Today on Newshub Nation ` the prime minister has called it the 'year of delivery'. So what can Kiwis expect to get? We talk to Jacinda Ardern. Plus, economist Marilyn Waring tells us why she's disappointed by the government's plans for a Wellbeing Budget. And exhausted lifeguards pared back patrols this summer. So does the government need to throw the service a lifeline? www.able.co.nz Copyright Able 2019 Kia ora, good morning. I'm Emma Jolliff. And I'm Simon Shepherd. Welcome to Newshub Nation. The prime minister says she's listening to the concerns of small business and farmers in the wake of Tax Working Group recommendations to introduce a capital gains tax. It's part of what could be the biggest shake up of the tax system in years. The government claiming it wants to make taxes fairer. But Ardern has to negotiate with a potentially obstructive coalition partner first, which could water it down. And we won't know what they've decided until sometime in April. More claims KiwiBuild's a flop this week, with just 62 homes built, and only 10,000 under contract to be built by 2028. That's just 10% of the target. The Housing and Development Ministry has admitted the numbers it was working from late last year were way off. And turbulence for Air New Zealand as cut-price seats to the regions take off. But earnings in the six months to the end of December slump by more than $100 million. Regional Development Minister Shane Jones cautiously welcomed the news of cheaper flights regional flights and even took credit for them. I don't seek personal glory in these matters. I've got a job to do. And the leaders of regional New Zealand know they can rely on me, I'm sure. But Air New Zealand boss Christopher Luxon says the politician had nothing to do with it. Uh, no, no, absolutely not. I mean, um, you know, Shane's a political animal. He's got a great agenda, and he's got lots of opinions on lots of different things. We're pretty focused on trying to run a $6 billion global company. Well, the prime minister says this will be the 'year of delivery' after turning the ship around last year. Yet the number of people waiting for a state house has shot up, so has the cost of hardship benefits, and KiwiBuild's missing its targets. And with another commercial construction company hitting the wall, I began by asking Jacinda Ardern if she's concerned about the well-being of the construction industry. There's definitely work to be done, and I think even the industry itself acknowledges that. Some time ago now, we had a group of ministers meet with members of the industry, looking up what we in particular can do. We do as, I guess, consumers make up part of what the construction industry's working with. 18%. 18%, and so we're looking to model the kind of behaviour that we'd like to see as a purchaser in that industry. Does that mean you will share the risk of those projects? I think it's more about just generally acknowledging that there has been a level of undercutting that has bought the construction industry to a place where it is incredibly fragile, that serves no one, and that there is something we can do in that space as well. Are you concerned that we actually will have to have more overseas companies here rather than local employers? Oh, I think we should, across the board, be concerned about the state of the industry. And, look, the industry themselves acknowledge the problems that exist. We have been working` Are you going to be a better buyer of services? That's absolutely what we intend ` modelling the kind of behaviour that we need to see across the board. And when will that come in? Well, really, work's already underway in that space. We've already, again, reissued some of our procurement expectations across government departments, because the industry actually tells us there's actually are already really good; others where we could lift our games, so we've already done that, and we are working on a wider piece of work with the construction industry where we each take a bit of responsibility to try and firm up the sector. All right. You started this year by saying that this is going to be the year of delivery ` your words. So can you tell me ` what would be the three big tangible differences that New Zealanders will see by the end of this year? And absolutely, this is the year where we have to ` and we've said from the beginning ` tackle the big challenges that New Zealand is facing. And they are significant. Look, if we take, for instance, the housing crisis that we came in and inherited, it is a significant issue in New Zealand. It's impacting on the daily cost of living for a number of New Zealanders. And so our focus there is broad. We need to make sure that we are supporting tenants, which there's an increasing number of, making sure that they're operating in quality rental properties. We need to make sure that we have more affordable housing in the market. And we need to make sure we're building more state houses, which we are ` over 1000 since we came in. So by the end of this year, we're going to see movement on all of that. We already are. OK. You know, what we had to, of course, acknowledge through the KiwiBuild programme ` it's not easy, and I don't think anyone expected that it would be. One of the issues we've had is in order to move quickly, we've wanted to work with developers to try and produce some of our KiwiBuild homes, and it has been, frankly, difficult, in some cases, to attract developers into the affordable housing market, which you would understand, and that's why we have this problem in the first place. Would you acknowledge that the KiwiBuild, as you say, it was a flagship programme ` $2 billion ` has it been a flop so far? No. It's one of many programmes. That's the first thing I would say, because, of course, we have to address our housing crisis across the board. Sure, but this particular programme has got 62 houses built, and, you know, the targets have been scrapped. There was supposed to be 1000 by July. You know, you might get 300 built by July. About 280 under construction currently. Yeah. We've contracted roughly 10,000 over a 10-year period so far. Yeah. And, look, we absolutely acknowledge it is difficult, and I think people understand that, because under the last government, they made no effort to build affordable houses at all. And so the alternative for us, Simon, is to do nothing. And if we do nothing, we will not solve the fact that we are tens of thousands of houses short in New Zealand, and roughly only 5% of the houses that were being built were for first-home buyers. OK, but that's KiwiBuild, right? Yeah. So you also need the social houses as well. Absolutely. OK, and so you have a target of building 1600 social houses a year. We've said that, and we've created 1900 public housing places since we came into office, and there's been 1000 state houses built. OK, but some of those are transitional houses, so, you know, 1000 houses built ` you want 1600 a year. Salvation Army says, 'We need 2000 a year.' Do you need to expand that goal? Well, of course, we are working across both ` working with the social sector to up their provision building state houses ourselves. We've also increased the number of Housing First places by a significant amount. Now, just to give a little