AM Edition: Here are the top 10 politics articles on LiveNews.co.nz for June 12, 2026 – Full Text
1. Amnesty International – Israel accelerates ethnic cleansing in West Bank
June 11, 2026
Source: Amnesty International Aotearoa New Zealand
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2. Creating certainty for Rural catchment groups
June 11, 2026
Source: New Zealand Government
Farmers are an integral force behind improving land management practices and the Government is backing their efforts by increasing the footprint of rural catchment groups and creating funding certainty, Agriculture Minister Todd McClay and Associate Agriculture Minister Mike Butterick say.
“Rural catchment groups have a track record of delivering real results on-the-ground. They are supporting farmers to improve water quality and adapt to change,” Mr McClay says.
“There are 51 rural catchment groups and collectives being supported across New Zealand, and this year we will be funding 17 regional catchment collectives that bring together individual groups, which will help provide better co-ordination and wider coverage across the country.”
The Government is investing $40.5 million over the next four years through the Ministry for Primary Industries (MPI) to continue backing rural catchment groups and collectives.
There is $13.5 million allocated in the 2026/2027 year to support groups – including some previously supported by the Ministry for the Environment and those backed by the NZ Landcare Trust.
Mr McClay says the Government has taken significant steps to reduce the regulatory burden on farmers, cut red tape and modernise the resource management system.
“Taking a common-sense approach is changing the nature of work for Government-funded rural catchment groups.
“I’ve asked MPI to work closely with the sector to develop a plan for rural catchment groups that includes longer-term funding arrangements, including for the NZ Landcare Trust,” Mr McClay says.
“This Government backs their efforts for responsible land management and for the primary industries to keep producing the high-quality, safe and sustainable food and fibre that feeds New Zealand and the world.”
Associate Agriculture Minister Mike Butterick says groups currently receiving funding through MPI’s catchment services extension programme will all still receive support.
“Rural catchment groups and collectives have been a success story. They deliver environmental gains on-the-ground across the country and that will continue,” Mr Butterick says.
“Farmers care deeply about the land they work on and their involvement in catchment groups is testament to that.”
Original source: https://nz.mil-osi.com/2026/06/11/creating-certainty-for-rural-catchment-groups/
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3. Boosting returns for Kiwi wool growers
June 11, 2026
Source: New Zealand Government
A partnership between Government and industry will help turn New Zealand strong wool into high-value cutting-edge products and boost returns for growers, Agriculture Minister Todd McClay and Associate Agriculture Minister Mark Patterson announced at Fieldays today.
Through the Primary Sector Growth Fund (PSGF), the Government is contributing $8 million to the $20 million project led by Wool Source Manufacturing Limited to scale up production of wool-derived particles, powders and pigments for use in products such as inks, 3D printing materials, personal care, bioplastics and textiles.
“This project aims to transform New Zealand strong wool into premium ingredients for growing global markets, creating new opportunities for the sector.”
The project will establish a 1 million kilogram-per-year manufacturing facility in Christchurch to prove the technology at scale, support customer trials and generate early commercial production.
Wool Source transforms wool into fine particles while retaining its performance benefits in versatile, bio-based materials. These products provide new functionality or replace existing ingredients with a renewable, ethically sourced alternative. The end markets being targeted are collectively worth more than $50 billion globally.
The programme builds on earlier Government-supported work that proved the commercial viability of the technology and helped establish strong international demand for sustainable alternatives to fossil fuel-derived materials.
Mr Patterson says Wool Source Manufacturing Limited has already achieved its first high volume commercial sale, exporting wool particles to a Japanese personal care manufacturer, with higher-value powders and pigments expected to follow.
“This investment will help speed the technology to market so farmers can see the benefits sooner,” Mr Patterson says.
The project has the potential to redirect up to 20 per cent of New Zealand’s strong wool clip into higher-value applications over time.
“This is about unlocking the full potential of wool – lifting farmgate returns, supporting rural communities, and building a more resilient and sustainable sector,” Mr Patterson says.
