Treasury's Half Year Economic and Fiscal Update shows more delay to getting the books back to black.  

The deficit's expected to deepen to a depth of $16.9 billion and not narrow to $60 million dollars until 2029-30. 

Economic growth is expected to be just 1.7% next year. 

NZ Herald Business Editor Liam Dann told Kerre Woodham that the problem isn’t in how much we borrow, but the efficiency of government spending.  

He says there's a big lack of trust in the government, as people would be able to cope with higher borrowing if it was going towards amazing infrastructure projects, but we haven’t seen that over the last decade.  

LISTEN ABOVE 

Treasury's Half Year Economic and Fiscal Update shows more delay to getting the books back to black. &nbsp;
The deficit's expected to deepen to a depth of $16.9 billion and not narrow to $60 million dollars until 2029-30.&nbsp;
Economic growth is expected to be just 1.7% next year.&nbsp;
NZ Herald Business Editor Liam Dann told Kerre Woodham that the problem isn’t in how much we borrow, but the efficiency of government spending. &nbsp;
He says there's a big lack of trust in the government, as people would be able to cope with higher borrowing if it was going towards amazing infrastructure projects, but we haven’t seen that over the last decade. &nbsp;
LISTEN ABOVE&nbsp;

Join Kerre Woodham one of New Zealand’s best loved personalities as she dishes up a bold, sharp and energetic show Monday to Friday 9am-12md on Newstalk ZB. News, opinion, analysis, lifestyle and entertainment – we’ve got your morning listening covered.

Kerre Woodham Mornings Podcast

Liam Dann: NZ Herald Business Editor on the state of the Government's books

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/5d1935ac-d1bb-48a3-8289-b3b501763735/transcript

I was in the Coromandel over the weekend and I was reading their regional paper which still exists, The Informer, and in it was an article by Jeffrey Robinson, who's a local affairs reporter with decades of experience, and he points out the debate that is happening all over the country. The government is ending New Zealand's two tier regional and district council system, it has to happen by 2028 and every district must choose a new unitary council model.

The only rule is, well you can't go with the status quo. There's got to be change, there's got to be a rationalisation, it's got to be amalgamation, it's got to be smaller.

Now for Coromandel residents, they believe this means choosing between two options. One, create a small eastern Waikato focused council that looks after the Hauraki Plains and the Coromandel Peninsula that reflects the rural and coastal communities of interest, a Hauraki Plains Coromandel unitary authority. Or the other choice is be absorbed into a Hamilton based Waikato super city scenario.

Despite not having asked its ratepayers what they want because there's just not enough time and the government has demanded the action, they're all debating it. And the Waikato Regional Council has already said what it wants: one giant unitary authority based out of Hamilton for the entire region.

I mean it's the 07 isn't it? It's all got the same phone number, let's all have the same council.

Now under that model, the Coromandel with just 32,000 people would hold one seat on a 16 member governing board based out of Hamilton. Hamilton alone would hold seven seats. They have the advantage, they have the influence.

Decisions on rates and infrastructure and environmental management and long term planning would be made far from the Coromandel, while a Coromandel local board with only one seat to represent it would be left with minor matters they'd worry about parking and Christmas decorations, but they think they've got bigger fish to fry.

And, of course, a Hamilton based super block of seat holders would mean that Hamilton would be able to dominate decisions and funding. Yeah we could do a new bridge in the Coromandel, or we could make sure that new suburb of Peacocke has more stuff. I think we'll go for the Peacocke, won't we? What do you think? Yeah, there's only one guy to vote against it, that's what we'll do.

The Coromandel and Thames are very wary of that.

This may be efficient, but they believe it would also be unfair.

This eastern Waikato unitary council by the way, this idea has deep roots. Back in 2012 Coromandel and Hauraki residents gathered more than 1,500 signatures calling for just that, a council that represented Hauraki and Coromandel, keeping the decision making local. And such a model would return regional rates and jobs and environmental management to the communities they actually affect rather than happening in Hamilton, and ensure representatives live with the consequences of their decision.

