The news that mattered this morning
Extra money found - Finance Minister Grant Robertson said this morning that the Government had found an extra $1.4 billion over the next four years from cost savings and extra tax revenues to help it fund its plans.
He said in a speech to a business audience in Auckland the May 17 Budget would deliver a surplus in 2018/19, and in subsequent years, and meet the Government's Budget Responsibility Rules.
"We owe it to future generations to be fiscally responsible, given the risks New Zealand faces in terms of natural disasters and global economic shocks," he said.
He said he had asked ministers to reprioritise their plans and over the last five months they had come up with savings worth $700 million over the next four years. He said the Government was also finalising work started by the previous government to ensure foreign and multi-national companies pay more tax in New Zealand.
“As a result of these changes to make our tax system fairer, and our initial reprioritisation drive, we have freed up about $1.4 billion of funding over the next four years which will be re-invested in this Government’s priorities."
Amazon tax - Revenue Minister Stuart Nash and Customs Minister Meka Whaitiri are expected to announce an 'Amazon tax' (GST of 15 percent) on goods bought online for less than $400, at a bookshop in Wellington later today, the NZ Herald reported.
Currently, goods bought online for less than $400 are effectively exempt from GST. The NZ Herald reported the tax would raise $81 million a year within two years as large sellers would be required to register for GST. The last Government imposed a 'Netflix' tax that applied GST on imports of services.
Arched eyebrows - Prime Minister Jacinda Ardern weighed into the debate over competition in petrol retailing yesterday, describing leaked emails on BP's pricing strategy as likely to be seen by motorists as unfair.
"To hear so blatantly that pricing decisions are being made that sit so far outside the price of crude oil, that sit outside the exchange rate, that sit outside, for instance, operating costs, will no doubt be raising eyebrows with consumers," Ardern told her post-cabinet news conference.
Ardern said Energy Minister Megan Woods, who is already overseeing a fuel price review, had called in BP for a meeting to explain the emails. She also noted Labour's plan to give the Commerce Commission the power to do market studies and one was expected for fuel retailing.
Iran drama - Israel announced overnight that it had proof Iran stored documents about its nuclear programme in breach of its agreement with the US and European allies. It called on the US to rip up the agreement, which pushed the oil price up to US$69/barrel. (Reuters)
2. Ardern sticking to budget rules
Prime Minister Jacinda Ardern yesterday ruled out any review of the Government's Budget Responsibility Rules before the election in 2020, pushing back on talk from the Greens and others on the left that a pre-election review was needed.
“I have no expectation of them changing at this present point in time and we’ve campaigned for them to hold over for the entire three years,” she said.
Asked whether she would review the rules going into the next election, she again expressed confidence in the Government’s ability to balance investment commitments with the rules, which have been described as a ‘fiscal straitjacket’.
“It is as important for us to make sure we meet the competing needs that we have around strong services for health and education as it is to also make sure that we keep the books in good shape, that we are ready for any economic shocks we might experience as a small isolated vulnerable nation. That is what a competent Government does and that is what we are doing,” she said.
Ardern has come under increased pressure to loosen the Budget Responsibility Rules, which have again been thrust into the spotlight after announced it would break its first election commitment. Health Minister David Clark announced this weekend that Labour’s promise to reduce GP visits by $10 from July 1 will now be phased in over the next three years. Ardern also confirmed that yesterday.
The Budget Responsibility rules have a little-known carve out, which allows Labour and the Greens to reassess them before going into the next election.
Green Party co-Leader James Shaw said that it was always the intention to review the Budget Responsibility Rules during the Government’s first term.
“We will want to review those closer to the election,” Shaw said.
“We said that we would stick through them in this parliamentary term and we might end up end up sticking with them in the next parliamentary term,” he said.
3. Auckland's fuel tax gets green light
Auckland Council voted in favour of a regional fuel tax to fund transport infrastructure in the city yesterday.
The council voted 15-2 in favour of an 11.5 cent increase in fuel excise for the Auckland region.Councillors Greg Sayers and Sharon Stewart opposed the motion.
The council still requires the Government to pass legislation to implement the tax. The Land Transport Management Amendment Bill was introduced in March and is expected to be signed into law in June so that motorists start paying the tax from July 1.
Transport Minister Phil Twyford applauded the council for approving the tax.
“The Council’s National-aligned Councillors deserve a special mention for standing up for their local communities and defying their party heavyweights," he said.
The public has until May 14 to consult on the Regional Fuel Tax.
Aucklanders will be stung twice at the pump as the Government has announced that it will also increase fuel excise by between 9-12 cents a litre over three years nationally, meaning Aucklanders will face an increase in fuel excise of at least 20 cents a litre over three years.
