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Insights 23: 24 June 2016
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Dr Oliver Hartwich talks about Brexit as we wait for the result
Wellington's 'Deadly Heritage'

Brexit: Keep calm and carry on
Dr Oliver Hartwich | Executive Director |
It is midday New Zealand time, and in Britain they have just started counting the votes of their referendum on EU membership.

Polling day surveys show a narrow lead for the Remain camp. However, the race is tight and it is too close to call at this stage. We will not know the result for another few hours.

So let’s just speculate on the possible consequences of the referendum.

Markets hate uncertainty, and there is going to be plenty of that no matter which side wins.

Even if Britain decides to stay in the EU, it will not be business as usual. Prime Minister David Cameron and his Chancellor George Osborne have torn their Conservative party apart during the campaign. They may not stay in office for much longer. A change at the top of the British government, and maybe even an early general election, could be on the cards.

Should Britain pull out, there is even greater uncertainty about its political and economic future. In this case, both Messrs Cameron and Osborne are highly likely to be kicked out of 10 and 11 Downing St before too long. They just could not credibly negotiate Britain’s exit from the EU having just campaigned to stay in. Nor would their party still follow its failed leaders.

Which again means a change of government and maybe an early general election.

Such political uncertainties aside, there is no need to panic. Not even in case of Brexit. The slogan has to be ‘Keep calm and carry on’.

Even a Brexit vote would not mean that Britain is out of the EU straight away. It would only give the UK government the mandate to inform Brussels of their wish to withdraw. They would not have to do so immediately though. If Prime Minister Cameron had to go, he would most likely leave this task to his successor.

Negotiations would only begin once the EU is officially notified. Under Article 50 of the EU Treaty, these would take at least two years.

Over all this time, nothing would change. Britain would have access to European markets. And they could well retain it depending on the outcome of the negotiations.

So we will watch the count of the referendum with excitement. But let’s keep calm no matter what the result. There is no need to panic either way.

A much needed yardstick
Jason Krupp | Research Fellow |
Whether on the sports field or in the boardroom, the adage that ‘if you cannot measure something, you cannot control it’ is well known. It appears Local Government New Zealand has taken this piece of wisdom to heart with the launch of their Excellence Programme.

The programme aims to provide an independent rating of council performance that communities can understand. It is modelled on the format used by international ratings agencies, but with a focus on governance, financial decision-making, service delivery, and community engagement.

It is well-timed too, because the sector is coming under increasing scrutiny from central government. The Better Local Services Reforms, for example, noted with concern that council spending in recent years had tracked above consumer inflation.

To the time-poor voter, who may be unwilling to steep themselves in complicated measures of performance (quite rationally too!), this could be read as a sign that the sector as a whole is doing a bad job. But is it? Very little of council expenditure is made up by the same basket of goods and services that are used to measure consumer inflation.

Councils also perform a host of other tasks and services beyond roads, rats and rubbish, the effectiveness of which is impossible to assess by looking at expenditure alone. If a particular council keeps spending growth below that of inflation, does this mean they are managing their assets well, or consulting effectively? It is impossible to tell.

The Excellence Programme is, in effect, an information shortcut, allowing communities to make better informed decisions at the ballot box. Admittedly, it is early days yet. Only a small group of councils will be assessed in the first round, and the results will only be released after the upcoming local body elections.

But should the programme be adopted more widely, it has the potential to significantly alter perceptions about the sector. It could also change the tone of the dialogue between central and local government. After all, it is going to be pretty tough to use local government as a whipping boy should an independent report card show they are doing a decent job. Likewise, it gives councils little room to skirt accountability for poor performance.

If it works for sports teams and businesses, it should work for local government.

From degustation to defenestration
Dr Eric Crampton | Head of Research |
Nelson’s Medical Officer of Health wants a place at your table. Not in person, of course, but in spirit.

Last week brought news that Chef Martin Bosley’s degustation event at Te Awhina Marae will come with medically constrained wine pairings. Each of the seven courses on offer can come with no more than 50 ml of wine – or just over three tablespoons. The public health service reportedly worried about drink driving, despite the provision of shuttle services, and about how much wine women in particular should be allowed to drink.

A half-bottle of wine with the meal may sound like it should be enough, but should it really be the Medical Officer of Health’s job to decide how much should be allowed? Licensees are already banned from serving intoxicated people. Should restaurants also be required to serve no more than one bottle per two people at the table over the course of an evening?

We can perhaps look forward to future degustation menus where chefs face strict regulation of how much salt, sugar and fat are allowed in any course, maximum plate sizes to discourage overeating, and minimum broccoli requirements. Perhaps the unhealthiest foods could be artificially coloured to match proposed plain cigarette packages’ unappetising colour.

And I start wondering whether medical officers of health should be evicted from restaurants through the window rather than being kindly shown the door.

ACT’s David Seymour pointed to the problems around special event licenses when he had Parliament provide a special exemption for alcohol service during the Rugby World Cup. Everyone knows that special event licenses would have been possible for those events. But everyone also knows that the police and medical officers of health seem to enjoy layering nonsensical or impracticable conditions onto those licenses. The system is broken and in need of broader remedy.

But the nannying could have been worse, as famed Wellington lawyer-pedant (in the best possible sense of the term) Graeme Edgeler points out.

The Te Awhina Marae dinner is at least going ahead under a special licence. But it is at a Marae. And serving alcohol at a gathering of Māori has its own special difficulties under the Māori Community Development Act 1962, which aims to reduce “unruly behaviour” among Māori.

Getting freedom onto the degustation menu would be rather tasty. And could we have a side order of fixing outdated legislation? 

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