The news that matters this morning
May next - Prime Minister Jacinda Ardern met overnight with German Chancellor Angela Merkel and said she came away confident of German support for talks to start on a European Union Free Trade Agreement in May. Ardern is now in London ahead of talks with Theresa May and a meeting with the Queen.
German tabloid Bild reported the trip with this headline: "Mit babybauch bei Merkel" (roughly translated as with baby belly at Merkel).
Winston in the Churchill - Foreign Minister Winston Peters met UK Foreign Secretary Boris Johnson in the Churchill War Rooms in London overnight. They jointly announced closer cooperation between the United Kingdom and New Zealand in the Pacific Islands region after the meeting. There were few specific details announced, apart from New Zealand opening a newly-built High Commission in Honiara, Solomon Islands, in 2019 on a site shared with the British High Commission.
Hacked off - In the wake of US and British warnings about a Russian campaign to hack routers globally, GCSB director-general Andrew Hampton warned New Zealand organisations had been directly threatened by Russian state-sponsored hacking, Stuff reported. Ardern said overnight in Berlin she was awaiting advice from the GCSB. (Stuff)
Poachers turn advisers - The Inspector General of Intelligence and Security, which oversees the GCSB and SIS, announced yesterday the establishment of a Reference Group of outsiders for advice, and that it met for the first time last week. It included investigative journalists Nicky Hager and David Fisher and lawyer Deborah Manning, who represented Ahmed Zaoui.
"The Inspector-General stands in the shoes of the public: we try to ask what the public would ask" said the Inspector-General, Cheryl Gwyn.
"The Group brings together people from outside government and the intelligence community who can keep us in touch with legal, social and security developments in NZ and overseas, inform our thinking about our work programme, and provide feedback on how we are performing our oversight role."
Justice Minister Andrew Little said he was surprised by the appointments and Gerry Brownlee said he was concerned about some members' "lack of objectivity" and whether they would get top level security clearance.
Heart attack - Auckland Mayor Phil Goff told the NZ Herald he had a heart attack on the weekend that required two angioplasty surgeries and could have been fatal. He said one artery was completely blocked and another main artery was 75 percent blocked. "If the blockage had of occurred in the other (main) artery it could have been fatal," he said. Goff said his wife Mary prevented him from returning to work this week.
"I am back to normal and, in fact, will be better than normal in a couple of weeks," he said.
Migration attitude - Some are questioning whether the Government will follow through on the promises made by previous Labour leader Andrew Little to strip sub-degree level international students of work rights and tighten temporary migrant worker rules to lift skill levels. Little was always much tougher than Ardern in his rhetoric on this, although Ardern did commit to the policy before the election and it was part of the coalition agreement with New Zealand First.
But will she follow through? The work rights for students decision has already been delayed until well past October after heavy lobbying by the international education sector, while MBIE is still working on the temporary migrant settings.
Ardern's comments on migration are instructive. Her instinct is not restrictive, as illustrated in an NBC interview broadcast overnight, where she was asked about the instance when the Wall St Journal tweeted that she was the Donald Trump of New Zealand.
“That infuriated me, it infuriated me. We are a party who at the same time were campaigning to double our refugee quota. We are a nation built on immigration. I'm only a third generation New Zealander. The suggestion in any way that New Zealand wasn't an open outward facing country, the suggestion that I was leading something that was counter to that value, made me extremely angry.”
That doesn't sound like a Prime Minister willing to carry through with restrictions that would cut migration by 20,000 to 30,000. A decision to abandon the cuts would represent a win for businesses wanting to keep migration of temporary workers high and a potentially explosive difference of view with New Zealand First.
2. IMF suggests debt-to-income limit
It's a bit like a school inspection for the economy.
Every year 'inspector' economists from the International Monetary Fund visit New Zealand to produce their report on their 'Article IV Mission'
They meet the key players at Treasury, the Reserve Bank and in Government, along with people in the private sector, before giving their assessment. The economists then do a media briefing, which was yesterday.