Original source: https://nz.mil-osi.com/2026/06/11/boosting-returns-for-kiwi-wool-growers/
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4. Government backs AI support for small business
June 11, 2026
Source: New Zealand Government
New Zealand’s small businesses are getting a boost of AI-powered support to unlock new growth opportunities with new Government funding announced today, Minister for Small Business and Manufacturing Cameron Brewer says.
“Small businesses are the backbone of our economy, and every one of them has untapped potential to grow. That’s why I’m delighted to allocate and announce this funding today,” Mr Brewer says.
“This is about giving them the same smart, data-driven insight the big players have always had, without the big-player price tag.
The investment backs two initiatives putting practical, modern tools into the hands of the country’s 600,000 small businesses, the firms that make up 97 per cent of all Kiwi companies and employ about 680,000 people.
The Government is funding Business South to expand its AcceleratorNZ programme to a further 500 businesses, and Business Mentors New Zealand (BMNZ) to roll out AI tools that sharpen the support its mentors provide.
AcceleratorNZ uses AI to analyse a business’s own data, highlight its biggest growth opportunities, and hand the owner a practical action plan they can use straight away.
“The programme has already proven itself with more than 100 businesses. This expansion will let more than 500 benefit from AI-powered diagnostics over the next year,” Mr Brewer says.
BMNZ connects around 1,500 small and medium businesses a year with experienced mentors. The new funding will help develop its AI Digital Mentor tool, better matching mentors to the businesses that need them.
“This modernises a service Kiwi businesses already rely on, giving mentors smarter tools while keeping the human connection at the heart of mentoring. The technology supports the mentor, it doesn’t replace them, Mr Brewer says
“These tools show how going digital can lift efficiency and help more businesses thrive. This is about fixing the basics and building the future, making sure small businesses have the practical support they need to grow, compete, and succeed.”
Original source: https://nz.mil-osi.com/2026/06/11/government-backs-ai-support-for-small-business/
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5. Nearly 1400 classrooms fully funded in two and a half years
June 11, 2026
Source: New Zealand Government
Education Minister Erica Stanford announced a $160 million investment to deliver new classrooms that will support growing communities across Auckland and the upper North Island.
“This latest investment brings the number of funded additional classrooms and learning spaces to 1373 nationwide since I first became Minister,” Ms Stanford says.
“Of the $160 million being announced today for Auckland includes, an investment of $100 million will deliver 133 additional teaching spaces through additional classrooms and school expansions. This means more capacity in areas where families are choosing to live.”
A further 24 classrooms will be delivered to local schools in high growth areas outside Auckland across the upper North Island, helping to ease pressure in growing communities.
Funding has also been set aside for the design of a new secondary school in Kumeū, ensuring the area is well placed to meet future demand. Earlier in the year, I announced that land had been earmarked for the new school, marking an important step in planning for a growing North West Auckland community.
“I am happy to announce that we are investing $25 million to deliver 26 learning support classrooms across the upper North Island, so students with additional needs have the spaces and support they require to succeed.”
Ms Stanford says the investment package reflects a clear focus on practical delivery and planning ahead.
“When I first became Minister I inherited a school property system that was bordering on a crisis, with cost blowouts, maintenance delays that had resulted in mushroom growing on the walls of some classrooms and schools not being giving an idea of when or if they would receive new classrooms.
“Our Government has turned around the delivery of school property. We have reduced the cost of newclassrooms reuslting in cost-savings of $300 million which has been reinvested in schools.
“I have been very clear that this government is laser focused on delivering value for money.” Ms Stanford says. “That is why we are supplementing this investment with up to $7 million of existing Ministry funding to deliver approximately 17 of these classrooms announced today as refurbished relocatable classrooms. This approach means every dollar tipped in from Budget 26 can go further.”
A solution for Te Kura Kaupapa Maōri o Ngāringaomatariki
“I am also thrilled to announce that this package includes construction funding to relocate Te Kura Kaupapa Maōri o Ngāringaomatariki to a permanent location near Kaiwaka. Their current site at Oruawharo is constrained, and there isn’t sufficient space for additional buildings to accommodate the growing roll.”
