In summary today: PM Christopher Luxon is increasingly at odds with leaders in other countries in saying he trusts Donald Trump and the United States as reliable partners, despite this week’s tariffs and alliance swaps that have shocked and alarmed both New Zealand’s allies and global financial markets.
Meanwhile, Luxon is also being criticised as being out of touch with his support of David Seymour’s school lunch programme, which potential Luxon replacement and Education Minister Erica Stanford wants Seymour to ‘please explain.’
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Long stories short, the six key things that stood out in Aotearoa’s political economy around housing, climate and poverty on Wednesday, March 5 are:
PM Christopher Luxon has alienated1 teachers and parents and ignored the concerns of his own Education Minister Erica Stanford, a potential replacement for him, by dismissing critics of David Seymour’s school lunch programme to “go make a Marmite sandwich, and put an apple in a bag,” and that he trusted Seymour to fix the ‘teething troubles.’ Stanford declined to express confidence in Seymour and demanded Seymour ‘please explain’ in an 11.30 am meeting yesterday, which Seymour stood her up for because, he said, ACT’s caucus meeting ran long. (See quotes of the day below.)
Luxon also said yesterday he trusted Donald Trump and saw the United States as a reliable partner, just as Trump upended 80 years of US-led stability in trade and security by imposing disruptive sanctions on his allies and cutting off support for Ukraine in its war with Russia, which Trump now wants to relax sanctions on.
Those sanctions and the shock of Trump appearing to choose Russia’s side over Europe this week have rocked global markets again overnight, shredding the rest of the ‘Trump Bump’s US$3.4 trillion of gains in US stocks since November, and raising doubts about the US dollar’s role as the global reserve currency. US GDP growth expectations also collapsed. (See charts of the day below)
In another bipartisan and potentially inflationary shift to user pays for roads, National and Labour voted last night for ‘time of use charging’ legislation just as Auckland Council published a report2 showing road congestion cost the economy $2.6 billion per year. (See charts of the day below)
More detail has emerged of pleas3 by Finance Minister Nicola Willis’ own advisors last March to reverse her December, 2023 cancellation of the Government’s $551 million contract with Hyundai, which Treasury estimated4 would force break fees of $300 million, and which new Rail Minister Winston Peters is now trying to revive with Hyundai.
Non-residential building consents slumped again in January5, while housing consents nudged higher, showing the freeze on Government capital spending on roading, cycling, housing, hospitals and schools has reverberated through into this year. (See charts of the day below)
In scoops elsewhere this morning:
Jenee Tibshraeny reports new Commerce Minister Scott Simpson has recused himself from decisions about supermarkets competition because a family member owns a supermarket;
Richard Prebble wrote in his weekly NZ Herald column6 he had resigned from the Waitangi Tribunal because he didn’t want to turn the Treaty into a ‘socialist manifesto,’; and,
Jem Traylen reports7 S&P Global Ratings last week downgraded its assessment of New Zealand councils’ institutional framework because of funding reversals and political uncertainty generated by the Government’s repeal of Three Waters and transport and infrastructure funding freezes.
Quotes of the day
‘Let them eat marmite’
“If you really are unhappy with it, for God's sake, go make a Marmite sandwich, and put an apple in a bag, just like you and I had.” PM Christopher Luxon in an interview with NewstalkZB’s Mike Hosking yesterday morning.
‘It’s disrespectful’
“He lives a life where you have the things you need. For a lot of families, making lunch is doable, but for some of our students there wouldn’t be anything to make lunch from. We just have lots of hungry kids at the end of the day.” East Otago High School principal Helen Newcombe telling today’s ODT-$$$ Luxon’s comments were disrespectful.
‘They deserve safe and healthy meals to learn’
‘‘The images of plastic melted into school lunches served to our children is heartbreaking. These children deserve safe and healthy meals, delivered on time, so they can learn.’
‘‘No one would invite a child into their home and then serve them melted plastic, an ingredient they might be allergic to, or food that didn’t fit with their religious beliefs. The government should treat all children with the respect any caring person would.’’NZEI president Ripeka Lessels via the ODT-$$$ this morning.
Charts of the day
Infrastructure, commercial, retail & industrial building slumping
Housing floor area built lowest in 2024 in 10 years
US GDP forecasts slump as Trump sets tariffs and DOGE slashes jobs
Substack essentials today
Cartoon of the day
‘Did the United States just swap sides?’
Timeline-cleansing nature pic of the day
Ka kite anō
Bernard
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