|
You are subscribed as |
Unsubscribe
|
View online version
|
Forward to a friend
|
|
|
||||||||||||
|
||||||||||||
|
||||||||||||
|
|
||||||||||||
|
||||||||||||
| Dr Oliver Hartwich | Executive Director | oliver.hartwich@nzinitiative.org.nz | ||||||||||||
|
The IMF conducts these comprehensive economic assessments of its member countries every two years. Their teams analyse economic and financial developments. They meet with government officials, central bankers and organisations like ours before publishing their findings. This afternoon, Dr Eric Crampton, Dr Bryce Wilkinson and I will present The New Zealand Initiative’s assessment of New Zealand’s economic challenges and our reform recommendations. We believe it is vital that the IMF delegation understands what is happening in our economy. Their final report will include recommendations that shape policy debates and influence how international markets view New Zealand. Our message to the IMF is straightforward: New Zealand needs fundamental reforms across multiple fronts. New Zealand’s economic prospects remain fragile. While inflation has retreated to within the RBNZ’s target band, the legacy of policy mistakes continues to burden our economy. Government spending and public debt remain too high, with Treasury projections showing deficits throughout this decade. We will emphasise that monetary policy must remain focused on price stability. We also believe it is vital for the Reserve Bank to learn from its past mistakes to prevent future policy errors. On fiscal policy, we will stress the need to return government spending to sustainable levels. The structural deficit of 2.7% of GDP is dangerous. A credible path back to surplus must be established, including expenditure prioritisation and, potentially, asset sales. Housing affordability remains a critical issue driven by supply constraints. We need liberalised planning rules and better incentives for councils to welcome development. Competition policy also needs reform. In our view, the focus should be on making it easier for new competitors to enter markets. This is preferable to government or regulators intervening in competition directly. New Zealand must address its restrictive stance on foreign investment. As the OECD’s most restrictive country for foreign direct investment, we are starving ourselves of capital. The current government has taken positive steps in these fields, but implementation will take time. Whatever can be done to speed up and deepen these reforms would be most welcome. When the IMF publishes its findings in a few weeks, we hope it will join us in advocating for a freer and more dynamic New Zealand economy. |
||||||||||||
|
||||||||||||
|
||||||||||||
| Dr Darwyyn Deyo | Associate Professor of Economics at SJSU | insights@nzinitiative.org.nz | ||||||||||||
|
However, if Kiwis had to get permission from other businesses before they could offer their new idea to customers, they might instead find themselves following the American model. Despite its reputation for economic freedom, which encourages innovation and economic growth, the US has ranked below New Zealand in economic freedom for decades. An important factor in America’s score is labor market regulations like the thicket of occupational licensing laws covering the country. Although there is no official list of all licensing laws in the US, researchers have identified hundreds of occupations that require a licence to work, covering almost a quarter of the US workforce. For a sense of scale, about 1% of American workers are on the federal minimum wage and 10% are represented by unions. Occupational licensing laws often require completing specialised school programs and applicants must get permission from licensing boards – often staffed by their future competitors – before they can work. Licences even cover jobs to cut hair, decorate homes, and trim trees, but working without a licence can lead to criminal penalties. As licensing delays new businesses, it can also take the spark out of innovation. Imagine instead if there was occupational licensing for politicians! US states have begun to reform their occupational licensing laws, and the burden from licensing to workers and customers may be the only thing about which the Obama, Trump, and Biden presidential administrations agreed. Although some argue that licensing protects the public from unqualified workers, research shows that licensing can actually reduce quality by insulating industries from competition. Allowing providers to compete for customers with high quality services, certifying quality with third parties or professional associations, or requiring providers to carry liability insurance can protect consumers without licensing. These mechanisms do not generate the higher wages from licensing – but the high wages are paid for by keeping more people from working and by consumers paying higher prices. It sure would be a shame if New Zealand had a problem like this! Darwyyn Deyo is an Associate Professor of Economics at San José State University (SJSU) and Director of Regulatory Frontiers at the Knee Regulatory Research Center at West Virginia University. She is currently researching occupational licensing in New Zealand while at The New Zealand Initiative. |
||||||||||||
|
||||||||||||
|
||||||||||||
| Dr James Kierstead | Research Fellow | james.kierstead@nzinitiative.org.nz | ||||||||||||
|
My main response has been mild bemusement, as booze has been declared to be not so good for you, then actually pretty good for you, and – more recently – Very Much Not Good for You At All. ‘No level of alcohol consumption is safe for our health,’ declared the World Health Organization in 2023. Dozens of headlines have echoed the message, as have more than a few of my friends, often just after I’ve ordered another bottle of wine. Why has this latest trend of anti-booze news seemed so sure of itself? The impression that I got was that what we are seeing is a correction of a tendency in past studies. Past studies tended to find that moderate drinkers lived longer than teetotallers. But they often failed to consider that many teetotallers might be unhealthy for other reasons – including because they used to be alcoholics. Once you control for these ‘sick quitters,’ the benefits of moderate drinking vanish. As my colleague Eric Crampton pointed out to me over a beer the other day, the truth is more complicated. The ‘sick quitter’ problem has been recognised since at least the late 1980s. And as you might expect, many studies since then have controlled for it. That isn’t too hard to do, since you can simply compare ex-alcoholic teetotallers with people who’ve abstained from alcohol their whole lives. A 2017 study that did this found that lifetime abstainers, like other teetotallers, had a higher risk of death than moderate drinkers. The studies are unanimous that heavy drinking is very bad for your health – and that the heavier it is, the higher your risk. Most studies also find that moderate drinking raises your risk of most types of cancer – even if benefits to heart health outweigh that risk. Some studies also continue to find no protective effect of light drinking for reasons that have nothing to do with ‘sick quitters’ - though risks worth worrying about tend to start mounting only after about three drinks per day. But if somebody tries to tell you that the benefits of moderate drinking are just the result of failing to deal with ‘sick quitters’? You can safely tell them that you’re sick of that line of criticism and that it’s time to call it quits. Cheers! |
||||||||||||
|
||||||||||||
| On The Record | ||||||||||||
Initiative Activities:
To listen to our latest podcasts, please subscribe to The New Zealand Initiative podcast on iTunes, Spotify or The Podcast App. |
||||||||||||
| All Things Considered | ||||||||||||
|
||||||||||||
|
|
||||||||||||
Unsubscribe me please |
|
Brought to you by outreachcrm |