Briefly, in Aotearoa-NZ’s political economy around housing, poverty and climate on Monday, May 5:
When will our PM and Foreign Minister stand up to publicly express support for our long-time and close allies Australia and Canada in opposing Donald Trump’s talk of annexing Canada and his tariffs on allies without justification or sense? See more in today’s feature article below.
Christopher Luxon has pledged to more-than-double defence spending to 2% of GDP, setting the scene for more than $20 billion of real cuts in health, education, housing, transport and welfare spending to shrink the size of Government overall as a share of GDP from 34% to 30%. See more in today’s Journal of Record.
The spending cuts will add to those made in the last year that, for example, closed The North Shore Women’s centre, helped cost 12,606 construction workers their jobs1, caused Police to pull back from attending mental health crisis incidents and is starving vaccination programmes of funds. See more in Today’s Pick’n’Mix Six.
Character area development constraints in Auckland are stopping the development of a $4 million piece of land under Kāinga Ora’s most valuable home, just as Auckland Mayor Wayne Brown says he has Chris Bishop’s permission to scrap the MDRS standards that unleashed a much-needed boom of town-house supply. See Housing Pick ‘n’ Mix & Quote of the day below.
The Government’s freeze in Kāinga Ora’s building programme, its early-2024 suspension of classroom building and its go-slow on hospital building has contributed to a 40% rise in company liquidations in the March quarter, including a 21% rise in construction company liquidations. See more in Chart of the Day below
The collapse in trade between the United States and China is deepening day-by-day, accelerating late on Friday when Temu announced it had stopped all shipping of products to the US because of the expiry of the ‘de minimis’ rule which exempted goods worth under US$800 from tariffs of 145%.2
Canada & Australia stood up to Trump. When will NZ?
Australia’s centre-left Labor Government has joined Canada’s centre-left Liberal Government in staging a surprisingly-large come-from-behind victories over a conservative Trump-like candidate. So when might New Zealand’s governing coalition finally stand up to support its two closest Five Eyes and Commonwealth allies against Trump’s tariff bullying, and his new talk overnight about his desire to annex Canada?
The surprisingly strong re-elections of centre-left Governments in Canada and Australia in recent days have one thing in common: their Prime Ministers Mark Carney and Anthony Albanese have stood up publicly to oppose and criticise Donald Trump’s bullying on trade and his talk of making Canada the ‘51st state’ of the United States.
Our Prime Minister, Christopher Luxon, has said he trusts Donald Trump and has conspicuously refused to either criticise Trump, or publicly express support for Canada and Australia, both of whom are long-time Five Eyes and defence allies. The threat to annex Canada, repeated overnight in more direct terms3, is particularly shocking and worthy of expressing solidarity.
Carney’s surprising victory in federal elections last week was judged at least partly due to his robust criticism of Trump, in contrast with Conservative Opposition Leader Pierre Poilievre, who had been favoured to win earlier this year, but lost his seat in the election.
Carney’s victory speech last week was particularly stark (bolding mine):
“As I’ve been warned, America wants our land, our resources, our water, our country. But these are not idle threats. President Trump is trying to break us so that America can own us. That will never, that will never ever happen.
“Throughout our history, there have been turning points. Throughout our history there have been turning points when the world’s fortunes were in the balance.
“That was the case at the start of the Second World War, just as it was at the end of the Cold War. And each time, Canada chose to step up. To assert ourselves as a free, sovereign, and ambitious nation, to lead the path of democracy and freedom. And because we are Canadian, to do so with compassion and generosity.
“We are once again, we are once again at one of those hinge moments of history.
“Our old relationship with the United States, a relationship based on steadily increasing integration, is over. The system of open global trade anchored by the United States, a system that Canada has relied on since the Second World War, a system that well not perfect has helped deliver prosperity for a country for decades, is over. But it’s also our new reality.
“We are over the shock of the American betrayal, but we should never forget the lessons.” Mark Carney’s victory speech transcript
Australian PM Anthony Albanese was equally blunt towards Trump in his comments immediately after Trump announced arbitrary and punishing tariffs of 10% on allies such as Australia, the UK and New Zealand. Here’s the key bits (bolding mine):
“This is not the act of a friend.
“These tariffs are not unexpected, but let me be clear, they are totally unwarranted.
“The Australian people have every right to view this action by the Trump administration as undermining our free and fair trading relationship and counter to the shared values that have always been at the heart of our two nations long standing friendship.
"This will have consequences for how Australians see this relationship.