Thames Coromandel councillors will be discussing this on May 26th. Here's the thing though, have they asked their ratepayers? No they have not, because the government said you've got three months to do this, it's 10 weeks away, you've got to do it, just do it.

They don't have the time to consult. Nobody does up and down the country. And this is happening up and down the country.

In the Wairarapa, Masterton, Carterton and South Wairarapa are considering a combined rural unitary council because they don't want to be ruled by Wellington.

In Taranaki, iwi and local mayors support splitting the region into two unitary councils that represent the natural north south and urban rural division. Hāwera does not want to be ruled by New Plymouth.

Waitomo and Otorohanga are developing a King Country unitary proposal because they don't want to be run by Hamilton.

And in the South Island, Selwyn's mayor also wants to protect Selwyn's identity because there they're talking about the Canterbury councils merging into a Greater Christchurch super city and they are not sure they want that.

The mayor, Lydia, says it's an incredibly short timeframe, we can't consult with our ratepayers but we need to make sure we make the right decision. And they're not happy about it. Waimakariri and Selwyn ratepayers have expressed reservations of being ruled by Christchurch.

And this is a real fear up and down the country. The move to rationalise local government could see the big cities and towns grabbing all the power and money. 

LISTEN ABOVE

I was in the Coromandel over the weekend and I was reading their regional paper which still exists, The Informer, and in it was an article by Jeffrey Robinson, who's a local affairs reporter with decades of experience, and he points out the debate that is happening all over the country. The government is ending New Zealand's two tier regional and district council system, it has to happen by 2028 and every district must choose a new unitary council model.
The only rule is, well you can't go with the status quo. There's got to be change, there's got to be a rationalisation, it's got to be amalgamation, it's got to be smaller.
Now for Coromandel residents, they believe this means choosing between two options. One, create a small eastern Waikato focused council that looks after the Hauraki Plains and the Coromandel Peninsula that reflects the rural and coastal communities of interest, a Hauraki Plains Coromandel unitary authority. Or the other choice is be absorbed into a Hamilton based Waikato super city scenario.
Despite not having asked its ratepayers what they want because there's just not enough time and the government has demanded the action, they're all debating it. And the Waikato Regional Council has already said what it wants: one giant unitary authority based out of Hamilton for the entire region.
I mean it's the 07 isn't it? It's all got the same phone number, let's all have the same council.
Now under that model, the Coromandel with just 32,000 people would hold one seat on a 16 member governing board based out of Hamilton. Hamilton alone would hold seven seats. They have the advantage, they have the influence.
Decisions on rates and infrastructure and environmental management and long term planning would be made far from the Coromandel, while a Coromandel local board with only one seat to represent it would be left with minor matters they'd worry about parking and Christmas decorations, but they think they've got bigger fish to fry.
And, of course, a Hamilton based super block of seat holders would mean that Hamilton would be able to dominate decisions and funding. Yeah we could do a new bridge in the Coromandel, or we could make sure that new suburb of Peacocke has more stuff. I think we'll go for the Peacocke, won't we? What do you think? Yeah, there's only one guy to vote against it, that's what we'll do.
The Coromandel and Thames are very wary of that.
This may be efficient, but they believe it would also be unfair.
This eastern Waikato unitary council by the way, this idea has deep roots. Back in 2012 Coromandel and Hauraki residents gathered more than 1,500 signatures calling for just that, a council that represented Hauraki and Coromandel, keeping the decision making local. And such a model would return regional rates and jobs and environmental management to the communities they actually affect rather than happening in Hamilton, and ensure representatives live with the consequences of their decision.
Thames Coromandel councillors will be discussing this on May 26th. Here's the thing though, have they asked their ratepayers? No they have not, because the government said you've got three months to do this, it's 10 weeks away, you've got to do it, just do it.
They don't have the time to consult. Nobody does up and down the country. And this is happening up and down the country.
In the Wairarapa, Masterton, Carterton and South Wairarapa are considering a combined rural unitary council because they don't want to be ruled by Wellington.
In Taranaki, iwi and local mayors support splitting the region into two unitary councils that represent the natural north south and urban rural division. Hāwera does not want to be ruled by New Plymouth.
Waitomo and Otorohanga are developing a King Country unitary proposal because they don't want to be run by Hamilton.
And in the South Island, Selwyn's mayor also wants to protect Selwyn's identity because there they're talking about the Canterbury councils merging into a Greater Christchurch super city and they are not sure they want that.
The mayor, Lydia, says it's an incredibly short timeframe, we can't consult with our ratepayers but we need to make sure we make the right decision. And they're not happy about it. Waimakariri and Selwyn ratepayers have expressed reservations of being ruled by Christchurch.
And this is a real fear up and down the country. The move to rationalise local government could see the big cities and towns grabbing all the power and money.&nbsp;
LISTEN ABOVE

