- Tena tatou katoa. I am Rebecca Wright. - And I'm Simon Shepherd. Nau mai ki te motu. Welcome to Newshub Nation. On the programme today ` cash, cows and conflict. Can we trust Damien O'Connor's high-stakes plans? - Bernard Hickey and Christina Leung on surviving the cost of living crisis. - Digital editor Finn Hogan investigates deepfakes and what they could mean for our politics. - And how important are trees in our cities? Claims of increased tree felling as we await new protections. www.able.co.nz Copyright Able 2022 Well, it was hailed as an historic consensus and a world first by the Prime Minister. - Government and agriculture working shoulder to shoulder on how farmers could pay for their emissions. - The farmers came up with a plan; however, suggested government changes have now split the industry, with some farmers threatening to pull out. - So I asked Agriculture Minister Damien O'Connor whether that historic partnership is now broken. - No, not at all. We've still got commitment from industry leaders to continue through the process. We've taken their recommendations. We've gone back with some questions ` actually, not too much deviation from what they advised us. And we're listening to other farmers around the country as well to make sure that what we put in place, the farmers understand why and they can buy into it. - But Federated Farmers thinks that you've broken a promise of the partnership, and they're actually thinking of pulling out. I mean, that makes it look like a mess. - Well, I'll be disappointed. They've been part of the process all the way through. It's not a huge deviation from what was brought to government. But I'm not going to prejudge what they might do. But I hope for the good of their members and future generations of farmers that they stick with it, and we work on what is an agreed solution. - Because Beef + Lamb don't like the changes either. The industry seems split. That's not the result you were hoping for from a partnership. - Look, it's been a big task. You know, these are sectors that have a whole lot of different land management programmes and processes around success and profitability, so it's not surprising that it was` it took a while. You know, they reached a point of general agreement. And what we're putting back with questions is not too far from that ` so questions over how we set the price, questions over how we account for sequestration. It's not that it's excluded. While the papers say these are areas that we haven't included at the moment, the question is ` have we calculated sequestration the right way and what should we change? - So they seem to be the two major sticking points, don't they? For the price, the farmers would like a say in it, but your suggestion is that government ministers set the price. Why won't you` - Ultimately, they do. That says that, that we're obliged to consult with them and with iwi as well. So` - They will have a voice in` - Absolutely, they will, as the paper says. And the Climate Commission will be providing us advice as well. So no one's excluded from this at all. In terms of the revenue that is generated, there's an advisory panel, and so the industry will be part of that as well. - What about sequestration? So, some farmers are upset that they only get some of their planting offset against the emissions. Why can they not, which is what they wanted, have all their planting offset? - Because, as their paper says, there's scientific work needed in some of these areas ` really small woodlots, you've got windrows, you've got single trees that all do sequest carbon. The question of how much and then what happens if they blow over are really important things. We don't want to burden farmers unnecessarily with a system that means they're running around accounting for every single tree. So` And the Climate Change Commission said that as well. We might take a little longer to sort through the process that that means it's a sensible system. It's reasonably accurate; it won't be perfect. - But you might be left with a system where the farmers are paying a levy but not getting any incentives back for` - No, no, no, they are. They are getting incentives back for riparian planting and for other woodlots. - But not for all planting. - No, because some of them are very small, and it might not be worth the effort to account for the sequestration. We want to make sure that we're not imposing upon farmers a system that costs them more than they get credits for. - So, the modelling shows in sheep and beef farms that they could face a 20% drop in production ` that's the figure that's been touted. - That's` - If that happens` - That's a net revenue and maybe a loss of 7% of area. It's not 20% of the sector leaving, and so that's been misrepresented. - No, 20% of production, though. 20% of production. - Yeah, but production doesn't necessarily equate to productivity or profitability. And so there are a number of factors that play into that as well. - So you're saying that's not as doomsday has being suggested. - No, I don't think it is. And every single farm will be in a different position to take on that challenge. I'm not saying it's not an impact, and I'm not saying it's not a challenge, but I think that, having watched what the sheep and the dry-stock sector has done in previous decades, there's been an average reduction of about 12% of the area in beef and lamb farming over the past three decades. What we're projecting here is maybe 7% from this. I accept that the ETS and forest planting is another component that's putting pressure on that sector, but we've seen, on average, higher levels of reduction in area over the three previous decades, and it hasn't destroyed the industry at all. - But what about the communities that rely on the industry that may change to forestry or just give up on farming? Are you worried about those communities? - Yes, we are. Of course we are. And we've seen, you know, changes through the '80s and '90s, all those communities have been impacted in some way. With technology, we've seen a boost in the people moving out into some of those rural areas. They're working online. So it's not just shearers and people working in forestry who live in rural areas. - Is the modelling that you're basing this on too optimistic, because it does assume that methane reducing injections and genetics will be available and has taken that into account? If it's not available, the impact could be greater. - No, I think they've very conservatively taken that on board, and so they're looking at those technologies that are in the pipeline. In fact, the view is that, with some of those things, if they're proven to be correct, we can actually, you know, leap ahead of the projections in terms of the 10% by 2030, and then the target's yet to