"These are uncertain times, but Australians can be absolutely certain of this: our government will always stand up for Australian jobs, Australian industry, Australian consumers and Australian values.” Anthony Albanese in a news conference on April 2. Via NDTV
Even the usually cautious & transactional Singapore has grown a pair
Singapore’s PM Lawrence Wong also won re-election convincingly over the weekend after pushing back strongly at Trump’s tariffs in this statement on April 8 (bolding mine):
“The recent “Liberation Day” tariff announcements by the US confirms this stark reality: the era of rules-based globalisation and free trade is over.
“This marks a profound turning point. We are entering a new phase in global affairs – one that is more arbitrary, protectionist and dangerous.
“In Singapore’s case, we have an FTA with America. We impose zero tariffs on US imports, and we actually run a trade deficit with the US – meaning we buy more from them than they do from us. If the tariffs were truly reciprocal, and if they were meant to target only those with trade surpluses, then the tariff for Singapore should be zero.
“But still we are being subjected to the 10% tariff. We are very disappointed by the US move, especially considering the deep and longstanding friendship between our two countries. These are not actions one does to a friend.” Singapore PM Lawrence Wong in an April 8 statement after Trump’s tariff announcement.
Luxon and Peters missing in (in) action
Yet New Zealand PM Christopher Luxon and Foreign Minister Winston Peters have been nearly silent or oblique in their public comments about Trump’s tariffs.
Luxon’s April 10 speech on Foreign Affairs and Trade was notable for not mentioning or criticising Trump’s policies, or even those of the United States. This section was as close as he got (bolding mine):
“The events of recent days are the most significant challenge to the rules-based trading system since the General Agreement on Tariffs and Trade (GATT) was formed in 1947. Action, reaction, and response have shocked financial markets.
“As the Minister of Finance highlighted earlier this week, the direct impact on the New Zealand economy from the US tariffs announced last week is likely to be around $900 million or roughly 0.2% of GDP.
“But the second order consequences of a region and a world retreating from trade and increasingly uncertain about its economic future will be more significant, despite the welcome news of de-escalation this morning.” Luxon speech on Foreign Affairs and Trade on April 10 in Wellington.
Luxon even said4 on March 4 he trusted Trump, despite Trump’s decision the previous day to throw Ukraine under Russia’s bus.
Peters went so far as to sack his former fellow minister Phil Goff as New Zealand’s High Commissioner to the UK when Goff questioned Trump’s knowledge of history. He also warned Luxon and others against using emotive language when talking about Trump’s tariffs, quoted by RNZ on April 13 (bolding mine):
"In recent weeks, the tendency to hype up a debate about how international trade works into a black-and-white, polarising issue has been unfortunate and misguided. The use of military language - of a 'trade war', of the need to 'fight', of the imperative to form alliances in order to oppose the actions of one country - has at times come across as hysterical and short-sighted."
He said it was in New Zealand's interests, as a small country, to be "cautious, to be modest, to be pragmatic, and to be practical. To wait for the dust to settle before making choices we may later regret." Winston Peters via RNZ on April 13
‘Appeasement doesn’t work with this guy. Stop mucking around.’
Former Australian PM Malcolm Turnbull last week criticised Peters as weak and too subservient in his comments about ‘misguided talk of a trade war’ and waiting for the dust to settle from Trump’s tariffs.5.
“Did he say that seriously? I mean, you're getting into parallel universe stuff because the whole world is talking about a trade war. Trump's talking about a trade war. Trump tweeted not so long ago, 'Trade wars are good and easy to win.'
Drawing on his own experience dealing with Trump during his time as Australian prime minister, Turnbull warned New Zealand against adopting a posture of appeasement.
"I think showing weakness and subservience to Trump is a major, major mistake. I say this from my own experience, but there are so many examples you can point to.” Malcolm Turnbull in an interview with RNZ’s Guyon Espiner.
Former PM Helen Clark and AUT Law Lecturer Marco de Jong also warned in an NZ Herald-$ Op-Ed on Saturday that being subservient put New Zealand’s sovereignty at risk.
“The coalition Government insists New Zealand “can only protect our interests by working with traditional partners with whom we have a shared strategic assessment” – effectively returning us to the “Western alliance diplomacy” of the Cold War.
“But as the United States threatens Canada and Greenland and withdraws from European security, such associations are rapidly becoming unstable and even irrelevant.