“Budget 26 construction funding will unlock access to a full year 1 to 13 kura kaupapa māori, completing a pathway in Māori education we didn’t have. This project will provide increased options for students and whānau living between Whangarei and Auckland’s North Shore,” Ms Stanford says.
Funding to address condition issues at existing schools
“In addition to the $160m growth investment, we are also investing in six redevelopment projects to address ageing school property and bring facilities up to the standard students and staff expect,” Ms Stanford says.
These schools are:
- Dargaville High School in Dargaville
- Ellerslie School in Auckland
- Finlayson Park School in Auckland
- Massey High School in Auckland
- Rangataiki College in the Bay of Plenty
- Western Heights High School in Rotorua
“Many of these schools have had longstanding issues with older buildings that are no longer fit for purpose. This funding will replace or upgrade existing classrooms and facilities to ensure that schools can continue to meet the needs of their communities from now into the future.
“We are getting the basics right. That means making sure schools are in the right place, have the capacity they need and are in good condition to serve their communities,” Ms Stanford says. More announcements are expected in the coming weeks.
Original source: https://nz.mil-osi.com/2026/06/11/nearly-1400-classrooms-fully-funded-in-two-and-a-half-years/
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6. Treasury confirms $5 billion bill for Luxon’s climate inaction
June 11, 2026
Source: Green Party
Treasury has put a price tag on Luxon’s Government’s climate inaction, with new analysis showing it could cost up to $5 billion to buy the offshore carbon credits needed to meet New Zealand’s 2030 climate target.
“Every time Christopher Luxon has cut climate action here at home, he has increased the bill we need to pay other countries to reduce their emissions,” says Green Party Co-leader Chlöe Swarbrick.
“The Government keeps saying they will meet the Nationally Determined Contribution under the Paris Agreement. We have known for about a decade doing that will require offshore mitigation, but the size of that offshore cost depends on how much we do onshore.”
“This Government has robbed us all of investment in local climate action, which could also have reduced the cost of living and built our resilience. Instead, they’ve chosen to fund new fossil fuels and increased the price we’ve got to pay other countries to do the job we could do here.”
“After consistent Green questioning, Treasury committed last year to provide updated analysis on these costs. They have. The Government is now looking at a $5 billion bill materialising by 2030.”
“It’s time for Nicola Willis to be honest. If the Government is committed to meeting our NDC, they need to show us the money.”
“If the Greens dared to pretend we would do something without budgeting for it, these guys would be screeching bloody murder. The economic incompetence and double standards here is unreal.”
“If the Government is instead secretly planning on not meeting our NDC, then they need to be honest about that. Climate commitments are baked into our free trade agreements with the United Kingdom and the European Union. If Luxon walks away from that 2030 target, he puts our trading relationships and exporters’ market access on the line too.”
“All politics aside, these are immutable facts. New Zealanders deserve a Government who operates in reality, with real solutions to reduce emissions and the cost of living, something the Greens are proud to offer,” says Swarbrick.
Original source: https://nz.mil-osi.com/2026/06/11/treasury-confirms-5-billion-bill-for-luxons-climate-inaction/
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7. Community organisations call on Government to properly fund sexual violence prevention – PSA
June 12, 2026
Source: PSA
- Coalition for the Safety of Women and Children
- Counselling Services Centre – Ngā Whakahaymarutanga
- Eastern Refuge Society
- Good Shepherd NZ
- Public Service Association Te Pūkenga Here Tikanga
- Hui E! Community Aotearoa
- National Council of Women – Wellington Branch
- New Zealand Council of Trade Unions Te Kauae
- PSA Te Pūkenga Here Tikanga Mahi
- Tāhono Trust
- Te Wāhi Wāhine o Tāmaki Makaurau – Auckland Women’s
- The Backbone Collective
- Women’s International League for Peace and Freedom,
- Women’s Refuge | Ngā Whare Whakaruruhau o Aotearoa
- Women’s Refuge Tāmaki Makaurau
- YWCA Tāmaki Makaurau
- New Zealand Council of Trade Unions, Te Kauae
- Atamira Platform
- Dr Merrill Simmons Hansen, MANZASW, Reg SW. PhD,
- Dr Debbie Hagar, Disability portfolio, Tauiwi
- New Zealand Disability Support Network.