background on that ` what we've worked out is transitional housing, yes, we need it, because we don't want people living in cars. But, actually, if you want people to permanently be in housing, Housing First, which gives people security from the outset, is actually what's getting our rough sleepers off the streets long term. And we've been successfully increasing the rollout and funding a rollout of that in Auckland, in Hamilton ` across the country. Let's talk about the state houses, or the social houses, because, yes, you're committed to building those, but the waitlist for the state housing has shot up in the last year by 73%. Now you said, 'Look, we're going to get the ship sailing in the right direction.' That does not sound like it's going in the right direction. Actually, what I acknowledge is that that is the true reflection of the housing crisis in New Zealand, and we cannot shy away from that. What we had before ` and the Salvation Army themselves commented on this ` that they believe that people are coming through the door, and when they're seeking to be put on the register, when they seek a special-needs grant that that's happening more often. Because we said to our frontline workers, 'When you see need, we respond.' Whereas before, you will have seen once before, we have hit that kind of number, the last government instead cut two categories out of the waiting list. Now, hiding our homelessness and our housing crisis is not a way to respond. We need to own it, acknowledge the numbers and do everything we can. So that's a tangible difference, is it, that we're going to see by the end of the year. You're still sort of laying the blame back on the previous government for that. No. But you've had a year, and now these figures are not going the right way after a year. No, actually, for me, this is not about apportioning blame. You know, I think, actually, if you ask a member of the public, you know, 'Have we had a housing crisis?' Actually all the politicians now seem to accept that that's the case. Is it easy to resolve? No, but, again, I put the counterfactual ` yes, KiwiBuild isn't happening at the pace we want. I've acknowledged some of the issues we've faced. The suggestion seems to be that we do nothing. I do not accept that. Well, what about take the money from KiwiBuild and stick it into state housing and get rid of that register? Could you do that? Of course, keeping in mind, we're building state houses as quickly as we can. You know, we do have an issue with a skill shortage. Of course, that's been a major part of` we're having to build up that workforce at the same time. But KiwiBuild ` the $2 billion put aside for that ` of course, these aren't subsidised houses; they're about people buying them, that money gets recycled back through, and we build more. Yeah, I appreciate that, but you could also use that same model for building more state houses. And we know we need to build more state houses. In fact, Simon, what I point out ` we, as a government, are building more houses than any government since the 1970s. I just want it to happen faster. The government's about to deliver the world's first well-being budget. OK, so there seems to be concerns from economists that this budget might not be so much based on data. One of the examples that's come up recently is the Treasury's cost-benefit analysis, where it puts a figure, a specific value on things like contact with a neighbour or feeling lonely. I mean, how do you put a value on those things that you can't count? Incredibly difficult, granted. Actually, what some of the Treasury have used actually were` some of the modelling, as I understand, was actually developed under the last government, when they were doing social investment. These are all pieces of information that we use in a budget process. But it is not the thing that determines precisely what we then prioritise. It's an input. It gives us extra information. Because you're right ` some of it` it's quite hard to build evidence base in some of these areas, and yet we know the economic impact of, actually, some of the social issues we're trying to address. Now let me give you an example. Internationally, a big discussion around the economic impact of mental health and well-being ` we know that there are groups of our society who are experiencing more social disconnection, less contact with the outside world, greater levels of loneliness. Now, that might seem fluffy, but there actually is an economic impact for that downstream. How do we make sure we prioritise investing in the areas that help us from a social perspective, but also, ultimately, economically too? But some of the, sort of, criteria seem a bit out of whack, as it were. Like, you've got minus-$17,000 for loneliness, and that seems to be a greater figure than avoiding a heart attack and all these kinds of things. And, unfortunately, the Opposition have completely misused the tool that Treasury has created by comparing cost benefit and outputs incorrectly. OK. Treasury have debunked the way that that's been dealt with, but the primary point I'd like to make is these are just different pieces of data and evidence we can use. Ultimately, though, we are still the ones making the decision over what changes these things at an intergenerational level. So tell somebody. I mean, it sounds lovely and a bit woolly. So tell someone. It's a tangible difference about having a well-being budget. What's a concrete example? Let me give you an example. So in health, for instance. In the past, we'd just tell you how much we'd spent in the health budget. It doesn't really tell you anything about the well-being or the health of New Zealanders. So then you've seen governments over time would instead tell you how many operations we're purchasing. But, actually, again, that doesn't necessarily mean we're investing in a way that saves us money in the long term. What we're trying to do is factor in, for instance, the fact that children that grow up in poverty are more likely to have health problems as adults just by virtue of that trajectory, and they have the equivalent of what looks like post-traumatic stress. So, actually, if we want to save health dollars here, it makes sense for us to invest in the health and well-being of kids. Hasn't that been the motivation of government ministers? Shouldn't that be the motivation ` you know, the general well-being of the population from day dot? It should be, but` So why do you need the marketing stuff over the top? That should be your primary motivation. It's not the way policy is developed or spending decisions are traditionally made. Unfortunately, when you're a minister ` and this has happened through successive governments over decades, and it's an international problem that was being debated at Davos, for instance ` individual ministers, of course, make budget bids in their own area, and so that means that, you know, the Minister of Education might not be thinking about, you know, mental health and well-being issues even though he actually has a role to play in that area. The Minister of Health isn't necessarily` has the responsibility to deal with what happens with child trauma and child poverty, and yet he picks up the pieces. It's about trying to get everyone to work together to resolve what are