Last free Dawn Chorus: The long tail has a spike

Three new cases at Kaiaua endanger Auckland's expected drop from level 4 to level 3; One case was symptomatic in a north Waikato school last Thursday; Fresh MIQ slots opening up

TLDR & TLDL: Morena and welcome to the last free Dawn Chorus on The Kākā. I’m planning to turn on paid subscriptions from tomorrow morning.

I really appreciate all the thousands of people who have signed up for The Kākā in the year since I finished with Newsroom. But as I said from the beginning, I always planned to turn on paid subscriptions after a year.

But wait, there’s more… I’d love you to stay on and sign up as a paid subscriber so you can join The Kākā community. I even have a special offer for you.

I’m offering existing ‘free’ subscribers a special introductory offer. Anyone receiving this email who signs up for a one-year subscription (usually $19/month or $190/year) in the next week will receive a 50%-off Introductory offer. So that’s $95 per year for my daily emails about the political economy Monday to Friday. The weekend summary and promotional email will still be available for free subscribers.

Paid subscribers will also be able to comment on all articles and have access to my daily podcasts, along with invitations to join me and guests for live video discussion ‘hoons’ on topics of the day, and of course, the weekly ‘hoon’ around the week’s events on a Friday afternoon at 4pm.

I enjoy producing this work every day, but need to go paid to make it financially sustainable for me and my family. I hope you can join us here. Grab the introductory offer here. And if you’re interested in a corporate deal, just hit reply here and I’ll be in touch. Tell me what you think below also.

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In the news this morning

A sting in the tail - Auckland's level 4 to level 3 transition is in doubt after three new cases were found in the Waikato overnight, including of one child who was infectious in a school last Thursday.

Also: MIQ slots are available again for October and November this morning, but only if you’re in the lobby from 8am to 9am today.

Elsewhere, there's a big infrastructure deal due this morning in Sydney, while Z Energy and Ampol are talking about guaranteeing Z’s dividends while the Commerce Commission deals with Ampol’s takeover bid for Z. There are new Chinese bidders for local pet food giant Ziwipeak.

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Coming up today and this week

• In the 4pm presser today from the Beehive, PM Jacinda Ardern will detail Cabinet’s decision on whether Auckland drops from level 4 to level 3 from tomorrow night. The rest of the country is expected to stay at level 2, albeit with a relaxation on the indoor gathering limit from 50 people to 100 people.

• Reserve Bank Assistant Governor Christian Hawkesby will explain the bank’s ‘least regrets’ approach on interest rates in a speech due out at 9am on Tuesday. He is expected to give some indication of whether the bank will hike on October 6 and November 24, as most economists currently expect.

• The US Federal Reserve makes its monetary policy decision for September on Thursday morning NZ Time. It is not expected to signal a tightening in policy yet, but will release a fresh ‘dot plot’ showing when its monetary policy committee members expect to put up the Fed Funds Rate — the world’s most important interest rate. Most economists expect it won’t hike until March 2023, but they do see the Fed signalling in November that it will start winding back its money printing and bond buying, which is still running at US$120/b per month.

• Its a busy week for elections. Canadian voters go to the polls tomorrow night NZ Time, while German voters go to the polls on Sunday night NZ Time. And don’t forget Iceland’s election on Saturday night.

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In the news locally this morning

Infectious in a Waikato school - Three new Covid-19 cases were found near Auckland last night. The cases are from a household in Kaiaua on the Firth of Thames near Miranda and are linked to a man who tested positive after breaching parole and being pulled into Mt Eden Prison on remand. (RNZ)

‘Should we stay or should we go now’ - The discovery complicates the decision due in Cabinet this afternoon about whether to confirm Auckland’s move down from level 4 to level 3 tomorrow night. The National Māori Pandemic Group called for an extension of level 4 restrictions and Covid modeller Michael Plank has said staying at level 4 for another week would be safest. (RNZ)

A virtual lobby - MBIE opens its new ‘lobby’ system for awarding places in MIQ at 8am this morning. People registered there with their passport details will then be randomly selected and awarded a limited number of places for October and November at 9am. It’s designed to avoid people staying on the site refreshing screens for days on end, or employing bots. But spaces are still limited. (OneNews)

Quick trip? -For example, some of the BlackCaps enroute back to New Zealand from a hurriedly cancelled tour to Pakistan (because of of a credible bomb threat) will be allocated spaces set aside for emergencies by the Government. (Newshub)

The decision is due to be announced at 4pm this afternoon in the livestreamed news conference from the Beehive Theatrette at 4pm.