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8. New doctors to train in the regions that need them most
June 11, 2026
Source: New Zealand Government
The regions that will host clinical training for the University of Waikato’s new medical school from 2028 have been confirmed, alongside a new nationwide approach to clinical placements for medical students, Health Minister Simeon Brown and Associate Health Minister Matt Doocey say.
“Confirming these regions is a significant milestone in building a stronger, more regionally connected health workforce,” Mr Brown says.
“We know that where doctors train often influences where they practise. By embedding students in regional and rural communities, we’re creating a pathway for more doctors to stay and work in the areas that need them most.”
The New Zealand Graduate School of Medicine will provide an additional 120 graduate-entry medical students each year. Students will complete one year of on-campus study at the University of Waikato before undertaking three years of clinical training across five regions:
- Waikato: Waikato Hospital; communities including North Waikato, Hauraki/Thames-Coromandel, South Waikato, and Waipā/King Country
- Bay of Plenty: Tauranga Hospital; communities including Western Bay of Plenty and Rotorua
- Taranaki/Whanganui: Taranaki Base and Whanganui Hospitals; communities including New Plymouth and Whanganui
- Hawke’s Bay: Hawke’s Bay Fallen Soldiers’ Memorial Hospital; communities including Hastings and Wairoa
- Nelson/Marlborough: Nelson and Wairau Hospitals; communities including Richmond and Blenheim
“This new medical school is critical to growing our domestic medical workforce and addressing long-term shortages in primary care.
“The programme has been designed so that students – particularly those from regional and rural backgrounds – can complete most of their training within their home regions. Students will receive a balanced clinical education across hospital settings, primary care, and broader community health services, an innovative model that has proven successful internationally.”
In addition, a new national distributed clinical placement network is being established to support medical students across New Zealand’s three medical schools and strengthen the health workforce over the long term.
Health New Zealand has worked closely with the Universities of Waikato, Auckland and Otago to develop the network, which will help coordinate clinical placement opportunities and support future growth in medical education.
“Building the health workforce we need means ensuring there is capacity to train more students. This network will take a coordinated national approach to clinical placements, helping support more medical students to train in a wider range of communities and healthcare settings across New Zealand.”
Mr Doocey says one of the defining features of the network is the establishment of Community Clinical Learning Centres in smaller towns, because rural communities know when you train people locally, they’re far more likely to stay local.
“This Government is bringing healthcare closer to home for the one in five New Zealanders who live in rural communities by training more health professionals closer to the communities they will serve.
“Today’s announcement of Community Clinical Learning Centres complements the Government’s roll out of rural training hubs, which bring together educational placements, pathways, and pastoral support to grow the frontline rural health workforce.
“By embedding students in rural communities, we can help grow the frontline health workforce in the areas that need it most.”
Mr Brown says the confirmation of clinical training regions marks an exciting development for the new medical school.
“We are focused on fixing the basics and building the future of our homegrown health workforce – delivering the next generation of doctors trained in the communities that need them most.”
Original source: https://nz.mil-osi.com/2026/06/11/new-doctors-to-train-in-the-regions-that-need-them-most/
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9. Land Use Flexibility: empowering forestry and wood through tech
June 10, 2026
Source: New Zealand Government
The Government is backing the New Zealand’s forestry sector’s innovation and sustainable productivity, Agriculture Minister Todd McClay says.
“Greater land use flexibility results in prosperity through productivity, and new production methods and technologies are key to driving that step-change.
“Enabling this exemplifies the Government’s commitment to fixing the basics and building the future,” Mr McClay says.
“More than 39,000 Kiwis work in forestry, a sector that contributes $6.2 billion in export revenue – supporting regional economies and jobs.
“This National-led Government is committed to backing farmers and growers, including through sensible regulatory reform and cutting of red tape and costs, combined with the latest science, technology and farming methods provides the opportunity for strong returns with a smaller environmental impact.”
