NZ News
Chris Hipkins in Auckland after further heavy rain
Prime Minister Chris Hipkins who is in Auckland today has confirmed the cut to the fuel excise tax and half-price public transport will be extended until the end of June.
He is speaking to media after further heavy rain in some areas of the city overnight.
The briefing is underway and Hipkins says he was shown around the Moana-nui-a-kiwa hub this morning and was impressed with the support it is providing to the people of South Auckland.
“It’s an incredible effort and it’s so heartwarming to see the community rallying around to help others.”
He acknowledges the volunteers and workers across Auckland and New Zealand who have shown care to people who “in many instances have lost most of their stuff, and are in desperate need”.
He says the events of the last week highlight the importance of his decision to refocus his new Cabinet on the cost of living, which he signalled when he was named Jacinda Ardern’s successor as Prime Minister.
“It’s been a lot. And it’s been a lot on top of the last few years – first with Covid and then with the economic tail that was caused by that – so I get that households are thinking hard about their budgets and businesses about their costs,” the prime minister says.
He confirms the government will extend the 25-cent cut to petrol excise, to 30 June, saying it “reduces” the cost of an average 60-litre tank of petrol by $17.25. With the subsidy already in place however, it’s not so much a reduction as it is a refusal to see those costs go back up.
Half-price public transport will also continue to the end of June.
“These discounts were due to be phased out in the coming months but with global inflation pressure forecast to keep our rate around the 7 percent mark for longer, it’s important we keep providing support to families and businesses who need it.
“This is a start – it’s a meaningful step in an ongoing series of measures to help with some of the most persistent cost pressures.”
He says it was a good candidate for early action because it was a major cost for nearly everybody and could be done quickly.
“It’s also important for those experiencing the flooding here in Auckland which is putting extra stress and financial pressure on families. This policy alone won’t solve the cost-of-living crisis that we face but it will make a difference and right now I know that every little bit helps.”
Asked what can be done to bring down food prices, Hipkins says today’s announcement will have an impact because it will stop prices rising further due to the cost off moving goods around.
He says there is a lot of work under way to address emissions reduction, “but we also have to acknowledge that right here and right now an increase in fuel costs is putting a significant amount of pressure on families who have no choice but to continue to fill up the car”.
Finance Minister Grant Robertson who is also at the briefing says he took Hipkins’ request to think about what could be done to reduce the cost of living seriously.
“I … went away with the minister of transport and others and came back to the prime minister with this proposal. It’s important that we do as the prime minister’s just said – deal with the here and now as well as the long term.
“When we think about what’s the best thing that we can do quickly, this is it.”
Robertson says sufficient funding was found to be able to afford the extension and the government will take a look through the budget process at further ways to support New Zealanders with the cost of living.
“We’ve got to strike a balance here … we want to make sure that we keep the fiscal picture strong, that we support monetary policy with our fiscal policy. We also want to make sure we support New Zealand families and households to be able to take the hard edges off the cost of living crisis.
“Bear in mind this actually reduces the rate of CPI [the Consumer Price Index, one measure of inflation].”
Asked if he got it wrong when he said in December further extensions were not sustainable, Robertson says things have changed.
“We’ve got an issue in the here and now. Inflation, it’s steadied but it hasn’t come down significantly. We know New Zealanders are facing this cost of living crisis every day, we’ve taken another look. We have changed our decision, we’re not denying that at all but we have taken another look, and we acknowledge the circumstances New Zealanders are in and we’re doing everything we can to help.”
Transport Minister Michael Wood says public transport providers have all welcomed the support that has been provided and the government will be determined that people using public transport will see the effects.
He says the setting of fares at the local level is a matter for councils and local public transport authorities.
The Auckland Transport board approved a 6.5 percent fare increase at their meeting in December, subject to approval by Auckland Council’s council’s governing body. If the increses are introduced, they are due to take effect at the end of this month.
“The step that we are taking here is a really significant one and it halves the cost of what people are paying, whatever the baseline fare is,” Wood says.
He says insurance companies are cooperating well together and working to provide timely resolutions for people, and he and Robertson have both been in contact with the companies to ensure they are providing as timely a response as possible.
Hipkins says, regarding the weather crisis affecting the country’s northern regions, insurance companies are cooperating well together and working to provide timely resolutions for people. He and Robertson have both been in contact with the companies to ensure they are providing as timely a response as possible.
“I’m never in the rule-in, rule-out, forever for all time category [on] just about anything, but actually I think right now the focus has to be on making sure New Zealanders can get through the economic situation we’re in.”