be set beyond that. - But people like Federated Farmers are telling me that, you know, they're not so sure those technologies will be available, and if they're not, it could see almost a 30% drop in production in the sheep and beef sector. - Look, there's nothing sure in the world today. But what we do know ` there's a huge amount of effort going in to try and identify technologies to reduce emissions across the board. - I mean, the same modelling shows that if sheep farmers reduce emissions, competing high-emitting countries might take up that market share and sheep emissions might rise as a result. So is all of this pain that could happen... worth it? - Look, that's a possibility. There's some research that says that it's unlikely that we'll see a shift and a transfer of that production. You know, we're producing high-value, high-quality products that shift into the market. There's no guarantee that others can replace us. - But this is in the` this is in the consultation document that says that this could happen. - It could, and I think there have been some studies done that have said that it won't. I'm not getting into the debate on that. Of course, that's a possibility that people could step into that breach. - This is about reducing emissions. If we reduce emissions here and they rise elsewhere, what are we gaining? - Look, we're a relatively small emitter in international terms. Where we can really make a difference is the technologies that we develop here. If we share those technologies with the rest of the world, particularly when it comes to livestock protein production, we can have a huge impact, and our efforts here can be, you know, can be spread and shared around the world. That's where the real impact will be. - So does that mean that there's, like, the sheep and beef industry are being used as an experiment to reduce emissions so we can be branded around the world as an emissions leader? - No, look, in 1997, we committed agriculture to part of our emissions reduction program. That was done by actually Simon Upton as minister then. 25 years on, we're still grappling with how we do that. It is 48% of our total profile. We have to do our bit if we're` You know, we as a biological food production system country, we will be probably the most impacted by climate change. You know, we rely on biological systems, we rely on a pretty steady climate. We're facing some major disruption. We have to get other countries to do their bit and we have to do our bit and lead by example. - So it's not about branding or positioning New Zealand as an emissions reducer? - Well, it can be if we get on and do it and we're successful, of course it can. - Well, let's talk trade. That's your other ministerial hat. Let's talk China ` China's economy is slowing; its population's getting older. Why are we still playing the risky game of depending on China for most of our trade? - Of course` - It's still 30%, isn't it? - It is indeed. 30-plus per cent, and I've said to companies, you know, if you are reliant on one customer, you know, hugely reliant, then you're slightly exposed and your business model is risky. - And if that customer turns to custard, what's the plan B? Where do they go instead? - Exactly, and that's what I've asked the companies ` 'What is there?' They can't expect government to shift, you know, their export profile. Many of them` - But you opened the doors, right? - Correct. We've opened the doors in the EU and the UK. We're working in other areas. You know, we've signed up RCEP and we've got CPTPP, so we've done a lot of work in five years for brand-new trade agreements and two upgrades. That's a significant opportunity for exporters. - OK. If, for example, President Xi invades Taiwan, will New Zealand still continue to trade with China? - Look, those are decisions that will be made at the time. We have a very strong and healthy commercial relationship with both Taiwan and with China. We have One-China policy. We always respect that, but we have, as I say, very valuable commercial relationships that benefit not just New Zealand but the people buying our products. I'm sure that will continue, but we're not gonna prejudge what might happen. - Personally, as Trade Minister, are you happy, even without an invasion, to continue trading with China, regardless of things like the internment camps full of workers? - Look, we speak out on some of those issues at the right time, in the right way. China respects our position on that, but they also respect our right to trade commercially with them. - In terms of opening doors, Foreign Minister Nanaia Mahuta says a free trade agreement with India is not a priority and that's one of the largest economies in the world. Why not? - Well, it's not a priority because India have clearly expressed to us on numerous occasions that they're not gonna do a deal with dairy, and dairy is our single biggest export. So I went over there ` we can build really strong and valuable relationships with India without a free trade agreement. We don't have one with the US. We have an incredible opportunity to build the kind of relationship in India that we have with the US without a free trade agreement. - Are we being left behind at the moment? - No, we're not. No, we're not, and Australia's just signed an agreement in principle and I've got to work through that. In summary, like sheep meat ` they might have an advantage over us. So we just have to be realistic and, you know, balance up our efforts and trade negotiations with the reality of what we can deliver. - So if not India, who next? Which is the next biggest country that we can diversify to? - Look, the Middle East and the GCC ` we had a trade agreement almost over the line in 2009. That was parked because of internal issues there. We've been back talking with them both, you know, into Saudi and to UAE... - Yes. - ...and they are reliant, of course, on the importation of food, but they're developing their own sectors and I think that it will be in the services area. It will be in IP and technology where we can make huge gains. - But just on the Middle East, I mean, what's your personal philosophy when you're dealing with these countries and you disagree with the human rights? Like, the Saudis are known for executions. - Yeah, I mean, we speak out, where appropriate, but nonetheless, you know, there are commercial relationships that are separate from that. You know, and I leave those issues for the most part to the Minister for Foreign Affairs. My job is to open the doors for commercial opportunities that underpin, you know, our country. - How do you balance the commercial opportunities versus the human rights? - That's politics. You know, that balance is one of the things that not only New Zealand but every other country in the