HUGO Assessing the economic and political environmentvision in New Zealand Confidential to August 22 2016 HUGO members National open to electoral deal in Ohariu as well as Epsom Page 2 Both domestic opinion polls and the tide of international political sentiment towards nationalist, anti-migration parties favours Winston Peters and NZ First. National knows it may have to work with Peters, but it will work hard to make sure it has alternatives in 2017. Labour’s leadership becomes undisciplined Pages 2 & 5 Andrew Little has made a virtue this year of insisting on much more discipline from his caucus than it had exhibited in recent years. However, his attack on once-party member and Wellington mayoral candidate Nick Leggett and his finance spokesman, Grant Robertson’s, attack on the Govt Statistician were out of step with this new, more disciplined approach. Media mergers under pressure Page 3 The Commerce Commission has kicked the NZME/Fairfax merger approval to next March, at latest, citing concerns about the impact of the merger on the competitive provision of news. It was to have issued a determination today. A similar extension looks likely for the Sky TV- Vodafone merger proposal, given the weight of submissions from competitors. Graeme Wheeler’s charm offensive Page 3 RBNZ governor Graeme Wheeler is especially sensitive to the widespread criticism he’s copping for the fact that nothing the central bank does seems capable of either restoring inflation to the target 2% annual rate or reducing the value of the NZ dollar. The main reason for that: the US Federal Reserve keeps holding off on its plans to raise American interest rates. Dairy recovery gathering pace Page 5 The sharp lift at the last two GlobalDairyTrade auctions are allowing the sector to hope that it has now turned the corner on three seasons of very low prices – or more accurately, a recovery in prices, even if not to the $8-plus per kg of milksolids of four years ago. Wellington airport runway argument heats up again Page 8 The airlines and the management of Wellington International Airport are back in the trenches following publication of a consultant’s report for the airline lobby, BARNZ, drawing negative conclusions about the demand for long-haul flights to the capital, based on similar figures used by the airport’s consultants to build the case for them. HugoVision – normal transmission resumes Sept 2 Today’s edition of HugoVision is out of the normal fortnightly cycle because of the timing of last week’s Hugo Group CEO Seminar & Retreat at Millbrook. Thanks to all who attended for a stimulating and challenging weekend. The next edition of HugoVision will appear, as usual, on Friday Sept 2. Text finalised August 22 Contact: [email protected]. No responsibility is accepted for acts or omissions by clients as a result of items herein. © The Hugo Group 2016 HUGOvision August 22 2016 POLITICS AND POLICY Nats focus on Peters alternatives nomination in the Whangarei electorate. Idle talk of a new breakaway political party involving some The general election is still 16 months away, but the of these characters, and including strong podium National Party is clearly thinking hard about how performers such as Pagani’s wife, Josie, is just that: to create alternatives to the almost certain pressure idle talk. With the exception of NZ First, breakaway it will face to deal with a resurgent NZ First party parties under both the old and the current electoral next November – assuming the election is held on the system tend to sink into bit-part impotence or usual timetable. obscurity. The usual accommodation with the ACT party in Epsom is assured, but while the National Party The latest polling leadership rates its youthful leader David Seymour, Much has been made of TV3’s Newshub/Reed it’s far from convinced the Act brand is capable of Research poll putting National and Labour/Greens carrying more than one parliamentary seat. Two neck and neck and indicating the potential for a would be nice, but there are no expectations. change of govt. We are more sanguine at this stage. More controllable, they are starting to reason, is an National is still polling at about the level it achieved electoral accommodation in Ohariu. It seems long- in 2014, in spite of a terrible few weeks in which it’s serving MP and lone United Future party MP Peter been hammered on trade, immigration and most Dunne is rethinking retirement in 2017. of all, housing. The immigration issue is starting Labour and the Greens have already indicated some to gain sufficient traction to be a further headache willingness to have one party stand aside in an for National, but the natural first choice of coalition Espom-style deal in Ohariu. National is thinking partner for Peters remains National; all the moreso it would be willing to do the