The Kākā by Bernard Hickey
When ‘back on track’ meant going into reverse

When ‘back on track’ meant going into reverse

Construction chiefs plead with Bishop for pipeline certainty & warn of skilled staff exodus after projects cancelled; Cancer treatment system 'near collapse'; Waikato Uni suspends medical school work
House-building and infrastructure industry leaders are begging the Government for project-pipeline certainty and warning of a 2009/10-style exodus of skilled staff overseas. Photo: Lynn Grieveson / The Kākā

TL;DR: The National-ACT-NZ First Coalition Government won last year’s election with a pledge to ‘get things done’ and ‘get New Zealand back on track,’ while also reducing inflation in living costs. But the exact opposite has happened because it:

  • abruptly cancelled and suspended billions worth of transport and school building projects;

  • urgently repealed water industry and RMA reforms without replacements;

  • loudly-proclaimed it would slash Government spending and public service jobs to pay for income tax reductions, mostly for rental property investors; and,

  • cut funding for councils and increased Government fees and charges, actually pushing up domestic services inflation and keeping mortgage rates high until well into 2025. (See details, charts etc below the paywall fold)

For example, just this morning:

  • it emerged house-building and infrastructure industry leaders begged Infrastructure, Housing and RMA Reform Minister Chris Bishop last month for project-pipeline certainty and warned of a 2009/10-style exodus of skilled staff overseas because of the abrupt funding and reform freezes; (See full letter below the paywall fold)

  • doctors are warning parts of the health system, including cancer services in the middle of the North Island and radiology services, are near collapse because of intensifying funding restrictions after decades of sinking-lid policies on real per-capita public health funding;

  • it emerged the 51%-state-owned Air New Zealand, which the Government has pushed for more dividends and allowed to operate a domestic monopoly in the regions, has quietly doubled its fees for overweight and oversized baggage domestically and hiked domestic baggage fees around 30% in recent days; and,

  • despite warnings of a looming shortage of almost 1,000 doctors, National is being blocked from building a new medical school by its coalition partner ACT.

(Paying subscribers can see and hear more detail and analysis below the paywall fold and in the Dawn Chorus podcast above. We’ll open it up for public reading, listening and sharing if we get over 100 likes. Update: achievement unlocked!)

Here’s my top six ‘pick ‘n’ mix’ of links to news, analysis and opinion articles, announcements, official reports, reviews and research in the last day or two to 9:06 am on Tuesday, May 28:

1: ‘Please give us certainty’

Economy: Key leaders in housing and infrastructure construction have sent a joint letter to the Government pleading for more project certainty and warning its funding freezes for councils, water reform and transport projects had significantly damaged confidence and risked driving key staff overseas, Newsroom’s Fox Meyer reported this morning.

The abrupt cancellation of transport projects and the urgent repeal of water and RMA reforms without replacements has devastated private sector confidence in any long-term infrastructure pipeline. This is turn is destroying any prospect of arresting or reversing the 35% fall in building consents seen in the last year. (Here is the letter in PDF form)

Letter To Chris Bishop From Industry Member Associations
1.26MB ∙ PDF file

2: ‘We’re on the brink’

Health: Doctors fear Te Whatu Ora’s cancer treatment services in the middle of the North Island are on the brink of collapse because budget cuts were stopping hiring of long-needed senior doctors, Rowan Quinn reported for RNZ yesterday.

These reports come despite repeated assurances from the Government on the eve of a tax-cutting Budget that spending reductions would not affect frontline services. They also reinforce how stressed the system is after decades of sinking-lid policies designed to compress the size of Government under 30% of GDP, despite the pressures of ageing and healthcare costs rising faster than GDP. (See more below from Radiologists on burnt out staff in quotes of the day below)

3: The problem with anecdata

Housing: Documents released under the OIA yesterday show Kāinga Ora’s board strongly contested the conclusions of Bill English’s review last month, rejecting outright his conclusion of ‘financial unsustainablity’ and saying much of the report was based on anecdotes, rather than full discussions with Kāinga Ora. NZ Herald Julia Gabel. (Here’s the full board response in OIA document form)

Final Board Response To Interim Review Report Oi 24 305
1.44MB ∙ PDF file

4: Or just no data at all

Climate Scoop: Foreign Minister Winston Peters did not seek advice on impact of coal policy on Aotearoa-NZ’s climate agreements, NZ Herald’s Demelza Jackson reported this morning. This pattern of substantial decisions likely to increase emissions being taken without impact assessments for climate and trade agreements is reckless, in my view.

5: A tax by another name

Cost of living: Air New Zealand doubles excess baggage prices and hikes regular baggage fees around 30%. Fee hike came into force on May 23 and was revealed through an industry update to travel agents, The Press-$$$ Emma Stanford reported this morning.

