- The news that mattered this morning
'Get on with it'- ANZ Chief Economist Sharon Zollner said yesterday in a research note distributed to the business client base of the country's biggest banks that a case could be made for the Government to get on with using its own balance sheet to address infrastructure deficits (ie to lift its debt target).
"We think an argument can be made for increasing near-term debt targets for the purpose of growth-enhancing infrastructure spending," Zollner wrote.
"The Government books are in a good position and years of strong population growth but constrained Crown capital spending have put significant pressure on infrastructure," she wrote.
"In our view, simple, transparent debt financing would be optimal. A long, relatively smooth forward-looking pipeline of appropriately prioritised infrastructure spending, with the option to ramp up if economic activity were to soften, should be the goal. The sector is resource-constrained, but given the long lead time of infrastructure projects, it does not seem an inopportune time to get planning underway."
The full note is well worth a read, and the chart above tells the key story. The Government needs to spend heavily on infrastructure to keep up with past population growth, let alone future growth.
Ministry of Works? - Anne Gibson reported Economic Development Minister Shane Jones as saying he wanted to beef up the infrastructure planning unit within Treasury, or create and entirely new state agency.
"At the moment, their ability to radiate influence is not at all flash," he said.
Culture change required - Prime Minister Jacinda Ardern told RNZ this morning a culture change was required within the Ministry of Social Development after it was revealed it stopped a solo mothers' benefit after two Tinder dates.
"We need culture change. I've had conversations with the minister about that. She's gearing up to do a comprehensive piece of work in this space," Ardern said, adding the minister would have an announcement soon. The Ministry insisted it made a one-off mistake.
Apology - Columnist and PR man Matthew Hooton apologised to Steven Joyce over comments he wrote in his last column for NBR, saying any suggestions of unethical behaviour were untrue and not his intention.
Retiring - Grey District Mayor Tony Kokshoorn announced yesterday he would retire next year after 15 years in the job.
3 percent? - US Treasury markets sold off overnight with the key 10 year bond yield rising to a four-year high of 2.998 percent, just sky of the key three percent level, but not quite exceeding it. Shorter term US interest rates have risen in recent weeks on renewed expectations of two or three hikes in the Federal Funds Rate this year by the US Federal Reserve. The New Zealand dollar dropped to a three-and-a half month low of 71.4 US cents as the higher US interest rates made the US dollar more attractive.
We're letting others cover the birth of the royal baby and columns about Jacinda Ardern and Clarke Gayford. Life's too short for us.
2. Customs' painful 'lessons learned'
Big IT projects often go wrong and they seem to go wrong an awful lot inside Government agencies.
They may go wrong just as often in large private organisations, but are not heard about because of the requirements of the Official Information Act don't respond to them.
National Affairs Editor Shane Cowlishaw has done us all a service by delving into an official Deloitte report into the five year delay and the $28 million cost blowout in Customs' new Joint Border Management System with the Ministry for Primary Industries.
This is a useful cautionary tale for CTOs, CEOs, ministers and boards everywhere on what can go wrong in these big IT projects and the resulting impact on an organisation's progress and morale.
The Deloitte report found fault with Customs for not stumping up enough money for the required staff and found the project only got back on track after the personal intervention of then Finance Minister Bill English. It also critisised IBM, which initially ran the project.
See Shane's full report here on Newsroom Pro, where it was first published yesterday.
3. Shimmying around the debt target
Newsroom's Thomas Coughlan has been tasked with covering local government, infrastructure, transport and housing in the years ahead.
This is already one of the biggest action areas for this Government as it grapples with decades of infrastructure under-spending, a migration-led population shock over the last five years and plans to build 100,000 affordable houses and at least four new rail lines over the next decade.
A key question is whether the Government will be able to create the special purpose vehicles needed to fund the infrastructure under all this development. The Government does not want to breach its own 20 percent net debt target and councils have their own self-imposed debt restraints, which mean they are looking beyond their own direct balance sheets.
Thomas has taken a deep dive into how the Government is progressing with the hunt for special purpose vehicles and has talked to the experts in Treasury and the LGFA.
It's clear a lot of the detail needed to convince the ratings agencies that these vehicles aren't actually issuing government or council debt has yet to be worked out. That detail will also require legislation.
In my view, it begs the question: why waste all this time and money in higher interest costs by creating special vehicles. Why not just borrow with the central Government's balance sheets and keep those assets in Government ownership? Those assets will include rail lines, motorways and the infrastructure around them, which are usually owned by the central Government anyway.
See Thomas' full report here on Newsroom Pro, where it was first published on Friday.
4. 'We're just as vulnerable'
The debate over the use of Facebook to screw the scrum of election campaigns has so far largely been limited to what happened in the US elections of 2016 and the 2016 Brexit vote.
No one has suggested yet that sinister forces used Facebook to unduly influence elections in New Zealand last year.
But Thomas Coughlan has had a closer look at our electoral laws and has found us vulnerable to abuse.
There is no requirement on parties to archive their campaign ads. This isn’t an issue when an ad goes out to millions of viewers on television or hundreds of thousands of readers in a newspaper, but a spurious advertisement targeted at a small number of voters could fly under the radar unchecked and unchallenged, he writes.
In New Zealand election advertisements must have a promotor statement with the name and address of the promotor on it, but attribution is not the problem. The Trump campaign’s ‘dark posts’ also carried authorisation from the campaign. The problem was no one else could see them outside of their direct targets.
See Thomas' full comment piece, which was published first on Newsroom Pro.
Also, see this richly reported New York Times piece on how Facebook was used to spread fake rumours in Sri Lanka that set Buddhist against Muslim.
5. Mapping our chemical romance
One of Newsroom's Auckland reporters, Farah Hancock, writes about education, the environment and technology. She reports today on the Environment Protection Agency's plan to map the types and location of chemicals used in farming and other activities.
She spoke to EPA CEO Allan Freeth.
Freeth expects the final output of the two-year mapping project will be a mix of geographic maps and diagrams illustrating chemical usage and toxicity. He estimates the project will cost between $200,000 and $1 million.
Chemicals will be mapped in order of risk. The EPA has a list of 300 chemicals which cause concern globally, 30 of which they consider high-risk. Among them are the herbicides paraquat and mecoprop and the pesticide chlopyrifos.
6. Coming up...
Cabinet is due to meet this 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 today at 10.45 am.
ANZAC Day is tomorrow. We will not publish Newsroom Pro tomorrow.
Overseas merchandise trade and visitor arrival figures for March are due to be published on Friday at 10.45 am
ANZ publishes its Roy Morgan survey of consumer confidence in April at 10 am on Friday. That will also mean Roy Morgan's monthly political opinion poll is not too far away.
7. One fun thing...
For those similarly bemused by a strange column in the NZ Herald, here's GCSB Intercepts this morning:
"Intercepted In London"