Leveraging this, the Government is investing $3.2 million over three years in a new $8m project to assess the feasibility of producing prefabricated, fully fitted mass timber modules for the New Zealand market and potentially Australia. This will mean more timber is processed onshore creating greater value and more jobs. This work is funded in partnership with VoMo Limited, a Red Stag Investments company.
“Land use flexibility is about backing kiwi farmers and growers to feed the world.”
The project aims to convert industrial-grade logs into higher-value timber for a range of applications, including use in the construction of hotels, student housing, apartments and offices, multiplying the logs’ value 6.7 times.
It will determine if this model of construction is likely to be successful in New Zealand, which includes analysing aspects such as design, technical performance, seismic resilience, productivity gains, cost efficiency, and carbon savings.
Shifting supply from export to domestic markets also offers greater stability and encourages long-term investment in forestry and wood processing.
“Data and information from this and similar projects will be shared with farmers and growers to give them further confidence to innovate and grow their businesses – supporting a more productive and responsive sector that is better positioned to supply New Zealand and the world with high-quality produce.”
“The primary industries are the backbone of this economy and the lifeblood of rural communities. Supporting their success is a priority for this Government.”
Original source: https://nz.mil-osi.com/2026/06/10/land-use-flexibility-empowering-forestry-and-wood-through-tech/
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10. Energy speech to Auckland Business Chamber
June 10, 2026
Source: New Zealand Government
Well, a very good morning, everyone. It is wonderful to be here, and thank you so much to Simon Bridges and the Auckland Business Chamber for hosting this event. And thank you so much to everyone who is taking the time to be here.
I am pleased to share today some of my perspective as the Minister for Energy, and to set out how the government is working to make New Zealand a country where electricity is abundant, affordable, and reliable. Everyone here appreciates the role reliable energy plays in an economy. It fuels the businesses and industries on which jobs depend, and it keeps our houses warm and the lights on.
The government’s vision is simple. We want abundant, affordable, and reliable energy for all New Zealanders, and an energy system that is increasingly renewable. That means an electricity system that is not just building generation to meet demand, but building it to fuel economic growth.
A system that provides households with affordable energy, a system that pulls businesses up to compete with our trading partners instead of pushing them down with high costs, and a system reliable enough that industry can plan with confidence, because nothing undermines confidence like uncertainty.
Put another way, while the electricity and gas sectors directly contribute around 2% of GDP, that 2% underpins the other 98%. That places a heavy responsibility on everyone in the sector to understand how their decisions ripple through the wider economy.
This morning, I will leave you with three things.
First, why New Zealand needs a firm backup for the dry years, and why an LNG facility. Second, that our procurement of that facility is progressing, with two providers now shortlisted, and that we are working through how we can pay for it. Third, that we are putting a lasting obligation on the gentailers to manage the dry-year risk themselves, so we are never again left exposed in the way we were in 2024.
But first, let us consider the strong starting position we find ourselves in as a country. New Zealand is on track to have 95 to 98% renewable electricity, and the fourth quarter of 2025 was 96.4% renewable, the highest ever recorded.
Thanks to this government’s quick work to cancel the Lake Onslow project, secure the future of the Tiwai Point Aluminium Smelter, and launch the Electrify New Zealand programme, we have restored investment confidence and accelerated renewable generation. The volume of new generation built between 2023 and 2025 was double the volume built in the previous eight years. Make no mistake, this is a government committed to renewable energy.
New wind farms, new solar farms, geothermal power stations, and batteries are all coming online quickly. We have a renewables boom underway in our country right now.
However, there remains a large shadow over what is otherwise a bright picture. It is a shadow that keeps investors who depend on high-volume, low-cost power waiting on the sidelines instead of expanding. It turns electricity into an inhibitor of growth rather than a fertiliser of it, and it holds back new generators from entering a market still dominated by the four big gentailers.
That is because much of the new renewable energy being built is intermittent by nature and needs a backup for those winters when the lakes are low, the wind is not blowing, the sun is not shining, and geothermal cannot meet peak demand. This is the so-called dry-year scenario. 2026 is not likely to be one, but 2024 was.
