1. The news that mattered this morning

ANZ's survey found confidence about the wider economy slumped again in June, while 'own activity' confidence fell to a lesser extent. ANZ chart.

Phil Twyford has angered Wellington residents by suggesting the new Transmission Gully motorway be tolled, something Labour did not flag before the election. NZIER's business confidence survey due out at 10 am will be closely watched by politicians and economists alike.

Transmission Gully toll

Transport Minister Phil Twyford looks to have added more political pain for the Government from regional drivers with his suggestion reported yesterday that Wellington's new Transmission Gully, which is still being built, could be tolled.

The Dominion Post reported the New Zealand Transport Agency had recommended he agree to toll the four-lane motorway, which neither major party had previously suggested tolling. The project is being funded through a Public Private Partnership and is due to be completed in 2020.

"We were critical of the previous Government's financing of Transmission Gully through a public-private partnership because it increased costs over the life of the project," Twyford was quoted as saying.

"Now that the project is going ahead under the former Government's arrangements, it may make sense to establish a revenue source to offset some of those costs," he said.

Local residents were outraged and, unlike the Auckland fuel levy, this toll was not flagged before the election.

Paremata Residents Assocation President Russell Morrison, who was a spokesman for the Transmission Gully Action Council, wrote in a Dominion Post Op-Ed that residents felt betrayed.

"If NZTA and the other authorities want to raise more funds to maintain our roading network, they should forget about tolls on Transmission Gully and put their efforts into producing a comprehensive road-pricing strategy for the region," Morrison wrote.

Businesses confident?

The political focus on business confidence has intensified over the last week after ANZ published its monthly business confidence survey for June showing both wider business confidence and 'own activity' confidence falling back to post-election lows.

The debate has raged over whether the fall is politically motivated given wider confidence is typically lower under a Labour Government than a National. The debate was somewhat sterile for economists for most of the last six months because wider business confidence is not closely correlated with GDP growth, whereas 'own activity' confidence is more closely correlated and that has remained broadly positive over the last six months, albeit at a lower rate.

However, last week's figures from ANZ showed a worrying fall in own activity confidence too.

The New Zealand Institute of Economic Research (NZIER) is scheduled to publish its June quarter business confidence survey at 10am. It will be closely watched by politicians and economists alike, in particular the own activity figure. I'll be in the lock-up for the release of the figures.