Alice Taylor : Budget-friendly winter cooking
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RNZ News
19 hours ago
- RNZ News
Local Government Minister to propose policy that caps rates
Local Government Minister Simon Watt. Photo: Alex Burton A policy proposing a model for capping local council rates will be taken to Cabinet before Christmas, The Local Government Minister says. The government has previously signalled it was considering options to control rate rises - including placing a cap on how much local councils can increase rates. Local Government Minister Simon Watt told Morning Report there was a big gap between the country's average rate increase last year at 9.6, and population growth and inflation which sat at around 1.6 and 2.2 respectively. "[What] ratepayers are saying is they can't afford to continually see the degree of rate increases that are well above inflation and well above population growth," he said. Watt said he was working at pace on the proposed policy and feedback would be sought later this year. He said the government were looking at the Australian model - which already did rate capping - to take any "learnings" from it before implementing a similar policy in New Zealand. He said they wanted to make sure it worked and didn't in effect restrict any other policies, particularly those focused on increasing housing growth. Finance Minister Nicola Willis. Photo: RNZ / Mark Papalii Last month Finance Minister Nicola Willis told Morning Report that the the government wanted councils to stick to the basics and not waste ratepayers money. "We are concerned that the rates bill is a big part of the cost of living for many households, and rates have been going up very fast and are set to keep going up very fast across many councils," she said. "Councils don't always do a great job of spending your money like you would spend it. There are wasteful projects - there is evidence of that. "We want councils focusing on the things people expect them to do, which is the rubbish, the roads, the pipes, the basics - and not all the fanciful projects." Labour Party leader Chris Hipkins. Photo: RNZ / Mark Papalii Meanwhile Labour Party leader Chris Hipkins said the reason rates were going up at the rate they were, was because the government abolished reforms such as Three Waters. "The biggest contributor to rates going up around the country is the fact that our water infrastructure is in such a state of disrepair, capping the rates, in order to say 'well we want you to not do water infrastructure', just pushes the problem further into the future," he told Morning Report in July. "If you look at my area, Wellington... basically in the summer you can walk around and see all the leaky pipes because it's the only green spots on the grass at the side of the road. "Simply saying 'well just don't spend money on that' is going to make that problem worse not better." ACT leader David Seymour and New Zealand First leader Winston Peters. Photo: RNZ Both ACT and New Zealand First have previously cast doubt on whether capping council rates is the answer . ACT leader David Seymour said "you've got to be able to control the costs first". Seymour said the issue was being looked at, but he was "really strong" on making sure "you're saving money before you cap the revenue". "The only thing I'd say, if you're asking me, is don't cap your income until you've got your spending under control." When asked for his position, Winston Peters responded by saying "every other party is interfering in local government" and that New Zealand First had never interfered in local government. "It's a case of doctor, heal thyself" he said, "we can't be preaching to them when we haven't got our own spending under control ourselves." Local Government New Zealand has also cried foul over potential rates capping , saying such a policy would only drive them up. Local Government New Zealand President Sam Broughton. Photo: RNZ / Angus Dreaver In March, LGNZ President Sam Broughton said the government's proposal for a cap on rates increases would only make things worse, with Australian examples showing it would do the opposite to what the government wants. "A rates cap will have unintended consequences on communities, it will restrict the ability of councils to invest in infrastructure and risks their financial instability, and we need to avoid this," he said. "In the past, councils have had their own voluntary rates caps in many respects with elected members deciding that they'll keep their rates increases at 2, 3 or 4 percent or whatever is palatable to the community. "Over generations of that decision making we have a massive... multi-billion dollar infrastructure deficit as a country, and so we don't want to exacerbate the situation that we're in." He said South Australia, for example, had used transparency and accountability rather than the rates capping approach taken in Victoria and New South Wales, and was seeing lower rates rises as a result. "Sometimes, if you have rates caps, then you're making artificial decisions about the investment required. And if investment in infrastructure isn't kept up to date, then the catch up is very expensive later on. "We would rather have tools and availability to show our community the value of council investment and infrastructure as required and over the medium term." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
RNZ News
a day ago
- RNZ News
Australia could be about to leapfrog NZ on climate targets
