NZI - Insights 35/2015 | Turnbull's NZ role model | Let go of amalgamation bone

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Insights 35: 18 September 2015

Turnbull's New Zealand role model

Dr Oliver Hartwich | Executive Director | oliver.hartwich@nzinitiative.org.nz

Shortly after being chosen by his party as Australia’s new Prime Minister, Malcolm Turnbull singled out one international leader as his role model: his New Zealand counterpart.

“John Key has been able to achieve very significant economic reforms in New Zealand by doing just that, by taking on and explaining complex issues and then making the case for them,” Turnbull told the media. “And that is certainly something that I believe we should do.”

New Zealand observers may be surprised to find out, but across the ditch our government is regarded as a reform-minded administration. Last year, the Sydney Morning Herald’s Peter Hartcher described Key as a “neo-liberal activist” who “has coaxed his country into swallowing the pills of reform.” Meanwhile, The Australian’s Henry Ergas praised Key for his “prudent fiscal strategy” and “far-reaching tax reform”.

Hardly any New Zealander would describe Key this way. Certainly not his former minister Rodney Hide who summed up Key’s approach like this: “Politicians with ideas scare us. There’s no chance Mr Key will scare us. He has his power precisely because he does nothing with it.”

I dissected these different narratives in an essay last year, Quiet Achievers. My conclusion was that, on balance, Australian commentators had a better understanding of the New Zealand Prime Minister’s approach to government.

Key’s successful strategy, I argued, was based on the four P’s of Preparation, Patience, Pragmatism and Principles. This “incremental radicalism” did indeed add up to a reform agenda over time. However, the slow speed of implementation made these reforms harder to see up close.

If Turnbull took inspiration from Key’s first two terms, he could become a successful Prime Minister. And after eight frustrating years under Kevin Rudd (twice), Julia Gillard and Tony Abbott, Australia desperately needs better government.

But Turnbull is not the only one who would benefit from an analysis of the playbook of Key’s first two terms. Key himself should remember what led to his success.

So far, Key’s third term has been disappointing. The lost Northland by-election seems to have robbed the government of any reformist ambitions – apart from changing the flag. The NBR’s Rob Hosking recently even went so far as to ask whether Key was losing interest in the job.

The reformer’s job is never done, and there is plenty to do. Malcolm Turnbull knows this, and John Key should not forget it.

Let go of the amalgamation bone

Jason Krupp | Research Fellow | jason.krupp@nzinitiative.org.nz

This week the people of Central Hawkes Bay, Wairoa, Napier and Hastings voted two-to-one against a proposal to merge their authorities into a mega-council. The move is a third black eye for the National-led government in recent years, which seems to view bigger-is-better as the model for local government.

The first blow was delivered in Northland, when the Local Government Commission declined to proceed with the merger of the Far North, Whangarei, Kaipara and Northland district councils after it failed to gain popular support.

The Commission also walked back plans to form a Wellington Super City after the public spat the dummy over Greater Wellington Regional Council’s plan to amalgamate with Kapiti Coast, Porirua, Wellington, Hutt City, Upper Hutt, South Wairarapa, Carterton and Masterton district councils.

In fact the only local government merger to proceed in recent years was the Auckland Super City, and that was never put to a popular vote, but was legislated into being.

It is time for central government to pay heed to the message coming from the communities, namely that they do not want their voices diluted. If there is a pothole that never gets fixed, people want to be able to put a bee in the ear of the local councillor, not a member of a local board three tiers down from where actual decisions get made.

Central government’s problem with local government is that it is not proceeding fast enough on nationally significant projects and issues with the quality of spending. Fair enough. But these measures are not necessarily remedied by mega-councils.

Firstly, it is the people who live in the particular jurisdictions that will bear the cost burden of major projects, and they need to be convinced of the merits whether the council is big or small.

Second, amalgamations remove the ability of people to vote with their feet. Pre-amalgamation Grey Lynn residents could move to the North Shore if they disliked Auckland City’s spending plans. Now they cannot. Third, the international literature shows that very few amalgamations delivered on the cost savings they set out to achieve. More often than not, the reverse is true.

Although the idea of a simplified local government structure is appealing on some level, it is time for central government to abandon the amalgamation bone. This is a democracy after all.

Obese? Maybe eat less

Jenesa Jeram | Research Assistant | jenesa.jeram@nzinitiative.org.nz

In ground-breaking research conducted by the University of Cambridge, it has been discovered that “people consistently consume more food and drink when offered larger-sized portions, packages or tableware.”

In other words, if you are offered more food, you tend to eat more food. Anyone who has visited a buffet restaurant could have drawn the same conclusion.

Other factors that influence consumption decisions apparently include the size of crockery, cutlery or glassware. Your knife and fork may be tricking you into eating more. A slightly more convincing factor is the packaging of food (for instance, multi-pack or bulk). I cannot be the only one who can attest to the regret experienced after devouring a packet of chips in one sitting.

So, overeating can be attributed to overserving. That is reasonably uncontroversial. Overeating can in turn result in poor health outcomes (though outcomes will vary from person to person).

Surely the solution is obvious: if you are prone to negative health outcomes, eat less.

Not so, according to the public health academics at Cambridge. They recommend upper-limits on serving sizes for fatty and sugary foods and limits on the sizes of crockery, cutlery and glasses.

They also suggest restricting the practice of pricing larger portions less, and restricting price promotions on larger portion and package sizes. So they would deny consumers “value for money”, even though it often costs companies less to produce those larger sizes due to decreasing marginal costs.

Is it not wrong to charge budget-conscious families more for bulk and family-size snacks and meals, simply because some people choose to consume more than the recommended helping? And a body builder will have different consumption needs compared with, say, an economist. It’s a one-size-fits-all approach that assumes everyone’s size is unhealthy.

If policy-makers simply want to make overeating inconvenient, they could just mandate all Westerners eat with chopsticks.

Has it occurred to the researchers that not all adults wish to optimise their health at all times? Eating an entire block of chocolate may be a cathartic experience for some. Who are the researchers and regulators to prioritise physical health over happiness for the entire population?

There may be starving kids in Africa, but apparently there are also adults in the West who feel compelled to eat much more than they need because they use a large knife and fork.

On The Record

Blocked sale of station may worry other investors, Dr Bryce Wilkinson, Radio New Zealand, 18 September 2015.
Why the Government has finally stopped a Chinese farm purchase, Politik, 18 September 2015.
Effective altruism: how to do the most good we can, Dr Eric Crampton, The National Business Review, 18 September 2015.
Why Europe Failed, Dr Oliver Hartwich, ABC Radio National Between The Lines, 17 September 2015.
The EU is falling apart, Dr Oliver Hartwich, Business Spectator, 17 September 2015.
Should organ donors get priority for organs?, Kiwiblog, 16 September 2015.
New Zealand economist explains Europe's economic failure, Atlas Network, 15 September 2015.
NZ Initiative's Jason Krupp says there is clear hypocrisy when someone who resists urban change in their suburb bemoans the fact that their children cannot get on the property ladder, Jason Krupp, Interest.co.nz, 14 September 2015.
A better deal for organ donors, Dr Eric Crampton, The New Zealand Herald, 14 September 2015.
Economy warnings mostly 'hypochrondriac', Dr Oliver Hartwich, The Paul Henry Show, 11 September 2015.

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