long-term challenges. So, actually, this isn't about ideology; it's not about left and right; this is just, I think, a good methodology to use in the future. Housing is critical to well-being. So you will acknowledge that. Absolutely. OK, so one of the reasons that the state housing list that we've talked about has shot up recently is so big. Is that because the rentals are being` they're being priced out of the rental market. So I wonder what you're going to do as a government to make private rentals more affordable for people. Well, ask the likes of the Reserve Bank, and they will say, 'It's supply.' And we have a shortage of houses in New Zealand. It's been modelled in various ways, and there seems to be absolutely no dispute in that regard. Ultimately, if we want to make sure that we see more stability in our rental market, we need more houses, which is why we're being so audacious around KiwiBuild. Yeah, but counter to that are the policies that you're bringing in around private landlords. And they're telling us that they're feeling a bit hammered ` like, healthy homes, bright-line test, possible capital gains tax, lack of depreciation. So there's nothing there to encourage rental investors from your government, is there? The bright-line test, obviously, ultimately was first and foremost brought in by the last government. You are the government now, though. Yes, but` And that's something we haven't shied away from, but that's a bit a rich for the current Opposition to now claim that's a problem when they` No, I'm talking about the landlords. I'm not saying the Opposition. The landlords are feeling hammered. Do you know, actually, I think` particularly when you talk about healthy homes, I think we do a disservice to landlords ` to claim that they somehow wouldn't want to ensure that the home that they rent is healthy, warm and dry. That's one particular policy. We're talking about the whole batch of policies. The climate of the landlords right now ` they don't feel like they're being encouraged to invest in rental properties, and we need that supply, otherwise the prices will keep going up. We absolutely need supply in our housing market ` that includes first homes; it includes rentals. But, again, that's why I come back to what the likes of the Reserve Bank say, which is not that it's about those individual policies in terms of rental prices; it's actually about supply. More houses, less demand, and then you see greater competition then in the market. But for landlords themselves ` I do just want to come back to this ` you know, of course I'm sure we'd all agree that we want people living in healthy homes. We have a huge number of preventable hospitalisations and even premature deaths because of the quality of our houses in New Zealand. You know, landlords, I do think want that quality offering for their tenants. And we want people to not be sick. We want our kids to not be sick. So I don't think it's a big ask. Speaking of housing, just thinking more than half of those who are in severe deprivation are Maori or Pasifika, in terms of housing. Yes. So last year's budget allocated $15 more to the Papakainga initiative. I was just wondering whether you are going to do more to address the inequality in that housing area. Actually` And, of course that's` both the initiatives we undertake around housing, but also, of course, wages and incomes, and, in fact, one of our five priority areas, because when you use an evidence base to develop up your priorities as we have for this budget, and we have five, it includes the income of Pasifika and Maori because we know the long-term impact that's having and the inequality that we see for those groups. And so that is a focus this budget too. But does that mean that you're going to have to do more targeted funding to help people lift these incomes and get them into housing? Well, look, I think we've taken a bit of a dual track, so, obviously, Papakainga housing, that's an example of where we've been targeted. At the same time, actually, if you target low incomes, unfortunately, by default, you're targeting Maori and Pasifika. So in the very first mini budget we did, we put $5.5 billion overall into boosts in Working For Families, the best start payment, the winter energy payment. A good proportion of that went specifically to Maori families because of where they sit in our income bracket. That's where they sit in the overall ` that's universal. That's right. But, you know, your Finance Minister and Willie Jackson's also suggested that more targeted funding ` the Salvation Army also says more targeted funding is the only way to really address the inequality. In that families package, it was about targeting low and middle-income families. We targeted by income, and that did have a positive impact on Maori and Pasifika families. We even know how many, and it was a large number. But, at the same time, you know, things like targeted programmes that exist, Papakainga housing and others ` those are the areas where you'll see us also consider during the budget. OK, let's talk about capital gains tax, the subject on everybody's mind at the moment. Mr Peters, your coalition partner, has said that they` he's spoken out against it in the past. He's talked about, you know, it doesn't work. And you've talked about needed to reach a consensus. Yes. So how big a compromise are you going to make with Winston Peters? Well, obviously, it won't surprise you that I'm not going to conduct a negotiation here and` or not least without my coalition partners present. We, of course, have three parties we will be negotiating with. Yeah, and the Greens are all on board with the capital gains tax. It's Winston Peters who could prove the hurdle. And you yourself, pre being elected and pre being in this coalition situation have talked about maintaining a right as a leader to make sure the tax working group reports back and that you're able to` you can enact whatever it says. And, you know, that's your right, and so that right might be lessened. I don't know how that's been characterised. Of course, we all campaigned as individual party leaders. And everyone will have seen some of the statements I made as Labour leader. Yeah. I'm now the Prime Minister in a coalition government, and I have three parties I need to build consensus with. And, actually, that's what I just have to do day-to-day. And the tax working group report ` it's no different. But having said that, obviously now we're in a process of just allowing the public to see and the public to have that debate, and I think we should. You know, one of the things that I do think is unfortunate, though, is that, you know, there is a large group of New Zealanders, particularly young New Zealanders now who actually, if their aspiration has been homeownership has just become harder and harder. There's a group of New Zealanders who don't have columns in the Herald, who might not be having a chance to have their say on this. We need this debate in New Zealand, because we're one of only a handful of countries in the OECD that doesn't have this form of tax. And so let's debate it. And you're leading it. You're part of that debate, obviously, and your language is being scrutinised. Earlier this week, you seemed to be softening your language about, you know, having