It was only two years ago, and I was the Minister of Energy then, as I am again now. MBIE advises me that in a dry year, the shortfall we need to cover is around three terawatt hours over three months.
Assuming that coal can fill 1.5 terawatt hours, thanks to the Huntly Firming Options that have been put in place, this leaves a remaining 1.5 terawatt hours to cover. This is not a gap that you can plug with a few days of stored water or a handful of batteries. It is a sustained gap lasting weeks and months, and something has to fill it.
Our electricity market performs well in average conditions, but it does not reward investment in the firm capacity that is used only in rare, high-impact dry years. This is a market failure identified by Frontier Economics in its recent review. The previous government did not address this, leaving us increasingly exposed as gas declined.
Their one idea, a $16 billion lake at the bottom of the South Island that would not deliver a single kilowatt of electricity until 2037, was no answer then, and is no answer now. The result is a risk premium of $30 to $50 per megawatt hour, sitting in forward prices, borne by every household and business up and down our country.
People have been paying for the dry-year risk, even in the years where there has not been a dry year, and when a dry year does eventuate, we see an even more extreme impact on prices. In 2024, a moderate dry year, gas constraints meant gas-fired generation could not fully run. Coal ran at its maximum, and spot prices exceeded $800 a megawatt hour.
The New Zealand aluminium smelter cut production, and some businesses shut their doors for good. We call this demand destruction, but that clinical phrase hides what it really means. It means workers losing shifts and then losing jobs, a family in a regional town watching the plant that paid their mortgage fall silent, and a business that someone spent decades building gone in a single spell of bad weather.
This is not an outcome that the government accepts. We believe in markets, but we also believe in the responsibility of government to protect New Zealand’s economy and its families from the brutality of some market outcomes when sensible interventions can avoid them.
Compounding the dry-year risk, the backstop we have relied on has been a combination of coal and natural gas, and as gas supplies dwindle, soon that will become less of an option. Six major gas fields that provide 98% of our gas supply are in sharp decline, with the Maui field expected to cease producing later this year.
This creates problems across industry, but its effect on the electricity market is acute. If Maui ceases, it is expected that Methanex will exit with it, and with it the ability to temporarily shift gas from industry to electricity generation during a dry year would go. That was the very mechanism that kept the lights on in 2024.
Some will ask why we simply cannot burn more coal. The answer is that our coal generators can only deliver around half of what we might need in a dry year. In 2024, in what was only a moderate dry year, Huntly was running at capacity, coal was at its maximum, and prices still climbed over $800 a megawatt hour.
Coal-based electricity is limited by the capacity it can produce through the Rankine units at Huntly, and we cannot build more Rankine units quickly. So, in a deeper dry year, coal cannot come close to covering the gap.
Worse still, the gas-fired plant that would normally pick up the slack would sit idle for want of fuel. We would have generators, but not the gas to turn them on.
Our coal capacity at Huntly is also finite and ageing. Some would describe running Huntly as something like the government flying Boeing 757s for our Prime Minister, necessary but unreliable.
The numbers confirm what is at stake. Last year, high energy prices cost the economy $5.2 billion. The risk of a dry year is priced into every power bill, driving costs up and incomes down.
You cannot run an economy on weather forecasts. Dry-year risk should not define our electricity system, but it is starting to do exactly that. New Zealanders deserve better, and under this government, they will get it.
Looking ahead, the next dry year, which is expected on average every four years, will arrive with even less gas, and eventually, with the loss of Methanex, this will mean no large-scale ability to shift gas from industry to electricity. MBIE analysis is clear that without a circuit breaker, prices would rise, stay elevated for longer, and reach well beyond 2024 levels.
That is why the decision is urgent and not something we can leave for the next parliamentary term or the one after that. The next dry year could arrive as soon as 2028, the very same year an LNG facility could support generation.
A decision delayed is not a decision postponed. It is a decision to face the next dry year with no backup at all.
We do not get to choose when the wind drops and the lakes run low. We only get to choose whether we are ready.