This is another example of a state-controlled company with market power hiking prices in a way that elevates domestic services inflation, which in turn is forcing Te Pūtea Matua-Reserve Bank of New Zealand to hold interest rates high for longer. In my view, it should reinforce calls for a market study of domestic air travel. (See more in charts of the day below)

6: New medical school on hold

Health: Aotearoa-NZ is short of almost 500 GPs, with the shortage set to double within a decade, the Government has been advised. It was told New Zealand “will struggle to train or bring in enough international medical graduates to meet this demand,” The Press-$$$Louisa  Steyl reported this morning.

Meanwhile, Politik-$$$’s Richard Harman reported this morning that Waikato University had pulled its tender for a new medical school from GETS after complaints from ACT, which specified in its coalition agreement with National that the project would only be investigated through a business case process, rather than approved. (Here is the GETS cancellation notice)

146KB ∙ PDF file

The best of the rest

Housing, Transport and Climate

Housing analysis: Rent stress as accommodation supplement stagnant RNZ Lauren Crimp

Housing: Foodbanks, scurvy warning - fed-up students seek end to unpaid work while training RNZ Jimmy Ellingham

Transport: Wellington City Council ramps up bus lane monitoring, raking in $3000 a day. The Post-$$$ Julie Jacobson

Housing & climate: Wellington pipe backlog 406km and growing. The Post-$$$ Tom Hunt

Transport: From zero to $2.50/hr parking for motorcyclists in Wellington. $20 to park a motorcycle in the central city for a day. The Post-$$$ Rachel Thomas

Transport: Auckland Transport backtracks on K Rd bus lanes, operating hours cut back amid $100k fines per week NZ Herald Raphael Franks

Climate Deep-dive: 'Who is in and who is out?': Tensions over Westport flood scheme RNZ Local Democracy Reporter Brendon McMahon

Health, Poverty & Population

Health: ‘Lost faith in the public health system’: Woman with severe heart disease resorts to private healthcare. Stuff Shilpy Aurora

Poverty: Disability cuts devastate sector. Worries and fears are relayed to Labour MPs as restrictions on flexible funding hit disabled hard. Stuff Alecia Rousseau

Deep-dive: Inside a $2 billion pay-equity debacle NZ Herald-$$$ Audrey Young

Migration Scoop: Why aren't you pregnant, INZ asks 52-year-old woman. Minister asks Immigration for ‘please explain’, and department apologises after ‘disgusting and offensive’ letter questioning a couple’s relationship. Stuff Steve Kilgallon

Migration: Air Vanuatu collapse strands seasonal workers in Marlborough. “The summer boys just want to go home and see their families.” Stuff Andy Brew

Politics, Government & Te Tiriti

Politics Scoop: ACC CEO flies business class for $32k Europe work trip amid 390 proposed job cuts NZ Herald Adam Pearse

Politics Scoop: Pharmac minister David Seymour met new Act MP’s former drug company employer NZ Herald-$$$ David Fisher

Politics Scoop: Govt moves to replace or repeal Treaty principles clauses from laws. The coalition's plans to replace all references to the Treaty principles in legislation are now underway, new documents show. 1News Te Aniwa Hurihanganui

Economy Scoop: Tech failure led to more than 100,000 unnecessary census visits Newsroom David Williams

Quotes of the day

‘We won’t let them eat cake’

“We have uncovered a layer cake of government initiatives - many of which we had never heard of before - which were absorbing tens of millions if not hundreds of millions of dollars.” Finance Minister Nicola Willis warning yesterday of more spending cuts. Via Stuff

A cake eater pushes back

"The truth of the matter is that we are not training enough radiation oncologists to meet current, or future, service demand or to replace those practitioners who plan to retire, and urgent investment is required to fix this problem.

"We are keen to work closely with the New Zealand government to sustainable increase the number of trainee radiation oncologists and develop strategies to keep radiation oncologists in the country."

"However, putting out endless fires is not a cause for celebration and it does come at a price. The 2020 survey by the Association of Salaried Medical Specialists showed radiation oncology as the speciality with the highest burn out scores." Royal Australian and New Zealand College of Radiologists President Professor John Slavotinek via RNZ this morning.

Charts of the day

A trend that’s not friendly

Another unfriendly trend

Inflation driven by Govt housing, budget-cutting and migration policy

RBNZ May MPS Pages 27-31

Cartoon of the day


Chris Slane via The Listener-$$$ and via X

Timeline-cleansing nature pic of the day

Bush coral

E.E. Grieveson for The Kaka

Mā te wa


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The Kākā by Bernard Hickey
The latest daily snapshot of the news, detail, insight and analysis on geo-politics, the global economy, business, markets and the local political economy for citizens and decision-makers of Aotearoa-NZ.