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Insights 5: 24 February 2023
Newsroom: Oliver Hartwich on Europe’s unlikely new political superstar
Podcast: Infrastructure Commission’s Peter Nunns & Eric Crampton on infrastructure costs
NZ Herald: Bryce Wilkinson on the false claims for net benefits from RMA replacement Bills

Not your average canape chat
Dr Oliver Hartwich | Executive Director |
Few people attend business functions because of the speeches. No matter the speaker, these events are usually networking opportunities.
So it used to be with BusinessNZ’s annual ‘Back to Business’ function. In mid-February every year, the lobbying group would invite business and political leaders for drinks and canapes. And the Prime Minister would say a few inconsequential words, too.
That is how it would have been again this year if the Prime Minister had not changed. But with Chris Hipkins having only been in office for a month, the main event was him.
Thus, some two or three hundred guests eagerly anticipated Hipkins’ remarks. They were in for a surprise.
In previous years, those set speeches had become predictable, platitude-driven and self-congratulatory. Not so with Hipkins.
In a speech without notes, the Prime Minister first paid tribute to the victims of recent disasters. He expressed his gratitude towards the community and business leaders who have worked tirelessly to tackle the devastating floods, even helping their competitors. So far, so expected.
But with refreshing honesty, Hipkins then openly acknowledged the government’s past mistake of trying to do too much at once. He conceded that the pace of change was often too fast, not just for businesses, but for politicians as well. He also admitted that there had been a lack of communication between the government and the business community.
Drawing on his previous experience as Education Minister, Hipkins also shared the tough conversations he has had with business leaders about our education system. Business leaders had been telling him how concerned they are about New Zealand’s schools. Hipkins underlined how important it was to work with business leaders in making reforms happen. And many business leaders are parents, too.
The BusinessNZ crowd had not heard such words from a Prime Minister in years.
Given Hipkins' role in the previous administration, some might dismiss his speech as mere rhetoric.
The business community, however, saw it a sign of a new beginning. Hipkins' willingness to stay and mingle with the audience then reinforced the message that Hipkins had a different approach to business than his predecessor.
Even though BusinessNZ events are rarely cheerleading events for Labour, the new Prime Minister was well received.
No doubt there will be many issues on which the business community disagrees with the Government. But politics is all about perceptions, and Hipkins' new tone will reach people that had stopped listening to Ardern.
If Hipkins maintains this approach, and if he follows through on his promise of genuine consultation with business, it can only improve policymaking.
Incidentally, it will make this year’s election a much tighter affair than many would have expected.

Infrastructure Recovery
Dr Matthew Birchall | Research Fellow |
Cyclone Gabrielle has battered New Zealand’s infrastructure.
Roads, bridges and powerlines across large swathes of the North Island have been decimated. A substation has been flooded. And thousands of homes, farms and businesses lie caked in mud and silt.
Finance Minister Grant Robertson has suggested that the rebuild could cost $13 billion. That rivals the initial estimate for the 2011 Christchurch Earthquake.
And it means that the fallout from Gabrielle will be felt for many years to come. The government needs to get its response right.
In the short term, Prime Minister Hipkins must do everything he can to facilitate the rebuild.
That means loosening New Zealand’s strict immigration settings.
Fortunately, there are promising early signs.
Immigration Minister Michael Wood has indicated that he is ramping up work to ensure that skilled workers from overseas are able to get into the country with relative ease.
Tweaks to the seasonal worker scheme are also in the offing.
Long-term policy decisions will be just as essential.
Adjustments to EQC premiums could help. Levies are primarily determined by property value, not location. A better approach for EQC might be to set premiums to reflect risk.
People should still be able to build where they want, but they should pay more if they want to live in cliff-side homes or in floodplains.
A greater challenge still concerns infrastructure resilience.
Commentators have rushed to pronouncements about New Zealand’s broken grid. We are implored to future-proof our roads and embrace “sponge cities.”
The reality is more complicated.
Investing in infrastructure involves making difficult trade-offs between cost and resilience that cannot be avoided. Therefore, it is unrealistic to believe that we can solve the problem by simply spending more money.

If we want to move roads or build them to a higher standard, then we need to re-examine how we pay for them. That will likely mean more user-pays options.
Resilience is not free.
The same goes for New Zealand’s critical infrastructure. There may well be a case for relocating or strengthening vital parts of the network, such as substations. That is especially true for legacy infrastructure that was built to different standards.
But answers to these questions are still unclear. And now is not the time to resolve them.
Gabrielle is a cruel reminder of the hazards that come with living in our beautiful country. The rebuild will hopefully remind us of the opportunities.

Risky Business: How hasty decision-making puts English rugby's future at risk
Benjamin Macintyre | Research Assistant |
Sound decision-making underpins sound businesses and sound organisations. Major changes must be well-considered.
So, what should we make of some arguably ill-considered changes in English Rugby?
The Rugby Football Union (RFU), English rugby’s governing body, recently published plans to lower the allowable tackle height in the amateur game to below the waist. This, predictably, led to much furore among players and fans alike who fear these changes fundamentally change the game.
On the face of it, the decision seems hasty. Or at least that’s how it is being perceived.
For example, the idea that forcing players to place their heads in the path of oncoming kneecaps is somehow safer than high tackles – which are already strictly regulated – has been widely ridiculed.
But even more baffling was the way in which the RFU reached its decision. It largely relied on a single study looking into the likelihood of injuries occurring during a tackle.
The Guardian pointed out that if the study’s suggestions were adopted fully, they would reduce head injuries by 8%. However, this number would be achieved only if the recommendations are perfectly implemented and we never see a high tackle ever again. That seems unlikely.
Concussions are serious – and especially if they happen repeatedly. There are too many heart-breaking stories of young former players who suffer from debilitating brain diseases due to their years of rugby. Current players obviously need protecting from this.  But the rule change rips up one of the core elements of the game with limited and dubious evidence it would even work.
Other changes have worked. Stricter concussion protocols and limits on contact training in the professional arena have both had a positive impact without fundamentally changing the game.
No one who sits on the RFU board is a current player. And no current players were consulted.
A cynic might wonder whether the rule change was designed to make the game safer, or just to seem as if they’re taking player welfare seriously enough to avoid getting sued.
At least when these kinds of decisions are taken in sport, the consequences are limited. If the RFU got it wrong, they’ll find out quickly enough from fans. Rugby in England is already in bad shape, with two professional clubs going under and dwindling participation at grassroots level. Should this decision compound their existing woes the RFU will doubtless reverse course.
 Isn’t it a shame that poor policy decisions aren’t subject to such direct feedback.

On The Record

Initiative Activities:   
All Things Considered
  • Tweet of the week: The case for reverse OIA
  • The Ethics of Higher Education
  • Age of Invention: How the Dutch Did it Better
  • If we do not want more plans, ideas and whitepapers to sit wasting away on the shelf, then central government is going to have to trust local communities with more than just ferrying food and shovelling dirt
  • The world is not good now, but it is substantially funnier
  • Look. If they really were serious about it, they'd have made it some kind of Commandment
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