The Kākā by Bernard Hickey
The climate change bill arrives and the grown-ups don't want to pay

The climate change bill arrives and the grown-ups don't want to pay

Govt says will share flood buy-backs and protection costs with councils and insurers, but can't (or won't) say how (or when) the burden will be shared; Climate now changing faster than our politics
Aotearoa’s failure to deal with the escalating pace of human-induced climate change was starkly on display yesterday. Lynn Grieveson/Getty Images

TL;DR: Our planet is now warming and generating extreme climate events faster than our politicians, voters and institutions can agree to reduce the costs and share the burden of those events fairly now and in future.

That was evident in a range of delays, non-responses, finger-pointing fudges and distractions thrown up yesterday by Aotearoa’s politicians, who by default have decided to force today’s costs down onto those who can least afford it, and push tomorrow’s costs onto those who can’t do anything right now to stop it. See those examples below.

News elsewhere from Aotearoa’s political economy on climate, housing and poverty:

  • a third of babies overall and more than half of all Māori babies under six months old are now not fully vaccinated, up substantially from before Covid; The Post-$$$

  • Thomas Coughlan reported for The NZ Herald this morning he understood “from people familiar with the matter that the Ōtaki to north of Levin (O2NL) expressway could cost as much as $1.9 billion1 based on one recent costing,” which would be up by $400 million from the last official estimate; and,

  • The Earth Commission’s group of more than 40 researchers published a study in Nature overnight showing humans had pushed seven of the planet’s eight physical boundaries into areas that risk causing mass displacements, migration and conflicts.

Usually, I put in a paywall for paying subscribers at this point in the email newsletter and lock off the podcast above from free subscribers. But I want to experiment until the end of June with publishing everything to everyone immediately to see what happens with subscription rates, revenues and email opening rates. I want to thank paying subscribers in advance, who are still the only ones able to comment and get access to our very active chat section and webinars. Join our community by subscribing in full to support my journalism in the public interest about housing (un)affordability, climate change (in)action and poverty (not enough) reduction.

The bill has arrived and the grown-ups won’t pay

The understandable instinct of any leaders when confronted with a costly and unpopular choice is to play for more time and information, hoping new less painful options are magicked up, or the delay is long enough that today’s voters and shareholders2 aren’t around to bear the costs when they finally can’t be avoided.

That strategy — it’s more of a set of instincts — can work when the tectonic forces driving those costs and decisions is slower than the decision-making processes. Democracies, organisations and societies captured in the status quo have the slowest processes, in the absence of immediate existence-threatening crises.

Yesterday, the failure of Aotearoa’s political instincts and metabolic rates to deal with the escalating pace of human-induced climate change was starkly on display in a series of events, announcements, non-decisions and blatherings, including:

  • the Government yesterday announced it would share with councils and insurers the cost of buying back about 700 now-uninhabitable homes (~$1 billion) and protecting another 10,000 at-risk homes (un-estimated) from extreme climate events, but couldn’t say how much it would or could pay, and how much it expected or would force councils and insurers to pay;

  • the Deputy Mayor of our biggest and most-heavily-affected city, Auckland’s Desley Simpson, expressed alarm3 this morning that the Government hadn’t said how much of the sharing it would do, saying her ratepayers couldn’t pay;

  • the Mayor of that city, Wayne Brown, yesterday tried to stop the country’s largest news gatherer and its (only) two television news broadcasters from attending and reporting on his very-public announcement of how he wanted our second-largest Government4 to respond to these climate shocks financially by cutting social spending and selling a share of the country’s most profitable monopoly, in order to protect home-owners from higher interest rates;

  • the Mayor of our second-largest city, Christcurch’s Phil Mauger, ramped up efforts to rip out the safety bollards his own council screwed into one of its busiest roads to protect cyclists, just so drivers could get a lane back to pump more emissions into the climate5;

  • the leader of one of our four biggest political parties, ACT, said the Government was setting a dangerous precedent by agreeing to fund part of the buy-outs, which was likely to lead to councils being even more restrictive with consenting for new homes6; and,

  • a group of shop-owners in our third-largest city, Wellington, escalated their two-year-long legal challenge to a plan to remove 145 angled car parks outside their shops in order for the busiest commuter route into the city to have a safe cycle lane7.

News briefly elsewhere…

Hawkes Bay Regional Council, which estimates its total Gabrielle flood repair costs $885 million, is fighting with the Government’s National Emergency Management Agency (NEMA) over who will pay for emergency costs. RNZ (Lauren Crimp)

NZ Post dropped service to 25% of the world, and no one knew. Newsroom Pro-$$$ (Nikki Mandow)

Government may invest up to $56 million to subsidise less-carbon-intensive inshore fishing fleet. Newsroom-Pro-$$$ (Andrew Bevin)

Kāinga Ora downsizes KeriKeri housing development by a third to eight homes and adds two car parks to 16 parks after protest by 800 residents against three-story development. NZ Herald

National MP David Bennett, who will retire at this election after being an MP for 18 years, apologises for saying Commerce Commission staff ‘need a bullet.’ RNZ

Ka kite ano



That cost for the motorway in the Horowhenua would make the per-kilometre cost for the 24km road around $79 million, while the 4.5km Waterview tunnel and motorway in Auckland cost $311 million per-kilometre in 2017 and the ongoing City Rail Link rail project in Auckland is costing at least $1.6 billion per-kilometre for its 3.45 km of tunnels


Sadly, in our version of democracy, those without ownership stakes (ie renters, workers, other non-voters and the unborn) are irrelevant in the reality of hard political decisions dependent on winning and retaining the votes of swinging median voters.


Simpson told Bernard Orsman in this morning’s NZ Herald the cost of buying back Auckland’s 400 red-stickered homes could be $500 million, adding: “This could cost us a lot. We don’t know what the split is between the taxpayer, the ratepayer and the homeowner themselves. I welcome the announcement, I welcome the timeframe, but I’m holding my breath on what happens next.”


Auckland City Council governs an area that a third of Aotearoa’s population live in and that generates 37% of GDP, controls assets it values at $72.7 billion, generates a pre-capital-spending surplus of $1 billion and expects to fund its rising investment needs with bigger surpluses and less borrowing (I kid you not), as detailed here in this investor update in March. This essentially means the costs of future investment will be borne through ongoing spending reductions and revenue increases, rather than using debt to spread the costs out over a longer period at the expense of higher mortgage rates now.


See more detail here in this Press-$$$ article this morning on the stoush over the recently-installed Park Terrace cycleway.


Although David Seymour was unhappy with the Government-funded bailout for affected land owners, he didn’t say he would reverse it, although he did say: “It means that every property use effectively has an unwritten guarantee by Government. Governments and councils will inevitably respond by becoming more restrictive on consenting as a result.”


See more here via Stuff on the Thorndon Quay Collective’s legal action, and the comment of one of its lawyers in the article yesterday arguing the Council did not consider all the options: “The status quo was not considered as a reasonably practicable option,” Hannah Yang said, “Even though the council said it was one.”

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.