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Insights 27: 24 July 2026
The Post: Dr Eric Crampton on council rules blocking new supermarkets
 
New Research Note: NZ by Comparison, Dr Oliver Hartwich and Dr Bryce Wilkinson
 
Newsroom: Dr Eric Crampton on why America's datacentre gold rush could power up NZ

The revolving door at the end of the Pacific
Dr Oliver Hartwich | Executive Director | oliver.hartwich@nzinitiative.org.nz
No country moves people the way New Zealand does.

Nearly three in ten New Zealand residents were born overseas. In our 29-country comparison, only Singapore, Switzerland and Australia have larger shares of foreign-born residents.

Meanwhile, 12.8% of New Zealand-born people, roughly one in every eight, live overseas. Only Ireland joins New Zealand near the top of both lists, and New Zealand’s combination is more extreme. We are a revolving door at the end of the Pacific.

Migration figures do not reveal why individuals move. Yet other data in our new report New Zealand by Comparison suggest reasons.

Those arriving may be reading the society pages. New Zealand ranks fourth of 29 countries for honesty in government and fifth for the rule of law. New Zealanders also report greater life satisfaction than people in richer countries, including the United States, Germany and Britain, and rank fifth for generosity and sixth for having someone to count on.

Those considering departure may have read the economy pages. New Zealand’s productivity ranks 20th of 29. In 2024, the average Australian wage exceeded New Zealand’s by about US$10,700 a year, adjusted for purchasing power. The gap applies to like-for-like jobs from the supermarket checkout to the hospital ward.

Nobody emigrates because of a chart, not every departure is permanent, and wages are never the whole story.

Even so, the numbers show that wages remain too low, houses are unaffordable and businesses cannot access the capital to grow. Those are pressures that push people to leave.

New Zealand’s social stability and strong institutions may help explain why people come, while its economic weaknesses may help explain why some leave.

That data contain hope as well as warning. New Zealand has trust, safety, clean government and social support, although none can be taken for granted.

Policy cannot make the country larger or move it closer to its markets. But it can improve the settings for investment, competition, housing, trade and skills, helping productive firms grow and good jobs remain here.

The revolving door will keep turning either way. The real question is whether we give more people greater reason to stay.

Download ‘New Zealand by Comparison – 2026 Edition’ from our website, listen to the podcast and read about it in our latest articles in NZ Herald and The Australian.

Better urban planning
Dr Eric Crampton | Chief Economist | eric.crampton@nzinitiative.org.nz
Oliver asked me to make the case for the government’s resource management legislation. It should be read in conjunction with Nick Clark’s critique below. I share his concerns, and I expect he’d share some of my hopes.

Under a supportive Minister like Hon Bishop or Hon Twyford, the legislation would enable a more liberal approach to housing and development.

For ages, urban planning has treated competition as though it is a swear word. Competitive urban land markets with abundant development opportunities are now one of the planning system’s many goals.

Many of the rules that stop new apartment towers, subdivisions and supermarkets will disappear.

Currently, proposed supermarkets often must prove they will not hurt the vitality of other neighbourhoods by stealing customers from existing supermarkets. Some councils block new subdivisions by pointing to carbon dioxide emissions in transport that are already regulated by the Emissions Trading Scheme. Those days will be over.

Having the same zoning definitions across different cities will make building easier. A building allowed in one city will generally be allowed in a part of another city that has the same zoning. Under a supportive Minister, the system could be built on foundations of liberal mixed-use zoning, with more kinds of activities allowed in more places.

And more activities will be permitted, without the need for resource consents.

When planning imposes costly restrictions on one person’s property for the benefit of the neighbours or the broader community, councils will be required to proactively consider the cost of those controls on the affected landowner. However, compensation machinery is patchy. And when central government requires council to impose a restriction, council should be allowed to ease the restriction rather than compensate owners for imposing it. But both improvements can yet be made.

Private plan changes, a pressure-release valve when plans do not keep up with community needs, are somewhat strengthened in the new regime. Councils will more often have to evaluate those change proposals on their merits, instead of rejecting them without evaluation.

The improvements described above are written into the Bills themselves. Some important details, like zoning definitions and how hard the government will push for more housing, depends on the national direction that will be set by future Ministers.

But it is an improvement. And one that can be built on, if future Ministers share Hon Bishop’s and Hon Twyford’s vision of better urban planning.