same thing to help as the MoU between Labour and the Greens would Dunne back for the 2017-20 term. Dunne held make it very difficult for Labour to ditch the Greens the seat in 2014 but only by 710 votes. If Labour’s at the altar in favour of NZ First after election day. Virginia Andersen, with 12,859 votes, had also had Reed Research put National at 45.1%, Labour at the Greens’ 2,764, Labour would have won the seat. 32.7%, Greens at 11.5%, and NZ First at 8.1%. One However, if National hadn’t stood a candidate and factor that may also be helping Peters is the absence assuming Dunne would have picked up most of of the Conservative Party, which snaffled nearly 4% Brett Hudson’s 6,120 votes, Dunne would have won of the vote in 2014 without winning a seat. Colin comfortably. Craig’s supporters are moral conservatives and older – in other words, classic NZ First supporters. Elsewhere, senior ministers’ opinion appears to be ambivalent about the Maori Party’s capacity to do Auckland Council better than its current two MPs. Co-leader Marama Fox is attracting column inches from political media, The Auckland Council has passed largely but mainly because of her attack on Helen Clark’s bid unchanged the Unitary Plan as recommended by for the UN Secretary-Generalship. The Kingitanga’s the Independent Hearings Panel. Whether their flirtation with support for parallel Maori sovereignty decisions will make much difference to the shape is a political minefield. of the next council is a moot point. At present, little significant change appears likely. Former broadcaster Labour’s internal divisions Bill Ralston is the only centre-right candidate thought likely to win a seat (Waitemata) from a left Part of the reason National is so worried about NZ Councillor (Mike Lee). The govt clearly believes First doing well next year is because the Labour Party Goff will win the mayoralty, which is why John Key is deeply worried it’s losing a significant slice of will not endorse the centre-right candidate, Victoria support to Winston Peters. Andrew Little’s outburst Crone. Meanwhile, there is finger-pointing from the against ‘right-winger’ mayoral candidate and former National Party hierarchy at the failure of Auckland Labour Party member Nick Leggett earned him MPs Nikki Kaye and Paul Goldsmith, and party a drubbing from Wellington beltway critics, and operatives Michelle Boag and Sue Wood to produce a for once it seems unlikely the move is playing out coherent centre-right campaign under one banner. differently in the electorate. The Auckland event where Leggett was to appear with Stuart Nash – ProdCom proposes standing IHP before Little told Nash he couldn’t attend – was also attended by several other luminaries of the rejected The Productivity Commission’s interim report on Labour right, including David Shearer, his former Better Urban Planning proposes the creation of a political chief adviser John Pagani, and Shane Jones, permanent Independent Hearings Panel to help local who these days is more likely to angle for a NZ First govts make politically difficult trade-offs on urban 2 form. “Facilitating development requires a more HUGOvision August 22 2016 POLITICS AND POLICY restrained approach to land use regulation”, with entertainment. Submissions show virtual unanimity “broader zones” allowing a “wider range of activities among major players who say consumers would and a stronger evidence base to support new rules”. do better by Sky offering sports and entertainment The report implies but does not specifically advocate packages to the whole telecommunications market splitting the RMA into two pieces of legislation: rather than to one player. While that would be less one for environmental management and the other profitable for Sky, it would be likely to expand the for urban form. While environment management total market by more than the merged entity. “within clear bio--physical limits” should be non- negotiable, urban areas should operate with “a Wheeler’s charm offensive presumption in favour of development”. RBNZ governor Graeme Wheeler has held a round Govt headache over Labour bill of one-to-one briefings with leading economic commentators in the days following the Aug 11 Labour’s Minimum Wage (Contractor Remuneration) monetary policy statement, where he cut rates 25bps Amendment Bill’s steady progress through the and the currency rose again. The charm offensive House is starting to alarm business groups. The reflects the extent to which Wheeler worries he’s private members’ bill, in the name of David Parker, losing the PR battle on the central bank’s record intends to stop employers from skirting minimum in managing monetary conditions. The simplistic wage and other employment law requirements by analysis says he’s failed for too long to get inflation contracting out of them.