Andrew Dickens: Local council amalgamation could see less say for smaller towns

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/e93511e9-2abc-4e82-a047-b45401887d4b/transcript

The Government has unveiled a major overhaul of social housing, creating both winners and losers. 

So what is social housing? Social housing provides subsidized rental properties for those who cannot afford private rentals. Homes are managed by Kāinga Ora or various Community Housing Providers (CHPs). Tenants typically pay an Income Related Rent. To qualify, you must be a New Zealand citizen or resident, meet housing need criteria, and fall under specific income and asset limits. 

Single with no kids, income must be under $832 a week after tax. If you’re a couple with two kids, so four of you, you must be earning in the hand, under $60,000 a year before you could actually claim either the accommodation supplement or get onto the waiting list and get yourself into a state house and pay the State rent. For current social housing tenants, minimum Income Related Rent contributions are 25% of your income. But now the Government is changing the rule to make the system “fairer” and more targeted.  

From April 2027, the minimum rent contribution for social housing tenants will rise from 25% to 30% of income. This saves the government nearly $400m, which will be reinvested into higher Accommodation Supplement rates. Those privately renting and receiving the Accommodation Supplement, they'll get a bit more. As a result, 110,000 families renting privately will gain about $15 a week, but 84,000 social housing families will be around $30 worse off. Another 45,000 families receiving Temporary Additional Support will also lose about $11 a week. 

Housing Minister Chris Bishop says the current system is “backwards and inequitable”, with social housing tenants often hundreds of dollars better off than similar families renting privately. The reforms will tighten access to social housing, focusing on people with the most severe and persistent barriers — such as mental health challenges, addiction, disability, or family violence. Affordability alone will no longer be enough to qualify. 

The Government also wants to improve people getting out of social housing. That includes exploring tenancy duration limits, more regular eligibility check-ins, and better support for people who could move into private rentals. Bishop says many tenants will still need lifelong support, but others can transition out — freeing up homes for those in greatest need. 

As a result, 110,000 families renting privately will gain about $15 a week, but 84,000 social housing families will be around $30 worse off. Another 45,000 families receiving Temporary Additional Support will also lose about $11 a week. Bishop says the changes “narrow the gap” between social and private renting, encouraging work and independence. He argues the system must be financially sustainable —with housing supports costing $5.5b last year— and better targeted to those with the highest needs. 

In essence it shows that this Government prefers social housing to be provided by private landlords. But they're wary of a wholesale change because of what it would do to the housing market at a time 20% of townhouses are being sold at a loss. They don't agree with social housing for life. They probably don't agree with the State owning housing stock at all, but they're too chicken to go the whole hog. 

This is all about ideology and the response will come down political lines. Those tending right will support it and feel that finally the Coalition is walking the talk they've talked for years.  And those tending left will reflexively call this the move of a heartless Government who just don't care about poor people. And they are poor people, which is why Nicola Willis' won the lotto comment was so tone deaf and required an immediate apology. 

