8 Things Monday: Orr says no need for NZ bank inquiry; Richard MacManus on Spark's streaming tech challenge

The news that mattered this morning

Not so leaky - The sewage leaks at Middlemore hospital have become shorthand over the last month for health sector under-funding. But were there really sewage leaks at the hospital?

Lucy Bennett reported from the Manukau District Health Board (DHB) this morning that the leaks may not be as bad as first reported. She cited comments from the board that reporting on two sewage leaks in the Scott Building last year were not correct, and there were not ongoing issues.

"We can confirm that despite the dramatic language that has been used around sewage issues at Middlemore Hospital, the sewage leaks were small." One was so small it was cleaned up with water.

"There was no sewage spilling into the building, just some staining on the ground within the soil stack duct. To clean it up, engineering had to mix water on it, so the quantity was less than a bucket," the DHB said in a statement.

'Already tested' - Kim Yong Un announced on Saturday that North Korea had suspended missile tests and had shut down a nuclear test site because it had already verified its nuclear capability.

Experts think the North Korean dictator wants to cement in his nation's nuclear status and remove sanctions at his summit in June with Donald Trump. President Kim is due to meet South Korean President Moon Jae-in this Friday. ( Reuters )

Commonwealth trade deal? - Foreign Minister Winston Peters talked up the prospects for a Commonwealth-wide free trade deal after CHOGM talks in London. He said there was some excitement about the prospects for such a deal during the talks.

"A whole lot of countries, without saying too much about it, realise there's something very exciting and new about this," Peters was reported by Stuff as saying in London. Peters also said a trade deal with North Korea was possible in the very long run.

2. 'No need for NZ bank inquiry'

New Reserve Bank Governor Adrian Orr argued over the weekend that New Zealand's big banks were infinitely better than their culturally suspect parents over the Tasman and an inquiry here was not needed.

Australia's Financial Services Royal Commission has dominated the headlines over the Tasman over the last week, revealing banks and insurers systematically over-charged customers and then lied to customers and regulators about it.

ABC reported the probe went from just plain awful to truly shocking over the last week.

AMP was found to have falsely charged customers for service it didn't provide, and then lied to the regulator and customers repeatedly about it. AMP's CEO resigned last week.

Commonwealth Bank of Australia, which owns ASB, was found to have charged fees to dead people and delayed telling customers and the regulator for two years.

ANZ's financial planners were found to have forged signatures, impersonated customers, fraudulently used power of attorney, falsely witnessed of documents and transferred customer's funds to advisers' personal accounts.

All this prompted a few to wonder if the same big four banks are doing the same here.

New Zealand First Leader Winston Peters called in September 2016 for an independent review of the Australian-owned banks that was focused on the costs of overseas ownership in terms of lost profits. Peters did not secure a review in his coalition agreement, with the only mention being an investigation of growing Kiwibank's capital base and awarding it the Government's banking contracts, which are mostly held by Westpac at the moment.

Orr gave his first television interview to Q+A's Corin Dann over the weekend and was asked directly if there should be a review in New Zealand. See the transcript here. (http://www.scoop.co.nz/stories/PO1804/S00237/qa-reserve-bank-governor-adrian-orr.htm)

Orr described the Australian Royal Commission as "not a happy situation" and that the Reserve Bank was watching it and was concerned.

Orr was also asked about ****criticism from former BNZ Chairman Kerry McDonald about the Reserve Bank**** as a bank regulator and he addressed criticism earlier this month in a NZ Initiative report, which highlighted survey responses showing less than a third respected the Reserve Bank.

Orr said the IMF had given the Reserve Bank a pass mark and the Reserve Bank also relied on APRA to do some of the work. He said APRA had helped find evidence of the practices highlighted in the Royal Commission.

"The true problem and challenge that is going on in Australia is cultural," Orr said.

"It's not whether the regulator was awake or asleep. It's cultural," he said.

He was asked about the culture of New Zealand banks.

