Newsroom Pro's 8 things at 8: Free and frank advice?; Polytechs in big trouble; $36 bln climate change bill; Rod Oram's column; Weekend Reads


In today's email we followed up the Briefings to Incoming Ministers released yesterday, and asked how 'free and frank' our public servants really can be.

1. Finally, some free and frank advice?

The Briefings to Incoming Ministers (BIMs) arrived in a rush at midday yesterday, giving journalists and others a mountain of reading to understand the details and thrust of the ministries' advice to the new Government.

This is rare moment around the Beehive when officials who may have bottled up their toughest advice for nine years while the other side was in power are able to finally unload their juiciest details on a new Government.

We also get to see advice that may have been suppressed or redacted by the other side, but which is also convenient for the new Government to release.

There is a growing debate about the politicisation of the public service under Governments of both flavours over the last 30 years or so, which has staunched this flow of free and frank advice.

Chris Eichbaum and Richard Shaw from Victoria University's School of Government and Massey University respectively have researched the 'free-ness and frank-ness' of New Zealand’s public servants in both 2005 and 2017 to see what officials think (as opposed to what their bosses say publicly) and whether it has changed.

They found officials became more guarded in and around an increasingly politicized Beehive and suggest a few remedies for the new Government to consider in this piece first published this morning on Newsroom Pro.

Eichbaum and Shaw give some rare insights into how the public service has changed and pose some tough questions for the likes of the State Services Commission and the new Government about just how free and frank all that advice is.

2. A potential climate cost of $36 bln

Officials have warned the Government that meeting its greenhouse gas commitments under the Paris Agreement could cost up to $36 billion by 2030 and it should do as much to adapt to climate change as it does on preventing it, Newsroom's Eloise Gibson reports from the Briefing for the Incoming Minister for Climate Change.

New Zealand needs to start focusing as much on adapting to climate change as it does on preventing it, officials have urged in a briefing to James Shaw.

Given that New Zealand’s climate is already changing, we should put more effort into readying for changes that could threaten our farm-heavy economy and our way of life, says the briefing.

Despite knowing what’s coming, the response so far has largely been reactive –responding to floods, droughts, and coastal erosion as they happen, rather than the “deliberate, planned and coordinated” approach that is needed, says the summary.

Elsewhere, the briefing skewers a popular excuse often used by small countries to justify not acting strongly to curb emissions, namely that their contributions are tiny in a global sense. It notes that while New Zealand generates less than 0.2 per cent of global emissions “the sum total of small actors’ emissions is significant…countries that individually contribute less than one per cent of global emissions together make up over a quarter of global emissions.”

Our high per-capita emissions also pose a risk to “brand New Zealand”, as readers of the international news will already know.

But the cost of bringing emissions down is not small. The briefing puts the cost of meeting New Zealand’s first commitment under the Paris Agreement at $14 billion to $36 billion between 2021 and 2030. That’s the estimated cost to remove about 220 million tons of carbon from our economy, by cutting domestic emissions, planting trees and buying carbon credits from overseas.

The figures assume there is no carbon price applied to agriculture, no technological leaps, and conservative growth in forestry. The briefing advises the Minister that there is only a short window to set a plan for meeting New Zealand’s first target under Paris, to reduce emissions to 30 per cent below 2005 levels by 2030.

See Eloise's full report on the climate change BIM on Newsroom Pro, where it was first published yesterday.

3. 'Price water and boost EPA funds'

Sharper incentives to be frugal with water drawn from New Zealand’s lakes and rivers will help clean up our waterways, faster, according to a briefing to the incoming Minister for the Environment, Newsroom's Eloise Gibson reports from the BIM from MfE.

As New Zealand’s population and farming industries keep growing, the demand for fresh water will rise, even as climate change causes more prolonged droughts and periods of low flows in rivers in parts of the east and north of the country.

Ministry for the Environment officials have called for several changes: notably, more central government direction to councils and “sharper economic incentives” to send water where it will be most valuable.

That may mean introducing a cap and trade scheme, or a price on water or its discharge, say officials.

Right now, fresh water is given out on first-come-first-served basis, and people wanting new permits may find them all-but-impossible to get, if they are in already over-stretched catchments.

“A new approach to allocation is needed which will better value fresh water and encourage smarter production methods for commercial use,” says the briefing. “The Ministry advises doing this through changes in decision-making and accountability, and better allocation tools.”

Officials mooted the idea of creating a new national water authority to run a national market for water. The authority could also monitor and enforce the rules.

See Eloise's full report on the BIM here on Newsroom Pro, where it was first published yesterday.

4. Regional polytechs face extinction

Regional polytechnics face a grim future with many teetering on the edge of financial failure, Newsroom's Shane Cowlishaw reports from the BIMs.

The dire warning was included in the Tertiary Education Commission’s (TEC) briefing to its incoming Minister Chris Hipkins.

While most Institutes of Technology and Polytechnics (ITPs) were making “ends meet”, an over-reliance on international education was the only thing keeping many providers afloat and many were vulnerable to an economic shock, the TEC said.