It is a major shift, but it could have been a lot heavier. What will come from it? Will it bring more private properties into the social housing market? Will it break the back of those people at the edges of society? And what do you think we need to do with social housing and benefit support for housing in our country? 

The Government has unveiled a major overhaul of social housing, creating both winners and losers.&nbsp;
So what is social housing? Social housing provides subsidized rental properties for those who cannot afford private rentals. Homes are managed by Kāinga Ora or various Community Housing Providers (CHPs). Tenants typically pay an Income Related Rent. To qualify, you must be a New Zealand citizen or resident, meet housing need criteria, and fall under specific income and asset limits.&nbsp;
Single with no kids, income must be under $832 a week after tax. If you’re a couple with two kids, so four of you, you must be earning in the hand, under $60,000 a year before you could actually claim either the accommodation supplement or get onto the waiting list and get yourself into a state house and pay the State rent. For current social housing tenants, minimum Income Related Rent contributions are 25% of your income. But now the Government is changing the rule to make the system “fairer” and more targeted. &nbsp;
From April 2027, the minimum rent contribution for social housing tenants will rise from 25% to 30% of income. This saves the government nearly $400m, which will be reinvested into higher Accommodation Supplement rates. Those privately renting and receiving the Accommodation Supplement, they'll get a bit more. As a result, 110,000 families renting privately will gain about $15 a week, but 84,000 social housing families will be around $30 worse off. Another 45,000 families receiving Temporary Additional Support will also lose about $11 a week.&nbsp;
Housing Minister Chris Bishop says the current system is “backwards and inequitable”, with social housing tenants often hundreds of dollars better off than similar families renting privately. The reforms will tighten access to social housing, focusing on people with the most severe and persistent barriers — such as mental health challenges, addiction, disability, or family violence. Affordability alone will no longer be enough to qualify.&nbsp;
The Government also wants to improve people getting out of social housing. That includes exploring tenancy duration limits, more regular eligibility check-ins, and better support for people who could move into private rentals. Bishop says many tenants will still need lifelong support, but others can transition out — freeing up homes for those in greatest need.&nbsp;
As a result, 110,000 families renting privately will gain about $15 a week, but 84,000 social housing families will be around $30 worse off. Another 45,000 families receiving Temporary Additional Support will also lose about $11 a week. Bishop says the changes “narrow the gap” between social and private renting, encouraging work and independence. He argues the system must be financially sustainable —with housing supports costing $5.5b last year— and better targeted to those with the highest needs.&nbsp;
In essence it shows that this Government prefers social housing to be provided by private landlords. But they're wary of a wholesale change because of what it would do to the housing market at a time 20% of townhouses are being sold at a loss. They don't agree with social housing for life. They probably don't agree with the State owning housing stock at all, but they're too chicken to go the whole hog.&nbsp;
This is all about ideology and the response will come down political lines. Those tending right will support it and feel that finally the Coalition is walking the talk they've talked for years. &nbsp;And those tending left will reflexively call this the move of a heartless Government who just don't care about poor people. And they are poor people, which is why Nicola Willis' won the lotto comment was so tone deaf and required an immediate apology.&nbsp;
It is a major shift, but it could have been a lot heavier. What will come from it? Will it bring more private properties into the social housing market? Will it break the back of those people at the edges of society? And what do you think we need to do with social housing and benefit support for housing in our country?&nbsp;

Andrew Dickens: The social housing overhaul creates both winners and losers

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/c70cb9f0-7b8c-4907-91c5-b452000d8706/transcript

Let's talk EVs. And I better make the declaration straight away; I am an EV driver. There is a new state of the nation report from an organisation called Drive Electric which has been released. It's calling for consistent cross-party support. The report shows just 11% of new vehicles registered in New Zealand are electric – that is down from 27% in 2023 when we had the rebate. But countries like Norway, they're sitting at, wait for this, 98%. New Zealand also has one of the lowest EV to fast charger ratios in the OECD, despite 88% renewable electricity generation and promises from the Government to actually help. Drive Electric's State of the Nation report, which was launched at Parliament, is calling for long-term cross-party policies to speed up EV uptake and charging infrastructure. And the board chair of Drive Electric New Zealand, Kirsten Corson, spoke to the Mike Hosking Breakfast this morning about how far behind the rest of the world we are. 