Resources Minister Shane Jones. Photo: RNZ / Mark Papalii A conservative Australian politician turned climate leader has told New Zealand ministers it is in their interests to do more on climate change. Australian climate change authority chair Matt Kean - a former top minister for the New South Wales Liberal Party - met with Resources Minister Shane Jones and Energy and Climate Change Minister Simon Watts while he was in New Zealand to attend the Green Property Summit. "My message to them was we want to encourage them, we want to support them and we want to share ideas about how we could lower cost of living pressure for New Zealand households and business, how we could create new jobs and opportunities for New Zealand at the same time as reducing emissions," he said. "My message to conservatives both in Australia and abroad is when it comes to taking action on climate change, if you do it in an economically rational way there is also a political dividend to be gained." Australia could be about to leapfrog New Zealand on the ambition of its climate targets, as it bids to win the right to host the COP31 global climate summit in 2026 . New Zealand's international climate target for 2030 - cutting emissions by 50 percent - is currently ahead of Australia's 43 per cent target, with both countries using 2005 as a base year. But New Zealand has adopted a target for 2035 of cutting planet-heating gases by 51-55 percent, only slightly above its 2030 target, while the Australian climate change authority has consulted on a target of between 65 and 75 per cent. Kean described New Zealand's ambition as "largely static". Australian climate change authority chair Matt Kean. Photo: Supplied / Climate Change Authority He could not divulge where Australia would land on its 2035 target but he said beating New Zealand - and then some - should be achievable and good for Australia. "Obviously Australia wants to do its bit to meet this challenge, but we also think it's in our economic interests to grab the capital that is available internationally to build the industries and opportunities that Australia wants to realise for the future," Kean said. "Our national interests as a country on the front line of the impacts climate change are to be part of a global effort to reduce emissions, but it's also in our national interests to build industries, attract investments and create jobs as a result of this global economic transition." He said the same applied to New Zealand, and he hoped to see more competition between the countries on climate action. "There's always been a healthy and friendly rivalry between our two countries on the sporting field and hopefully that expands to meeting climate challenges." Kean said he was grateful for the chance to meet Jones and other government ministers and MPs. He was supportive of a proposal for government subsidies for New Zealand homeowners to replace their gas and inefficient heaters with heat pumps, which the Green Building Council said would save the country $1.5 billion a year . Australia had its own challenges with gas availability, but unlike New Zealand it had subsidies for alternatives such as residential solar panels, electric storage batteries and hot water heat pumps. Building Council chief executive Andrew Eagles told Morning Report that although New Zealand households were making progress in the adoption of heat pumps and decreasing purchases of gas hot water systems, commercial and residential natural gas/LPG consumption was still climbing - leaving some gas-reliant businesses facing closure. "It's a huge talking point in Australia as well, we've got more gas than pretty much anywhere else on Earth but because it's all contracted offshore there's a shortage of gas for Australian businesses and families and that's putting enormous pressure on household bills," said Kean. "We were trying to share some of our learnings from our time in government and how we addressed it and also to hear where the New Zealand government was coming from as well." He said governments had a role to play in the energy market. "In Australia, my preference was always for less government intervention but we had to look at what government not being involved could look like, and certainly in the energy transition the private sector wouldn't always take on the risk that was required," he said. "The government putting the policies in place that facilitated the private sector meant savings for business, savings for households and a better outcome." RNZ has approached Jones' office for comment. Australia has overtaken New Zealand for EV sales on the back of more supportive government policy and has long been ahead on rooftop solar with almost a third of households having solar panels. However its electricity sector as a whole still burns much more coal and gas than New Zealand's. Australia's international climate targets do not cover its fossil fuel exports, because the coal and gas it produces for export are burned elsewhere. That's in contrast to New Zealand's export dairy sector, which produces most of its emissions inside New Zealand. (However international flights for tourism are excluded from New Zealand's targets). As one of the world's biggest coal and gas exporters, Australia's fossil fuel exports produce around three times as much climate-heating gases as activities within Australia, according to one study . A landmark opinion from the International Court of Justice has declared major fossil fuel producers could be liable for reparations to countries damaged by climate change. Kean said Australia needed to be ready to replace its fossil fuel exports. "The reality is the fossil fuels we are exporting are not going to be at the same level of demand as is currently the case, so we need to prepare for this transition and start to build other exports that can continue to grow Australia's GDP," he said. He said Australia had "periodic table" of elements in its ground to draw on. "We recognise that China, Korea, Japan, some of our big takers of Australia's fossil fuel, are changing the things they want to use to power their economies and the reality is we're really well placed to meet their new needs, because of our abundant renewable energy resources." Kean said his message of saving money