"I think it is infinitely better than some of the activity you've seen in Australia," he said, adding an inquiry was not needed here.

"The financial markets authority are all day, every day, thinking harder around the consumer-investor behaviour. We've got ourselves around the prudential regulatory behaviours. We've got the Ministry of Business, Ministry for the Environment, talking about consumer protection. You know, these things are happening daily. Why, suddenly, stopping everything and having a royal commission in search of a problem not yet to be identified? It just doesn't make sense.

"I don't see any lack of confidence in banks in New Zealand. They are highly capitalised. They are highly efficient."

3. A cashless society?

Orr was also asked in interviews about the future of cash in New Zealand, given some other central banks, such as the Riksbank in Sweden, are considering creating their own crypto-currencies.

New Zealand's EFTPOS system means a relatively high proportion of transactions are done without cash, but, as Orr pointed out, cash issuance continues to grow faster than nominal GDP.

See more background in this Newsroom Pro piece by Lynn Grieveson from November last year.

"I find the cash side amazing," Orr said in the Q+A interview.

"The death of cash has been forecast now for a long, long while — greatly exaggerated. There will be less of it; probably smaller denominations. I’m talking globally. But there is always a need," he said,

He pointed out in a Stuff interview that cash issuance was growing faster than the economy.

"We're still printing notes and coins faster than nominal GDP (is expanding), but I don't know who's using them," he said.

"And what are the alternatives and what role should we play in those alternatives?"

Orr was also non-committal about the future of open banking in his interviews.

And the quote of the day:

****Adrian Orr****
in this Hamish Rutherford interview published on Stuff over the weekend:

"Being a ginger, I tend to run towards the fire, rather than away from the fire. That's been to my cost my whole life.".

4. Can Spark fix Lightbox's tech in time?

In this week's technology column, Newsroom's Richard MacManus points out Spark has a lot of work to do before next year's Rugby World Cup to ensure its technology can handle live streaming of sports.

He points out Netflix is the gold standard and it needs to put servers in ISPs locally. That doesn't work with live streaming of sports from overseas and there is a history here of apps crashing when trying to cope with big volume live sports events.

Spark has also had issues with its Lightbox streaming technology with smart TVs.

Only one thing is for sure: Spark is staking its reputation on a glitch-free streaming experience in 2019. If it can pull it off, it’ll be a huge marketing boost for its broadband services and upcoming 5G network.

But if the app crashes just as Beauden Barrett crashes over for a game-winning try, the fallout will be so bad that Spark may have to re-brand itself again, he writes.

See Richard's full column published first on Newsroom Pro.

5. Briefly in the political economy...

First trees - Almost six months after the Government's appointment, Forestry Minister Shane Jones, Associate Agriculture Minister Meka Whaitiri and Gisborne Mayor Meng Foon announced they had planted the first trees of the Government's one billion trees plan. They planted Kōwhai, Tōtara, Kahikatea and Puriri and Matai trees at Tairāwhiti on Sunday.

'Housing for the many' - Britain's Labour Opposition Party launched a green paper over the weekend titled 'Housing for the many' that promised to build one million affordable houses over the next ten years, including the creation of the English Sovereign Land Trust to compulsorily acquire rural land suitable for development at rural land prices. ( The Guardian )

6. Coming up...

Cabinet is due to meet on Tuesday morning with Prime Minister Jacinda Ardern expected to hold her post-cabinet news conference around 4 pm.

Parliament is not sitting this week for the second week of the school holidays.

Migration figures for March are scheduled to be published by Statistics New Zealand on Tuesday at 10.45 am.

ANZAC Day is on Wednesday. We will not publish that day.

Overseas merchandise trade and visitor arrival figures for March are due to be published on Friday at 10.45 am.

7. One fun thing...

President Donald Trump again accused Robert Mueller of running a witchhunt over the weekend.

This response from Jon Favreau was worth it:

"19 witches indicted
5 witch guilty pleas"

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