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Insights 6: 2 March 2018
Oliver Hartwich on RadioLive: Doubts about KiwiBuild affordability
Latest report: Recipe for disaster, building policy on shaky ground
Upcoming Auckland event: Dinner lecture with Katharine Birbalsingh

Accidental success is not a strategy
Dr Oliver Hartwich | Executive Director |
The excitement around the new Labour-NZ First-Green Government and National’s leadership change makes it easy to forget there is a fifth party in Parliament, too. But at last we learnt earlier this week how ACT wants to revive its fortunes.

The Fairfax press reported that ACT’s leader (well, sole MP) David Seymour had just travelled to Germany for some post-election inspiration. What Seymour discovered in Berlin was the story of the German Free Democrat Party (FDP).

In last year’s election, the FDP returned from extra-parliamentary obscurity to the Bundestag on a respectable share of 10.7 percent.

No wonder this result attracted Seymour’s attention. His own ACT party managed a meagre 0.5 percent of the vote.

So, if the goal is to increase ACT’s electoral performance twentyfold, then Germany’s FDP looks like a good role model. Unfortunately, any potential parallels between the FDP and ACT end right here.

Now don’t get me wrong. The world should never stop listening to Germans for advice. Every now and then it may even make sense (I am speaking from experience).

But ACT and the FDP have little in common besides both being more or less free-market. Structurally and historically, they are different parties.

For a long time in post-War history, the FDP enjoyed its kingmaker status between the centre-right and the centre-left. This gave it power, gravitas and plenty of positions to fill. The FDP was part of the German establishment in a way that ACT has never been.

But the FDP’s constant kingmaker position has also contributed to ideological flip-flopping. Yes, it was notionally free-market. But that never meant it would not fight hard to protect its own clientele.

Incidentally, that was one reason why it got kicked out of the Bundestag in 2013.

That the FDP recovered from this near-death experience had a simple reason. As voters on the centre-right became dissatisfied with Chancellor Angela Merkel and her coalition, they sought alternatives to Merkel’s Christian Democrats. They found them in the FDP – and in the populist Alternative für Deutschland, which even finished slightly ahead of the FDP.

So what is there for ACT to learn?

To be frank, not much. Unless, of course, sheer frustration with Labour and National drives desperate voters to Seymour.

But that probably does not pass as a political strategy – even though it did wonders for the FDP.

If David Seymour follows his own instincts, his party would easily be more appealing than a party relying on protest votes.

A dual education
Martine Udahemuka | Research Fellow |
We all want a New Zealand where citizens can enjoy a healthy and prosperous life. But, there is still a long way to go.
To pick one statistic: in 2017, 90,000 youth were neither in education nor in employment.
When we have such high numbers of disengaged youth, often with few marketable skills, it is worth considering whether there is a better approach.
In Germany, Switzerland, Denmark, and Austria, post-school training serves a dual purpose: it prepares young people for the workplace, and it responds to the skills needs of the labour market.

Typically in a Dual Education model, students split their time between classroom instruction at a vocational school and job training at a company. The paid training generally lasts two to four years and ends with a national qualification.

In these countries, vocational training is not regarded as the poor relation of a university pathway.  Most school leavers there choose the vocational track and can select from hundreds of courses we would otherwise consider university types here.

And overall unemployment and youth unemployment levels are lower in many of these places compared with New Zealand.

At least this is what I gather from behind the computer. But there can be a world of difference between desktop research and on-the-ground observations.

So, I am heading to Europe to learn, first-hand, how the four countries manage school-to-work transitions in a seemingly seamless fashion.

I will visit corporations of varying sizes as well as leading education providers to observe the dual training in motion.

Interviewees will include key stakeholders: from apprentices to training managers, to employers’ federations and trade unions. And of course, I will speak to reformers, policymakers, and fellow researchers.

We all know that a youth excluded from the labour market has negative implications not just for the individuals, but for the society too. Given thousands of young New Zealanders are subsequently out of the labour market in their early 20s, I am looking forward to learning whether the European model is one worth considering.

All good Jedi
Dr Eric Crampton | Chief Economist |
Now is the time for all good Jedi to come to the aid of their country.

In the classic Cold War film, Dr Strangelove reminded us that it is pointless for a country to have a doomsday device if it is kept secret.

While the Cold War ended more than a quarter century ago, turmoil has engulfed the international community.

American taxation of trade routes to outlying countries like New Zealand is in dispute after it abandoned the Pacific’s Trade Federation.

China’s National Assembly eliminated term limits for its Supreme Chancellor.

And droid armies are rising.

Fortunately, the Census is at hand.

In the 2006 Census, over 20,000 people revealed themselves as Jedi when listing their religion. In 2013, the number of Jedi dropped to just over 19,000 despite population growth.

New Zealand is fortunately positioned, but we cannot rely only on wide oceans to protect us. Bespian was over 49,000 light years from the Galactic Core, but that hardly stopped the Empire from seizing Cloud City.

And so it’s time for some game theory.

Our Jedi deterrent can work well if it is expected to be large.

It would be one thing if Census suppressed Jedi figures on national defence grounds. Our potential enemies might reasonably expect the Jedi muster to have increased since 2013. The blood tests required by Immigration New Zealand provide extra points to migrants with high midi-chlorian counts.

That the New Zealand Defence Force makes no mention of the country’s Jedi contingent in its Defence Capability Plans only reveals that their role is so powerful that they need not talk about it.

But the Jedi count will not be kept secret. The Government Statistician is committed to Open Data, as is the Statistics Minister. If only a handful of our Jedi declared themselves on Census Day, it would be too difficult for the limited number of Jedi Knights to maintain peace and order.

New Zealand has a strong Jedi contingent. But like Dr Strangelove’s Doomsday Device, deterrent capability is limited if nobody knows about it. And Statistics New Zealand knows this. That is why Jedi is one of the religions listed as an option on the online forms, making it easier for Jedi to self-declare.

It is illegal to lie on the Census, so I could not declare myself to be a Jedi. But my daughter… the Force is strong with that one.

Census Day is 6 March. Are you our only hope?

On The Record
All Things Considered
  • Chart of the week: Diesel-powered cars are on their way out.
  • Historically Western Europe led the world in economic prosperity. But why?
  • Bitcoin now expected to double in value by mid-year
  • South Africa votes to confiscate white-owned land without compensation.
  • Dave Chapelle understands free trade better than most politicians.
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