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Insights 16: 10 May 2024
The Australian: Dr Oliver Hartwich on NZ's biggest budget test since the 1980s
 
Newsroom: Dr Eric Crampton on the economic case against conscription
 
NZ Herald: Nick Clark on NZ's approach to China's Belt and Road Initiative

A shovel-ready autopsy
Dr Oliver Hartwich | Executive Director | oliver.hartwich@nzinitiative.org.nz
Cast your mind back to mid-December. A new Prime Minister had just been sworn in, the new Government started its 100-day programme, and Christmas was only days away.

Amid all the haste, a report landed that would have deserved our attention.

I am talking about the Auditor-General’s damning exposé on the previous government’s “Shovel-Ready” and New Zealand Upgrade infrastructure programmes.

In forensic detail, it exposed myriad failures of process and governance that saw billions of taxpayer dollars shovelled into projects with little regard for cost, quality or value.

Predictably, the report sank with barely a ripple, lost in the pre-Christmas frenzy. We owe a debt of gratitude to the Finance and Expenditure Committee for thrusting it back under the public spotlight.

By inviting submissions on the Auditor-General’s findings, the Committee has given us a golden opportunity to learn from past mistakes and chart a saner course for the future.

At The New Zealand Initiative, we were unsurprised, if still dismayed, by the Auditor-General’s findings. For years, we have warned that a lack of rigorous cost-benefit analysis would cost us dearly as a nation.

Sadly, those fears were realised in the Ardern Government’s infrastructure programmes. Decision-making was opaque and inconsistent. Cost-benefit analysis was piecemeal at best. Haste and political expediency triumphed over rational economic calculation.

The question now is not who is to blame, but how we can learn from this debacle. The answers are writ large in the Auditor-General’s recommendations. We strongly support them in our submission to the Committee.

Furthermore, our submission recommends the establishment of an independent Office of Parliament to scrutinise government spending and fiscal prudence.

Regular public reporting on the progress and performance of major investments is a must. Treasury should seek feedback on its guidance for expedited decision-making. Minimum standards for contestable funding processes should be established. These simple measures would strengthen accountability and improve future infrastructure decisions.

Crucially though, we need a different culture of ministerial decision-making. Ministers must follow established processes, not circumvent them for political gain. They must prioritise value for money over ribbon-cutting photo ops. And they must have the patience to wait for rigorous cost-benefit analysis and business cases before reaching for the cheque book.

For the new government, the path forward is clear. Heed the Auditor-General, reaffirm the primacy of prudence over politics, and restore confidence in our infrastructure regime. Transparency, accountability and robust cost-benefit analysis must be at the heart of all future investment decisions.

What matters is not how many shovels you wield but how wisely you dig.

Read the Initiative’s submission to the Finance and Expenditure Committee, prepared by Nick Clark and Dr Matthew Birchall, here.

The school cell phone ban will be good for girls
Dr Michael Johnston | Senior Fellow | michael.johnston@nzinitiative.org.nz
Social media use is ubiquitous. Young people, especially, are relying on it for social interaction, sometimes to the near exclusion of offline friendships.

While social media provides tools to connect people from all over the world, it can also bring out the worst in human nature. People who are polite in their everyday dealings can turn vicious online.

The combination of cell phones and social media can be an especially toxic witches’ brew for young people. For one thing, it can amplify problems with bullying.

Online bullying is hard for parents and teachers to detect. Moreover, young people tend to be nearly constantly online, meaning that targets of social media bullying get little respite.

Over the past decade, mental health data have shown ever-worsening rates of anxiety and depression in young people. This has coincided with the growth of social media and cell phone usage.

A correlation alone cannot prove that social media or phones are to blame for the wave of mental health problems in young people. But recent research by Sara Abrahamsson from the Institutt for Samsfunnsøkonomi (Institute of Economics) in Norway comes close to establishing a causal link.

Abrahamsson compared academic achievement and mental health at schools following the adoption of cell phone bans, and at schools that did not ban phones. She found a marked decline in bullying at schools implementing bans.

For girls at schools banning phones, there was a 29% reduction in seeking specialist help for mental symptoms. Girls’ academic results also improved. These benefits were especially pronounced for girls from socioeconomically disadvantaged families. There were no reliable effects of bans on boys’ mental health or academic results.

Abrahamsson suggested that the lack of effects for boys may be attributable to their lower use of social media in the first place. Alternatively, as social psychologist Jonathan Haidt has noted, social media exacerbates traditionally female forms of bullying. On the academic front, boys may simply have found other ways to be distracted in class.

The deterioration in teenagers’ mental health alongside the growth of social media and phone usage has been especially serious for girls. Putting that together with Abrahamsson’s findings of positive effects of bans for girls helps establish a causal link between excessive social media use and poor mental health. Her results support the blanket ban on cell phones in New Zealand schools, which came into effect last week.

City saviours
Max Salmon | Research Fellow | max.salmon@nzinitiative.org.nz
The New Zealand Initiative has taken advantage of the tumultuous media landscape and branched out this week into news coverage. Your faithful reporter’s first task was covering the approval of the Wellington City District plan by the Minister for RMA Reform.

While largely content with their decisions, the Minister diverged from the council in walking back the removal of Heritage protections for ten specific buildings.

Among them were the derelict Gordon Wilson Flats. The Wellington landmark has developed a special spot in the heart of locals. It was described to this reporter as a “godawful eyesore” and a “disgraceful waste of land.”

The decrepit monument to the hubris of heritage advocates nationally will escape redevelopment. The Minister, himself a closet supporter of development, was forced to defend the rotting edifice as worth preserving.

The buildings were spared on a technicality – the council didn’t put forward evidence to scrap their protections. Your reporter asked the Minister whether evidence was really required to judge the wreck as needing redevelopment, when anyone with two eyes and a lick of common sense could see that it is.

The Minister, with a heavy heart, responded, "Look, it's simple really, while to the untrained eye that abandoned heap looks like a dump, I’m told to the expert eye, it has a delightful vintage patina."

As he gestured toward the building, a windowpane slipped from its decaying fastenings to a wince-inducing shatter.

The Minister was also compelled to rescue the "Miramar Installation Bulk Storage Tank 3" from the clutches of developers. They had audaciously proposed transforming the site into 150 housing units.

His discomfort was palpable as he regurgitated the lines of heritage experts, citing the tank's value as a "representative example of bulk storage tanks" and "a significant landmark in the local townscape." Several Miramar residents were heard to say that something being a landmark was a matter of fact, but whether something should be a landmark was a matter of taste.

In the wake of an otherwise massive victory for urbanists, and faced with obsolescence, heritage advocates are now seeking heritage protection for the heritage rules themselves.

The advocates believe they have a strong case. “The Heritage Laws are just as much a part of Wellington’s landscape as the buildings they protect. Like those buildings, they too deserve to be shielded by layers of impenetrable, and regressive bureaucracy.”

 
On The Record
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