The IMF has been broadly positive in recent years and was again yesterday, but did again warn about high household debt levels and agreed with the Reserve Bank's ongoing push for a debt to income multiple limit.
The IMF was, however, only lukewarm in its endorsement of the Government's adherence to its target of reducing net debt to 20 percent of GDP by 2022.
3. Selling to the poor with a 400% markup
Newsroom is publishing an months-long investigation today into the mobile shopping truck industry that includes shocking video footage.
Every day, trucks piled with overpriced food and clothing cruise the poorer suburbs of Auckland and Wellington preying on vulnerable consumers.
The so called 'mobile shopping trucks' sell everyday goods at inflated prices to people who find it difficult to get to the shops or who are attracted by the credit they offer.
A Newsroom investigation by Sarah Hall found that the trucks were selling food items like 3kg packs of chicken drumsticks at $59 - five times the price the same amount would cost at The Mad Butcher.
Packs of corned beef (24 cans) cost $359 when the same amount could be bought at Countdown for $233.
Kris Faafoi, the Commerce and Consumer Affairs Minister, described the food truck footage as “reprehensible”.
He said the behaviour of those operating mobile trucks - which preyed on the most vulnerable - would sit uneasily with most New Zealanders but unfortunately was relatively widespread.
“If you take a trip around my electorate (Porirua) and some of the areas of South Auckland they’re all over the show.”
Faafoi said the trucks would be part of a consumer finance review that would look at predatory practices. It is expected legislation will be introduced before the end of the year which will build on changes made in 2015.
Faafoi said the initial review would look at issues like high interest, debt collection practices, high fees, and door-knocking tactics.
He suggested one solution to the latter would be for ‘do not knock’ stickers to act as an automatic trespass notice to prevent people being pressured into unfair deals.
4. Inside the 'Russell McFactory'
Newsroom also continues its investigation into allegations of sexual misconduct at Russell McVeagh and elsewhere this morning.
Sasha Borissenko, who broke the original story with Melanie Reid, goes behind the culture of exploitation and ill treatment of junior lawyers overall.
Sasha quotes one male graduate on the culture inside Russell McVeagh.
"It was all “parties and boozing and misbehaving. This [was and] is encouraged and expected”.
It was his experience as a graduate, not a clerk, that was horrific, he tells Newsroom.
“The pound of flesh it took, and drama and anguish it caused really took its toll on me, as I know it has on many others.
“[Firms] basically chain you to a desk, throw away the key and ask you to account for your time in six-minute increments. They ultimately write most of the [time] off because it’s been under-quoted by the partner managing the file, and then they don’t give you a pay rise because you haven’t met your targets despite having no control over either the quote or the write-off.”
Being the lowest member of the food chain at what he describes as “Russell McFactory” meant “you are pitted off against your fellow grads, meant to fight for work on the basis that if you don’t meet your targets and don’t get a pay rise you are essentially shamed into exiting”.
See Sasha's full article here, which details how attempts to unionise such firms have so far failed.
5. 'It's not road vs rail'
I wrote an analysis on April 4 of the Government's Transport reform proposal that pitted the 'Rail Government' against the 'Motorway Opposition'.
Transport Minister Phil Twyford has written an Op-Ed for Newsroom pushing back against that.
Here's the Op-Ed on Newsroom Pro.
"Rebalancing our funding for transport doesn’t have to be an either/or argument between rail and motorways – it’s about having it all," Twyford writes.
I also interviewed Twyford in an '8 Things' video where I ask him 8 questions about the Government Policy Statement. The video is at the bottom of our report yesterday.
I welcome any feedback.
6. Coming up...
Statistics New Zealand is scheduled to report inflation figures for the March quarter on tomorrow at 10.45 am. Thomas Coughlan will cover it for Newsroom.
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 did occur to me too.
"When you forget to buy a gift for your host and have to stop at the airport shop."
8. This morning's political links
These are available in the morning subscriber email.