National Party Leader Simon Bridges told media that he would scrap the regional fuel tax if elected in 2020.
4. 'Waka jumping bill undemocratic'
Political and legal academics told a select committee late yesterday they believed Attorney-General David Parker was wrong in his assessment the waka-jumping bill does not breach the Bill of Rights, Shane Cowlishaw reported for Newsroom.
Human Rights Commissioner David Rutherford also called for Parker to release the legal advice related to his decision, while other submitters, including current and former MPs, told the Justice Select Committee the bill was an attack on democracy.
Formally known as the Electoral (Integrity) Amendment Bill, the proposed legislation would force list MPs out of Parliament if they quit or were expelled from their party. Electorate MPs would face a by-election.
It has been introduced as part of New Zealand First’s coalition agreement with Labour. Some notable examples of waka jumping include Hone Harawira’s departure from the Maori Party to the Mana Party and Peter Dunne, who left Labour to found United NZ.
New Zealand First itself features heavily in party-hopping history, with six MPs including Tau Henare and Tuariki Delamere leaving to form the short-lived Mauri Pacific. More recently, the party’s MP Brendan Horan was expelled by Winston Peters but stayed on as an independent.
Victoria University professor Claudia Geiringer, representing a cohort of academics who had earlier slammed the legislation, described it as a blunt instrument that was searching to fix a problem when there wasn’t one.
“You don’t use a sledgehammer to crack a nut," she told the committee on Monday.
In his assessment of the legislation, Attorney General David Parker found it did not breach the Bill of Rights although the issue was “finely balanced”.
But Geiringer disagreed and said it was the overwhelming view of the academics that the bill may violate the Bill of Rights Act by limiting freedom of expression and association.
It was also highly unusual that the Attorney-General had only released his own decision while withholding the advice he had been provided by Crown Law, she said.
Committee member Chris Bishop, a National MP, said he had spoken to Parker about releasing the advice but he had refused to waive privilege, stating it did not provide him with a clear choice either way.
Another National MP, David Carter, also appeared to speak to his submission, made in his role as a member of the International Parliamentary Union’s human rights committee.
Carter said that in this role he often dealt with terrible breaches by parliamentarians from countries such as Cambodia and the Maldives, and while New Zealand was not comparable, this bill would raise questions.
He believed the aim was not to make Parliament more robust, but to improve the stability of the current Labour/New Zealand First coalition.
“I was the junior whip between 1996 and 1998 when the National/New Zealand First relationship disintegrated so I know about instability but I also know the pressure that some of you may be under from a coalition agreement point of view to see this legislation through.”
He implored MPs to vote against the bill to prevent damage to democracy, but if that could not be done he recommended a time limit be placed on the legislation so that it expired at the end of the current coalition.
Keith Locke, a former Green MP who was in Parliament between 1999 to 2011, told the committee the bill punished politicians for speaking their mind if they disagreed with their party.
The point of parliamentary debate was to convince the opposition of the merits of your legislation, but this would gag those whose minds were changed during this process, he said.
“There is an important constitutional principle here and that is all MPs are elected as independent, thinking beings no matter the party label attached to them at the election. They are not simply party robots.”
The Greens have wavered in their support for the waka jumping bill, with both Julie Anne Genter and Marama Davidson unconvinced when asked for their thoughts during the recent leadership debates.
5. Briefly in the political economy...
Construction confidence collapse - ANZ reported its business confidence survey for the month of April found falls in confidence about the wider economy and businesses' own activity. Construction industry confidence, in particular, fell sharply.
A net 23 percent of businesses were pessimistic about the year ahead, down 3 points from March. Firms’ views of their own activity, which is more closely aligned to GDP growth, fell to a net 18 percent optimistic from a net 22 percent last month.
Construction sector confidence fell to its lowest level since 2008. Residential construction confidence fell to a net 9.1 percent from 33.3 percent in March. Excluding construction, aggregate confidence fell only one point.
6. Coming up...
Parliament resumes at 2pm today after a two week break. It will sit for the next four weeks including the Budget on May 17. The parties hold their caucus meetings from 10 am, which we will cover.
New Zealand jobs and wages data for the March quarter is due to be published tomorrow at 10.45 am. Thomas Coughlan will cover those for Newsroom.
The US Federal Reserve's Open Market Committee is not expected to announce an interest rate increase at the conclusion of its two-day meeting on Thursday morning New Zealand time, though it might flag a steeper pace of rate hikes ahead.
7. One fun thing...
Have I got news for you sums up the Michelle Wolf situation:
"After Republicans take offense to 'brutal' ridicule of Trump, comedian Michelle Wolf instantly resolves the situation by sending them thoughts and prayers."
8. This morning's political links
These are available in the morning subscriber email.