and energy while cutting emissions received a good reception from Jones, a minister who has previously described climate concern as "hysteria" . Kean was a member of the conservative Liberal Party and former New South Wales Treasurer and Energy minister before chairing the climate change authority. He said his message to conservatives in Australia and New Zealand was that there were political dividends to be gained from progressive action on climate change. "In the state of New South Wales where I hail from, the forward-thinking climate policies that the conservative government put in place have now been adopted by the progressive government, so the policies are surviving political cycles, and what we have been seeing at a national level is the party that advocated for stronger action on climate change get a huge and thumping majority, whereas the conservative party that looked to backslide when it came to climate action lost a whole lot of seats in their traditional heartland to climate friendly independents." The climate authority's final recommendation on Australia's 2035 target is due to be provided to Australian Climate and Energy Minister Chris Bowen within the next month. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
NZ Herald
a day ago
- NZ Herald
The double tax hitting ratepayers in the pocket, another rate cut looms and concrete data shows hard times roll on
Why is it that local bodies do not receive a share of the GST spent in their area? Local government spends a lot of money providing the services to enable businesses to generate tax dollars. Why not return a portion of this to local government? At the very least, removing a tax on a tax by not charging GST on rates would help councils to keep rates down. Is there an explanation as to why this can't or won't happen? Steve Browne A: Thanks Steve, a couple of good questions there. I wrote on Sunday about the dire state of Auckland's economy. Perhaps your suggestion would offer a way forward. The idea of letting councils have a share of GST has been pitched before. In particular, the New Zealand Initiative (the economic think tank) has been a champion of the idea for several years. The New Zealand Initiative is a strong advocate for more devolved government, giving local councils more say in decision-making and funding them to do it. It has even highlighted the merits of the Swiss model of tax sharing. Switzerland operates as a confederation with three levels of government – federal, cantonal (state), and communal (local). The Government, the federal level, collects income and corporate taxes but is constitutionally required to share a portion with cantons and communes. Currently, cantons receive about 17% of direct federal tax revenue and they often pass some of this down to their communes. In a research paper published in 2019, the New Zealand Initiative's Bryce Wilkinson and Patrick Carvalho argued that local councils bear most of the new development costs, while tax revenue windfalls from the developments flow directly to central government in the form of increased income and GST collections. They advocate for central government to pay local councils for every new house completed within a specified period. 'The payments could be benchmarked on the goods and services tax (GST) charged on residential building (excluding land value), or be a fixed sum,' they said. 'Under the GST model, if each of the 9400 residential building consents issued in Auckland in 2015 resulted in construction, and each home had a build value of $200,000, Auckland ... Council would have netted $282 million.' The idea has gained some serious traction with the coalition Government, which has agreed in theory to look into some kind of GST sharing. As to your other question about paying GST on rates, well, it's a relevant one, but perhaps not for the reason you might have hoped. From what I can see, any suggestion that the Government would give up the GST on rates would likely see it returned to the council rather than to ratepayers directly. But the Government probably won't even go that far, given that it is desperate for revenue at the moment. It looks more like it will limit things to considering returning some of the tax collected on new residential builds to help with infrastructure costs. So, why not? I guess if I have a reservation about devolving power and tax revenue to local councils, it is that they haven't exactly covered themselves in glory when it comes to financial management in the past few decades. I've never had a great deal of faith in central Government to get things done, and if anything, I'm probably more sceptical about the standard of governance at a local level. Smaller councils in particular are vulnerable to the vagaries of low levels of participation in democracy (that's a nice way to say they sometimes elect weirdos and nut jobs). What happens if we divert tax funding to local councils for infrastructure, but they vote for an unrealistic blue-sky project that bankrupts them? I suspect the Government will still be expected to come to the rescue. I worry that New Zealand doesn't have the level of sophistication in local body politics that Switzerland does. These fears may be unfounded. I'm pretty sure the New Zealand Initiative would argue that the low standard of local government simply reflects the low level of influence it has in the grand scheme of things. Perhaps if we funded local government to do more of our governing, the standard would rise. It's probably a moot point, though. The answer to your question as to why this idea isn't taken more seriously is probably simply down to politics. If we can trust central government politicians, from all ends of the spectrum, on one thing, it's that they are not going to be keen to legislate away their own power. Reserve Bank to deliver verdict on economic recovery Next Wednesday, we'll