The news that mattered this morning
Riot act read - Regulators have launched an urgent inquisition into the big four Australian-owned banks, demanding the results of internal inquiries into problems like those seen in Australia be handed over within two weeks.
The Financial Markets Authority and the Reserve Bank of New Zealand took the unprecedented step of sending a joint letter to bank chief executives demanding they provide the full results of all internal inquiries into misbehaviour like that identified by a Royal Commission in Australia. They released the letter in full on Friday afternoon.
FMA CEO Rob Everett and Reserve Governor Adrian Orr sent the letter to the CEOs of New Zealand's banks and their boards on Thursday, asking that the details of internal inquiries and any measures to fix problems be declared and handed over the regulators by May 18. They said they retained the right to make on-site inspections of the banks if they felt the banks had not complied. See the letter in full here on Newsroom Pro.
Peak cow - Environment Minister David Parker spelled out in more detail on Sunday in a Q+A interview how he expects cow numbers to fall.
"In some areas, the number of cows per hectare is higher than the environment can sustain. That won’t be done through a raw cap on cow numbers; it will be done on nutrient limits, the amount of nutrient that can be lost from a farm to a waterway, because it’s not just a dairy cow issue," Parker said.
National Leader Simon Bridges said in response this morning the suggestion of reducing cow numbers through nitrate limits was an "attack on the regions."
$1.1b hole - Education Minister Chris Hipkins accused the previous Government of leaving a $1.1 billion capital spending shortfall in education over the next four years because it under-estimated the effects of population growth. Former minister Nikki Kaye said Labour was in a pre-Budget panic and the 'chickens were coming home to roost' on its pre-election promises. (RNZ)
Overstayers to build KiwiBuild homes? - The NZ Herald's Jared Savage reported hundreds of construction workers who are illegal overstayers may be allowed to stay on to help with Kiwibuild. The report also includes disturbing detail of poor practices on building sites in Auckland.
Mob links - The New York Times reported extensively yesterday on Michael Cohen's background, including his links to Russian mobsters and money laundering. Donald Trump's lawyers now expect Cohen, who handled Trump's most sensitive matters, to 'flip' and cooperate with investigators into the Trump campaigns ties to Russia and election interference. Meanwhile, Rudy Giuliani said Donald Trump may choose to plead the fifth amendment if Robert Mueller issues a subpoena to interview Trump. (NY Times)
Weak wage inflation - US non-farm payrolls figures for April found unemployment fell 0.1 percent to 3.9 percent and below 4.0 percent since 2000 after jobs rose 164,000 in the month. But wage inflation remained weak at an annual rate of 2.6 percent, begging questions yet again about whether the world's largest economy is at full employment and generating inflation that would require faster interest rate hikes. (Bloomberg)
2. So what can PM Peters actually do?
Newsroom's National Affairs Editor Shane Cowlishaw has taken a look ahead to what Prime Minister Winston Peters might get up to once he ascends to the top job some time in mid June for six weeks.
Prime Minister Jacinda Ardern's due date is June 17.
She is expected to release more details later today about exactly how the relationship between her and the New Zealand First leader will work while she’s away, and what she expects of her deputy.
For anything major she will still be calling the shots and will remain involved in decision making, continuing to receive Cabinet papers for some light reading during her time off. For people joking about Peters going rogue, rest assured that almost certainly won’t happen.
Most decisions are usually made in consultation with Cabinet, which Labour controls. Technically Peters has the power to fire ministers or declare a snap election, although the Cabinet Manual declares he should be making decisions in consultation with the actual Prime Minister.
The reality is Peters' time in charge will be business as usual, although the post-Cabinet press conference will likely be slightly spicier, Shane writes.
He is also expected to keep Ardern’s regular Tuesday morning media slots, making his appointment with RNZ’s Guyon Espiner mandatory listening.
See Shane's preview of those six weeks in full here on Newsroom Pro, where it was published first on Friday.
3. Heard of Parrot Analytics?
Technology columnist Richard MacManus looks this week at a New Zealand data mining company that aims to become the Nielsen for ratings in the streaming era globally.
It's a huge prize, but not without challenges, he writes.
For now, Amazon and Netflix have the most actual data on what subscribers are watching, but Parrot Analytics is doing a fascinating job of using proxies to estimate demand for specific shows, actors, show runners and genres.
Parrot's founder Wared Seger above has quietly built a company here that has deals with some of the world's biggest media companies.
See Richard's column in full on Newsroom Pro, where it was published first this morning.
4. Could Ruatoria become the next Te Puke?
Behind the scenes of the debate over the legality of medicinal cannabis is a lively bunch of entrepreneurs hoping to make marijuana one of our next great exports.
Newsroom's Thomas Coughlan has taken a deeper look at the state of New Zealand's nascent industry here at Newsroom Pro. He finds one company in Ruatoria has big plans for expansion.
New Zealand has the right physical climate, but the regulatory climate leaves plenty to be desired, as Thomas reports.
5. A big day for Adrian Orr
New Reserve Bank Governor Adrian Orr will get his first chance on Thursday to explain his views on the economy and the outlook for interest rates when he presents his first Monetary Policy Statement (MPS).
The document will include the first full round of forecasts since he began his five-year term at the end of March. He will also be in a position to talk about more fully what he means by "supporting maximum sustainable employment", which is the new element in his Policy Targets Agreement.
The MPS will be released at 9 am on Thursday here and both Thomas Coughlan and I will be at the Reserve Bank for the news conference that will begin shortly afterwards. Orr is also expected to appear before the Finance and Expenditure select committee early in the afternoon. It will be his first appearance as Reserve Bank Governor. We'll cover that too.
No change in the Official Cash Rate is expected until later next year because wage inflation and inflation more generally is under control, despite the economy being in its eighth year of solid expansion and unemployment being at 4.4 percent. Orr's views on whether more stimulation is needed to reach full employment, and where that might be, will be in focus.
6. Coming up...
Prime Minister Jacinda Ardern is expected to detail more about the arrangements for her six week maternity leave due to start in mid-June when she holds her weekly post cabinet news conference around 4pm this afternoon. Ardern is expected to meet former US State Secretary Hillary Clinton earlier in the day.
Parliament resumes at 2 pm on Tuesday for the second week of its four-week Budget session. The political parties hold their weekly caucus meetings around 2 pm.
The Finance and Expenditure select committee meets at 9 am on Wednesday to discuss the Overseas Investment Act changes, the Base Erosion and Profit Shifting changes to tax legislation and to hear a briefing on the Budget process. It will also hear submissions on the 2018 investment statement.
The Social Services Committee will hear submissions on the Child Poverty Reduction bill from 9 am on Wednesday.
Statistics New Zealand is scheduled to publish electronic card transactions data on retail spending in April at 10.45 am on Wednesday.
The Reserve Bank publishes its May Monetary Policy Statement at 9 am on Thursday. Governor Adrian Orr will hold a news conference shortly after 9 am and then take questions at a Finance and Expenditure select committee from 1.10 pm on Thursday.
The Foreign Affairs, Defence and Trade select committee will discuss in public the Comprehensive and Progressive Agreement for Trans-Pacific Partnership from 9.30 on Thursday.
Finance Minister Grant Robertson will give his traditional pre-Budget speech to the Wellington Chamber of Commerce at 1 pm on Thursday.
7. One fun thing...
This is some good dumb fun from 'You only had one job':
8. This morning's political links
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