The news that matters this morning
EU FTA and climate change - Prime Minister Jacinda Ardern met with French President Emmanuel Macron for over an hour overnight and emerged pleased with his support for New Zealand's hopes for a Free Trade Agreement with the European Union. Ardern said the EU was due to discuss and vote on a mandate for a deal next month.
“We know there have been roadblocks in the past, but the sense I have come away with today is that our focus on building an agreement that models environmental standards and social outcomes is something France is very much in support of so I was very heartened by the response of President Macron today,” she said in a statement after the meeting.
Ardern also gave a speech on climate change in Paris. She travels for a meeting today in Berlin with Angela Merkel, before going on to London for CHOGM, a meeting with Theresa May and an audience with the Queen.
'Don't pigeon-hole me - Reserve Bank Governor Adrian Orr gave his first interview as Governor, which was published overnight. He told the NZ Herald's Liam Dann that he saw the Reserve Bank's role as more than just keeping on top of inflation.
"The vast majority of people weren't around or cannot remember a period of high inflation," he said, adding the expectations around inflation were now no different to maintaining a stable banking system or supplying notes and coins.
Orr described speculation about whether he'd be a more hawkish or dovish governor as naive.
"I've never had any idea on how I should be pigeonholed — if you'll excuse the bird pun," he said.
"I think people get my concern for the environment, concern for people and concern for this country confused with someone who is just wanting to lower interest (rates) — I get that a lot."
Down but ahead - TVNZ broadcast its latest Colmar Brunton poll last night showing the combined Labour-New Zealand First-Green vote fell to 54 percent from 56 percent in the last poll in February, while National rose one point to 43 percent.
Labour fell from 48 percent to 43 percent, but the Greens rose to six percent from five percent and New Zealand First rose to five percent from three percent. (Corrected from an earlier version that transposed the Green and NZ First results)
Simon Bridges got 10 percent support in his first poll as preferred Prime Minister after being elected National leader. That is below the 20 percent seen from Bill English in the last poll and below Ardern on 37 percent.
2. How the OIO made ANZ dodge HNA's bullet
This morning we feature Newsroom Business Editor Nikki Mandow's detailed look at the Overseas Investment Office's decision to block the takeover of ANZ's UDC by China's HNA.
She found ANZ and UDC customers and funders dodged a huge bullet, thanks to the OIO's due diligence.
One question stands out: why went wrong with ANZ's own due diligence and why did it push ahead with the deal?
Nikki asks this question to start the piece: Why did the ANZ Bank try to sell UDC Finance (and its portfolio of mostly small investors and SME borrowers) to a Chinese group with a junk bond credit rating, murky ownership, a history of questionable related party transactions, and which was being questioned by regulatory authorities in at least four jurisdictions, including the US?
Nikki used documents obtained under the OIA to report the article, which includes comments from the Shareholders' Association criticising ANZ and noting that as much as 60 percent of UDC term depositors planned to leave their money in UDC, rather than move it to ANZ. ANZ declined comment.
See Nikki's full column here, only on Newsroom Pro today.
3. Twyford's way around the debt target
Transport Minister Phil Twyford spoke to transport industry representatives yesterday morning at a conference in Wellington to discuss the Government's proposed draft Government Policy Statement. The Government's own 20 percent net debt target hung heavy in the room..
Newsroom's Thomas Coughlan was there and reports Twyford and Associate Transport Minister Shane Jones were talking up the prospects for alternative funding vehicles for some of the infrastructure spending needed around rapid transit (ie light rail and busways).
Labour has ruled out Public Private Partnerships for schools and hospitals, but is open to the idea, along with special purpose vehicles such as Crown Infrastructure Partners (formerly Crown Fibre Holdings).
When Shane Jones took his turn at the microphone, he was keen to talk up the efforts the Government was taking to finance investment projects.
“Phil has talked of the need to draw on private and public capital to meet our infrastructure deficit,” Jones said.
“There is a significant wedge that will not be funded from public sources, therefore the Government as reflected by Phil, Grant Robertson and myself is open for business,” he said.
Twyford spoke about the possibilities for public-private partnerships, value capture uplift rates in areas benefiting from rezoning and transport infrastructure investment, special purpose vehicles and even the possibility of attracting investment as part of China’s Belt and Road Initiative.
4. What the Spark/TVNZ rights deal means
Newsroom's Co Editor Mark Jennings took a closer look yesterday at the announcement that Spark and TVNZ had formally won the rights to show the Rugby World Cup games off Sky TV.
He writes Spark has made its move into sports coverage before the US online giants get here, but the immediate beneficiary is TVNZ.
At first glance Spark looks to have pulled off a major coup winning the TV rights to the 2019 Rugby World Cup in Japan, but look closer and you can see it's not quite such a loss for Sky TV.
Essentially, as Sky boss John Fellet likes to point out as often as he can, the Rugby World Cup is a free-to-air television event. The International Rugby Board’s rule that the finals must be carried live on free-to-air TV sucks most of the value out of the event for a pay-TV operator.
Spark will also need to be careful on pricing as most die-hard rugby fans are still (and will be for some time) coughing up for their Sky subscriptions.
If it is seen to gouge fans the PR backlash will be withering. Spark sources say its coverage will carry adverts but the “intensity” is likely to be low and not off-putting for viewers.
The reality, of course, is that Spark isn’t overly concerned about making a profit on the Rugby World Cup. The company’s revenue last year was $3.6 billion, so a small loss will seem little more than a rounding error.
The telco’s aim will be to win more customers for its broadband, mobile and wireless products. Expect to see Spark customers get discounts on tournament streaming passes – something in the order of 50 percent.
Offering any more could be considered anti-competitive and draw the attention of the Commerce Commission.
5. The oil and gas industry's view
Gavin Evans is a former Bloomberg reporter who is now the editor of Energy News. He has written a strong opinion piece condemning the Government's decision last week to end block offers for offshore oil and gas exploration.
He argues it has achieved no immediate emissions reductions and was a purely political act.
It is a piece of polemic, but is well argued and reflects what is obviously a deep unhappiness within the oil and gas industry with the decision.
6. Coming up...
Parliament is in a two week recess for school holidays and returns on May 1 for a four-week session leading up to and including the May 17 Budget and its enabling legislation.
The Real Estate Institute is due to publish house sales data for March at 9 am today.
A team of economists from the International Monetary Fund (IMF) is visiting Wellington for its regular bilateral discussion of economic and financial developments and policies (known as an Article IV consultation). They are due to brief journalists later today, including Newsroom's Thomas Coughlan.
Statistics New Zealand is scheduled to report inflation figures for the March quarter on Thursday at 10.45 am.
Economists expect quarterly inflation of around 0.4 percent, which would see annual inflation drop from 1.6 percent to 1.0 percent -- the bottom of the Reserve Bank's target band. The Reserve Bank's last public forecast in February was for 0.6 percent for the quarter and 1.1 percent for the year.
Outside of housing costs (rent and house building costs), there is little inflation. The move to free fees for the first year of tertiary education is expected to offset a 10 percent rise in tobacco excise.
Economists are not expecting the Reserve Bank to hike rates until well into next year, although all will be watching Adrian Orr's first Monetary Policy Statement as Governor closely on May 10.
7. One fun thing...
This reaction video of the Black Ferns colleagues watching that last try in their gold medal win over Australia is adorable.
Black Ferns: "The reaction when your team mates make history in the Gold Coast. RT @rubytui"
8. This morning's political links
These are available in the morning subscriber email.