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Insights 24: 30 June 2017
Briar Lipson: We're failing kids over school attendance
 
Event invitation: Amplifying Excellence Panel Discussion with Hon Nikki Kaye
 
The Overseas Catch: The state of recreational fisheries management abroad
Help! It's an election year
Dr Oliver Hartwich | Executive Director | oliver.hartwich@nzinitiative.org.nz
So here we go again. It is an election year, and we are witnessing the political equivalent of a soap show – only interrupted by the occasional attempted election bribe.

Both National’s Todd Barclay saga and Labour’s internship programme may not quite fall into the category of good political management. However, beyond Election Day few people will remember what the fuss was all about.

Similarly, New Zealand First may attempt to win young votes by promising to wipe out student debt. But they can only be so generous knowing that it is highly unlikely they will have to deliver after the election.

In other words, it is a pretty conventional election campaign so far.

New Zealand can be proud of many things. But our election campaigns are not among them.

We have made a habit of focussing on the most trivial and absurd aspects of politics before our elections.

Winston Churchill once said that “The best argument against democracy is a five-minute conversation with the average voter.”

But from a voter’s point of view, especially in New Zealand, the best argument against democracy are the roughly five months that precede each election. It is the time when we can observe how hollow our democratic process has become.

As voters and citizens, we should demand better of our political leaders and candidates. We want to hear them debate the future of the country. We need answers to the nation’s most pressing questions.

To help inform a better election debate, the Initiative published Manifesto 2017: What the next New Zealand government should do. It was our attempt to inject some content into this year’s election. Of course, we did not expect everyone to agree with all our policy recommendations. But we wanted to help steer the election away from the sort of trifles that often dominate politics.

So here is a plea to journalists. After grilling the Prime Minister on his knowledge of an employment dispute between one of his parliamentary colleagues and a staffer, ask him if he would support our call for better fiscal incentives for councils that plan for more housing.

Besides asking the Labour leader when he became aware of his party’s use of foreign interns, ask him how he would create better career paths for teachers.

Let’s talk about policy for a change. Let’s discuss New Zealand’s future.

Arguing immigration
Dr Eric Crampton | Chief Economist | eric.crampton@nzinitiative.org.nz
This week, members of the Law and Economics Association were treated to dinner and a show. Or something close to it.

After the Association’s AGM, I argued with Michael Reddell, New Zealand’s most articulate immigration critic.

But we seemed to broadly agree on a few things.

First, the current surge in permanent and long-term arrivals overstates the longer-term increase. Many now arriving will depart in a few years, bringing an outbound surge.

Also, the evidence suggests migrants are less likely to be on benefit, less likely to commit crime, and far more likely to have children who pursue higher education than native-born Kiwis.

This should not be surprising. New Zealand has one of the world’s most skilled immigrant mixes, due in large part to the skills focus in the immigration points system. Those likely to commit crime or go on benefit are far less likely to be admitted in the first place.

Where we disagree is whether immigration is to blame for lower recorded productivity.

In Reddell’s view, New Zealand’s productive opportunities, largely restricted to agriculture, are barely sufficient to support the current population, let alone a larger one. Immigration demands more infrastructure, driving up interest rates and the exchange rate, and hurting productivity more generally.

Consequently, he argues permanent residence approvals should drop to 15,000 per year from recent averages of around 45,000.

Poor productivity growth is widespread, but New Zealand’s is especially bad. The trouble is that many hypotheses can explain the same data. Without clean ways of testing Reddell’s argument, it becomes less compelling. This is especially the case where the international findings on immigration suggest small but generally positive effects of migration on local wages.

Other potential explanations include the increasing importance of agglomeration – the productivity penalty applied to small places. If agglomeration is to blame, New Zealand’s productivity might have fallen further had population not grown.  

If New Zealand were limited to opportunities provided by the sheep’s back and the cow’s udder, Reddell’s hypothesis would be more worrying.

This week, Idealog highlighted the tech firms here pushing the boundaries of what’s possible, and how New Zealand’s better policy and regulatory environment helps it happen.

And Rocket Lab’s transforming a sheep paddock into a space base makes it hard to believe that agriculture is New Zealand’s only productive opportunity.

New Zealand can be bigger than that.

Computerisation First
Dr Rachel Hodder | Research Fellow | rachel.hodder@nzinitiative.org.nz
Important developments often get overlooked during busy news weeks. With the Lions tour, the America’s Cup victory, and a salacious scandal or two, it can be hard to keep up.

With all the excitement going on it would appear the public have overlooked some exciting announcements from the New Zealand First conference last weekend.

Like the Initiative, New Zealand First recognise that local governments often incur costs to provide services and infrastructure from which they receive too little benefit.

In the Initiative’s 2017 manifesto, we recommend that the GST paid on new building developments be returned to the councils where the developments are situated. New Zealand First has a similar idea but applied to tourism – return the GST received by tourist spending to the local governments where the tourists are spending.

A great idea in principle. However, the implementation could be tricky. Unlike tracking new building developments, it is not quite so easy to track the location of tourist spending.

Never to fear, New Zealand First know how they will get around that. In the words of Winston Peters: “the wonderful thing about computerisation – we know exactly where they spend their money”.

It could not be simpler. Why has no one else thought of it? In this high-tech world we live in, we can always rely on computerisation to solve sticky policy issues.

It is a shame they did not go further. Computerisation could be the solution to other tourist issues facing local governments.

Drunk rugby fans making a ruckus? With computerisation we can know exactly when and where tourists are drinking and exactly how much. Police can swoop in to curb the bad behaviour before it even begins.

Freedom campers leaving a wake of mess? With computerisation we can know exactly where they stop for the night and fine them accordingly.

Why stop just at the human visitors? With computerisation, we can also track and exterminate all the foreign predators killing our native birds.

While we are at it, let’s try to solve the housing crisis with computerisation. How exactly that will work we can leave for the tech boffins to figure out.

In all seriousness, we do applaud New Zealand First for tackling localism issues and proposing policy that could help local governments provide services and infrastructure. Perhaps the technical details can be figured out once everyone is less distracted by scandals and sports.

 
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