1. The news that mattered this morning

May 28 decision - Prime Minister Jacinda Ardern said yesterday the Government and industry leaders would have to make a decision within seven days on whether to try to keep eradicating mycoplasma bovis, or whether to accept it is here to stay and manage its effects. A final decision looks set to be made at next Monday's cabinet meeting, which is just four days before the June 1 'Gypsy Day' when sharemilkers move thousands of cows around the country.

Speaking after visiting farmers in the Waikato on Monday morning, Ardern told her post-cabinet news conference she wanted to eradicate the disease and that "hope remains", but the final decision would depend on how far it had spread and advice from a group made up of MPI and other advisers. She expected the cost to the Government to rise above the $85 million specified in Budget 2018 and would not be drawn on the likely amount farmers would pay. The Budget indicated cost sharing by DairyNZ and Beef and Lamb of $11.2 million, but Ardern said the negotiations were continuing.

She said the eradicate-or-manage decision would not be dependent on the cost or a final agreement on cost sharing. She also said there was still a chance of a prosecution of whoever brought it into New Zealand.

Justice reform - Ardern signaled the beginning of a politically risky debate on bail and sentencing laws as she confirmed a mega-prison would not be built at Waikeria.

She said a final decision had not been made about the exact form of a necessary Waikeria rebuild, but she ruled out the building of a 3,000 bed mega-prison as outlined by the previous Government. She pointed to the rise of the number of prisoners on remand from 1,800 to 3,000 since bail laws were toughened in 2013, despite predictions of an increase of just 50. This was in contrast to a static crime rate.

She acknowledged changes to the prison and justice system would be needed in the long run to keep the prison muster in line with that static crime rate.

Gentle rebuke - Ardern gently rebuked Transport Minister Phil Twyford for describing Treasury analysts as "kids" in disagreeing with its advice about Kiwibuild.

“Some of these kids at Treasury are fresh out of University and they’re completely disconnected from reality," Twyford was quoted as saying last week.

Ardern told the news conference she did not agree with Twyford's characterisation, but did agree with him that MBIE's forecast of the likely impact of Kiwibuild was more accurate than Treasury's.

"I have made that clear to Minister Twyford," she said when asked if she had expressed her disappointment to him.

Roughed up - Stuff's Andrea Vance reported this morning the Government had pulled a proposal to the South Pacific Regional Fisheries Management Organisation restrict deep sea trawling after the fishing industry threatened legal action and called for the intervention of Foreign Minister Winston Peters. The proposal was designed to protect orange roughy stocks and prevent the destruction of seabed life.