concerns about farmers and small businesses. So does that mean that you're going towards where Winston Peters might sit? It was an acknowledgement that in all of the debates we've had on capital gains. It often has been quite heavily focused in the commentary around, for instance, investment properties, and less so in the space where the tax working group went, which is broad-based and covering additional sources of income, and so small businesses in particular have been brought into that debate. And my message was I hear that there's a lot of arguments for and against, and I hear that. Because that was a new part of the debate, I didn't want anyone to think that we weren't considering all of the issues around that area. So you say that, you know, you're not going to reveal your position until you've reached consensus with your partners. Yes. That's two months away. Are you concerned that this is creating uncertainty? No. It's a debate. Business confidence ` yesterday, stalled. April is not that far away, and this has been an issue that has been debated on and off for a number of years. We're moving as quickly as we can to give certainty. We're giving people a lot of input at the same time. I think that's actually what a robust democracy is about. Do you think you have the political will to actually go through with a capital gains tax this time? Again, for me, my job is consensus building. (CHUCKLES) OK. Will you be able to convince enough people that it's a good idea? Well, actually, when you look at some of the polling, more people were in favour of a CGT with a tax switch attached to it than weren't, so obviously there's a debate here to be had. And, of course, we inserted into the debate the idea of it being revenue neutral, about there being, you know, cuts attached to anything that might be implemented. So let's have that debate. Because, ultimately, even if you look at Australia, you know, 95% of people aren't affected by their capital gains tax. You'd see something very similar here if we were to go down that track. But people can end up being better off, so let's have the debate. All right. And just quickly, one question on China ` have you set a date for your trip to China yet? No. OK. Prime Minister, thank you very much for your time. Thank you. And if you've got something to say about what you see on our show, let us know. We're on Twitter, Facebook and Instagram ` NewshubNationNZ Our Twitter panel this week is Tim McCready and Josiah Tualamali'i. They're using the hashtag #NationNZ Or you can email us at nation@mediaworks.co.nz The address is on your screen now. After the break, we're joined by our panel ` Ella Henry, Chris Simpson and Tracy Watkins. And then we talk to economist and former MP Marilyn Waring about the upcoming Wellbeing Budget and why unpaid work is still undervalued. Welcome back. I'm joined now by our panel ` Ella Henry from AUT, Stuff political editor Tracy Watkins and Waikato Chamber of Commerce CEO Chris Simpson. Welcome to you all. Thanks for joining us. Kia ora. Let's get straight into it, Tracy. Do you feel that the prime minister has been clear about what she's going to deliver in what they're calling 'the year of delivery'. Um, well, I think` I noticed today that one of the big things that she kept talking about was housing. That still is the big issue for her, and she made the point, I think, she wants the KiwiBuild` she wants more affordable houses built faster. That is the big measure that they are going to be gauged on. So how they're going to achieve that, I don't know. Because as we all know, KiwiBuild's been a bit of a disaster so far. So that suggests some sort of, like, review, re-tinkering, restructuring of that programme. So that is going to be the big one, I think, for them. Ella, state house waiting lists have ballooned, hardship grants are up, KiwiBuild's missed its targets ` have they actually turned the ship around, as they claimed? I think we have to remember that the housing crisis has been looming for 30 years. And when we haven't built, you know` No government since the '70s has had a really strong social housing programme, building programme, so whichever political party was involved would have to be dealing with this right here and right now. Growing population, not enough housing stock, unrealistic prices. And my biggest concern is that neither political party has a commitment to actually investing the huge amounts necessary to actually churn out 100,000 houses. That will require modularisation, strong-term commitment to key developers at a time when developers are actually going to the wall. So that's not necessarily government policy, that's just the market. And what the government can control is the market. Chris, on the Wellbeing Budget, one thing to be delivered` that's one thing to be delivered this year. It attempts to put an economic value on intangibles like loneliness. Is it possible to measure those subjective concepts, do you think? Well, it's not possible to measure them from a sort of monetary perspective. From an intangible perspective, you can measure it in the sense of 'how are you feeling?' But that's more of a social science approach. That's more sort of a qualitative, rather than a quantitative, approach. But regarding the Wellbeing Budget, trying to work out exactly what is going to work for well-being can actually end up being a political football, because all of a sudden, instead of talking about economic growth or GDP, you're talking about, 'Oh, they're feeling lonely. We're going to focus on loneliness.' And then the narrative and the story is about that, rather than what may be or may not be happening in the real world out there, especially in business. So, Ella, can the Wellbeing Budget do you think ever be more than a marketing exercise? I think absolutely. I think that` And I think about the Icelandic experience, where they had huge problems with youth suicide and binge drinking. And the government put an incredible investment into creating programmes for youth. Because we have the highest youth suicide rate in the developed world, so you may not be able to measure loneliness, but, boy, the outcomes are lethal when you feel disconnected. So money, investment in policies and strategies that increase engagement, increase connection are real tangible outcomes of a Wellbeing Budget. Tracy, the government said last year's Budget was the 'Rebuild Budget' ` the first in a trilogy. Will this Wellbeing Budget be some sort of blockbuster, do you think? Um, I'm struggling with well-being ` the whole concept of well-being. Every time I try to sort of, like, get my head around what it means, I'm not sure that it's just anything particularly new or just a different label. I think, in terms of it being a blockbuster Budget, this is the middle year of a three-year term. I would be surprised if it's going to be huge. They will have to do something around housing. I think mental health is going to be the big one that they're going to have to address. And they've talked about that a lot. The big thing, of course, is whether or not they address some of this` the issues around tax. And obviously, they've talked about that being a next term priority. But, yeah, in terms of it being a blockbuster, I would be surprised, given just where we are on the electoral cycle. And I think, actually, their problem will be that despite the fact that they're going to talk a lot about their Wellbeing Budget, a lot of people are going to struggle with that. Oh, I absolutely agree. It's not going to be a blockbuster in any way, shape or form. Because the well-being measures will be talked about ` this is kind of what we're doing, we're hoping it's going to work. But already you've got Grant Robertson talking at the Labour Party conference in Dunedin, end of last year, saying, 'GDP is still an important measure. 