With declining gas, the choices are stark. Either gas is taken from industry, forcing large and small gas users to close, with production shutdowns, job losses, and lost exports, or gas is not prioritised for electricity, and wholesale prices reach extreme scarcity levels, with a real risk of a conservation campaign, where many users may be forced to shut down.
Either path imposes economy-wide costs, feeding inflation and doing lasting damage to confidence. That is why every other OECD country without enough of its own indigenous gas has secured access to imports through LNG terminals or through pipelines.
With indigenous gas dwindling, New Zealand is the outlier, and I put it to you, you cannot be a serious first-world country without access to the natural gas needed to fuel the economy. Modelling from MBIE suggested that, against a scenario of middling gas supply and rising gas prices, an LNG terminal that caps gas prices would leave GDP $1.2 billion better off a year by 2035, and would save up to 4,900 jobs by 2032.
As you know, the government has been procuring an LNG facility to act as that backstop. Today, I can announce that we have shortlisted two providers, both at Port Taranaki and both with global expertise in building LNG facilities. Having carefully weighed the impact of the conflict in the Middle East, we have concluded that, even so, LNG remains the cheapest, most flexible, and fastest solution to the dry-year problem this decade, given the dramatic reductions, and further forecast reductions, in indigenous gas supply.
I want to make four points clear. First, importing LNG as a firming fuel is not a retreat from our commitment to renewable energy. It supports it.
Second, LNG will not replace renewables. It is the transitional tool that lets the system become overwhelmingly renewable without outages, price spikes, and economic shocks. It will help more wind and solar get built, because developers know there is a reliable backup when the weather does not cooperate.
Third, the outlook for LNG supply is positive. 2026 was already expected to begin a period of global oversupply, and the International Energy Agency expects new supply this decade to far outweigh any disruption in the Strait of Hormuz. Future prices for 2028 and 2029 remain consistent with our decision to proceed.
Fourth, consider the counterfactual without LNG. New Zealand faces domestic gas prices that PwC forecast could reach $31 per gigajoule as supply declines, alongside costly shortages. A diversified gas supply helps keep electricity prices down.
MBIE, after taking expert advice, assessed 11 options for dry-year cover and shortlisted five, each capable of delivering 1.5 terawatt hours of cover annually. The electricity sector has yet to convince government that no dry-year risk exists, and government needs absolute certainty in this regard, given the costs to our economy and the impacts on New Zealanders.
LNG was selected over the rest because it offers four things. First, speed, supporting generation from 2028, in time for the dry year if it hits that very year. Second, lower prices, with dry-year cover at around $200 to $250 a megawatt hour that could materially reduce wholesale future prices.
Third, flexibility, to manage unpredictable dry years without locking us into new long-lived assets, such as building Rankine units. And fourth, system-wide benefits, providing gas to industrial users for the longer term.
MBIE advises that LNG remains the most cost-effective option, and that since the announcement on 9 February, forward prices for 2028 and 2029 have already fallen by around $20 a megawatt hour. That is worth around $800 million a year to the economy in electricity costs alone, while giving manufacturers, growers, and bakers the gas they need to keep operating as they invest in longer-term solutions, saving jobs in the process.
It is worth weighing LNG against the alternatives others have put forward. Some have suggested simply burning more diesel. While this was the next best option identified, diesel would cap prices at around $550 a megawatt hour, more than twice the cost of LNG.
It would do little for forward prices, and would also consume around 27% of our country’s daily diesel needs. In terms of batteries and other types of storage, whilst these can provide for intraday peaks and are improving, they do not provide for the long-duration winter peaks, the winter dry-year problem that we are dealing with.
Ultimately, the government has decided, on the evidence before us, to procure an LNG import terminal. New solutions may emerge over time, but we need to act now, and quickly, to give Kiwis the confidence the problem can be solved.
The next question is how this will be paid for. The government is now working through the detail of how this facility will be paid for, but Kiwis can be certain of one thing today, and that is it will not be funded by a levy on their power bills.