Better than the RMA is not good enough
Nick Clark | Senior Fellow | nick.clark@nzinitiative.org.nz
Eric shows that, under the right ministers, the government’s replacement legislation should be an improvement on the existing RMA.
 
But being better than the RMA is a very low bar. That alone is not a good enough reason to pass these bills. And legislation that only works under the right minister is risky. My case is that Parliament should pause them and allow the government to fix them properly.
 
The bills provide a framework, but ministers would still decide too many important details later. Those details include which activities need consents, zoning, housing density, environmental limit setting, public notification rules and the meaning of the bills’ main goals. A pro-housing, pro-development minister could make this system faster and more enabling. A different minister could make it even slower and more expensive than the RMA. The more a minister can decide, the more vested interests will lobby the minister.
 
That risk might be tolerable if the design were sound. It is not. The National-ACT coalition agreement and Cabinet's 2024 principles put property rights at the centre of reform. By the time the bills were introduced, that promise had been weakened. The select committee could not fix it because it had to work within a philosophical approach favouring top-down regulation and planning over one based on property rights and the use of market-based tools to deal with environmental impacts.
 
The bills’ regulatory relief provisions apply only to a few factors and do not have to match the landowner's loss. The committee removed the alternatives to first-in first-served water allocation. The bills still have no property rights presumption, no cost-benefit discipline on national direction, too little legislative support for competitive urban land markets. The bills’ plethora of unranked objectives and vague wording will provoke the litigation that plagued the RMA. There will almost certainly be detail buried deep in the bills’ clauses which cause nasty surprises come implementation.
 
All three opposition parties oppose the bills, and the system would not take effect until the end of the decade. Legislation rushed through prior to election is unlikely to last. The last RMA replacement was repealed within weeks of the 2023 election. Substantial amendments will likely be needed next year even if there is no change in government.
 
Eric makes the case for pass and repair. My case is repair, then pass. Oliver Hartwich will provide his own assessment and explain his decision in next week's Insights.

Parisian Letters
Henry Olsen | Research Analyst | henry.olsen@nzinitiative.org.nz
The North American World Cup ended Monday, with Spain defeating Argentina in a 1-0 snoozefest.

Argentina decided to recreate their Dirty War on the pitch, tallying five yellow cards, one red, and one yet-to-be-disciplined chokehold. Spain, for their part, demonstrated that 1588 was the last time that their offence posed a formidable threat.

Despite its lacklustre finish, the World Cup offered a plethora of wonderful moments, from Cape Verde’s tenacious battle with Argentina to yet another so-bad-it’s-good meltdown by England; like Odysseus, football will not be coming home any time soon.

I could continue to discuss the positive aspects of ‘the beautiful game.’ Instead, I will turn to its politics, particularly its nationalism. Whether it was the deluge of European tourists or the increasing dominance of social media in our lives, the nationalist banter that usually pervades the World Cup reached new heights.

Indeed, some European nationalist commentary reminded me of the Baron de Montesquieu’s novel, Persian Letters. In that novel, two Persian noblemen travel to pre-Revolution France and send letters back home making fun of the backward, unenlightened nature of feudal society.

Except instead of Persians, North America got Parisians.

Of course, many antiquated barbarisms of North American life would be quite jarring for a cultured European, like complimentary water or air conditioning. I imagine the European tourists writing the Parisian Letters:
 
“The North Americans give the players hydration breaks due to extreme heat [and increased advertising revenue]. What babies! In Europe, we let thousands die during our heatwaves to preserve our inclusive way of life.”

There would be genuine and fair complaints about the North American hosts too.
 
“Trump’s attempts to rig officiating and photo-bomb the Trophy Lift are disgusting. The half-time show interrupted play just to force-feed us a washed Madonna, a rusty BTS, and a still terrible Justin Bieber. I would rather have watched Eurovision than that!”

But not all commentary in the Parisian Letters would be negative.
 
“The Americans are quite friendly and chatty – the Canadians too! The nature and open space are wonderful, Five Guys ought to be a world heritage site, and many people hail from our hometowns. Are we really that different?”

Perhaps in 2030, when North American tourists visit the Iberian Peninsula for the next World Cup, we can all avoid football fandom’s recurrent pitfalls of myopic nationalism and boorish hubris.

Oh, who am I kidding? ¡Vamos!
 

 
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