Danyl McLauchlan analyses the past week in politics in an online exclusive story.
Friday: Commerce Commission targets banking sector for market study
The Commerce Commission is doing another market study, this time into the banking sector, which – like many of New Zealand’s most important markets – seems incredibly profitable and not especially competitive. The Reserve Bank has previously noted that New Zealand’s big five banks are more than twice as profitable as the smaller banks and they’re more profitable than banks in other comparable economies.
The commission’s previous big study was into the grocery sector. It found the supermarket duopoly was earning excess profits of a million dollars a day, and that they were stopping new competitors from entering the market by taking out restrictive land use covenants that prevented rivals from building new stores. The government has blocked the further use of covenants and appointed a Grocery Commissioner to monitor the sector.
Most MPs seem to regard commerce as a dud portfolio: a brief stop on the way to better things higher up the Cabinet ladder. But an activist minister in commerce and consumer affairs could probably do more to help low- and middle-income New Zealanders than any other portfolio. However, they’d make so many influential enemies doing so that they’d probably never climb any higher.
Sunday: Labour’s GST exemption overshadows Green’s energy initiative
Labour announced its GST exemption policy on Sunday. It received extensive coverage, mostly negative, and it eclipsed a much better policy: the Green Party’s scheme to provide up to $36,000 in grants and loans to make homes warmer and more energy efficient. It’ll fund the installation of solar panels, double-glazing, EV chargers, heat pumps, the replacing of gas appliances, and insulation.
Australia has spent the past 10 years rolling out rooftop solar at astonishing speed and scale. PV panels on houses have been funded by various grants and rebates across state and central government, and they’re everywhere. Household power prices in Australia are significantly cheaper and coal stations are being decommissioned because the distributed solar grid generates so much clean energy. Although it’s true that most of the country is a gigantic furnace-like desert, which makes solar highly efficient, this is a successful policy and an obvious one for New Zealand to imitate.
Monday: Former MP launches new party amid controversy
Former National Party MP Alfred Ngaro announced he’s forming a new political party. On the one hand, Ngaro insists this is not a Christian party, but, on the other, his party is called NewZeal. He says he is running for Parliament again because of National’s failure to oppose law changes on gay conversion therapy and gender identity.
There’s probably a gap in New Zealand’s political market for a religious conservative party, but a very unholy curse seems to descend on every party that tries to fill it. Christian Heritage, the Kiwi Party and Colin Craig’s Conservative Party have all been smote by terrible scandals and civil wars. With less than two months to campaign, it’ll take a miracle for Ngaro to win the roughly 80,000 votes needed to make it into Parliament.
It’s getting very crowded in the small-party space. In the past year, we’ve seen the registration of an Animal Justice Party; DemocracyNZ – an anti-vaccine mandate party led by another former National MP, Matt King; Freedoms NZ, led by Sue Grey and Brian Tamaki (together at last); the Leighton Baker Party, led by conservative activist … Leighton Baker, and the New Nation party, also an anti-vax project.
Tuesday: Immigration trends spark debate on visa exploitation
Immigration NZ recorded record numbers of migrants – predominantly from India, the Philippines, China, South Africa, and Fiji – entering the country in the first half of this year. But this is offset by record numbers of New Zealand citizens leaving: about half of them for Australia.
Over the past few weeks, there’s been growing criticism of the government’s Accredited Employer Work Visa scheme. This was introduced last year in an attempt to resolve the dire workforce shortage, and it was also supposed to reduce exploitation in the sector. But it seems to have made things a lot worse. Because the visa is tied to a specific employer, some employers are charging applicants tens of thousands of dollars for a visa, then firing them shortly after they arrive.
This week, Newshub broke the story of small, three-bedroom South Auckland home into which dozens of migrants had been squeezed. They’d paid many thousands for visas, received no work and been reduced to begging after running out of food.
Immigration New Zealand has launched an investigation, but migrant advocates are calling for the government to suspend the visa scheme in light of the widespread abuse taking place. Immigration Minister Andrew Little insists most of the visas issued under the scheme are working fine.
Economics commentator Bernard Hickey warns in his Substack that New Zealand risks turning into “the Dubai of the South Pacific” – a nation with a labour force powered by a quasi-legal form of slave labour.
Wednesday: Labour unveils paid parental leave bill
A few weeks ago, Labour refused to support a paid parental leave member’s bill introduced by National, on the grounds that it was “unimplementable”. Some left-wing supporters found this baffling, and this week, we discovered the real reason: yesterday, Labour launched its own paid parental leave bill. The introduction will be staggered, eventually giving partners four weeks of paid leave by 2026. It’s incredibly cheap: $230 million over four years. There’s an abundance of evidence demonstrating that policies supporting families and babies during pregnancy and early childhood – the first 1000 days, is the catchphrase – deliver the highest returns on investment over time. Babies don’t vote, though, so we don’t bother to do this. New Zealand is near the bottom of the OECD for childcare leave and parental support, and this policy would make that a little better. National dismissed it as “rushed”.
Thursday: New policies announced as retiring MPs reflect
David Parker unveiled the government’s $20 billion dollar transport plan for the next three years: buses, cycleways, lots of roads - which will be funded by an increase in the fuel tax. It’s admirable that they’ve announced this prior to the election instead of springing it on us afterwards. But it’ll more than eliminate the savings people would gain from the GST exemption. Which Parker hates, so perhaps that’s not a coincidence.
Andrew Little has announced a review of migrant work visas.
National announced an odd KiwiSaver policy , allowing people to split their savings across multiple funds. While not obviously a terrible idea, it doesn’t seem very relevant. Who is asking for this? What problem does it solve? Most KiwiSaver providers already diversify their portfolios and allow you to split your savings across multiple risk categories. Luxon’s theory is that this’ll introduce competition to the sector. This column is not qualified to give financial advice, but if you do split your KiwiSaver in the future make sure you’re not simply doubling the fees you’re paying.
Parliament entered its last sitting block this week: three weeks of last-minute legislation in which the government expects to pass its epic reform of the Reform Management Act and to create the Water Services Entities, ie Three Waters rebranded. National has announced they’ll repeal both bills if elected.
Politicians retiring from Parliament have been delivering their valedictory speeches. Marja Lubeck, a Labour MP who seemed to spend her entire term on Twitter complained that the media “preyed” on politicians, while Jamie Strange - another Labour MP, who’d previously announced that he was retiring because he was suited to the government benches rather heavily implying he expects his party to lose the election - called out people who were mean to MPs on social media.
Paul Eagle noted his work altering the adoption act enabling children to access information about their birth parents. Former Green MP Elizabeth Kerekere relitigated her grievances with her former party over allegations of bullying - none of her fellow Green MPs attended the speech, except for the co-leaders James Shaw and Marama Davidson, who sat through it stone-faced and left afterwards without farewelling her.
Stuart Nash used his speech to thank his exceptional mates for their financial support, and insist that politicians be allowed to criticise the judiciary for their decisions, suggesting a possible lack of contrition over the reasons he was sacked from Cabinet: criticising the judiciary to the police commissioner and leaking confidential information to his campaign donors. Former health minister David Clark was arguably the most graceful. Nearly all the MPs thanked their families and apologised for the lengthy absences politics imposed on their lives.
