Monday
More Treaty drama today: 12 protesters were arrested after a protest at Te Papa in Wellington, in which a man abseiled from the roof and defaced a large-scale replica of the Treaty of Waitangi with an angle grinder. Their argument is that the English translation of the Treaty should not be on display because it has no validity. The te reo version is the version that matters, is the argument here - which is also advanced by Te Pāti Māori and several prominent academics - and the version perpetuates the false claim that iwi and hapu ceded sovereignty and thus gave the crown – i.e. Parliament - the right to govern the country.
It’s an interesting inversion of an infamous ruling by the Supreme Court in the late-19th century, which found that the Treaty of Waitangi was a “simple nullity”, because Māori as a tribal society held no legal status for the crown to grant rights to. Now, we’ve arrived at the argument that the Crown has no legal status. Which might be progress?
There’s a “Franz Ferdinand Found Alive: World War I mistake” quality to this argument. But this rhetoric and mode of protest will be enormously helpful for the new government, especially the minor coalition partners. ACT and New Zealand First argue Treaty interpretation and adoption of tikanga Māori have gone too far, therefore we need to throw out or rewrite about 40 years of law and cultural progress. Which is a radical and divisive notion - but if there’s an even more radical framework emerging on the left, a comfortable majority of voters will support the Peters-Seymour approach. The major parties will need to re-establish a bipartisan consensus on the role and definition of the Treaty but that will be fiendishly difficult if the minor parties on the left and right can peel votes off them by attacking any form of compromise.
Also worth noting. One of the new government’s first policy reversals was to freeze the Working for Families abatement rate, which would have delivered an additional $37 a week to low-income families with children. We’re seeing ferocious debates about which version of the Treaty to display and changing the names of government departments. But there hasn’t been much discussion about the abatement, even though that will be $2 billion dollars less to a cohort that are disproportionately Māori.
Tuesday
Once again migration numbers - inward and outward flows - are at record highs. Statistics NZ reported an annual net migration of 128,900 during the last year, mostly arriving from India, the Philippines, China, India, South Africa and Sri Lanka. Some 44,500 New Zealand citizens were long-term departures, most moving to Australia. To put that in context: that’s just under 1% of the population leaving the country. But the population still increases by 2.5% because of inward flows, primarily from south and east Asia. These are profound demographic shifts. Historically the New Zealanders migrating overseas have been young and highly qualified; increasing numbers of them are looking around and deciding they’re better off somewhere else. We’d be in terrible trouble if we weren’t able to replace them with skilled workers from other nations - but we’re not building enough houses or other infrastructure to cope with this scale of inward migration. Christopher Luxon has indicated that this isn’t sustainable.
The first post-election poll was released today. The Curia corporate poll showed National down slightly, Labour up slightly although without other polls to compare this to we can’t say if this is meaningful change or just random noise. The most meaningful shift - if it holds up - is the transfer of support from Act to New Zealand First. It’s always hard to say where voters are going to or coming from. Maybe Act lost some supporters to National, which lost a roughly equivalent number to Peters? The important point is that Peters’ war with the media, inflammatory statements about Māori, etc, are a successful strategy. He’ll have an incentive to continue them and Seymour will be looking to compete with him. And this seems to be good for Te Pāti Māori, which has also risen, presumably because it has been the highest-profile opponent to this form of politics.
Wednesday
The House went into Urgency this week. It means it sits from 9am until midnight. The extended hours are needed to roll back many of the previous government’s policies. It has changed the Reserve Bank Act so that it focuses on inflation (no one seems to think this will change anything). And it has scrapped the Fair Pay Agreements. This was a sector-wide wage and conditions bargaining framework advocated by the unions. It was supposed to be one of Labour’s flagship policies - part of Jacinda Ardern’s great transformation, that transformed next to nothing - but implementation was so painfully slow that no agreements under it were ever reached. So, it can be dumped without complications. Incidentally, the Fair Pay framework was based on the Australian labour market model - that wealthier country with much higher wages that our most qualified young people are moving to in vast numbers.
The government also cancelled the funding for the Cook Strait ferry upgrade. The Interisland ferries keep breaking down, and there was a plan to replace them with “rail enabled ferries”, which also required the construction of new port infrastructure. But the cost had quadrupled over the last five years, and KiwiRail was asking for an additional $1.47 billion for the ports. The previous government had agreed to this but hadn’t allocated the funding. Finance Minister Nicola Willis has now told KiwiRail it won’t get it.
There’s risk for Willis here. If the old ferries keep running and there’s an accident then the Opposition can blame her for the consequences. And if they stop running because they just aren’t safe that’ll be a hit to the economy. But by some measures, New Zealand’s infrastructure is the most expensive in the world. Public builds have become synonymous with gargantuan cost-blowouts. (Earthquake strengthening for Wellington’s Town Hall was supposed to cost $43 million: the current estimate is $329 million.) And in government there’s always a strong incentive to keep throwing good money after bad. Willis is signalling to agencies and state-owned entities that she won’t blithely save their white elephants. Contracts will be cancelled and projects will be killed, especially if they were green lit by Labour.
Willis’s decision coincided with the release of a scathing report by auditor-general John Ryan, who investigated two of the previous government’s multi-billion-dollar infrastructure projects: the New Zealand Upgrade Programme and the Shovel Ready Projects. These had a combined total spend of $15 billion. Ryan found that they were rushed, poorly costed and went against the advice of officials, seemingly because the ministers wanted to generate positive media for themselves, and that this process led to cost blowouts. He also criticised the quality of the bookkeeping, finding that it was difficult to see where the money went and whether the spend delivered any value, noting: “I have made similar observations about aspects of the Strategic Tourism Assets Protection Programme, the Cost-of-Living Payment, the Provincial Growth Fund, and – most recently – the reprioritisation of the Provincial Growth Fund.”
This week’s Curia poll suggests that few voters care about Treaty debates. They care about infrastructure, though. If core services like the pipes and the ferries fail, the government will become unelectable. If it can work out how to build and rebuild with a higher level of competency than its predecessor it will be nigh untouchable.
Thursday
Every central banker wants to reduce inflation by engineering a “soft landing”: they raise interest rates, unemployment bumps up, inflation goes down because the economy slows - but it doesn’t slow too much! As inflation returns to the target band they lower rates and avoid a recession. The US economy is currently enjoying growth, high employment and low inflation: a textbook soft landing. New Zealand, not so much. Despite that record high immigration number, we saw -0.3% growth, -0.9% per capita GDP and our export sector is shrinking.
This is worse than the forecasts suggested. National will blame the outgoing regime - we’ll spend the next 3, 6 or even 9 years hearing about the “terrible economic legacy” of the Labour government. But there’s still no positive messaging to offset the sense of decline and mood of national gloom. Perhaps that’ll come next year: because it can’t keep cancelling ferries and scrapping labour policies indefinitely.