'That's what we have to measure against.' And the reality is in the real world of business, which we represent, cash flow is more important to a business than just wellbeing aspects. But cash flow does ignore a whole lot of those other issues like mental health` Except I suppose where I struggle is that these are not issues that governments have ever ignored. And I heard the prime minister talking about these, about round the Cabinet table, you know, we want ministers to be talking about the effects of loneli` you know, some of the effects that she mentioned around mental health and isolation, etc. But I'm` Governments do grapple with these issues. They might have different labels. But I don't think there have been any government ministers in recent years that I can recall of whatever stripe that don't grapple with these issues. Whanau Ora was one response to this. Can we just move on quickly to the capital gains tax and the negotiation that's required with Winston Peters to get this over the line. Behind the closed doors, talks have started already. Is it going to work? Is it going to get across the line, Tracy? Uh, not in the form that it was proposed by the Tax Working Group, no. So what changes would you see happening? I think, really, we're looking at some more` an extension of the rental property taxes, CGT ` around that. I think in terms of small businesses and farms and everything else, I'd be very surprised. It's not going to happen. Ella, is it an attack on the Kiwi way of life, as Simon Bridges claims? Or is it about making the tax system fairer? I certainly think so. And I reiterate what the prime minister said ` there are only two countries in the OECD that do not have a capital gains tax, us and Portugal. Other countries have done it, and it hasn't brought them to a grinding halt. And I think it does increase the tax pocket, which is what we're talking about funding these new initiatives in the Wellbeing Budget. The crazy thing, though, is that they're already promoting an $8 billion surplus, so the money's already there anyway. So you don't need to bring it in. And then the misnomer of saying, 'Well, we're the only two who don't have it.' Well, that's a good thing, from a competitive advantage. That's a good thing, which is why you want to be doing business in New Zealand. Because of that competitive advantage that other countries don't have. Whereas other countries have lower corporate tax rates. So ours is 28%, whereas the rest of the world in the OECD is 21%. So there's no conversation there, yet they're still bringing in surpluses, so I don't even know why we need it. And I sort of think that with NZ First, it's almost like a red herring. I think on their own, they're probably going to be spooked by some of the reaction. All right. We're going to have to leave it there. Thank you very much for joining us. Well, up next, economist Marilyn Waring has been calling for change in the way we measure our economy for more than three decades. We ask her if things are improving. Plus, why Surf Life Saving is looking to the government to keep the service afloat. Welcome back. Leading economist and former National MP Professor Marilyn Waring first raised her concerns about inequality and economic measurement 30 years ago. Now, she's detailed her criticisms of Treasury's new framework to measure inter-generational well-being in her new book, Still Counting. Professor Waring was New Zealand's youngest MP in the 70's, and the only female in Robert Muldoon's late 70's caucus. She famously threatened to cross the floor on the nuclear issue when National had just a one-seat majority, triggering the snap election that ended Muldoon's reign as Prime Minister. Professor Waring joins me now in the studio. Thank you very much for joining us. Morena. So, 30 years ago, you published Counting for Nothing about the undervaluing of unpaid work. What did you want to achieve with that book? In particular, I wanted central government decision makers to understand that the single largest sector of the nation's economy, in every country, was left out of GDP figures, and when you use those figures as the central framework for public policy making and for redistribution of your resources, it's kind of mad. How do you describe that sector exactly? The one that's left out? Ok, well, it's the unpaid sector. So pretty much everybody in New Zealand contributes at some time. So, unpaid voluntary and community work, subsistence food production ` you know, on the farm or the back garden, if you happen to have one. In particular, though, house work and, it growing, care work. But in my, uh... my ideas, of course, it also includes lactation and pregnancy, which don't count anywhere at all. Don't factor. Yes. So it's been suggested that we've never valued unpaid domestic work less than we do now, in fact, and success is still measured through professional achievements. Would you agree that's still the case? It's measured through market transactions. So a really important other factor is that those market transactions are supposed to count all underground economic transactions. So that would be the illegal drugs market, internationally, of course, it's traffic in people, illegal traffic in armaments. But a truly significant part of GDP is the underground economy, and it is counted. But, yet, what's not underground, and is a positive contributor, is not? Yes, and New Zealand started to go in this direction some time ago. In the very first coalition agreement Winston Peters signed, there was a commitment to conduct nationwide time-use surveys. We did that twice. They were the most sophisticated in the world when we did that. But nobody in the bureaucracy or parliament really knew how to use them. And that's why they didn't continue to be used? They didn't continue to be used because National became the government, and it doesn't suit National's... population support to figure in unpaid work, because that would mean redistributing budgetary resources, and they tend to like to feather the nests of those who support them. Let's come back to time-use surveys in a minute, but first up, the government says it's putting wellbeing at the centre of this year's budget. But in your new book, Still Counting, you're critical of their approach still. What are your concerns? Well, I want to distinguish between Treasury and the government, because Treasury came up with the framework which is not good. First of all, it's another kind of neo-colonial tool. They take what was developed in Europe, in Paris, and try to impose it on New Zealand. We are actually really different. You know, we don't have rivers that flow through contiguous nation state boundaries. We have tangata whenua here. We