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Insights 23: 2 July 2021
Newsroom: Oliver Hartwich on the effect the Moscow-backed RT News will have on the EU
Podcast: Immigration advisor Carsten Hallwass on NZ immigration settings and the effect of Covid -19
NZ Herald: David Law says the evidence of KiwiSaver's success is still missing in action

Make housing affordability the priority
Matt Burgess | Senior Economist |
This week, Environment Minister David Parker released his draft Natural and Built Environments bill. It is the first of three pieces of legislation to replace the Resource Management Act.

The government’s reforms, based on last year’s Randerson report, centralise decision making.

A new national planning framework will set environmental bottom lines and targets. Planning committees, made up of council appointees, mana whenua and a Ministerial appointee, will write local plans and set local environmental limits. Councils will continue to decide consents and notifications. There will be 14 plans to replace more than 100 currently.

It is not clear how any of this will make it easier to build a house.

In the year house prices rose more than 30%, the government's top priority for the system to replace the RMA is respect for the Treaty.

Has the government thought through what this means? Article 2 of the Treaty guarantees undisturbed possession of lands, which further overreach by planners will not deliver. Since the RMA landed in 1991, house prices have risen more in this country than any other in the OECD. The government might ask who has lost the most from this rampant inflation.

The proposed reforms take some powers from councils, appropriate given their role in stifling housing markets. But the reforms will be for naught if they are not based on an understanding of why councils misbehaved in the first place.

The bill makes planning committees responsible for everything from the relationship between iwi and hapū to carbon emissions to protecting customary rights. Housing affordability is mentioned only once, 12th in a list of 16 desired outcomes.

Parker has acknowledged delays are one of the RMA’s pressing problems. Yet his bill does not give decision makers any reason to go faster. To the contrary, the wide scope it gives unelected committees practically invites them to lie in front of developers’ bulldozers for fashionable causes.

Reforms of the planning system should start with an understanding of the problems property rights cannot solve, and an awareness that planners, whoever they are, can be captured. Yet Parker’s model combines more planning with less accountability. This government cannot help itself.

Much lies ahead, but the writing is on the wall. When the Natural and Built Environment Act becomes law, the NBA will no longer be a game played by tall men in America. It will be the reason you cannot put a deck on your house.

The hijacking of KiwiSaver
Dr David Law | Senior Fellow |
In recent months there have been a few changes to KiwiSaver with more under consideration.

But those who are inclined to tinker with the scheme should be looking at the evidence on its efficacy and thinking about whether any changes are consistent with its objective – to help those with a savings problem save more for their retirement.

You may have missed it, but the Government will now be ensuring that savings in default KiwiSaver funds are invested ‘more responsibly’. That’s a worry, especially given that so called ethical investment choices already exist in the market.

For now, investing ‘more responsibly’ means excluding any investments in fossil fuel production and reflects the Government's commitment to its climate goals.

But addressing the impact of climate change is not the objective of KiwiSaver. Pursuing multiple objectives in this way makes it less likely that KiwiSaver can actually do what it was intended. It also misses the fact that we have a much better policy to address climate change – the Emissions Trading Scheme.

Beyond this, where will the Government’s prescription for ‘responsible’ investment end and what will it cost us? Will we next be required to invest in local infrastructure or electric vehicle production and be prohibited from owning shares in companies that manufacture utes or barbeques?

The Government is also investigating a proposal to increase KiwiSaver contributions. New members, and those who opt into it, would see their contributions increase from 3 to 10 per cent.

This is surprising because KiwiSaver has been rigorously evaluated against its objectives and was found to be a poor performer. Good public policy scales back failures it doesn’t scale them up.

I worked on that evaluation for several years, undertaking two major studies. To summarise: KiwiSaver membership had no effect on net wealth accumulation, and it was highly inefficient and wasteful. On top of that it doesn’t even boost savings at a national level.

Over the last decade, despite their complaints, KiwiSaver proponents have been unable to provide any rigorous evidence showing the scheme has been successful at meeting its objectives.

In the meantime, the international evidence base on the efficacy of schemes like KiwiSaver keeps growing. It turns out our experience is not unique. For instance, Harvard Professor Raj Chetty and his co-authors examined 41 million observations on savings for the population of Denmark and found that each additional dollar of government expenditure on subsidies increased total saving by only one cent.

It would be great to see more attention paid to evidence in public policy decision making.

Unkind speech
Ben Craven | External Relations Manager |
Humans are fallible creatures.
We make mistakes. We suffer errors of judgement. Sometimes we even drop conversational clangers that cause offence.

Worse, even when we try to do right, it can be hard to tell whether we have erred.
“When you see it, you know it,” said Jacinda Ardern of hate speech. But even the Minister of Justice has had trouble articulating just what might draw prosecution under Labour’s proposed hate speech legislation.
Perhaps technology could come to the rescue, saving us from our human foibles and enhancing our collective wellbeing.

We’ve seen it with the NZ COVID Tracer app.

Notifications from this app have helped remind us of the importance of the Alert Level measures. They have shown that we all have an important part to play in New Zealand’s collective wellbeing. And they have helped us change our behaviours accordingly.

Couldn’t similar or even better technologies be deployed to combat other social ills – like problematic speech?

To help both our elected representatives and the Team of Five Million, the Government should commission a SafeSpeech app. It’s clear that we all need a helping hand. Who better placed than the state?
It would make the Minister of Justice’s task much easier. Rather than having to say what would be banned, he could just remind us all to trust the app to tell us. As the government’s guidelines evolve, so too will the technology.
The app would prompt users to practice kindness in their daily discourse, and act as a repository of offensive terms that could hurt feelings. It might also serve as an interactive encyclopaedia, where historic figures can be vetted and warning labels applied based upon our modern social norms and sensibilities.
Artificial intelligence and machine learning processes powering the app will allow it to predict what the latest offensive terms might be and deduce when a user might be straying into unkind discourse. Of course, this would require the SafeSpeech app to always be on, recording all of our speech, processing it, and updating itself regularly to monitor against newly discovered types of offence and offences.
Turning on Bluetooth connectivity would allow the app to warn you if potentially offensive people are nearby, until the offenders are arrested.

It is said that to err is human. But in 2021 and with the technology at our disposal, should we really settle for that?

On The Record

Other Initiative activity:
  • Podcast: Immigration advisor Carsten Hallwass on NZ immigration settings and the effect of Covid -19
  • Podcast: Matt Burgess on agriculture’s place in climate policy
All Things Considered
  • Graph of the week: Rapid rail cost per km by country: NZ is the world's most expensive
  • Economist Robert MacCulloch has a good question to the Health Minister
  • Chastened Immigration NZ reviewing hundreds of wrongly curtailed visas
  • Is your teenager secretly a libertarian? 9 warning signs to look for
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