Kieran McAnulty, left, Chris Hipkins, centre, and Grant Robertson, right, at the Moana Nui A Kiwa Hub. Photo: RNZ / Samuel Rillstone
Fuel excise cuts, half-price public transport tipped to be extended
Beforehand Hipkins was expected to confirm plans to continue with fuel excise cuts and half-price public transport for the fourth time.
The subsidies were first introduced in March last year as a temporary measure, to help New Zealanders facing rising costs due to international fuel prices which spiked after the Russian invasion of Ukraine and other inflation pressures.
Advice from government agencies has consistently urged the government to bring these subsidies to an end, and Finance Minister Grant Robertson noted in December it “wasn’t sustainable to continue to subsidise the cost of petrol indefinitely for everyone”.
The move – along with a cut to Road User Charges (RUCs) – has however also been recognised as having helped control inflation. The RUC discount ended on Tuesday.
Asked about that after yesterday’s Cabinet meeting, Hipkins said he would not be making announcements about that yet but “the decisions we took still stand, I acknowledge that the trucking industry’s been given significant notice that that was going to happen”.
At the same media briefing, Hipkins also announced the long-signalled Cabinet reshuffle.
It included demotions for Nanaia Mahuta and Andrew Little in favour of Jan Tinetti, Michael Wood, Ayesha Verrall, Willie Jackson and Kiri Allan.
Source – RNZ
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Opportunities to mitigate multi-million-dollar RNZ budget blowout likely missed – experts
Multiple opportunities to identify and mitigate a multi-million-dollar budget blowout at RNZ appear have been missed, according to the former executive director at Audit New Zealand.
The public broadcaster on Monday revealed a near $12 million shock financial loss after a litany of financial blunders, which will now lead to sweeping job cuts.
The $11.8m loss is more than 25 times the $470,000 RNZ had expected to lose over the year to June.
CEO Paul Thompson took responsibility for the result, and said internal reports gave an inaccurate picture of the finances, meaning the scale of the loss only became clear in October.
RNZ’s former chief financial officer Hilary Parker resigned unexpectedly in early October.
The board said it would commission an independent review into what went wrong.
Independent contractor Stephen Walker, who left the Audit Office earlier this year, said the size of the loss was surprising, as was the length of time it took to identify it – months after the financial year ended.
Supplied / OAG
“Probably more of a concern is that they had seemingly been unaware that they were running up a significant deficit until they were in the preparation stage of their annual report in October.”
Walker said public entities typically produced monthly financial reports.
An interim audit also took place before the end of the financial year, he said, but if the organisation hadn’t identified significant losses at that stage, the auditor could also be in the dark.
“It seems that there’s a real weakness in forecasting and budgeting that’s occurred here and that the monthly accounts, when they’re produced, either haven’t identified these significant variances against budget or the magnitude of them really hasn’t come to light until right towards the end of the financial year,” Walker said.
“And really at that point, there’s no opportunity for the chief executive, the leadership team to take, and the board to take, any corrective action because the year has effectively been completed.”
Walker said the “significant miss” was difficult to account for given it was more than 10 percent of RNZ’s total funding.
He said based on RNZ’s annual report, financial complexity didn’t appear to be a factor.
“This $11.8m loss isn’t made up of one particular item … it seems to have been contributed to by a number of separate expense lines running over budget. So I don’t think it’s necessarily to do with complexity.”
Among the errors, RNZ wrongly counted $2m from land sales as income in its budget. Staff costs also came in $3.2m over budget, including $1.4m in redundancy payments.
Professor at Auckland University’s business school Norman Wong said based on media reports the issues identified were “significant and troubling”.
Supplied / University of Auckland
“But recognising the sale of land as income in their budget is a basic error that one would have expected to have been caught and corrected well before it got to this point.”
With funding reductions at RNZ over the past two years, Walker expected greater scrutiny of financial results.
“Virtually every public entity has had their annual budget reduced. And so you would expect … the leadership team on a monthly basis and board – I’m not sure how frequently the board will consider the information – but you would expect them to be interrogating the results on a regular basis throughout the year,” he said.
Walker said initiating an independent review was the correct course of action and that he’d want to understand what information the leadership team and the board were regularly receiving.
He said he’d “love to say” surprising financial results were rare, but conceded they occured on a semi-frequent basis during his time leading the Audit Office.
“The benefit of independent scrutiny by the Audit Office – and the auditors providing that support to the Auditor General – [is] that the reporting is fairly presented at the end of the year, whether it’s good, bad or ugly.”
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