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Insights 24: 3 July 2026
Newsroom: Dr Oliver Hartwich on what NZ must learn from Germany's military meltdown
 
New Research Note: Head Start Done Right - A better way to reorganise local government
 
The Australian: Dr Eric Crampton on why Wegovy and RSV vaccines are on NZ’s slow track
Who decides, and how
Nick Clark | Senior Fellow | nick.clark@nzinitiative.org.nz
Local government reform has turned into a numbers game. The government’s ‘Head Start’ asks how many councils we should have, and where the lines between their jurisdictions should be drawn. But a more important question is, what decisions should be made at each level of government?
 
My new research note, Head Start Done Right, argues that decisions should be made at the lowest level able to make them well. That approach is called subsidiarity.
 
A community can look after its own parks, its main street and its local rules. A function should move upwards only when scale demands it, as with river catchments or major water networks.
 
The presumption sits with the local, and the burden falls on anyone who wants to shift power toward the centre. In contrast, Head Start assumes bigger is better and requires communities to prove otherwise.
 
Pointing to the presence of community boards or local boards means little if they lack decision-making power. For example, Auckland's local boards have a democratic mandate but little authority. They cannot make local bylaws, set their own targeted rates or stop the governing body overriding them. Real power is not held at the pleasure of head office.
 
The same problem runs through the councils themselves. In most, the people who hold the real power are unelected officials.
 
Day-to-day control sits with the chief executive, who manages the staff, the flow of information and the agenda. Elected members who push too hard, or who push for the issue they campaigned on, can find a code of conduct or conflict of interest policy turned against them. Larger councils will magnify dysfunction rather than close it.
 
My note proposes solutions to these problems. Auckland's mayor already has powers and a dedicated office that no other mayor has. Those powers and resources should be extended to every council. Elected members should have the right to access information, to commission their own advice and to speak their minds. Genuine conflicts of interest should be policed. Charges of misconduct should not be used to stifle political disagreement. Local decisions, wherever possible, should be made locally.
 
New Zealand needs a structure of government councils under which decisions are as close as possible to the people affected by them and elected representatives hold the reins. This is harder than consolidation, but it is the only version of reform worth having.

Explore Nick’s research through our new research note and our podcast episode.
Compulsion requires guardrails
Dr Eric Crampton | Chief Economist | eric.crampton@nzinitiative.org.nz
Choice, competition and open markets provide strong consumer protection. The risk that a customer might shift to a competitor, or to another type of product entirely, provides discipline.

National proposes removing one of the choices you might want to make about your retirement savings.

Currently, if you do not like the restrictions that come with a KiwiSaver portfolio, you do not have to join. Investment firms offer a wide variety of other options. You could invest directly. Or you might prefer to put your money into building your own business.

A re-elected National government would make KiwiSaver compulsory and sharply increase contribution rates.

When the United Kingdom phased in higher minimum contributions, from 2% to 8%, MIT economists found that only about a third of the increase came from people spending less. The rest came from more borrowing, including on credit cards, and from running down other savings. Forcing contributions up did not raise net saving so much as reshuffle the balance sheet.

Potentially, compulsion brings an even larger risk.

If you can no longer opt out of KiwiSaver, a future government may start to see your retirement savings as its own pool of captive capital, to be directed toward its priorities.

Funds could be required to invest a proportion of their portfolio domestically, to back government-preferred projects, or to comply with an expanded set of Environmental and Social Responsibility mandates. There are already calls for KiwiSaver to help plug infrastructure deficits.

The ability to opt out provides some protection. If a future government required funds to act against your retirement interests, you could stop contributing the next time you changed jobs. That risk makes governments less likely to impose such obligations.

If that exit is removed, other guardrails will be needed instead.

Last week, I proposed a few guardrails for a compulsory KiwiSaver. If a future government directs or interferes with fund managers' decisions, it should give KiwiSavers the chance to exit. If exit is not allowed, a mandate protection note attached to every account would oblige the government to pay for the imposition. Annual statements would carry a running tally of any mandate's effects.

The proposals can be refined. But any legislation making KiwiSaver compulsory should come with the guardrails needed to protect it over the decades to come.

Better to put them in place early than to regret their absence later.

Explore Eric’s research through our research note and our NZ Herald column.
Grading your grandmother
Dr Michael Johnston | Senior Fellow | michael.johnston@nzinitiative.org.nz
Victoria University of Wellington wants the teachers it trains to be ‘agents of change.’ 

According to the university’s handbook for teacher education programmes, teaching graduates must be committed to “social, cultural, and ecological justice.” Decoded, that means attending protests about political causes the activists lecturers find important.

Providing teachers with skills to manage a classroom is not part of the brief. Neither is ensuring they can teach their students even a modicum of knowledge. It is crucial, however, that new teachers can critique their ancestors.

Yes, you read that correctly.

Akopai 1 is one of two courses focussing on practical teaching skills. One of its assignments, worth 45% of the marks, is called Ko Tōku Tupuna Ko Au (my ancestor, myself).

For this assignment, students must critically analyse one of their forebears, living or dead. Personally, I’d choose a living one. Having a corpse on my psychotherapist’s couch would be untidy.

The analysis must include critical commentary on “how gender influenced” the ancestor’s life. If I had asked my Victorian grandfather how gender had influenced him, he’d have told me not to be impertinent. But I suspect that response wouldn’t wash with the commissars course coordinators.

The ancestor’s spiritual side, political views and financial situation must also be discussed. But my ancestors followed old etiquette. They knew never to discuss religion, politics or money in polite company.

To achieve a high grade in the assignment, students must demonstrate “deep connection to whakapapa.” But where does that leave the estranged or the orphaned? And pity the bewildered international students who thought they had come to New Zealand to learn how to teach.

Top marks also require students to “deeply engage” with their ancestor’s “tangata whenua or tangata Tiriti positioning,” and with their “power and privilege.” For non-Māori students, the trick here is to choose an ancestor who had money or status and beat up on them mercilessly. Pride in one’s heritage is not recommended.

It so happens that many of my ancestors were teachers. If they saw the content of Akopai 1, they would have some critical analysis of their own.

“Why,” they would wonder, “do the people who designed this course continue to be employed?”

“How can they, with apparent impunity, inflict such blatant and insulting nonsense on people aspiring to educate young New Zealanders?”

“Now that,” they would say, “is power and privilege.”
 
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