have Treaty of Waitangi here. We have very different sustainable questions in terms of the environment. Why, in 2019, do we have to take some European model and suck it up here? It doesn't make any sense. Is Treasury the right place to manage wellbeing? Treasury isn't in their Johnny-come-latelys. For example, the Ministry for the Environment has been very sophisticated in its development of indicators for over 30 years, and they use those indicators and their authentic characteristics, so, for example, levels of pollution, hectares of standing forest, wildlife degeneration, to put market asset... figures on this. It's ridiculous! It's like, what do I bid for a giant weta? That living standards framework does put a monetary value also on intangibles like loneliness or contact with a neighbour. You originally argued for a monetary to be put on unpaid work and the environment. What changed? Yeah, I did. I argued that because I'd come straight out of parliament and if you wanted to get visibility for the unpaid work sector, or for the environment, the best way to argue was to take on the economy at its own terms, so to attribute market values. The further I got away from the immediacy of needing visibility in parliament, the more I realised what a pathological approach that was. I would not want, for example, unpaid caring work to be in the same database as military weapons, which are, by the way, treated like orchards. So it's a terribly pathological system. So time-use surveys are your answer, is that right? Time-use surveys are the key component. Whatever we develop now` Look, what we've established is that GDP is not reliable, especially for international comparators. Whatever's coming in in its place, we're going to be laden with that for the next 50 years. So we've got to have a base data characteristic that just will not change over the next 50 years, and time does that. We're going to have all kinds of catastrophes and challenges. They're going to change people's working lives. We may be moving towards things like universal basic income, or more towards it. We've already got one of those ` it's called national superannuation, and 750,000 people are on it. Time is what will demonstrate all of these shifts. We're looking now at a ` talking about measurement ` capital gains tax. Do you think that the government should implement one to improve fairness in the tax system? Yes, I do. Why do you say that? Because I think we want to see redistribution. I don't like having fields of assets where profit is not taxed, when it is taxed in loads of other situations. I do think it's time we just grew up and matured and got over this hurdle. Every single argument was heard in every single European country that introduced it. They're tedious now, and I'm interested in a far more equitable revenue asset base. That should mean being able to make changes in company and personal tax as well. And you think that will make a real difference? I do think it will make a real difference, yes. In fact, I was part of a government in 1982 that introduced a capital gains tax. We're seeing some of the watering-down of the language, though, that the Prime Minister is saying that she's listening to small businesses, she's listening to farmers. Do you think it might end up that it's just going to be on investment properties? It may well, but in New Zealand, it's very, very difficult to introduce taxes if they're not universal. We're at a very small population base. You spend so much logistic and technical money trying to sort out who to tax and who not to tax, that in the end, the return is quite small. On that issue of tax and many others, the Prime Minister has stressed that she needs to achieve consensus. Does MMP make it more difficult to make those big, transformational changes? I think that it makes debate better. It's always very difficult to say that, because when you ask me a question like that, I just go ` Israel, Germany, because who else do you compare it with? Those are the other MMP situations, and Germany definitely didn't have too much trouble. Do you think she's going to be able to navigate that coalition path on the capital gains tax? I hope that population feedback enables the coalition to proceed in that direction. All right, that's lovely. Professor Marilyn Waring, thank you very much for joining us. Thank you, Emma. Coming up, the leader of New Zealand's newest political party is aiming high. We talk to Vernon Tava in this week's Facebook Live. Plus, Surf Lifesaving New Zealand says there's growing demand for their services, but the funding isn't keeping pace. So should the government step in? Welcome back. For more than 100 years, surf lifeguards have kept people safe on New Zealand's beaches. But the service says it needs government funding to keep the red and yellow flags flying. The trials have already been axed at some holiday hotspots, and volunteer lifeguards are being pushed to exhaustion. Reporter John-Michael Swannix has been a lifeguard for the past 10 years. He looks at what's being done to future-proof the service. (UNSETTLING MUSIC) We got separated and we were drifting further and further apart. You know, you're stressed and water's coming in your mouth, and waves are crashing over your head. You know you need to relax and just let it take you, but, I mean, it's hard when you know that you could never get back to shore. It's been eight years since Becky Davidson was rescued by off-duty lifeguards at Northland's Ocean Beach. She'd gone for a swim after school when she and another friend were swept out in a rip. We made a big card for them because we were ` from the bottom of our hearts ` we were so incredibly grateful. My friend on the beach, she was crying. She was so upset because when you get into that position, who knows what can happen. Every year, the country's 5000 volunteer lifeguards rescue around 800 people like Becky. Thousands more are helped ashore or given first aid, and hundreds of thousands are kept out of danger through lifeguard's preventative actions ` like warning beach-goers about rips and other dangerous conditions. If we go and do a PA it can potentially, you know, stop someone needing to get rescued which is always good. And make sure that they're going home safe at the end of the day. But while their job is to save lives, lifeguards are spending more and more of their time working to keep the service afloat. We have this dichotomy in Surf Life Saving where the guys who are patrolling the beach and running the club are also doing the fundraising. That's equivalent to the doctors building the hospital or the police constables getting together to fund their new patrol vehicles. There are 74 surf clubs in New Zealand split into four different regions ` all governed by a national body. For more than a century they've relied on donations to operate, along with funding agreements with individual councils. That's around mid-20 million a year that we have to have for operating, and each year we have to find up to 6-10 million dollars a year for capital projects. By comparison, Fire & Emergency has a budget of $600 million a year, most of which is funded through the fire levy on home and car insurance. St John gets around $170 million a year from the government which covers around three