world is trying to work through in some really challenging and disruptive times. - That is Trade Minister Damien O'Connor. - E whai ake nei ` we dissect that interview and the week in politics with our panel, Finn Hogan, Georgina Stylianou and Sarah Perriam. - And what happens when seeing is no longer believing? A Newshub Nation investigation into deepfakes and what that could mean for our election. - Well, if there is one issue that will define the election next year, it is the economy. The heady highs of government wage subsidies and cheap borrowing during COVID are over, and the comedown could be brutal as storm clouds gather internationally. So with me now to discuss is our special economy panel ` Bernard Hickey, editor of Kaka.substack.com, welcome, and Christina Leung, principal economist at NZIER. Welcome to you both. Now, listen, I just wanna start with a bit of a sense that it is really tough out there at the moment for people, isn't it, Bernard? - Well, it feels tough because prices are rising, For those people who own property, they're seeing their prices fall. But actually, when you look at it in the wide sweep of history, the key thing to know is 3.2 or 3% unemployment. That's incredibly low and anyone who wants a job has got one. And when you look at household incomes, they are rising at the moment as fast as prices. So actually the real wage shock that everyone is talking about is not quite as great as everyone thinks. I actually think the last two or three years of COVID and war and a whole bunch of things has made us grumpier than we actually are, and if you look at how much we're spending and how much we're eating, we're actually doing a lot better than we say we feel. - Yes. And I want to talk about that sort of sentiment and employment as well, Christina, I was talking to Consumer New Zealand yesterday. They do a sentiment survey among New Zealanders. They found 10% of people are going into debt to make ends meet each month and 50% of Kiwis right now aren't saving. That is a big turnaround from 12 months ago, isn't it? That's the, the impact I suppose, of cost of living` - Yeah. So if you look at` And Bernard is right, we do have a strong labour market and that is providing some buffer to the economy. That said, though, if we look at the latest assets in state Household Living costs index and that does show that living costs are rising 7.7% over the past year, driven by high prices for food and housing. So it's these things, particularly for the low income, it's because it makes such a larger basket off their consumption basket. It's much harder to avoid for them. And that is where that pain is really hitting. - If it's` Sorry, Bernard? - And in a way we're having a society bifurcated into two groups. - Mm-hm. - Anyone who owns a home and anyone who doesn't own a home. Those people who are renting are probably on lower incomes and then on higher rents, and they haven't got the buffer now of higher asset values and savings in the bank, because actually when you look at the household sector and how well-off it is, $1.8 trillion, it's worth, and quite a bit up from the beginning of COVID. The difference, though, is that it's all about home ownership and assets. Those people who don't have assets in home ownership are the ones who are really feeling the pain. - Absolutely. And that was reflected in that Consumer New Zealand survey too that said our top financial concern is making rent or mortgage payments, and food was also up there, right now at the top of the list, and 12 months ago it was at eighth. So that's what we're feeling at the moment, isn't it? - Yeah. And certainly when you look at like the consumer, the CPI, where you have food prices going up almost 14% over the past year, again, just the fact that it's these price of necessities which particularly for lower income, it's a lot harder to avoid having to pay these high prices. - In terms of inflation, Grant Robertson said this week that it has peaked. Do we believe that? I'll start with you, Bernard. - Brave call from him! Because there's a few people that've said 'It's about to peak,' and then it hasn't, really. We'll know in the next six months or so. All of the leading indicators you're seeing globally, things like shipping container costs, and even just in the last couple of days, wage-inflation, in the likes of the United States is starting to come over the top and then down the other side. It's just whether it's fast enough to convince the central banks to stop hiking interest rates because at the moment the central banks are in pure credibility recovery mode. It's all about, 'we got it wrong last year 'and we better show you that we're really serious about inflation. 'So we're going to hike rates until they're pipsqueak. And even though they know that whatever they do now doesn't really take effect for a year or two, and in a year or two, inflation could be quite a bit lower, and the risk is they over-tighten, and we'll see whether that happens. - Yeah. Christina, do you think that we have peaked? - If we look at, for example, the NZIER quarterly survey of business opinion, certainly the inflation indicators show some moderation and it does suggest that the trend is moving down. Again, as Bernard says, it's just how fast it is. Is it fast enough for the Reserve Bank to be comfortable that it's done enough to bring inflation back towards its inflation target band of 1-3%. At the moment, Just given where with the latest CPI showing that annual inflation is at 7.2%, it does suggest that there's still some tightening to go to dampen that demand back to where supply constraints are in order to rein in inflation. To the point about the lag and the impact of rising interest rates, it is very true, particularly with the fact that 12% of mortgages in New Zealand only are on floating and we've got around 45% of mortgages that are fixed, that's to be repriced over the coming year. So we're talking about these households that are moving from historically low fixed mortgage rates of 2 to 3% to something over 5%. Now this increase in mortgage repayments, that will mean quite a significant adjustment in spending for many of these households over the coming year. - And it's particularly dangerous for the government because come just before Christmas, the Reserve Bank is expected to put up interest rates again and it could be a super bazooka, a 75 basis point hike, and then interest rates stay high, and as Christina says, the roll-over effect comes through into next year, just before the election. - (REBECCA LAUGHS) - So for the government, the timing is really bad. Inflation might only just be starting to fall, but that's when people with mortgages are really feeling the pain coming through. - It is politically precarious for them, isn't