get the first full Monetary Policy Statement from the Reserve Bank (RBNZ) we've had since May. In July – when the RBNZ hit pause on cuts – it was just the shorter Monetary Policy Review, which doesn't include a full set of forecasts. The market, and almost all the local economists, are picking that we'll get a 25-basis-point rate cut, taking the Official Cash Rate (OCR) to 3%. But a lot has changed since May, so most of the interest is likely to be in the new forecast rate track that the RBNZ produces. Evidence that the economic recovery stalled in the second quarter has been pretty strong. We've seen the BNZ/BusinessNZ Performance of Manufacturing and Performance of Services Index slip back into negative (contractionary) territory. Employment growth has stalled, particularly in the big cities, where unemployment is running much higher than the national average. BNZ head of research Stephen Toplis has taken an early look at what we might expect from the RBNZ next week. 'Our expectation is that the bank will print a rate track not dissimilar to what it printed back in May, namely with a decent chance of a cut to 2.75%,' Toplis said. 'We can see the argument for taking a more cautious approach, especially if the committee feels it does not want to push an incoming new governor into a corner.' 'Equally, an admission that even more work than a 2.75% low might be required is plausible. While 2.75% is our central forecast for the low, we think the odds of 2.5% are marginally higher than a 3% stall.' But Westpac chief economist Kelly Eckhold took a slightly more upbeat tone in his latest Economic Overview. Eckhold is still forecasting the RBNZ to pause again, after next Wednesday's cut, leaving the OCR at 3% for an extended period. 'The near-term economic outlook has weakened slightly since May,' he said. 'Uncertainty associated with the trade war, ongoing cost-of-living pressures and the still slow pass-through of past OCR cuts into household budgets have been weighing on activity.' But so far, the tariff damage to the global economy had not been as bad as expected. And while the pass-through of interest rate reductions had been gradual to date, they would provide 'a sizeable boost to households' disposable incomes and demand more generally over the next six to 12 months'. Here's hoping ... Hard times More evidence of the big slowdown in the second quarter came through on Tuesday with the release of the latest concrete production statistics. Concrete production is a pretty good barometer of the state of the construction sector, which we know has been struggling in the past few months. The news from Stats NZ was not good. In the June 2025 quarter, the actual volume of ready-mixed concrete produced was 891,909 cubic metres, down 10% compared with the June 2024 quarter. That is a big fall. While the completion of big projects such as Auckland's City Rail Link might have compounded the fall, it still likely represents a big slowdown in home building and commercial construction. If you want to visualise the concrete deficit (about 99,000 cubic metres), artificial intelligence (AI) tells me it would be enough to cover Eden Park's main rugby field to a depth of 14m. I'm not sure why Eden Park ... perhaps the AI thinks we should build a new waterfront stadium. But anyway, it's a lot of concrete to not get poured in just one quarter. Annual ready-mixed concrete volumes continued the downward trend which has persisted since volumes peaked at 4.78 million cubic metres in September 2022. Annual volumes of 3.70 million cubic metres in June were 23% below that peak, and the lowest since September 2014. Infometrics economist Matthew Allman noted that annual ready-mixed concrete volumes had continued on the downward trend that has persisted since volumes peaked at 4.78 million cubic metres in September 2022. Annual volumes of 3.70 million cubic metres in June were now 23% below that peak and the lowest since September 2014. The near-term outlook for construction activity remains soft, which will likely prevent a material change in the trend in concrete volumes over the next few quarters, Allman said. Infrastructure activity provides some upside risk for concrete volumes, with the Government focused on progressing major projects heading into the 2026 election. Activity is more likely to show through in 2026 as there currently seems to be a mismatch between intentions and activity in the infrastructure sector. More clues to come We'll see other high-frequency data on Friday, with new monthly numbers for electronic card spending, immigration and tourism (short-term visitors). All of these will be highly relevant to Auckland's economic recovery, given it is largely underpinned by population growth (driving the property sector) and the service sector. FYI, 'high frequency' just means the regular monthly numbers we get for second-tier economic data as opposed to the quarterly numbers we get for the biggies like GDP, inflation and unemployment. All of this stuff will be relevant to the Reserve Bank as it tries to get a handle on the extent of the slowdown. It will be fed into the RBNZ Nowcast, which is its version of the AI-driven, real-time GDP forecaster that has become popular (Massey University and Westpac have their own version). The Nowcast model has New Zealand's economy contracting again from mid to late June and it has been flatlining at about negative 0.3% ever since. It's not clear how much weight the RBNZ puts on this model, but at face value, it will only add to the case for further rate cuts this year. Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003. To sign up to hisweekly newsletter, click on your user profile at and select 'My newsletters'. For a step-by-step guide, click here. If you have a burning question about the quirks or intricacies of economics send it to or leave a message in the comments section.