“Australia’s all-out effort to demonstrate its worth was met by the US President asking “what does [Aukus] mean”, rejecting any tariff exemptions, and demanding that Australia further increase its defence spending. Former PM Helen Clark and AUT Law Lecturer Marco de Jong via an Op-Ed in The NZ Herald-$
At what point should Luxon and Peters stand up in support of our allies Australia, Canada and Singapore in opposing and criticising Trump? If their values are not pushing them to do it now, then perhaps the political realities spotlighted in three general election results in four days might do it.
The best of the rest here & overseas today
My Top Pick ‘n’ Mix Six for Monday, April 5
Housing news by Amy Williams for RNZ: New Zealand's most valuable state house cannot be subdivided
Housing & politics & Auckland news by David Long for Stuff: ‘Decay of areas’: Mayor and minister in deal to stem three-terrace new builds in Auckland.
Poverty & budget news by Ava Whitworth for Stuff: North Shore Women’s Centre battling to stay open after funding cuts.
Health & poverty news by Brittany Keogh for The Sunday Star Times-$: Thousands of kids eligible for free meningococal B vaccine could miss out.
Health & crime deep-dive by Katie Ham for The Post-$: ‘Crisis’ on the horizon as police pull back from mental health callouts.
Climate & housing deep-dive on plan to turn Takapuna Golf Course into flood mitigation wetland by Jonathan Killick for The Sunday Star Times-$: When climate resilience meets resident resistance
Housing, transport & infrastructure news
Water & infrastructure news about Lake Tarawera by Laura Smith for LDR via Stuff: Lake Tarawera locals push for lower sewerage costs
Transport deep-dive by Stewart Sowman-Lund for The Sunday Star Times-$: What the Mill Rd development could mean for those on its doorstep.
Housing news deep-dive by Marty Sharpe for Stuff: The sisters-in-law who ran a boarding house deemed ‘unfit for humans’.
Politics & transport deep-dive by Sam Smith for Stuff: Rats, a ramming and a stranding: The troubled times of the Interislander’s Aratere.
Poverty, health, education, welfare, & living costs news
Health & Palmerston North news by Jimmy Ellingham for RNZ: Vote set for sugary drinks ban at Palmerston North council venues
Health & politics news via RNZ: 'They’re worried': Dunedin locals fear hidden cuts to new hospital services, Labour says
Politics & education & health news by Ellen O’Dwyer for RNZ: Glass, melted plastic: School lunch programme food safety complaints soar
Health news via 1News: Vaping doubles risk of serious lung disease — study
Politics & Te Tiriti & justice deep-dive by Joel Maxwell for Stuff: A rocky $2.7b atonement: Warning on Treaty settlement commitments
Justice & Crime Op-Ed by AUT’s Alexander Plum & Kabir Dasgupta: This NZ law aims to give people with criminal convictions a ‘clean slate’. It’s not working
Climate, water, land, air & biodiversity news
Climate & housing deep-dive on plan to turn Takapuna Golf Course into flood mitigation wetland by Jonathan Killick for The Sunday Star Times-$: When climate resilience meets resident resistance
Climate & electricity deep-dive by Phil Pennington for RNZ: Artificial intelligence a wildcard in electricity demand
Column by Rod Carr for The Sunday Star Times-$: Middle class becoming the hunting ground for those who would polarise us.
Good news via 1News: New recycling scheme turns car bumpers into fence posts.
AP: Scientific societies to step up after Trump puts key climate report in doubt
AP: As Trump pares back ocean protections, California weighs expanding them
Today’s Journal of Record
Judith Collins and Christopher Luxon yesterday announced $3 billion of new defence spending and pledged to more than double defence spending to 2% of GDP by 2032/33. But Luxon’s Government is still committed to reducing core Crown expenses from the current 33.6% of GDP “towards 30% of GDP over time,” which means a doubling of defence spending would require extra real cuts in other spending on Health, Education, Transport & Welfare (but not NZ Superannuation or Police) of upwards of five percentage points of GDP or over $20 billion in today’s dollars.
Quote of the day: ‘Enough shitty townhouses’
“You go down a street and they’re all lovely old buildings and bungalows, then there are three shitty blocks just banged up together, and that’s the start of the decay of that area. So we’re getting to stop that.” Auckland Mayor Wayne Brown via David Long for Stuff:
Number of the day: 157 construction businesses
157 - The number of construction businesses liquidated in the March quarter, up from 130 in the March quarter of 2024. Via BWA Quarterly Market Report
Chart of the day: So much need, but not enough being built
Cartoon: ‘Let me be clear…’
Ka kite ano. Bernard
Statistics NZ: Employment indicators: March 2025
See the full transcript of Trump’s interview with NBC’s Kristen Welker
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