it? We are seeing mortgage rates at over 7% in the US at the moment, is that we we're heading at the moment, I think it's around 5.99% for a one-year fixed. Some of the longer term ones are creeping over seven, but are we set for those hikes to be reflected in interest rates. - So given how high the recent inflation data came out at, um there is definitely the increasing talk that the Reserve Bank will have to do more, and have interest rates for higher. The fact that with expectations of OCR reaching around 5%, potentially even above that, it's entirely possible that mortgage rates will go to 7% as well. - I want to talk a little bit about the Reserve Bank's role, because we've started talking about that here. But is it better` Is higher inflation better than higher unemployment? These are the things that it's balancing, isn't it? - So of course there are costs and benefits, why inflation matters for the Reserve Bank to be keeping it low is that at the end of the day, high inflation penalises savers. So if you have savings and you have high inflation, you're gonna see the purchasing power of those savings being eroded away quite quickly, like the rate of inflation is. So that's why` also the fact that with menu costs, like the fact that with prices rising so quickly, then people are constantly having to adjust prices. That makes planning that much harder, not knowing that whatever you commit to longer term, it actually might cost a lot more down the track. - It's I suppose I think people are, you know, able to stretch their paycheque to try and account for inflation, that is very different from having no paycheque at all. - That's right. And that's where the government can help, and does, with unemployment benefits and other things like working for families. The argument, of course, made by those covering child poverty and the like say the government should be doing more in following the recommendations of its own welfare advisory group, and that's gonna be a key thing over the next couple of years. How much help can the government give those people in that really feeling it, the, renters mostly, and also politically, how much will the government have to give to middle to higher income earners to make sure that the government gets their votes? Because frankly, to win an election in New Zealand, you need median voters. They are mostly older, home-owning middle income people and so they want their share. And the question for the government is how much can it give to them without inflating the economy more? Because that's the danger, you give them cash and suddenly you create an inflation problem. And secondly, is it enough to get re-elected? And, well, we'll see. There will be some middle class welfare to look at before the election. - Well, is the Reserve Bank getting that balance right, do you think? Because we are seeing it hiking interest rates to try and tame inflation, but it also has an imperative, a wellbeing imperative that was introduced in 2018, which is around unemployment. - As Christina says, inflation is something you need to get on top of for the long-run. - Is it too late though, already? Hasn't it got away from us already. At 7.7%? - Sure, you can start late, but you just have to run faster to get ahead. And for the Reserve Bank that they have a job which is in the Reserve Bank Act, you've got to get it down to 2%, and you could argue that they overstimulated the economy in 2020 and 2021, so then they have to a lot more to get it back and to win back the credibility, which although it's a soft thing, actually is worth a lot. The question, though, is how much help can the government give them? And I think we overlook that the government has control of a whole bunch of prices in the economy and could actually do a bunch of things to reduce prices, particularly for those on low incomes. And that's why, you know, debates around cutting GST, taking GST off various things is one that should be heard because not only does it give a benefit to those who need it most, but also it reduces inflation and helps the Reserve Bank. - Christina, do you think that the government could be doing more in this moment right now? For many people will feel like they are standing by, but do you think they could be doing more so when? - So when` Economics always comes back to supply and demand when we look at prices. For the Reserve Bank, they can actually really only control the demand side. So what we're having at the moment is severe, quite severe supply constraints in the economy. You only have to look at the NZIER quarterly survey about business opinion where for businesses labour shortages remained a primary constraint on business. So we've got a very supply-constrained environment. Reserve Bank, what they're trying to do with the increase in interest rates is to dampen demand, to bring it back in line with where supply is at in order to rein in inflation. So if we want to bring down inflation, yes, you can bring down demand or you can increase supply. So that's where the government could have a role to play in ways that we can increase the productive capacity of the New Zealand economy. - And that's why I think we're seeing the Government ease back on some of its migration controls in the last three or four months. You've seen the reopening of the skilled migrant class visa, the reopening of the parental class visa and a lot more temporary visas being opened up. And I think over the summer we'll get a better idea of how many backpackers and temporary workers have come, and then next year it'll be a competition between National Labour about who can loosen the migration settings the most. - show us the money, as John Key famously said. Now I want to finish. There is a lot of gloom out there. We haven't even got to what's happening internationally. But I want to finish on what is our best case scenario from you both. Christina? - Yeah, best scenario would be a soft landing for the New Zealand economy, where we do manage to bring inflation back towards the 2% inflation target, but in a way where households are able to cope, they've got the wage increases so that they can adjust to those high mortgage repayments as interest rates continue to rise. So slow and orderly slowing often used in economy. - Do you think that's likely, Christina? See it in your crystal ball? - Uh, it's possible. (LAUGHTER) - You don't seem entirely convinced. Bernard, what is your best-case scenario? - Yeah, I'm hopeful that we have a Goldilocks landing. Not too hot, not too cold. Everyone gets great porridge and we keep unemployment low, and at the same time, inflation goes back down towards 2% or 3% in the next couple of years, and we do it without any sort of financial market ructions. Unfortunately, though, a lot of the determinants of that will be happening overseas, in the mind of Vladimir Putin and also in the bowels of the US and European economies and how they react to this very fast monetary policy tightening that's going on at the moment. - It is such an interesting time. Thank you so much for joining us here this morning, Bernard Hickey and Christina Leung. - Thank you. - Well, up next ` Finn Hogan investigates the rise of deepfakes and what it means for politics where seeing is no longer believing. Plus ` a wholesale slaughter of trees while we wait for new protections. Simon Shepherd investigates. - Hoki mai ano. Welcome back. Well, the push for more housing is getting pushback from those who want more trees in our cities, with claims that thousands are being felled every week. - The government is working on urban tree policy now following the loss of blanket protections in 2013. - So is there a way to have the housing and the trees? - We can't let this go on any longer. 