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Insights 6: 1 March 2024
Newsroom: Dr Eric Crampton on the core issue behind housing unaffordability
The Australian: Dr Oliver Hartwich on Otago's bold bet on Grant Robertson
NZ Herald: Dr Bryce Wilkinson on how "we" might improve public policy debate

Bishop’s pledge to end the housing shortage
Dr Oliver Hartwich | Executive Director |
Housing policy made significant progress this week. The housing minister, Chris Bishop, addressed the Wellington Chamber of Commerce and released a cabinet paper outlining his plan for solving the housing crisis.

Taken together, we can now see the Government’s comprehensive strategy to increase land availability, incentivise councils through GST revenue sharing, and reform the planning process.

Minister Bishop’s explicit long-term target that the median house should not cost more than five times median household income is particularly welcome.

Bishop’s proposal to liberalise planning and encourage infrastructure development echoes our calls for enabling better local decision-making.

Like Minister Twyford before him, Minister Bishop recognises that supply constraints, driven by inadequate incentives for councils, are at the heart of New Zealand’s housing affordability issues.

In the previous government, Minister Twyford did make progress with important initiatives like the National Policy Statement on Urban Development. But easing the barriers preventing councils from embracing growth would have required greater buy-in from Twyford’s cabinet colleagues.

By contrast, Minister Bishop seems to have stronger backing from the Prime Minister and the Minister of Finance. Thus, Bishop’s speech announced that he will be the final arbiter of disputes between independent hearings panels and councils.

Furthermore, sharing GST revenue with councils from new housing construction would encourage councils to enable more building, more closely aligning the financial interests of councils with national housing supply goals.

Broadening GST sharing to encompass construction more generally would encourage councils to welcome more forms of development, encouraging a virtuous cycle of growth.

Getting those incentives right is tricky. Until they are right, councils will game targets that central government sets around housing.

National will allow councils to opt out of medium density requirements if they immediately release thirty years’ worth of zoned land. But remember that Wellington’s Independent Hearings Panel believed that a rather restrictive district plan had plenty of supply.

The government will need to set better measures to prevent such gaming.

Rather than relying on council forecasts of housing demand and feasible supply, it could instead look to prices. If land zoned for apartments carries a massive price premium over land zoned only for townhouses, and if land zoned for housing is worth hundreds of dollars per square meter more than paddocks, more upzoning is obviously needed.

We commend the Government and Minister Bishop for their proposals. And we are thrilled to see the Initiative’s long-standing positions on land-use planning and local government finance reflected in them.

When the bloat began
Dr James Kierstead | Research Fellow |
Last year, the Initiative released a report on administrative bloat at New Zealand universities. It showed that the majority of staff at New Zealand universities are non-academics, and that this has been the case for quite some time. 

But for how long? Our report relied on figures available on the Ministry of Education website that only went back to 2012. 

Luckily, Statistics New Zealand’s series of official yearbooks go back further, allowing us to pinpoint the year that non-academics first became more numerous than academics. 

That year was 1991. Surprisingly, though, there was no huge rise in non-academic numbers that year. Instead, there was a steep fall in the number of academics – part-time academics in particular. 

This seems to tell against one theory about this country’s unusually bloated university bureaucracies: that universities added more non-academics as a result of the market-oriented reforms of the 1980s. 

But what might explain the sudden drop in part-time academics? 

It wasn’t just a matter of part-time academics being relabelled as full-time, since part-time academic numbers went down by 2198 and full-timers only increased by 170. 

Maybe universities were spooked by the government’s announcement that it would be reducing tuition subsidies, leading them to look for savings by offloading part-timers. That might explain why part-time academic numbers fell, but not why part-time non-academics decreased only slightly, and full-timers saw their numbers grow.  

A final possibility is that part-time academics became a riskier proposition, perhaps because universities were now forced to hire part-timers on a full-time basis after they had served a certain number of years. That may have led universities to shift some part-timers to full-time contracts but to shed the remainder.  

The official yearbooks also allowed us to look at something else that we had touched on in our report: the various types of non-academics (technicians, managers, etc.) that work at our universities, and how this has changed over time. 

Before the mid-90s, this was remarkably stable, with librarians, administrative, and grounds staff (say) consistently making up roughly the same proportions of total staff.   

Since then, things have been more dynamic, with our universities increasingly outsourcing hands-on staff like technicians while taking on more and more white-collar employees.  

What exactly has caused those changes will have to remain, for now, a topic for future research – by us or by others. 

Dr James Kierstead and Dr Michael Johnston's report, When the Bloat Began: Non-Academic Staffing at New Zealand Universities over the Long Run, 1961-1997, was published on 28 February. 

Benjamin Macintyre | Research Assistant |
Today I found out that both the Prime Minister and I are self-described “test cricket tragics”. If he can tell me what Neil Wagner’s final bowling average is upon retirement, I’ll believe him.

This past Monday, the Prime Minister welcomed both the New Zealand and Australian cricket teams to Premier House. It was to celebrate the upcoming test series between the two sides.

However, despite strict rules to not mention the underarm incident, there was still a diplomatic faux-pas at the event.

It now seems that the Prime Minister does not actually live at Premier House as it is “condemned”. This, according to Australian batsman Usman Khawaja.

The Prime Minister, of course, denies saying as much. He claims that there are “long-standing maintenance issues” which prevent him from living there.

Khawaja and Mr. Luxon are an unlikely pantomime duo, but this exchange of “yes you did!”, “No I didn’t!” has added an unexpected twist to the build-up to the cricket.

But what we really saw was a masterclass on how to perform political double-speak.

Luxon says that the house has maintenance issues serious enough to prevent him from living there. He says this information comes from a report that was also handed to his predecessor.

So, the issues are serious enough to mean he cannot take up residence in Premier House and old enough to have been an issue before the change of government.

Sounds pretty condemned, right? But you can’t say that because that sounds bad.

No, much better to say, “long-standing maintenance issues”. Because that is really boring and most people will ignore it.

Obviously, none of this is Luxon’s fault. These issues pre-date his government and it’s not like he can wave a magic wand and fix it.

Someone should have warned Luxon, however, that the Australian cricket side cannot be trusted. Are they really here to just play some cricket? (Ed: Yes).

Or are they here to steal state secrets? It’s certainly quite convenient that they should be playing the first test in Wellington, thus giving them time between innings to snoop around.

There are already reports emerging that David Warner, Australian batsman of particular fame, was spotted writing down what the Prime Minister said on a sheet of sandpaper.

All seems pretty suspicious to me. And by attacking not our bowling attack, but our Premier House, the Australian mind games have already begun.

Let’s hope we can condemn them to a series defeat.

On The Record

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