“I think the interesting thing that this report shows is there's been a shift. This isn't an environmental decision anymore, this is an economic one. And what we've seen in the last three years is a massive emergence of countries like Ethiopia, 60% electric, you know, new vehicle sales are electric, Vietnam 40% Thailand 28% Turkey 22%. These are all emerging nations that are making the transition purely from an economic perspective because they do not want to import fossil fuels.” 

We're at 11%. Drive Electric's report goes on to say that New Zealand has a major advantage because we've got renewable energy, but the recent policy changes, the scrapping of that incentive, has really slowed progress. So EVs, by Drive Electric, they're now being framed as more than just transport that doesn't use fossil fuel. The report wants to call them mobile energy assets, so they can store electricity and feed it back into the grid when the demand is high.  

Now transport currently accounts for about 18% of our total emissions and nearly half of the CO2 emissions as well. But electrification could boost energy security and reduce the country's $7 to $9 billion annual fuel import bill. There are of course health gains because the air pollution is a little bit lower. The key opportunity they say is vehicle to grid technology, which allows EV owners to sell stored power back to the network while their car's sitting there. Maybe it's on 80% or 90% and it could actually be providing the electricity that does the hot water heating and take the load off the entire network. Vehicle to grid technology. And of course they're asking for government money.  

Now look, as I say, I have an EV and I did take advantage of the EV rebate when it was in place, just like the Prime Minister did. But the thing about that, and I felt a little guilty about it, is I didn't agree with it because EVs or a car or any product really have to rest on their own competitive advantage. Mike called it this morning the artificiality of a market, and that's not right. But the current fossil fuel crisis, it is bringing that competitiveness up without us providing any government money. So if we could help, how should we? 

I thought about it for a while and thought, well, how could we do it? And one possibility might be the subsidy of home-based smart chargers. If they are capable of feeding back into the grid, and the Drive Electric claims are correct, that if 30% of EV users feeding back into the grid could in fact rival our entire generation capacity at any given time, then isn't that an investment in improving our electricity infrastructure? Which would be good for everybody and would mean that while it might be a subsidy to an EV driver to put in a smart charger that can feed back into the grid, it's actually an investment into the entire electricity network. Can you see the logic in that maybe?  

I do not have an EV charger at home. I use fast chargers at the supermarket. I don't have an EV charger because when I bought the car, I looked at how much the home EV charger was going to cost me —$2,000— and frankly, I don't have a lazy two grand sitting around. I don't know if you've noticed, times are tight and the cost of living is high. But hey, what about if the Government pitched in half of that? Would that tip me over? I think it might. So if they put in a thousand and I put in a thousand, then I'd have an EV charger at home, which when I wasn't charging the EV, it would be feeding back into the network and saving the electricity for everybody.  

So there's the question for you today: should we as a nation be offering some sort of incentives towards increasing the size of the EV fleet? And what are the ramifications of the EV fleet being expanded as is happening right now? I mean, what are the ramifications of this for us? Do we have enough renewable energy? Do we have enough electricity? We seem to swing from pillar to post in terms of electricity excess to a lack of electricity and then the prices go through the roof. So can we actually really support an EV fleet the way Norway can where 98% of their vehicle sales are in fact EVs, even though they have their own oil? 

