Long stories shortest: Christopher Luxon denies his Government caused a homelessness crisis documented by Auckland Council. Instead, he wants media to celebrate his achievements more. Libelle’s collapse demonstrated how David Seymour has cut Erica Stanford out of the loop and how he ignored official concerns last year about Libelle and Compass. Donald Trump just doubled tariffs on Canadian steel and aluminium imports to 50%, so global markets are falling again this morning.
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Long stories short, my top six news items in Aotearoa’s political economy around housing, climate and poverty on Wednesday, March 12 are:
PM Christopher Luxon yesterday denied1 the Government’s removal of homeless families from motels without knowing where they ended up was the cause of a 50% rise homelessness, as reported2 on Monday by Auckland Council. He said the media should report more about lower numbers of homeless people in motels. (See quotes of the day below)
Luxon adopted some of Winston Peters’ anti-‘woke’ campaign yesterday, asking Judith Collins to focus a Public Service Act overhaul around making it a meritocracy, without giving examples of unmeritocratic hiring. (See quotes of the day below)
Libelle, the company making 120,000 school lunches for Auckland students in David Seymour’s cut-price lunch programme, collapsed into liquidation yesterday, blindsiding Erica Stanford and forcing the lead contractor Compass to take over its 600 staff and operations. (See quotes of the day below)
Seymour said Libelle’s collapse was a good thing in the long run, without giving details because of ‘commercial confidence,’ although it emerged he had known about its financial problems for months. Stanford said she wasn’t aware of the ‘full and utter extent of it,’ noting Seymour had told Luxon, but not her. (See quotes of the day below)
BusinessDesk-$$$’s Cecile Meier reported last week Government officials raised concerns about Compass and Libelle in September last year after hearing the companies were shortlisted to run the programme in September, including that both companies were poor performers in the previous Ka Ake Ka Ora programme, but were the only two providers chosen out of the 156 previously used. (See OIA of the day below)
Donald Trump lashed back overnight at a Canadian threat to impose a 25% surcharge on electricity exports from Ontario. He announced a doubling of tariffs on Canadian steel and aluminium imports to 50% in a social media post, which hammered global stocks and bonds again on US recession and inflation fears.3
My Pick’ n’ Mix Six of scoops & deep-dives elsewhere
Bank capital rules deep-dive: With Orr gone, Willis sharpens case for relaxing bank capital rules. The Post-$$$’s Tom Pullar-Strecker
Climate, housing & insurance deep-dive: Falling insurance cover could hurt whole economy, leaders warn RNZ’s Eloise Gibson & Kate Newton
Politics analysis: Why Christopher Luxon approached influencer Alice Taylor. Christopher Luxon’s political judgement is not his strong suit - but he needs it now more than ever. Stuff’s Jenna Lynch.
Politics investigation: Millions of dollars set to go to offshore gambling operators RNZ’s Guyon Espiner
Geopolitics analysis by WSJ’s Chief Foreign Affairs Correspondent Yaroslav Trofimov: Trump Is Overturning the World Order That America Built: As the president embraces Putin, longtime allies are starting to view the U.S. not just as unreliable but as a possible threat to their own security.
Banking Op-Ed by Massey University’s Claire Matthews via The Conversation-RNZ: Calculated risk: Will the next Reserve Bank governor relax capital requirements for banks?
Quotes of the day
‘We should be meritocratic’
“I'd just say, when we took the keys to the place, it was pretty woke, and it's entirely appropriate that we look at what else we can do to make sure the public service delivers.
“We want to make sure it's a meritocracy, meritocracy, meritocracy... we need to make sure it's all about meritocracy.” PM Christopher Luxon telling reporters he was open to using some of Deputy PM Winston Peters’ anti-‘woke’ campaign by asking Public Service Minister Judith Collins overhaul the Public Service Act to ensure it was a meritocracy.4
‘A complete and utter (insert word here)’
“Minister Seymour had updated me a little while ago that there was some difficulties. I didn’t know the complete and utter full extent. He has been updating the Prime Minister, but in terms of what happened today, I didn’t know it was at that point.” Education Minister Erica Stanford talking to reporters in Parliament about the collapse.5
Making six times as many lunches for a third of the cost
“Last year they did 20,000 lunches a week and this year they were trying to do 120,000 a week, so I mean two or three times is possibly doable, but six times is quite a lot isn't it?” A Libelle worker talking to RNZ’s Checkpoint about the issues faced by the lunch provider as it sextupled lunch production at a third of the cost ($3 vs $9).
‘Why aren’t you saying nice things about us’
“I've met with homeless shelters in the past, I haven't in recent weeks or recent months, but the reality is I'm just saying to you I'm proud of the work we're doing. We're doing a great job.
“We talked about emergency housing, I remember being a big issue in the media, and I haven't heard anybody actually really pick up and say 'hey listen, great job, great job, isn't it awesome?'” PM Christopher Luxon when asked about the rise in homelessness documented in Auckland.6
OIA document of the day
‘We have some concerns about Libelle and Compass’
Last week BusinessDesk-$$$’s investigative reporter Cecile Meier detailed documents provided under the Official Information Act to Health Coalition Aotearoa showing how Ministry of Education officials had warned Seymour about the poor performance of Libelle and Compass under the previous programme (bolding mine).
An email from Ministry of Education staff sent to its operations and integration leader Sean Teddy, along with previous memos detailing a litany of performance issues for both companies, was released under the Official Information Act (OIA) to Health Coalition Aotearoa.
Compass and Libelle are the only businesses out of 156 suppliers to last year’s school lunch programme to have been retained for this year’s cut-price model. They are part of a consortium, which has been under fire since the start of the first term for meals described as inedible, burned, full of leaking plastic, repetitive and failing those with special dietary requirements.
The email, entitled “ROI (Registration of Interest) process for alternative provision concerns”, reveals:
Libelle lost nearly 60% of the schools on its books since it joined the programme in 2021. It went from delivering lunches to 196 schools down to 79 by September 2024.
Compass failed 53% of the 38 meals assessments the ministry conducted in Term 3 and 4, 2023 in terms of meeting nutrition standards.
Together, the companies fielded 242 complaints since 2021. Libelle had 163 complaints and incidents “predominantly related to food quality/appeal, food safety, surplus/waste and suitability to special diets”, the email said.
Surplus levels in 2024 for both Libelle and Compass were “well above the programme average” at 11.5% and 10.6% respectively, compared to a programme average of 6.4%.
The ministry defines a surplus meal as an “untouched complete meal that is left over after all lunch service is finished”.
Both companies went through a six-week Performance Management Plan in early 2024, with mixed results.
Compass lost 23 of the 53 schools it had on its books since it started in 2021 by September 2024. Meal assessment data about Compass “indicated prolonged issues with undersized meals, inconsistent portioning and meals not meeting nutrition standards overall” in 2023.
“Libelle and Compass have partnered with Gilmours to register their interest in the alternative provision model,” the email said. “While their application was evaluated positively in its written content, the special projects team provided detailed due diligence on all suppliers early on in the process to ensure the panel were aware of the historical performance concerns,” the email says. BusinessDesk-$$$
Chart of the day
Co2 levels average over 430 ppm for first time last week
Substack essential
writes via his substack that National needs to change the economy, not their leader. writes via his substack about how housing is a pass/fail question for climate.Cartoons of the day
Timeline-cleansing nature pic of the day
Ka kite ano
Bernard
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