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This morning in global politics, economics, markets and business

‘Don’t travel’ - China’s latest Covid outbreak worsened over the weekend, with some cities calling for people not to travel during the mid-Autumn festival due soon. A survey by China Newsweek found 56% would stay at home during the holidays, which would hit the Chinese economy again. There were 66 new cases reported on Saturday in Fujian, double that from the previous day. (SCMP)

‘Come home now’ - France withdrew its ambassadors from Canberra and Washington over the weekend in an escalating protest over Australia’s decision to abandon a A$90b deal to build conventional French submarines and instead sign up to buy American and/or British nuclear submarines. (CNN)

‘We’re opening, regardless’ - Victorian Premier Dan Andrews pledged to open up the state from its current Covid -19 restrictions from October 26, which is when the state is expected to surpass a 70% vaccination rate. New South Wales plans to start reopening schools from October 26. (The Age)

However, modelling done for Victoria found a better than one-in-two chance of exceeding the state’s hospital and ICU capacity, and between 1455 and 3152 deaths. (The Age)

Deals galore - Transurban and its Sydney Transport Partners consortium agreed to buy 49% of Sydney toll roads company WestConnex overnight and will announce the deal and an associated A$4b equity raising later today. (AFR-$$$)

‘Show us the money’ - Z Energy wants Australia’s Ampol to guaranteeing dividends flow to its shareholders while the NZ$3b bid by Ampol goes through regulatory hoops, shifting some of the risk over the Tasman. The Commerce Commission is expected to force Ampol to sell its Gull stations here to get the deal through. (AFR-$$$)

Chump change - Two Chinese funds, FountainVest Partners and Boyu, are set to join the auction to buy New Zealand pet food and supplies firm Ziwipeak for A$1b. KKR, Carlyle and Nestle are already in the auction. (The Australian)

Questions of the day

If China attacked Taiwan, and Australia and the US rushed to its defence, what would or should we do?

How is the Government planning for booster shots, if at all?

Will the Government underwrite an insurance scheme for events businesses?

Why isn’t the Government planning any incentives for vaccinations?

Will the Government back vaccination mandates in a widespread way for employers?

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Comment of the day on The Kākā

“The PM has ruled our CGT and wealth tax but not a deemed rate of return approach-such as outlined in my paper and Terry Baucher, The Fair Economic Return: Restoring equity to the social fabric of New Zealand.

“This is the last chance saloon- announcing a fair economic return from 2023 would give the market the jolt it needs while not affecting the vast majority of modest homeowners. The problem is a real resource issue- too much goes to elaborate homes and investment units and houses held by speculators for capital gain leaving too little labour, cement, wood, tiles etc for basic state houses.” - Susan St John on the 31.1% house price inflation article

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Chart of the day

ANZ Chief Economist Sharon Zollner produced this chart on the sharp divergence recently between house price inflation and house sales growth.

“Exceptionally low listings are seeing house price inflation hold up even as sales drop back. But the data is consistent with our belief that this housing boom is on borrowed time as mortgage rates continue to lift and macroprudential restrictions are set to tighten.” ANZ Chief Economist Sharon Zollner.

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Signs o’ the times news

The Dominion Post @DomPost

Buses turned into budget tiny homes are helping families beat rising house prices and soaring rental costs

dlvr.itBuses turned into budget tiny homes are helping families beat rising house prices and soaring rental costsEx-tour buses are being parked up and turned into houses as desperate families seek alternatives to high rents and soaring property prices.

David @theOCP2

@MattNippert Incentives didn’t help in the States: cbsnews.com/news/statewide… We don’t have tribalism driving the hold outs like they do. but I think the stick approach is what appears to get the hesitant to move in most places.

cbsnews.comState vaccine incentives do little to boost vaccination rates, research showsEmployer incentive programs could be more effective than state-led initiatives, according to one expert.

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My weekend reads

bernardchickeysubscribers @bernardchickey2

Good scoop via @JonoMilne: Very muddy Three Waters now. "It would be good to get some clarity on the issues regarding debt because councils cannot afford to stop undertaking Three Waters capex that is debt-funded ahead of June 2024."LGFA CEO.

newsroom.co.nzUndisclosed problem shifting billions in water debts from councilsGovernment officials have admitted they can’t take over ratepayer debt on the country’s water infrastructure in the straightforward transfer that councils had been led to expect.

bernardchickeysubscribers @bernardchickey2

How Democracy ‘works’ these days. via @nytimes

nytimes.comHow Accounting Giants Craft Favorable Tax Rules From Inside GovernmentLawyers from top accounting firms do brief stints in the Treasury Department, with the expectation of big raises when they return.

bernardchickeysubscribers @bernardchickey2

Fascinating on the ins and outs of NZR/Silverlake vs the Players (and media) Subscribe to The Bounce, by @DC_thebounce

dylancleaver.substack.comThe BounceNew Zealand’s sharpest sports writing and independent analysis.

bernardchickeysubscribers @bernardchickey2

‘Cash is so short that this sum­mer, the de­vel­oper said it be­gan pay­ing bills to con­trac­tors and sup­pli­ers with un­fin­ished apart­ments in­stead of ac­tual money.’ Via @WSJ-$$$

wsj.comHow Beijing’s Debt Clampdown Shook the Foundation of a Real-Estate ColossusChina Evergrande’s looming collapse and its ripple effect on the economy will pose a test for the government’s campaign to keep housing affordable for the masses

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Some fun things

Suzanne The Chosen @Suz_TheChosen

This kid knows what’s up.

Ka Kite ano

Bernard

PS: Here’s that link to the introductory offer again. ;)