quarters of its costs. Coastguard receives around $2.4 million a year for its search and rescue assistance ` about 12% of its $20 million budget. The remainder of that money` It's our volunteers who are out there raising this money. Not only are they doing the training, they're out there doing the rescues, but they're out there actually raising money to keep these boats on the water as well. Surf Live Saving's national body receives around $200,000 a year ` less than 1% of its costs. But while St John and Coastguard can charge users for their services in some circumstances, Surf Life Saving has no way of recovering its costs. Traditional funding from lottery grants and gambling foundations is drying up. And funding from local councils is inconsistent and there's just not enough of it. They do so much for our community. They're always helping out, and as Aucklanders, we already pay through our rates ` about $1.3 million a year. We're really tapped out. We can't give any more. But we'd love the government to support them. Paul Dalton says it's the only avenue left to them. Central government funding is important for us because we're looking for long-term security and sustainability of our funding. Most of our sources of funding are very short-term ` maximum 12 months ahead of time and very contestable. You don't really know how you're going to go against a whole load of other charities that are all going for the same funding. National MP Chris Penk has five clubs in his West Auckland electorate, and wants Surf Live Saving to be funded as an emergency service. It's never been funded by central government of either stripe, so actually for me, it's not a red or a blue issue. It's about trying to do a thing that's good for the community. Penk has started a petition to highlight the issue. I think we're approaching the thousand-mark. Certainly, I'd like to get that a bit higher, but actually it's mostly been about starting the conversation and getting some interest and hopefully attention from the government. And there are more challenges on the horizon for Surf Life Saving. There are 17 clubs in the organisation's northern region, located in the Far North, Whangarei, Auckland and Waikato. More people are hitting the beaches than ever in this region, but funding for life saving services has stagnated since 2013. The equipment they need to do their jobs. Life saving facilities ` surf clubs ` are not to the standards they should be. Kerikeri and Karioitahi are due for rebuild at the moment. It has taken so long in the current funding environment to get those rebuilt that they were near-condemnable. Surf Life Saving is also doing far more than just patrolling the beaches. It provides valuable beach education programmes to schools and community groups. This summer, Onehunga high school student, Ilynah Itamua, saved the life of her drowning friend just days after attending her first Surf Life Saving lesson. It helped me to stay calm throughout the situation I was in to help my friend get on to the shore. When I got back to shore, I told my mum that I just learnt that three days ago in camp. Yeah, pretty helpful. Northern region also provides a 24/7 rescue coordination service called SurfCom that lifeguards can activate through their radio network. It also has a team of rescue-trained jet ski operators and a dedicated 'rock man' who checks the regions angel rings, and gives safety advice to fishermen. Lifeguards used to come to the beach, they'd patrol the flags, and most of the focus was between the flags. That's not true any more. 80% of the work is outside of the flags. It's in the hills doing a search and rescue for someone that's got lost, it's on the road responding to a vehicle accident or a nearby medical emergency. It's with the police doing a search at a nearby location. All really great work, all work the organisation is responding to well, but we weren't built or provisioned for that, so we need to be supported to grow strategically in that space. This increasing pressure is starting to take a toll. This summer saw reports of volunteer lifeguards limping off the beaches in places like Muriwai, exhausted by their workload. Even the most resilient volunteer workforce will tire under that workload if we don't have the ability to improve our capacity. More lifeguards and capability, more skills in that pool of lifeguards. And there's pressure to set up new patrols at popular holiday hotspots. Auckland is recreating at different coastlines than it did 10 years ago and getting in trouble at different coastlines, and lifeguard services aren't there. I think there's a very strong case for Northland, that the same is happening. But William says they don't have the resources to put patrols everywhere they're needed, and they're starting to have to make tough choices. This summer was the first in 15 years that lifeguards have not patrolled at Browns Bay or Milford Beach on Auckland's North Shore. We had to look at how we would meet the need to expand the services at beaches like Piha, cos we needed to be here for longer, without a growing budget. That meant, like any business, we had to reduce the services in some locations. We should have never had to move back from an area we were. That piece of coast became inherently less safe. At the moment, neither local nor central government has responsibility for making sure surf clubs have the resources they need. Chris Penk wants the government to change that. Actually, part of the issue is that there isn't a minister whose role specifically includes that as a delegation. Whereas we've got the Internal Affairs Minister who has Fire and Emergency, I understand. There isn't in the same way a direct equivalent for Surf Life Saving. I suppose, actually, you mention Grant Robertson's name ` obviously he holds the purse strings as finance minister, but also Sport and Recreation. Grant Robertson wouldn't appear on camera, but in a statement he said he ` Chris Penk is hopeful that there will be some funding for Surf Life Saving in the upcoming budget in May. I've really started to see a pick up in interest at the government level in that, so I'm quietly hopeful that we'll get something come through. Becky Davidson believes funding Surf Life Saving is a no-brainer. More funding? Absolutely. Cos I just would hate to think what position I would've been in, if they weren't there that day. Stay with us. We're back after the break. Welcome back. I'm joined now by our panel ` Ella Henry from AUT, Stuff political editor Tracy Watkins, and Waikato Chamber of Commerce CEO Chris Simpson. Welcome to you all. Kia ora. Thanks for coming in. Kia ora. Ella, Marilyn Waring says that we still don't value unpaid domestic work enough. Would you agree that's the case? Well, I'd take the word 'domestic' out of that statement. Out of the unpaid work that goes on, particularly in the Maori world, the Maori economy would collapse without people going home to their marae, supporting our iwi. Kohanga Reo began in garages and living rooms. It's a multi-million dollar industry now. So, literally, the Maori economy would collapse without unpaid labour, and it's not recognised and it's not acknowledged in our GDP, and I think that finding some way to do that is good for Maori people, as well as the New Zealand