THOMAS CRANMER: Wayne Brown lays down the challenge to Ardern and Mahuta

The Mayors of Auckland, Christchurch and Waimakariri deftly proposed an alternative plan for Three Waters on Monday and despite the Government’s initial response, the ball remains in its court. THOMAS CRANMER writes –

Monday saw Mayor Wayne Brown of Auckland make his first formal foray into the Three Waters debate when he fronted a press conference on the contentious reforms. It was of course no surprise to anyone that he reaffirmed his opposition to the existing proposal but the manner in which he put forward the alternative plan was noteworthy.

The press conference was held in Auckland and although it was led by Brown he made only the briefest of opening remarks before handing over to Waimakariri Council Mayor Dan Gordon, who announced “the path forward” with what he described as the “new consensus plan”.

Christchurch Mayor Phil Mauger then spoke in support of the proposal.

A fourth Mayor, Helen Worboys of Manawatu, was also scheduled to attend but was unable to do so due to family circumstances. Thus, whilst the press conference had all the optics of an Auckland proposal, it was clear that the impetus was coming from further south.

Indeed, despite the claim from Dan Gordon that this was a “new” plan, it was also clear that this proposal was based on a significant amount of the C4LD analysis and was broadly in line with the opposition to Three Waters that had been voiced in the recent local government elections.

That in itself is not a bad thing. The fact that this proposal leverages off the C4LD and Castalia work gives it more weight and counters any arguments that this is a half-baked plan concocted by novice mayors.

Why we should be keeping an eye on the US yield curve

In an article at Newsroom Pro headed 8 things that mattered this week, business writer Bernard Hickey included interest rates and a flattening of the yield curve in the United States.

The yield curve is a line that plots interest rates over different maturity dates.

Longer-term interest rates normally are higher than short-term rates because lenders want greater compensation for locking their money up for longer periods, as Mark Lister explained in a recent newspaper article headed Is it time to panic about the sharemarket?

Lister, Head of Private Wealth Research at Craigs Investment Partners, said the relationship between short and long-term rates is important.

At the whiff of trouble on the horizon, investors will accept  lower returns in the future, longer-term rates will fall below short-term rates (which are driven primarily by central bank policy) and the yield curve will become downward sloping, or inverted.