2023 has to be the moment that we actually do something. - Go home, brother! - No! You promised! - And it is just wholesale slaughter of losing our urban forests, and that is going to accelerate now with the intensification rules in place. - Then it does become a matter of the developer thinking, you know, 'Is this a resource that we can use?' - Tamaki Makaurau Auckland ` not as green as it might seem. - 18% of urban Auckland is covered by trees. - And is that good enough? - It's not good enough. - Auckland Council's senior arborist David Stejskal. He says the goal is to have 30% of the city covered by its urban ngahere ` it's tree canopy. Auckland's 18% is better than Christchurch with 16%, but only Wellington hits 30% coverage. In Auckland, there has been increased planting on public land, but the removal of nationwide blanket tree protections in 2013 has seen thousands of private trees lost. - So, we're talking 150ha of private canopy has been removed, of private tree canopy. - That was in 2016, the last time the urban canopy was measured. - We're estimating, what's going on at the moment, we're losing probably about a thousand trees a week in Auckland ` at least. That's a really conservative estimate. But yeah` - And these are mature big trees, are they? - Yeah, these are big trees. Because they're the ones that are competing for development space. - That's because the race is on to densify New Zealand cities. New government planning guidelines mean where there was once a single-storey house, there could be multiple three- or even six-storey buildings. Some trees aren't going without a fight. Two years ago, Mana Rakau protesters occupied rakau ` trees ` for 245 days in Auckland's Avondale. (CROWD CHANTS) Arborist Zane Wedding camped in one to highlight the loss of urban rakau and what that means, especially for Maori. - A tree like this, more than anything, is kind of that window into te wa o nehera ` like, olden times. A rakau like this, particularly pohutukawa, would be used throughout our burial processes. Our tupapaku ` our bodies ` would be laid amongst these branches, just like what we see here, and then their flesh would be poured into the soils to join with these rakau. - Zane Wedding says the biggest impact is in the poorest areas where there are higher Maori and Pasifika populations. Their stories are lost, and life is more uncomfortable. Right, so what are the readouts here between the shade and the heat on the footpath? - So we have to sort of, like, targets showing on the screen. - 'This thermal heat reader shows 17 degrees in the shade, 30 degrees on the sunny pavement.' So it's twice as hot out there on the pavement as under the tree. - Yep. - We are in Mangere, a suburb with just 10% tree cover. On the council's heat vulnerability index, Mangere and many other South Auckland suburbs do not rate well. - The street is zoned for terraced housing and apartment building, which means that we may see up to six-storey-high buildings being built on those properties that are single-owned. - Keeping the trees not only keeps the suburb cooler, the trees provide oxygen, soak up stormwater and reduce blood pressure. So how do you balance the need for homes and the need for trees? - So, we start with can we use these trees? And if we can, how do we design around it? And that's what we've got here in Avondale. - Kainga Ora, formerly Housing New Zealand, is one of the biggest residential developers. Its Highbury Triangle site is typical intensification ` 15 houses and flats are being replaced with five six- to eight-storey-high apartment blocks containing 236 homes. In the middle of the construction site, two pohutukawa trees, which have been preserved, and one resident duck. - And what we've learned is, actually, access to green space, access to places where they can connect with each other, connect with the natural environment is actually a really important part of successful intensification. - It doesn't happen on every site ` at another Kainga Ora build, this kauri stood tall while the local area was levelled. But it didn't last. The soil was contaminated with high lead levels. But the aim is to view trees as a resource, not a liability. Arborist David Stejskal says the design process should be reinvented. - Perhaps we could turn it upside down and start with trees and say, 'We would like to have canopy cover on this street of 20%. 'Let's plonk the trees on the street and then let's design around it.' - Pro-tree activists have been busy lobbying the government ` more than 2100 submissions to the Natural and Built Environments Act were about urban trees. Associate Environment Minister Phil Twyford acknowledges the current system is inadequate and is working on a new approach. Mels Barton from the Tree Council says the new law should create a national standard that councils then have to put into practice. She proposes one known as the 3-30-300 Rule. - And it's about being able to see three large trees from your house, from everybody's house, for aiming for 30% of coverage, tree canopy coverage, in each suburb, and only having to walk 300m to the nearest urban green space or park. - Developers like Kainga Ora favour flexibility. - It becomes difficult if you don't have the control to be able to say, 'Oh, this works well. This is something we can definitely do. 'These other trees ` actually, there are reasons why we can't use these trees in these environments.' So the flexibility to be able to do that is obviously really important for us. - New government policy can't come soon enough for Zane Wedding. This week, he and others were discharged without conviction for the Avondale tree protest. That, he says, justifies the fight to save the urban rakau. - We can't let this go on any longer. 