We have been clear that responsibility for managing dry-year risk sits with the sector. As the largest players, the gentailers have particular responsibility to ensure New Zealand has secure and affordable energy at all times, including in dry years. That principle, keeping the lights on, sitting with the electricity sector, is what will guide the decisions on funding.
I have asked the Ministry of Business, Innovation and Employment, and the National Infrastructure Funding and Financing Company, to work with the gentailers on a fair funding model. We will have more to say in due course. It would prioritise access to LNG for dry-year generation, but include a user-pays element, so that industrial users can pay to access gas, reducing the cost to the electricity sector and protecting jobs.
My message to the gentailers is clear. The alternative to LNG is the deindustrialisation of New Zealand businesses, either by taking their gas and shutting them down, or by pushing electricity prices sky high in a dry year, because there is no alternative. We saw that in 2024, and we will not stand by and let our industrial base become the collateral damage of an insecure market.
I want New Zealand exporting our goods, not our jobs, and our electricity market has a critical role in making sure that is the case. While negotiations are underway, Cabinet has agreed to develop a regulatory backstop should these negotiations not succeed.
What I can tell Kiwis is this. The job of managing the dry-year risk belongs to the gentailers, and we will make sure they take it on. What it will not be is funded by a levy on the power bills of ordinary New Zealanders.
Finally, while LNG secures the fuel to manage dry-year risk in the medium term, there is a need to get ahead of the dry-year risk and, once and for all, fix the foundations of the market. To do that, the system needs to identify dry-year risk earlier, and needs stronger incentives so the market invests in the firm capacity and fuel we need, and it needs better tools to manage risks as they evolve.
Today, I can also announce that Cabinet has agreed to strengthen the dry-year regulatory framework by giving the Electricity Authority a broader role in managing, monitoring, and responding to dry-year risk, improving information and reporting, and updating existing risk-management tools, all of which will ensure the system does a better job and delivers better outcomes for New Zealanders. The government will be changing the law to make managing the dry-year risk one of the key requirements of the Electricity Authority.
The Ministry of Business, Innovation and Employment has also started consultation on a new reliability obligation, which will be placed on the major gentailers. The obligation is designed to ensure the electricity sector addresses dry-year risk instead of consistently leaving the system on the edge. When Transpower’s modelling indicates emerging dry-year risk, the obligation will kick in, backed by strong penalties for non-compliance.
The obligation will sit on the retail side of the gentailers’ business over the long term, to ensure that they have firm capacity contracted over the long term, and the obligation will also sit on the generation side in the short term, to ensure they have the fuel to back up the eventuality of a dry year, as previously agreed by Cabinet.
The government is also increasing penalties for serious rule-breaking from a maximum of $2 million to up to $10 million, or three times the commercial gain, or 10% of the company’s turnover, whichever is the greatest. Power companies, in particular the gentailers, need to face real consequences if they do not meet their obligations.
This will ensure there is enough investment in firming, such as backup winter generation and secure fuel supply, which will obviously make the system more resilient. It will also deepen hedge markets, enable more retailers and generators to compete, and that competition in turn will support more renewable generation and help deliver abundant, affordable electricity.
I encourage the electricity sector to engage with the consultation, which has been launched today, and to share its views.
In closing, let me return to the three things I came here to say. First, New Zealand needs a firm backup for the dry years. An LNG facility is the fastest, cheapest, and most flexible way to provide it.
Second, that facility is being procured now, with two providers shortlisted, and we are working through how it will be paid for, though I can assure you, not through a levy on power bills. Third, we are placing a lasting obligation on the gentailers to manage this risk, so the country is never again left where it was in 2024.
The stakes only rise from here, as our homes, our cars, and our businesses come to run more and more on electricity, and as our electricity system becomes more renewable, we need to make sure we get this right. For too long, the investment needed to secure the system has not been made, and this government is making the decisions necessary for the future of our electricity system.
We intend to keep the lights on, keep the bills down, grow jobs and opportunities here in New Zealand, and deliver abundant, affordable, reliable energy for all New Zealanders.
Thank you very much.
Original source: https://nz.mil-osi.com/2026/06/10/energy-speech-to-auckland-business-chamber/
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