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Insights 43: 19 November 2021
The Dominion Post: Eric Crampton on why we are failing the Covid testing test
Podcast: The latest European Union migrant crisis
Webinar 2 Dec: What central banks should - and shouldn't do, with John Cochrane

Wanted: A long-term vision for New Zealand
Dr Oliver Hartwich | Executive Director |
Another Groundhog Day week in our never-ending Covid crisis. We got an announcement on Monday for another on Wednesday. The confusion continued, followed by waiting for the next update, whenever it may come.

But it is still unclear what the government plans to accomplish in the medium- and long-term. Is the Government’s goal to restore as much ‘normal’ life as possible - or is it content to keep imposing restrictions on us?

The management of Covid is symptomatic. In practically every area of policy, there is the same vagueness.

Despite the hyperactivity of its ministers, the Government does not offer a roadmap for where it wants to see New Zealand in, say, twenty or thirty years.

The closest the government has come to such a long-term goal is its commitment to achieve net-zero emissions by 2050. However, even this goal is unclear. Is it to drive down emissions, or is it to transform society?

Confusion also reigns in other areas. Exactly what is the goal of the Three Waters reforms? To achieve economies of scale through centralisation? To create more jobs in the sector (resulting in diseconomies of scale)? Or to shift power from councils to central government and iwi?

The direction of education is also unclear. Despite the New Zealand Curriculum being overhauled, its goals are hardly defined beyond buzzwords.

Visit the Ministry of Education’s website to find a target. Say that all children should reach an internationally recognised level of literacy or numeracy. It does not exist.

The focus of the Productivity Commission has blurred as well. Finance Minister Grant Robertson tasked it with looking “beyond traditional measures of economic success” in his letter of expectations. Chair Ganesh Nana interpreted this as an invitation to explore alternative economic models. Only the name of the Commission points to its original task.

New Zealand desperately needs long-term goals. These goals must be measurable, not mere slogans.

How about an economy with a productivity level in the top quartile of the OECD and levels of prosperity to match? With a PISA-measured education level above Asian averages? With median house prices not exceeding three times median household income? With public debt reduced to pre-Covid levels?

If this Government has a long-term vision, it keeps it to itself. But whatever it is, Kiwis deserve to know it – and to figure out if they like where the Government wants to lead them.

Three houses of up to three stories, and a supermarket
Dr Eric Crampton | Chief Economist |
When land use planning is wrong, it is hard for anything to be right – from housing to supermarkets.

Labour and National jointly support legislation allowing people to build more housing. In every major centre, building up to three houses of up to three stories on your property that meet the building code will simply be allowed.

It is a shame that this kind of legislation is necessary.

The legislation forces councils to allow building in places where a lot of people want to live. But even better would be changing councils’ incentives so that they would not want to use zoning and consenting to block growth in the first place.

If urban growth were a benefit to be welcomed, rather than a cost to be mitigated, zoning and consenting would be very different.

A housing shortage caused by a lack of suitably zoned land is just one symptom of bad zoning. A less-than-competitive grocery sector is another.

The Commerce Commission’s draft grocery retail report highlighted the lack of land zoned for use in larger-footprint grocery retail. If councils allow very few places to be supermarkets, government should not be surprised if the sector is less competitive than government would like.

Sadly, during two weeks of hearings, the Commission was more interested in hearing about just about anything other than the problems caused by government.

But the new planning legislation brings opportunity.

When three times as many people are allowed to live in a neighbourhood, they will also need places to eat, places to get a coffee, bookshops and more.

Far more retail can be supported when more people live within walking distance.

But the legislation does not make provision for more pie shops, dairies, grocers and pubs.

Our submission on the legislation suggested broadening things a bit. The legislation could allow three houses of up to three stories on a property, or a supermarket, or both. Apartments could easily sit above a supermarket in a mixed-use residential area, as they often do overseas.

The supermarket suggestion was a bit cheeky. Few residential lots would be big enough on their own – but they could be merged for larger footprints.

Setting mixed-use zoning as a national default standard would have advantages. Until councils can be encouraged to welcome growth, this kind of legislation would help make land use planning a lot less wrong.

For more information you can find the Submissions:
On the Resource Management (Enabling Housing Supply and Other Matters) Amendment Bill here
Issues raised at the Consultation Conference on the Commission’s Market study into the retail grocery sector draft report here

In praise of aspiring ‘influencers’
Leonard Hong | Research Assistant |
Content creators are the fastest growing type of small business worldwide. Today, over 50 million people consider themselves 'influencers' on social media.

According to YPulse – a youth research organisation in the United States – over 72% of Generation Z wants to become online celebrities.

Nowadays, getting famous on Instagram or TikTok is the ticket to wealth and fame. According to a Harris poll, more kids dream of becoming a YouTuber than an astronaut.

Generation Z kids do not want traditional careers in engineering, medicine, consulting, and teaching. Becoming viral on TikTok through outrageous flamboyance can make you a millionaire.  “Don’t need no education, don’t need no thought control”.

Intellectuals, social conservatives and cultural pessimists commonly decry this trend of 'superficial consumerism'. “Yet another dissolute younger generation in the making”, they sniff.

Yet, pop culture meets a need. No one is forcing the youthful masses to follow ‘influencers’. Following them takes time, and buying the products they endorse swallows money.

This is not new. Teenagers have been buying ‘brands’ for decades. They having been indulging and experimenting in all sorts of things that affront their elders, probably from time immemorial.

So the followers of the influencers must be getting a benefit. In part, it will be a social group thing. I get that.

Moreover, ‘influencing’ must be a competitive and risky business. Entry is free. Anyone can be outrageous and flambuoyant – until the euphoria fades. One tweak that misses its mark could destroy months or years of assiduous cultivating of one’s followers.

Take Daniel LaBelle for example. He started a physical comedy channel on TikTok last year, and now has over 23 million followers. Podcaster Joe Rogan has to entertain 200 million people monthly on Spotify.

Imagine waking up every morning wondering what you can do next to titivate such followers, without blowing everything. Who wants that pressure?

Many influencers will crash and burn, just as pop musicians have for decades.

But pop music endures because it entertains. So far influencers are passing that test.

On The Record

Initiative Activities:
  • Submission: Issues raised at the Consultation Conference on the Commission’s Market study into the retail grocery sector draft report by Eric Crampton
  • Submission: Resource Management (Enabling Housing Supply and Other Matters) Amendment Bill by Eric Crampton
  • Free Kiwis Podcast: Oliver Hartwich on the German election and Covid response policy
All Things Considered
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