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Insights 43: 10 November 2017
Local Government Magazine: Why New Zealand needs more, yes more, councils
Latest report: Analog Regulation, Digital World
Free Wgtn event: Welfare, work & wellbeing panel discussion with Dr Sue Bradford

Analog Regulation, Digital World
Dr Eric Crampton | Chief Economist |
Which moves faster: technology, or the regulation that tries to keep up with it?

New Zealand’s ability to adapt to new technology depends on whether our regulations can keep pace. We have always faced the twin tyrannies of size and distance. We are small and remote.  If our rules hold back adoption of new technology, we can add a third tyranny to the list: being out of date.

This week, the Initiative and Internet New Zealand jointly launched a stocktake of New Zealand’s tech-facing regulations. New Zealand needs to be better at embracing permissionless innovation, at leaning more heavily on foreign certification where appropriate, and at watching out for regulatory stumbling blocks to creativity.

We need adaptable regimes that allow entrepreneurs to innovate without the need for constant permission. When innovation requires cumbersome permissions, innovators seek greener fields. And that is even more true for small and distant countries.

The report finds some areas where New Zealand has excelled. When Rocket Lab wanted to send satellites into space from New Zealand, MBIE very quickly developed a framework to let it happen.

In other areas, we have failed to fully appreciate how technology has changed the game. Where technology solves a problem and makes regulation redundant, regulation is too slow to get out of the way.

Rules around taxicabs, and around film ratings, worked to protect consumers when information was hard to get. Today, phone apps tell us how other riders have rated a taxi driver before we step in the car. And a host of websites can provide parents with far more detail about whether a film might be right for their children than was ever possible twenty years ago. But the rules have only partially adapted to this change.

The report argues for reform to copyright to enable greater flexibility in fair dealing, for greater commitment to open data practices that unlock innovation, and for easing the regulatory burden where risks are low.

Greater flexibility will not only be good for innovators, it will also be better for consumers. Kiwis risk missing out on technological developments if our regulations maintain precautionary approaches. Those approaches risk making New Zealand not only small and distant, but also years behind our neighbours.

Analog Regulation, Digital World is available here. Co-authors Eric Crampton and James Ting-Edwards are today discussing their report at NetHui.

Why NCEA would be a good place for paternalism
Briar Lipson | Research Fellow |
My dad just refitted his small cottage kitchen. He is over 6ft tall, so wanted the worktops raised 6 inches, precluding his need to bend.

However, his circumstances may change. Aside from his possible shrinking, he might one day want to sell the house, or even welcome a ‘lady-friend’ who is less than 6ft tall. Needless to say, after acknowledging the trade-offs, a worktop compromise has been made.

We are all making trade-offs all the time, accepting the pros and cons and getting on. New Zealand’s national qualification NCEA is no exception, except that many of its cons fall on our most disadvantaged children, who have little voice in any debate.

When conceived, NCEA’s purpose was very different to that of the old system. No longer would our national assessment be about equipping universities to select between candidates. Instead, NCEA was designed to motivate lower-achieving students and provide enough flexibility that everyone could leave school qualified.

These social justice objectives are clear and worthy. But worthiness is not enough.

The economic wellbeing long-associated with success in School Certificate and University Bursary had always been hard fought. Simply shifting the goal-posts would not suddenly ensure educational success for all. And yet, this is what NCEA tells us. That ‘Prepare and present espresso beverages for service’ has equal value to ‘Apply the algebra of complex numbers in solving problems.'

Of course, readers of Insights recognise the absurdity in this. But if you are a child growing up without parents who can advise, and where barista courses are offered at your school, then what madness would drive you to complex numbers over coffee cups?

Elsewhere in the OECD, a core curriculum communicates minimum expectations for all students. It provides a safety-net against premature specialisation and immature decisions. But in New Zealand it is perfectly possible to graduate with NCEA Levels 1, 2 and 3 having never completed a national assessment in English, maths or science, let alone a humanity or language.

This truth is sold as flexibility. But flexibility comes at a cost. For one, circumstances change. In the same way that a petite ‘lady-friend’ might appear, young adults sometimes change their minds about their life-goals.

A core curriculum protects against the worst foibles of youth. But until adults are prepared to acknowledge this, already-disadvantaged young New Zealanders will continue to slip through the net.

Our very own House of Cards
Dr Oliver Hartwich | Executive Director |
As House of Cards is ending in sad circumstances, the TV series has a real-life successor. It is the New Zealand House of Representatives.

The theatre on our 52nd Parliament’s opening day was highly entertaining. And it made for better TV than any fictional stories about US Presidents ever could.

The plot was genius: An opposition pretending it had a majority in the House due to absences on the government benches. To be clear, it was a legitimate try. But for the government to fall for this bluff is a twist that most screenwriters would have deemed too implausible.

It was just like National claiming there was a hole on Labour’s side – except this time Labour believed it.

To add colour to the plot, we heard friendly banter between newly elected speaker Trevor Mallard and Bill English. And to both English’s and Mallard’s credit, these two warhorses of New Zealand politics understand that parliamentary politics is often not about policy. It’s show business.

Winston Peters delivered an even weirder sideplot without even being present. Which was, of course, the reason why the government appeared low on numbers.

But even in his absence, the Deputy Prime Minister dropped a bomb on Parliament’s first sitting by having legal papers delivered to journalists, politicians and bureaucrats.

How is that for a plot? The same character who, until only three weeks ago, was considering a coalition with National, now prefers to sue them instead. It is an idea so wild and unexpected, it would be in the running for best original screenplay at the Academy Awards.

Despite what you read in some newspapers about all this being bad signs of things to come in this Parliament, there is a positive side to it. The new Parliament promises to be a place of high theatre.  It will be the stage for heroes and villains of Shakespearean proportions.

And more than that, the more this policy-void theatre goes on, the less time our politicians will have to make any actual policy mischief.

So don’t worry about the lack of seriousness in the House and the noise created. Our politicians only want to play.

And we want to see them play. After all, we can no longer watch Frank Underwood with a good conscience.
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