Fallout from the Hisco affair is bound to spread to RBNZ moves to regulate bank capital

Pressure may be mounting for  a  broad  inquiry into  the banking industry following recent incidents involving  the biggest trading  bank in NZ.

Agriculture  Minister  Damien  O’Connor  said this week  banks  are  “bullies”  (according to a  Radio NZ report).  It’s a  sentiment shared  by  many  New Zealanders.

This  sentiment has  been rekindled by the departure  of ANZ’s CEO  David Hisco  who, it had been found, passed off charges for chauffeur-driven cars and the cost of storing his wine collection as business rather than personal expenses.

ANZ suffered a couple of regulatory blows last month with the Reserve Bank forcing it to hold more capital against housing and farm lending from June 30 and to use the standardised model for calculating its operational risk capital (ORC) rather than its own internal model.  That’s because it had been using a modified internal model for calculating ORC since December 2014 without first getting RBNZ approval. Continue reading “Fallout from the Hisco affair is bound to spread to RBNZ moves to regulate bank capital”

Drilling  programme  is vital in  ensuring  NZ does  not   become  dependent  on  imported   oil and gas

The  arrival  of  the   self-propelled, 34,500-tonne  offshore  drilling  rig COSL Prospector in  Taranaki   heralds   an  important  stage  in  the exploitation of  NZ’s oil and  gas  resources.

The first task  for  the  rig is to  drill three side-track wells  for Malaysian-based Tamarind  at  the  Tui offshore field, in the  expectation it  can  extend  the life of the field  beyond    next year and  lead  to the extraction of  6-8m  barrels of  oil.

Then the  rig   is  contracted  by  OMV, operator of the offshore  Pohokura  and Maui   fields, to  drill an exploratory well in the Great  South Basin.

OMV, which also operates the offshore Maui and Pohokura gas fields, expects to begin drilling towards the end of the year – potentially using the COSL Prospector if  consents  are secured.  OMV’s first well lies in about 1,200 metres of water 130 kilometres south-east of Balclutha.  If successful, the programme potentially could involve drilling 10 wells, up to two further exploration wells and up to seven for appraisal. Continue reading “Drilling  programme  is vital in  ensuring  NZ does  not   become  dependent  on  imported   oil and gas”

Outside of Parliament, the cold water thrown over the Wellbeing Budget should dampen Robertson’s rapture

Finance Minister  Grant  Robertson   could not disguise the rapture that had seized him, when   he was questioned this week in  Parliament  on reactions  to   the budget.

He  was  excited,  apparently,   because  the government  had received  an  “overwhelming”  response from the people of  NZ to the  wellbeing budget.  There had  been a   vast  amount of  correspondence.

He cited   the  Salvation Army as  seeing the budget as   “a step on the path towards lifting New Zealanders out of poverty”  and the Children’s Commissioner  likewise  believing  it “takes seriously the need for a step-change in the way we support the wellbeing of NZ children”.

Good stuff, then, even though it  may  sound a bit  weird  to Kiwis   who  had believed their  country’s living standards  rank  reasonably   well  against  those of  other  developed  nations.  Continue reading “Outside of Parliament, the cold water thrown over the Wellbeing Budget should dampen Robertson’s rapture”

Fonterra and farm leaders gripe at O’Connor’s DIRA decision – Greenpeace is even more grouchy

Agriculture Minister Damien O’Connor didn’t win too many new friends  (and may have lost some) with his  decision  on the review of  the  Dairy Industry Restructuring  Act, the  2001  legislation  which set up  Fonterra  supposedly to   become  a  “ national  champion”.   

We  all know  how  that  has turned out.

So   what were the reactions to  O’Connor’s  latest  move to improve the  legislation  which initially had the  objective of  “promoting  the efficiency  of  NZ  dairy markets”?.

Fonterra  chairman  John Monaghan  said  the company was disappointed it still has to supply milk to large, export-focused businesses. Continue reading “Fonterra and farm leaders gripe at O’Connor’s DIRA decision – Greenpeace is even more grouchy”

Defence allies are expected to welcome NZ’s $20bn Defence Capability Plan

Defence Minister Ron Mark will unveil the latest Defence Capability Plan tomorrow.  Our various contacts expect it to be a significant document affirming an on-going positive approach to NZ defence policy involving expenditure of $20bn out to 2030.

The plan is expected to reaffirm the Pacific Reset programme announced by Foreign Minister Winston Peters – and spelled  out again in his recent Pacific foray.

There will be big-ticket items: a replacement for the 50-year-old RNZAF Hercules, a new dedicated southern ocean offshore patrol vessel and a downgrading of the inshore patrol fleet, new IED-proofed armoured vehicles for the Army and a shift into unmanned aerial vehicles (UAVs) for both maritime surveillance and tactical use to complement the vast intelligence-gathering resources of the RNZAF’s new Boeing P-8A Poseidons, due in service from 2023. Continue reading “Defence allies are expected to welcome NZ’s $20bn Defence Capability Plan”

Cabinet reshuffle is promised but the PM is limited in which cards to play

Prime Minister   Jacinda  Ardern is  promising  a  Cabinet  reshuffle  later this  month.

Not  before  time,    given the   piles of   deadwood    revealed   so far in the  ministry’s make-up.

Or,  more significantly,  in the failure to  deliver  “transformation”, as   with  KiwiBuild.

With  the  high  poll ratings  of the government, largely as a  result  of her  own  performance,  Ardern in  theory  should  be  able to deliver, without any  political  qualms,  rejection  slips to  those  who  are  a  drag  on the  coalition

Yet  she  is  severely  constrained in  any changes   she contemplates. Continue reading “Cabinet reshuffle is promised but the PM is limited in which cards to play”

Bhutan was into well-being long before NZ – and the bureaucrats could be an obstacle here

As  the  dust settles   after   last week’s  budget   (or should that be  on last week’s  budget),  it  has been  hard to  find   any  commentators  who  thought it   was  “transformational”.  Those  who  might be  identified as  Left-leaning didn’t  break into raptures;   some who claim to be  independent (Duncan  Garner,  for  example) were  critical  (“what should have been a  triumph  became a nightmare”);  and on the right  a   headline over a  Matthew Hooton  essay (“Well-being  just  Wellington BS”)   was  fairly  typical.              

Of  course, there  were  some  like  Audrey   Young   in the  NZ  Herald who  thought it  was  a  “marketing triumph  for  Ardern and  Robertson so far”,  although   she  sensibly applied  a  caveat   that  slow growth   “could  nix feel-good  factor of the  well-being  Budget”.

Across  the  Tasman,    commentary  on  the  NZ  budget   was  highly  laudatory,  particularly  from those pundits   who  were still red-faced from predicting  a Labour shoo-in   at  the  Federal  election. Continue reading “Bhutan was into well-being long before NZ – and the bureaucrats could be an obstacle here”