2023 has to be the moment that we actually do something to strengthen our ability to build resilience into the system that allows us to still be sitting under this tree in 50 years, 100 years from then, for people to still be sitting under this rakau. And it's the decisions that are made right now that will make that so. - Minister Phil Twyford says he is working on new tree protections as part of the wider reform of the resource management system. He says to expect more information soon. E haere ake nei ` plenty to explore there with our political panel, Finn Hogan, Georgina Stylianou and Sarah Perriam. - But first ` can we trust what we see? Finn Hogan investigates the rise of deepfakes. - Waihape mai, welcome back. What happens when seeing is no longer believing? - At a time of record-low trust in the media and with an election on the horizon, Finn Hogan investigates the rise of deepfakes and what they could mean for our politics. - This story was shot by Hannah Warburton. - FINN HOGAN: None of these people actually exist. This is not Barack Obama, this is not Morgan Freeman, and that is not Tom Cruise. - I'm gonna show you some magic. - Everyone you're seeing is a deepfake ` computer-generated mimicries of real people. - I would like to welcome you to the era of synthetic reality. - Technology once the purview of Hollywood, now available to all. - Anybody who wants to do a deepfake can probably do one from home. - Dr Andrew Chen is a research fellow at Auckland University and warns deepfake technology is rapidly outpacing our ability to regulate it. - At the moment, a lot of these images that are being created, you can still tell that they're not quite right and we'll probably see those issues start to fade away over the next couple of years. - So pretty soon these deepfakes are gonna be indistinguishable from the real thing? - Yeah, you know, there's just not going to be a way for us to be able to distinguish that this is a real image versus one that's been generated by a computer. - The political consequences of pixel-perfect deepfakes could be dire. - We have actually seen deepfakes be used in elections over the last couple of years already, but their impact has been relatively muted because generally we've been able to tell that those are deepfakes and most people have been able to ignore it. If we get to the point where the deepfakes are indistinguishable from the real thing, then, you know, we are gonna have to rely on our other defences. - Defences like public education or new regulation, slow-moving tools for a fast-moving problem. - But there are no short-term fixes unfortunately, and there hasn't been enough funding or resources put into exploring the regulatory responses to these types of technologies. - And with an election approaching, Andrew warns things will likely get worse before they get better. - I think we will probably see that bad actors will try to use deepfake technology to influence people. People in my industry, that's what we do ` we say that, like, these harms are coming and then... generally we get ignored until, like, the harms are severe enough that actually people will do something about it. - Audio deepfakes are particularly easy to create, meaning moments like this... - Maureen Pugh's (BLEEP) useless. - ...could soon be difficult to trust or verify. In a world where anything is fakeable, everything is deniable. - You are fake news. - You need to have trust in a society's institutions in order for a society to function well. Losing that trust, like engendering distrust in the media forms, has massive ramifications. - Experts like Sarah hope New Zealand could be a world leader in our deepfake response. - We are often seen as a nation that can mediate between international groups because we exist almost outside of a lot of things. So I think we have a unique opportunity here. - Pointing to the Christchurch Call as a model for cooperation between nations and tech giants. - We're never going to be able to stop an individual doing a deepfake. Like, there's always gonna be a teenager doing something somewhere and we're never gonna be able to stop that. However, the virality of it is the problem. - But as with other harms, the dangers of deepfakes aren't distributed evenly. - They particularly target along lines of gender, along lines of race, sexuality. - Well, well. - We're already seeing gendered targeting of politicians, the attacks that Jacinda Ardern gets on a regular basis is profoundly different from her male predecessors. So we're going to see deepfake doing exactly the same thing. - And for women outside of politics, we already are. Netsafe told Newshub Nation complaints from Kiwis involving deep-faked pornography are rising, but since they can't determine which images are genuine, the increase cannot be quantified. - They can cause the harm, but without any recourse through the courts. - Arran Hunt is a lawyer specialising in tech and says the Harmful Digital Communication Act is ambiguous ` unclear about whether creating sexualised deepfakes is an offence. - The law has to adapt with technology. It always has. They can change the Act so that it no longer needs to be about that person's body, but merely that it identifies it as being that person's body. It was raised with a select committee by a number of us. The government decided not to take the action on it. It is a tiny fix to the legislation they could be making now. - But legal fixes for individuals won't prepare us for what's coming. - But we can get to the point where we can virtualise their entire existence, so we can say how they move, what they talk, even their voice. - It's all... the real... thing. - We could do a video of Biden declaring war on Russia and you'd have him so perfect, you couldn't tell the difference if it was him or somebody else. - And deep-faked video is just the start. With one sentence written by you, new artificial intelligence tools like DALI-2 and GPT-3 will soon be able to write a convincing news story, academic essay or cabinet document, complete with entirely fake videos and imagery, all in a way that's practically impossible to detect. A wave of synthetic media is coming. Every face you see behind me is a non-existent person generated at the click of a button. But soon, much of what you read here and watch could be artificially generated. While that's alarming to some, others say the real danger is overreaction. - The actual alarm from these kinds of technologies creating just as much harm as the actual technologies themselves. - Tom Barraclough co-authored an extensive report for the Law Foundation in 2019 on deepfakes and advised against significant reforms. - Broadly speaking, New Zealand's legal system is quite well-prepared to deal with these kinds of harms. - He agrees we should update legislation on deepfake pornography, but says fears of political deepfakes are overblown. - I think that issue is already here and we've dealt with it. A journalist would seldom take, you know, audiovisual material showing something extremely inflammatory around a politician and not also reach out to them for comment and say, you know, 'Is this accurate? 