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Insights 04: 12 February 2016
The Local Formula: Myths, Facts & Challenges
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Oliver Hartwich argues free tertiary education is a regressive policy

Property rights at the beach
Dr Oliver Hartwich | Executive Director |
Abel Tasman beach is not only a beautiful South Island spot. It also shows us the beauty of property rights.

A crowdfunding campaign is aiming to raise $2 million to buy this slice of heaven from its current owner. If successful, the campaigners pledge to donate the beach to the Department of Conservation (DoC). This way, all New Zealanders would have access to it.

Enter Gareth Morgan, the self-made economist millionaire. Morgan offered to make up the shortfall in the crowdfunding campaign, currently about $600,000.

However, Morgan’s help would not be entirely selfless. In return, he expected to keep a part of the beach to himself. This would only be donated to DoC once the Morgan family “have finished enjoying it”. It was a case of Give-a-Little, Expect-a-Lot.

It will not come to that since the crowdfunders have already rejected Morgan’s offer. However, the whole exercise demonstrates what freedom of contract and property rights are about.

There is the current owner. It would have been perfectly within his right to keep exclusive access to the beach. Instead, he was so civic-minded to bestow parts of his property to the public. Incidentally, that is precisely what Morgan intended to continue.

It is now also within the current owner’s right to put his property for sale and sell it to the preferred bidder. This need not be the one offering the most money. If the owner puts value on public access, he might select a bidder guaranteeing it.

For those caring about free public access to beaches, they are putting their money where their mouths are. This is exactly as it should be. They are not asking the government to spend other people’s money on something they care about. Good on them.

Gareth Morgan is also right: He can offer his money under his conditions. Whether that offer will be accepted is a different matter. But as such, there is nothing morally wrong with Morgan’s bid.

Morgan is also right that both crowdfunding and his potential involvement would prevent taxpayer involvement. It would have been middle class welfare anyway. As Morgan pointed out, less affluent people are unlikely to ever visit this particular beach.

Solving public issues through private initiative and civic-mindedness, property rights and freedom of contract: New Zealanders can be proud of the current beach owner, the crowdfunders…and Gareth Morgan.

Immigration grows the pie
Roger Partridge | Chairman |
If Donald Trump were seeking election in New Zealand, he’d have no need to promise a fence to keep out migrants. Nature has given us our own moat.  
Sadly, our island state is not enough to stop a vocal minority chanting their own exaggerated anti-immigration claims. In recent times, calls to halt immigration have focused on Auckland’s overheated housing market. But, as economic conditions softened last year, back came the protectionist clichés about immigrants stealing Kiwi jobs.
Chief among the cheerleaders was Winston Peters and his internal affairs spokesman, Clayton Mitchell. They started 2015 berating the government for allowing record immigration while “309,145 New Zealanders are stuck on benefits” – and they did not relent. 
The results of the latest Household Labour Force survey from Statistics New Zealand should now silence New Zealand First and its followers.
With the media’s attention focused last week on the circus at Waitangi, you could be forgiven for having missed it. But the survey suggests the New Zealand economy notched up record levels of employment in the final quarter of 2015.  
The results are remarkable. They indicate the rate of unemployment fell from 6% in the previous quarter, to 5.3%. That is its lowest point this decade. 
If these figures came as a surprise to economic forecasters, they no doubt confounded Mr Peters. They should not have. It is true that last year New Zealand’s 120,000 immigrants outpaced emigrants by two to one. But while it may have needed a miracle to feed the multitude, it does not need a miracle to employ them. 
In a market economy, the number of jobs is not static. More migrants create more jobs. They mean more teachers, more retail staff, more factory workers, and more managers. In fact, more of almost everything.
And that is not the end to the good news. Countless international studies have shown that increases in immigration not only tend to increase jobs, but also to increase the prosperity of the host nation. We benefit from their productive endeavours, their ingenuity and their diversity. And the more skilled the migrants, the greater the benefits. 
That there are gains from immigration has received cross-party support in New Zealand since at least the 4th Labour Government. Let us hope the anti-immigration demagoguery falls on deaf ears. Going down that path we all lose. 
The challenge is not keeping out the migrants; it is keeping out the bad ideas. Luckily, that does not need a wall, just clear thinking.

When academics try and explain millennials
Jenesa Jeram | Research Assistant |
I’m really glad I’m a millennial. If I wasn’t, I’d have a pretty hard time understanding exactly what they’re all about. Good luck to academics trying to do the same.
The latest example of academics weighing in on this fascinating species is thanks to a new Heineken advertisement. And who better to seek reaction from than a definitely not-millennial university academic?
In a nutshell: Heineken have produced an advertisement encouraging men not to drink too much if they want to attract the ladies. It’s a sensible message, albeit an unexpected one coming from an alcohol company.
University of Canterbury Associate Professor in marketing Ekant Veer argues “it comes across as a little sexist.” So, it seems the Tinder generation don’t want to be characterised as a bunch of women “out there begging for a guy and to find their life is complete as a result.”
Now, some women may indeed find the idea offensive. But considering there are 52,000 more women than men in the 25-49 age group, the man drought is hardly a figment of a marketer’s imagination. It’s not inconceivable that some women may indeed still be looking for a partner. Some women even go out on the town to do so.
Elsewhere, Otago University marketing professor Rob Aitken argued “If Heineken wanted to seriously promote moderate beer consumption they could advertise the health impacts of drinking.”
Now, I’ve never taken a marketing course, but even I’ve heard of the adage that sex sells. Some people may respond to scientific claims, but I bet a whole lot more people will respond to the idea that sober is sexy.
At any rate, I’d hope any discussion of health impacts would include the information that moderate drinking can be good for your health, but somehow I doubt a ‘drinking is good for you’ campaign is what he had in mind. Professor Rob Aitken acknowledges that millennials are fairly cynical. But that means they can probably see through hyperbolic calls for teetotalism too.
What I want to see is an academic explain why hazardous drinking rates amongst this age group are decreasing. Maud Meijboom, the marketing director of Heineken-owned brewery DB reckons social media plays a role, where public drunkenness is unattractive.
If that is the case, perhaps academics are overthinking things. Characterised as vapid, self-obsessed and ambitious, perhaps the best way to change millennial behaviour is to appeal to their highest priority: their self-image.

On The Record
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