economy. Are you optimistic that that might change? Um, I'd like to think that, and particularly in the time-use survey ` the one that was done back in the 80's, highlighted how much time, particularly Maori women, volunteered, and the critical role that was played. So I do think that, you know, re-initiating the time-use survey and applying the findings more realistically around professional development and training support is a good thing for New Zealand. Of course, measuring it is one thing, but you have to actually use it to drive policy and improve outcomes as a result. So, Chris, professional achievement and financial gain still our measures of success, really, when it comes down to it. From a business perspective, it's absolutely how you do measure things, in the sense of how do you drive productivity, and how do you drive profitability? So it has to be measured by that. However, business is actually changing in the way that you're looking at unpaid labour in the sense of how do you give your team, or your colleagues, or your staff, time off to actually go and help in the community? And what you learn from the community that you bring back to business, that you share in a business sense. So you look at something like the Waikato Chamber of Commerce. So it's 113 years old. In our constitution, the very first thing is that we have to be part of our community. So it is how do we start engaging, and how do we actually make that an important aspect of business? Does that happen a lot already? It's starting to happen a lot more than it used to be. Compared to when I first went in to work to where we are now with my own team, it's like, 'have time off, engage with the community', and how do we work with that community from a business perspective? Tracy, Marilyn's also critical of the framework for the well-being budget. How damaging is it for the government to have someone of her calibre criticising what they're trying to do? Well, I think her criticism that this is much more treasury-led than it is Grant Robertson or Jacinda Ardern led, I think that's something that, you know, that will hurt them. It is sort of like a fairly stern criticism of that. She's` absolutely, it was a really interesting interview. I found it fascinating. But then the question is, I guess, that it comes back to that issue of how do you` How do you sort of produce outcomes that take in to account some of those measures? And she's been great for years, and she had some, I thought, some fantastic ideas around that. So, Ella, are you concerned about Marilyn's claim that Maori and Pasifika are still gonna be losing out in the well-being budget? Well, I mean, that hasn't changed for quite a long time. Our expectations are not necessarily high that a budget is going to be transformative for the Maori community, but I am a supporter of the regional growth funds, because I know that some of those are going out in to rural, isolated communities that desperately need support and more infrastructure to create employment. So, on the one hand, I think it's unfortunate, but I see Marilyn's point of view, because I am actually a supporter of us being able to measure and utilise well-being, like kaitiakitanga, which, when it was first mooted in the 90's, everybody scoffed about it, but it's actually an internationally recognised phenomenon that you measure the well-being of the environment and you fund it accordingly. So we can be innovators again. Well-being means different things to different people, of course, doesn't it? So, Chris, Marilyn's calls for the introduction of time-use surveys again. Do you see that working here? Well, based on the census data that hasn't been released, and it's taken a long time by Stats New Zealand, you've got to wonder who's actually going to do it. But coming back to having that as a valuable, sort of qualitative tool, absolutely. But it's got to be current, and it's got to be relevant. But that's a big ask. Moving on to construction, we saw another commercial construction company in trouble this week. Does the government need to look at ways to safeguard the industry in some way? I mean, we've seen a succession of companies ` Hawkins, Mainzeal ` and this is the time when we need the building, we need the houses. Yeah, and the government does have a big part to play there in the sense of the spending that it does in infrastructure. What government's got to do, though, is actually understand a collaborative working arrangement with the industry, where it is a pain-share, gain-share. At the moment, it's just the procurement of services, and it's the lowest cost possible, and then that's it. That's not a really smart way to actually invest in to infrastructure. So the irony is` It's not unique to construction, though. Well, it's not unique to construction, but the irony is that Labour, in the previous government under Helen Clark, operated on collaborative working arrangements in pain-share, gain-share when they built the billion dollars worth of prisons. Soon as National came in, that went out the window, because that didn't seem to work. Yet, it actually built four prisons really fast. That's where they should be looking at. So, Tracy, the government is responsible for 18% of commercial construction work. Is it enough for them to say that they're going to lead by example in being better buyers and having better procurement processes? Well, I mean, if you look at the sort of programme that they've got rolling out with KiwiBuild. I mean, that's a great opportunity for them to work with the industry. I was interested in the Prime Minister's comments during the interview, where she started talking about developers as part of that KiwiBuild problem, if you like, and I'm not quite sure what she was getting at, in that sense, and whether they are looking at, perhaps, part of their re-tweak, having a bigger programme for the developers to get involved in. But yeah, given the role of the government in the economy, they absolutely have to play a part. I mean, they're such a big purchaser of these services. It's worrying to see some of these KiwiBuild houses empty, actually, that we're hearing more and more about too. It's quite amazing that, in the current situation, you can actually get it wrong, in that people aren't wanting to buy what are supposed to be affordable houses, given how much demand there is. I mean, that programme was launched, there was something like 20-something thousand registrations in the first 24 hours, which was just a pent-up hope and demand for affordable housing, so how it managed to get so off the rails is just a bit of a mystery. Could it possibly be over-bureaucratisation of the application process? Because one of my daughters was looking at it, and, as you said, 20,000 applications within the first day or so. But then, a stonewall. So it may be, actually, a bureaucratic issue rather than a kind of policy one that's the hold up. All right, we'll have to leave it there. Thank you all for joining us. And that's all from us at Newshub Nation for this week. Thanks for watching, and we'll see you all again next weekend. Captions by Able. Captions were made with the support of NZ On Air. Www.able.co.nz Copyright Able 2019 This program was made with the assistance of the New Zealand On Air Platinum Fund.