'Is it true? Is that you in the video?' - He also argues regulation risks limiting freedom of expression. - And I wanna use one of these technologies to create a really engaging image that can convey my message much wider than I can. Then if we're intervening too heavily from a legal perspective, we risk undermining people's ability to do that. - While others say inaction would be worse than risking censorship. - I think we have a unique opportunity here, but if we don't take it, the opportunity for it to get worse is massive. - So a wait-and-see approach, and a rapidly-approaching world where seeing is no longer believing. - DR CHEN: That actually undermines what it means to be a human in some sense ` our eyes now betray us. - And last night, Ministry of Justice Criminal Justice General Manager Brendan Gage sent Newshub Nation a statement. He said, 'There is work underway to examine harm from online content, 'and officials have already consulted with experts in relation to deepfakes of a sexual nature.' He said, 'We are aware of potential issues with the Harmful Digital Communications Act 'and there are plans to review it.' - We will continue to update you on developments. Kia u tonu mai, e te iwi. Stay with us. We're back after the break. - Hoki mai ano, welcome back. And I'm joined now by our panel, Digital Editor Finn Hogan, former parliamentary staffer for National and NZ First Georgina Stylianou, and agribusiness broadcaster and host of Sarah's Country, Sarah Perriam. Tena koutou. Thanks for your time. Let's do deepfakes. Finn, just saw your story ` how damaging could they be in election year? - Well, I mean, that's the problem. We don't really know the extent of the danger because we're not paying people to do that research. There's about five people in the country that are thinking about this professionally. You just saw them all in that story. That's barely an exaggeration, but it is a serious problem. Like, I think deepfake video is one thing, it's going to exacerbate existing issues with distrust in media. But I think the important point here is synthetic media is a much broader umbrella than that. We're dealing with technology that can now create convincing versions of text, of audio, of video, of pictures, so we're entering a world now where you can log on to a website, it's gonna to scan your publicly available information and it's gonna to make you an entire website of content created just for you. We've dealt with curated content before and social media and those dangers. What happens when it's created? - Right. So when you look at that, Georgina, do does it make you uncomfortable or do you feel that we're just being a bit overreacted to it? - Well, we've solved this problem in the green room just before and basically decided turn the internet off is the solution. On a serious note, it is deeply troubling. I mean, I think the` We talk about maybe not overestimating the problem, but what I find, if you look at Trump with his fake news and dismissal of every article that said something he didn't like, if there are recordings or footage that politicians can suddenly dismiss as fake, that also poses a problem. I have no idea. So, I mean, it's going to be a problem coming up this area. You know, a politician doesn't like it. They're going to call it fake. It's a deepfakes, it's an easy out. - Absolutely. It's about saying I didn't do that when they could have been doing that the whole time beforehand. I mean, to be honest, it gave me goose bumps, more than the he waka eka noa, where that's gonna land with the emissions pricing. - Well, we're gonna find out now. - What a segue! - That's a great segue. Where are we going to land with that Sarah Perriam, it's a historic consensus, but shouldn't be. Farmers are really unhappy. Is that partnership over? Well, mean, it is because the point in case was to come up with a recommendation, a well-thought out` That had government, iwi and farmers, we forget, all at the table to come up with a sensible solution. At the end of the day, when it comes right up to the 12th hour, the government is now starting to play politics going into 23. And yet again, as they did in 2017, farmers are the easy to utilise in this and so to incite that much pain to change some fundamental things at the end, it to me sounds more like politics than it is about practicality. - Is there is this debate about whether reducing sheep emissions here could lead to emissions going up overseas from` So standing back as an observer, does it feel like that part is worth it? - The emissions leakage problem is something that I don't think agencies across the board, not just in AG, but in in industrialisation generally in this country, do we want onshore manufacturing or do we not? Are we willing to get it offshore at a higher carbon cost? But yeah, coming back to agriculture, I think we just need to remember that this has been on the table for decades by frankly, I'm bored of the topic, right? I think we somebody had to do something at some point. And my view on this is if you have a proportion of the farmers and Greenpeace saying that` (OBJECT SLAMS) - Sorry! - That's all right, we'll get it later. - ...that the proposal sucks, I think it's probably landed about right. - Oh, OK. Finn, I just wanted to ask you, I mean, the Minister was saying, you know, we're gonna depend on technology to, you know, mitigate emissions. But is that technology there? That's the question. - I mean, that's the thing. We've talked about this on the show before, and you brought up genetic technology in that interview there. And that is not something that you can depend on, particularly in New Zealand, for various reasons. One, we've got such a strict regulatory environment about developing technologies, particularly around gene editing, so they would have to move on that if they're going to rely on these technologies, they're showing no inclination to do that. And B, even if they do, those technologies take years to decades to bring to market. And so I don't know if they're ever going to come to market in a timeframe that's useful based on the track record. Sarah might be able to bring us in on that. I mean, what do the farmers say? Do they think` believe that the technology is going to be there by 2030 to reach these emissions targets? - Well, I think it was really interesting to cross over with deepfake around the pace of law and the pace of technology and which one comes first, because fundamentally, we are