increase in nominal debt.
"What we have discovered is that those numbers did not take account of the need for increased spending in education capital expenditure, health capital expenditure, or a range of other areas," he said.
Joyce later challenged Robertson in a statement to put a ceiling on debt.
"So what is Mr Robertson’s upper limit? Is it $70 billion or $75 billion? The major bank economists certainly believe it will be higher than he thinks," Joyce said.
"The public will be surprised at how quickly Mr Robertson is backing away from his own numbers when he’s only been in the job three weeks."
It's worth having a look at the full November 7 report released by ANZ's Cameron Bagrie, in which he was less than concerned about his forecast of a net issuance of around $10 billion of bonds per year over the next four years.
"That’s a sizable lift from the Pre-Election Update’s $7 billion run-rate, but not overly problematic for the market to absorb," Bagrie said nearly 10 days ago.
"While the numbers sound large, it is worth remembering that the degree of additional debt issuance would still leave net debt stable at 23-24 percent of GDP over the projection period," he said.
"The economy would still be firmly in surplus to the tune of $4.4 billion by 2020/21."
He did warn that any economic downturn would hit tax revenues, as it would for any Government.
"Spending pressures are all headed one way – and a lot depends on the economy holding up. You don’t have to tweak the growth line too much for the tax take to be threatened," he said.
6. Chris Hipkins a busy man
Newsroom's National Affairs Editor Shane Cowlishaw has interviewed new Education Minister, State Services Minister and Leader of the House Chris Hipkins about the challenges he faces in education in particular.
He has one of the heaviest workloads in the Government, given he has retained the tertiary education portfolio and is managing the removal of national standards. All have immediate challenges, particularly around the shift to new measures to replace the standards, a big issue with dilapidated school properties and the move to the first year of fees-free tertiary education by January 1.
And he's starting the job with a bad cold.
Sitting down with Shane despite his sickness, Hipkins joked that he had the stamina to deal with the job.
“I think I’m up for it. Everybody gets a cold from time to time.”
Shane's piece, first published on Newsroom Pro yesterday, goes into the issues around national standards and the school property portfolio in more depth.
7. Time to cut herd sizes?
Newsroom's new Christchurch reporter David Williams has also interviewed new Agriculture Minister Damien O'Connor about the future of dairy in particular.
O'Connor agreed with many that New Zealand had hit 'peak cow', but also talked about the potential need eventually for herd size reductions.
Cutting livestock herds is “one of the things that has to be considered”.
But he added: “I don’t accept that that’s an automatic need to meet our climate change obligations, but it’s one of the things that has been on the table, and it has to be considered along with a lot of the other things.
“I don’t believe that planting trees in every nook and cranny will deliver the solution, either. Somewhere in the middle there’s a sense of a way forward.”
O’Connor said one of his aims as minister was to have agriculture “accepted by the wider public as being sustainable and valuable to New Zealand”.
“At the moment, the sad reality is that too many people approach the dairy industry with a very negative attitude. And that’s not good for us, as a nation or as an industry."
8. A couple of fun things
Kelvin Davis has been the acting Prime Minister while Jacinda Ardern has been overseas this week. He has been super cautious in answering questions in Parliament, clearly keen not to give the Opposition extra ammunition.
That tactic reached a new level yesterday when he answered all Bill English's questions, bar the first, in Te Reo, thus making it harder for the Opposition to leap on his responses.
France was named overnight as the host of the 2023 Rugby World Cup in a complete shock, given South Africa was expected to win and had been recommended by experts. Ireland, which has never held the cup, was also the crowd favourite. It means France will host the cup twice in five cycles.
Rugby experts grumbled online about the role of France's extremely wealthy rugby culture:
Chris Foy: "Let’s just announce future RWCs now: 2023 France, 2027 England, 2031 France, 2035 England, 2039 France... (USA one day)... $$$$$$$$$$$$$$."