Let's talk EVs. And I better make the declaration straight away; I am an EV driver. There is a new state of the nation report from an organisation called Drive Electric which has been released. It's calling for consistent cross-party support. The report shows just 11% of new vehicles registered in New Zealand are electric – that is down from 27% in 2023 when we had the rebate. But countries like Norway, they're sitting at, wait for this, 98%. New Zealand also has one of the lowest EV to fast charger ratios in the OECD, despite 88% renewable electricity generation and promises from the Government to actually help. Drive Electric's State of the Nation report, which was launched at Parliament, is calling for long-term cross-party policies to speed up EV uptake and charging infrastructure. And the board chair of Drive Electric New Zealand, Kirsten Corson, spoke to the Mike Hosking Breakfast this morning about how far behind the rest of the world we are.&nbsp;
“I think the interesting thing that this report shows is there's been a shift. This isn't an environmental decision anymore, this is an economic one. And what we've seen in the last three years is a massive emergence of countries like Ethiopia, 60% electric, you know, new vehicle sales are electric, Vietnam 40% Thailand 28% Turkey 22%. These are all emerging nations that are making the transition purely from an economic perspective because they do not want to import fossil fuels.”&nbsp;
We're at 11%. Drive Electric's report goes on to say that New Zealand has a major advantage because we've got renewable energy, but the recent policy changes, the scrapping of that incentive, has really slowed progress. So EVs, by Drive Electric, they're now being framed as more than just transport that doesn't use fossil fuel. The report wants to call them mobile energy assets, so they can store electricity and feed it back into the grid when the demand is high. &nbsp;
Now transport currently accounts for about 18% of our total emissions and nearly half of the CO2 emissions as well. But electrification could boost energy security and reduce the country's $7 to $9 billion annual fuel import bill. There are of course health gains because the air pollution is a little bit lower. The key opportunity they say is vehicle to grid technology, which allows EV owners to sell stored power back to the network while their car's sitting there. Maybe it's on 80% or 90% and it could actually be providing the electricity that does the hot water heating and take the load off the entire network. Vehicle to grid technology. And of course they're asking for government money. &nbsp;
Now look, as I say, I have an EV and I did take advantage of the EV rebate when it was in place, just like the Prime Minister did. But the thing about that, and I felt a little guilty about it, is I didn't agree with it because EVs or a car or any product really have to rest on their own competitive advantage. Mike called it this morning the artificiality of a market, and that's not right. But the current fossil fuel crisis, it is bringing that competitiveness up without us providing any government money. So if we could help, how should we?&nbsp;
I thought about it for a while and thought, well, how could we do it? And one possibility might be the subsidy of home-based smart chargers. If they are capable of feeding back into the grid, and the Drive Electric claims are correct, that if 30% of EV users feeding back into the grid could in fact rival our entire generation capacity at any given time, then isn't that an investment in improving our electricity infrastructure? Which would be good for everybody and would mean that while it might be a subsidy to an EV driver to put in a smart charger that can feed back into the grid, it's actually an investment into the entire electricity network. Can you see the logic in that maybe? &nbsp;
I do not have an EV charger at home. I use fast chargers at the supermarket. I don't have an EV charger because when I bought the car, I looked at how much the home EV charger was going to cost me —$2,000— and frankly, I don't have a lazy two grand sitting around. I don't know if you've noticed, times are tight and the cost of living is high. But hey, what about if the Government pitched in half of that? Would that tip me over? I think it might. So if they put in a thousand and I put in a thousand, then I'd have an EV charger at home, which when I wasn't charging the EV, it would be feeding back into the network and saving the electricity for everybody. &nbsp;
So there's the question for you today: should we as a nation be offering some sort of incentives towards increasing the size of the EV fleet? And what are the ramifications of the EV fleet being expanded as is happening right now? I mean, what are the ramifications of this for us? Do we have enough renewable energy? Do we have enough electricity? We seem to swing from pillar to post in terms of electricity excess to a lack of electricity and then the prices go through the roof. So can we actually really support an EV fleet the way Norway can where 98% of their vehicle sales are in fact EVs, even though they have their own oil?&nbsp;

Andrew Dickens: Should there be incentives to increase our EV fleet?

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/ef0d4e43-acfe-4661-832c-b451001402fa/transcript

Liam Dann: NZ Herald Business Editor on the state of the Government's books

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