regulating something that does not have the technology in place yet. At the same time, we're not talking about the technology of sequestration, that we have now to be able to answer everything that Damien believes is impossible, is possible, and can actually position us to be able to sell our product at that premium he speaks of. - OK, just really quickly, Georgina, Labour won a lot of rural seats, probably off the back of the COVID in 2020. Will this issue lose seats for them next year? - Yes, and I think I think it's political capital they have they have decided that they are they are willing to lose at this point. I think there's a transformational program and whether you love or hate it, and I certainly disagree with some of the reforms, but at least they're trying to do something. Too many plates spinning, spinning and a bit of a comms problem in terms of bringing people along with you, but I'm kind of bored of the status quo. - You've mentioned that before. Just really quickly. So Labour doesn't want the farmer vote? - Oh, no, absolutely not. I mean, that 13% of the workforce is within the rural industry. It's more so about the fact that it's a faction of society that they can use to mobilise a wider unhappiness with the government, That will be what Act is currently doing right now. - Right. - And the Nats. And the Nats. - I don't know. - I think the National Party are going to be playing well into this. They already are. I mean the fact that we're already seeing headlines around it, some one in five sheep and beef farmers going out of business. Well, that's fake news. It's not` - That's a messaging problem on the government's part, right? They should put the message out there. - It get's rearranged. - I'm gonna move on, because we're moving around in circles on this one. But, you know, this industry is essential to our exports, and we're gonna talk trade now. His other hat. Finn, I mean, they're always talking about diversifying trade, but China still dominates our exports. How much of a problem? - I mean, it's been a massive problem. We know it's a massive problem. They keep saying they're going to do something about it. We're not seeing much action on that. And of course, as we bring up the Taiwan question as well, if any issues come there, that's going to be incredibly influential on our economy, but less of an issue if we pull back from China, an also on Taiwan` - But how easy is that? I mean, I just want to ask, Sarah, how is it to do that? I mean, once you've set up your sort of trade export profile, how can you just go, Oh, no, I'm just gonna go over here. - Well, you can't because, I mean, the 13 EU members actively hate us because of the conversation we're having around green flying our agricultural imports against what the strategy is, which is to be tenfold what we trying to achieve. We don't have the ability to pivot because the markets we want to pivot into are effectively subsidising their farmers to be well advanced in terms of their stance on environmental production. And you also talked about India. So it is obviously a massive market, but Georgie, we can't go there, because they do what we do. Yeah, I like what you just said. I think that is right. We do have governments in our trading partners that are being far more interventionist than we are. The same applies with on recycling and packaging and waste management. But when it comes to trade, our reliance is not new. We've seen this coming for many, many, many years. And I find the argument that government shouldn't intervene in a free market, but also can you give us FTAs so that we can diversify our businesses a little? Government can do some of the heavy lifting. Business needs to do some of it. - Damien O'Connor says it's his job to open the doors, but it's opening doors, Finn, even where there is an issue of balancing human rights and trade deals. I mean that's a pretty tricky` - I mean, but that's the tightrope that anyone in his position was gonna to have to walk, right? And I appreciate his sort of bluntness on that, because I don't think anyone else in that seat would really be doing anything differently. Maybe their messaging would be different, but at the end of the day, his job is to look after our economy and you're always going to be dealing with nations that have different values. - All right. Let's talk one last thing. We've got some pictures from this week. It's Christopher Luxon, there he is doing his Macca's shift, I don't know. Did it come across as authentic, Sarah? - Uh, no. (SIGHS) To me it didn't. And it was really a case in point that National haven't got their act together in terms of what they actually stand for, what their solutions will be. That to me, it looks like a man that's excited more about his childhood dream of being the prime minister than it does about actually fundamentally what he believes in. - Yeah, I mean, look, sorry, bro. You're going to have to flip so many burgers to convince people that you don't winter in Hawaii, you know? (LAUGHS) That's not gonna work for you. - Ah yes, I just` I mean, Georgina, you've worked in Parliament and we've seen these kinds of things again and again and again. What is the point of dragging a politician into that kind of sort of workplace photo opportunity? - Well, politicians visit businesses every day of the week. So I think that that's just what we do. And Labour ministers and MPs have been to Maccas stores. But I think he's trying to be more relatable, that's sort of the Luxon problem politically. I mean, whether the Merivale McDonalds is the best way of achieving that, but I think there was` It was been it was teed up for a long time. I'm aware of that. It's something that Luxon has wanted to do for a long time. So I think the timing with the fair pay agreements that aggravated the government was a little bit of a coincidence, maybe one they capitalised on, but... - Um` Yeah, sorry. - Does the CEO of Air New Zealand who drove a sustainability agenda actually wanting to talk about sustainability in the National Party dilute the conversation around that they could potentially could work with the Greens? - All right, that's time. (LAUGHS) Thank you for that question. Thank you so much to our panel, Finn Hogan, Georgina Stylianou, and Sarah Perriam. Thank you so much for your time and your takes. Ka matua i tenei ` that is all for now. Thank you so much for watching. Next Saturday only we'll be starting at the later time of 11.30am. Make sure you reset your calendars. Nga mihi nui, and we, of course, will see you all again then. Thank you so much. Captions by Sophie Pearce, Sam Baker and John Gibbs. Captions were made with the support of NZ On Air. www.able.co.nz Copyright Able 2022 He mea tona ki te hotaka nei na te Public Interest Journalism Fund.