“Many ITPs - especially outside the big metropolitan centres - have no buffer against a downturn in revenue or increase in costs, and little or no money to invest in capital works or operational improvements.

“Over time, unless something changes, these ITPs will experience an event that tips them over the edge, or will gradually become less capable of delivering high-quality and attractive offerings to students.”

The situation appears particular bad for regional institutions, who lack the economies of scale of larger organisations and struggle to invest in upgrades and innovations.

An illustration of the problems facing such education providers is Tai Poutini Polytechnic, who last week was given the lowest ever assessment ranking by the New Zealand Qualifications Authority. The TEC briefing singles out Tai Poutini, which received a $3.6 million bailout in April, as a particular concern, but also said there were other institutions where there were serious risks.

See Shane's full report first published on Newsroom Pro here.

5. Rod Oram's weekly column

In his weekly column for Newsroom, Rod Oram looks at moves afoot in commercial property to get serious about energy efficiency. He also shows how it can be done with one particular family's home and cars (the Orams' home and cars above).

See the full column published here on Newsroom Pro today. It is republished on the open Newsroom site on Sunday.

6. Weekend Reads

Back by popular demand, here's a few longer reads on economic, social and political matters for your weekend.

The New York Times' scoop on Harvey Weinstein looks to have been the biggest of the year, unleashing a wave of resignations and accusations. Here's the latest detailed New York Times report on how Weinstein relied on powerful relationships across industries to provide him with cover as accusations of sexual misconduct piled up for decades.

This rumination by the Wairarapa Academy for New Sinology (this is a thing and a good thing at that) of New Zealand's links with China on the 45th anniversary of the normalisation of relations between the two countries is very useful on the growing discussion around Anne-Marie Brady's paper (Magic Weapons: China's political influence activities under Xi Jinping) which got a good airing on Morning Report this week.

Newsroom has been covering this issue closely in recent months, as reported by Newsroom's David Williams on November 14 and Newsroom's Mark Jennings on September 19.

This Bloomberg piece on the disconnection between US productivity and worker pay since the late 1970s is a well worth a read, as is this 2016 paper from the CTU's Bill Rosenberg (via AUT) on the New Zealand experience (including this stunning chart below that nails the New Zealand-specific issue).

The Englightened Economist has published a good review of Dani Rodrik's latest book on globalisation called Straight Talk on Trade, including this quote from the book: "It is dawning on economists and policymakers that they severely underestimated the political fragility of the current form of globalization…. This backlash was predictable."

I love that the Bank of England has a special site for its staffers to blog called Bank Underground. Dan Nixon writes in this excellent post about whether the 'attention economy' is actually slowing down the wider economy.

This from Nixon was eye-opening: "A survey from 2013 found that we check our phones 150 times per day, or roughly once every 6½ mins; a more recent study found that the average smartphone user spends around 2½ hours each day on his or her phone, spread across 76 sessions." It's the best blog post I've read in a long time. If you click one thing from today's email, make it this one.

The New York Times covers a bribery case against Chinese energy giant CEFC that says a lot about how China's state-backed companies are operating in a world of diminishing resources and corrupt officials. A lot of bribes are being paid.

"Chinese businesses like CEFC are increasingly mixing money with diplomacy as they scour the world to secure valuable natural resources. The criminal complaint against Mr. Ho shows how the practice can be distorted, offering rare insight into a vast, mysterious conglomerate with ties to the Chinese Communist Party," the New York Times writes.

Meanwhile (and they're not unrelated), China has stepped up its fight to reduce the leverage pumping up its economy since the big Party Congress in October, as Bloomberg reports here in detail.

7. Coming up...

Financial markets are keenly awaiting the results of US jobs data due early on Saturday morning New Zealand time. Economists expect around 195,000 new jobs were created in November. Markets are also keeping an eye on the US Congress for news on tax cuts and a potential US Government shutdown.

TVNZ will publish the first substantial political opinion poll result since the election on Q+A on Sunday morning. TVNZ Political Editor Corin Dann explains here why TVNZ and Colmar Brunton have decided to change its polling to include 50 percent mobile phones.

Finance Minister Grant Robertson is set to give a breakfast address to a Chamber of Commerce event in Auckland on Monday morning.

Next week, Prime Minister Jacinda Ardern is set to release the details of Labour's families package and its legislation to target reductions in child poverty. Parliament is set to sit under urgency. She will chair a cabinet meeting on Monday morning and hold a news conference around 4 pm later on Monday.

Robertson is set to release the Half Yearly Economic and Financial Update (HYEFU) with a new Budget Policy Statement early on Thursday afternoon. It will reflect the new Government's policies in its 100 day plan and Treasury's latest forecast.

The Press Gallery's Christmas Party is on Wednesday Thursday evening. I will have to behave myself to ensure I can understand and report on the HYEFU the next day.

8. One fun thing

Bitcoin keeps rising exponentially, as does scepticism about its future, often from unusual and well-informed sources.

Sam Morgan: "Has anyone thought of using the blockchain to sell real estate on distant planets ? Verifiable ledger, beyond government control and a finite supply of hectares (sort of). Ticks all the boxes."