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Insights 43: 18 November 2022
NZ Herald: Matthew Birchall on the fragile lifelines of modern societies
 
Podcast: Christoph Schumacher on the amazing story behind GDPLive
 
Newsroom: Oliver Hartwich on the Eurozone's Catch-22

Too early to say
Dr Eric Crampton | Chief Economist | eric.crampton@nzinitiative.org.nz
The main legislation for the government’s proposed reform of the Resource Management System has over 850 sections and was released only three days ago.
 
Critical parts of the framework are still missing.
 
Former Chinese Premier Zhou Enlai reportedly claimed that it is too early to say what the influence of the French Revolution has been – though he may have been misinterpreted. But it is far too early to say whether New Zealand’s resource management reforms will improve things, make little difference, or mainly bring years of worsened uncertainty in planning and consenting.
 
The legislation specifies eighteen different objectives and sub-objectives.  
 
Many of them sound worthy. But the Bill provides no way of weighing objectives against each other when they conflict. And conflict is inevitable.
 
Cost-benefit analysis and an emphasis on property rights can help in adjudicating across competing objectives. But property rights are as absent from the new legislation as they were from the system it replaces.
 
Guidance on how regional spatial planning should weigh competing priorities under the new legislation will have to wait for the National Planning Framework – yet to be delivered.
 
If the National Planning Framework clearly prioritises housing development, so cities can grow up and out, reform could do a lot of good. If it fails to, then even laudable requirements like doing away with viewshafts and setting corridors for urban growth could be frustrated.
 
It is too early to tell.
 
It’s also too early to tell what some of the current legislation even means.
 
The Natural and Built Environment Bill tells planners to ignore effects on trade competition.
 
Preventing competitors from objecting to each other’s consents and zoning changes makes sense.
 
But it could also force the planning system to ignore a large benefit of liberal zoning rules.
 
The Commerce Commission’s market study into retail grocery urged that plans include enough space for retail grocery that new entrants would have choice of sites. Restrictive zoning hindered competition.
 
Competition’s benefits should count. And not just for groceries.
 
Finally, and at a deeper level, how the game plays out depends on the incentives facing councils. When growth is a benefit to be sought, they will find ways to enable it. When growth is a cost to be mitigated, they will use the system to frustrate it.
 
So are the proposed changes good? Ask me again in a few years. Or at least after the National Planning Framework is released.

Why my moustache is so important (as well as magnificent)
Dr James Kierstead | Research Fellow | james.kierstead@nzinitiative.org.nz
So far, the feedback on my moustache has been mixed. My sister, on a Zoom call from Ottawa, compared me (somewhat oddly) to a capybara. A colleague from the NZ Initiative hinted that I looked better before I started growing it. Another simply asked me, in a tone of weary resignation, ‘Why are you doing this?’
 
The reason I’m doing this is to support Movember, whose annual campaign was launched earlier this month in Parliament at an event hosted by ACT MP Damien Smith. By moving men to mould moustaches, Movember hopes to raise awareness and funds for a number of health issues that particularly affect men, from prostate and testicular cancer to suicide.
 
Of course, there are plenty of health issues that particularly (or even uniquely) affect women, from childbirth to breast cancer. The point isn’t to invite invidious comparisons or provoke pointless competition. It’s to make sure that our society is doing the best it can at providing help where it’s most needed.
 
In New Zealand, although women typically report poor mental health at higher rates than men (and did again in 2021), male deaths by suicide over the past couple of decades have outnumbered female deaths by a factor of between 2.5 and 3 to 1. In 2019/20, that meant we lost 183 Kiwi women in this way and 471 Kiwi men.
 
That reflects trends across the globe. Worldwide, women are more likely to report suffering from depression and anxiety than men. They’re also more likely to attempt suicide. But men die by suicide at between three and four times the rate of women.
 
Male suicide is thus a very serious issue, and something you’d think we'd be watching carefully. But the Ministry of Justice’s media release of provisional suicide statistics for 2021/22 doesn’t even include a breakdown by sex.
 
That’s just one more sign, in addition to the sobering statistics themselves, that the issue of male suicide isn’t getting the attention it deserves. This in a country with an overall suicide rate that’s almost twice that in the US and almost five times the UK’s.
 
And that’s why I’ll be continuing to tailor my ‘tache, at least until the end of the month – that, and the fact that moustaches are magnificent, as well as important.

Who said there was no such thing as a free lunch?
Dr Bryce Wilkinson | Senior Fellow | bryce.wilkinson@nzinitiative.org.nz
We at the New Zealand Initiative are aware of an ill-founded view that we are somewhat critical of our much-beloved government.
 
Of course, this “alternative view” has no merit.
 
Take, for example, Labour’s 3 November list of its 100 achievements since November 2021.
 
On one count 71 of the 100 involved government spending more of our money on this or that.
 
Top of the list was putting a targeted cost of living payment on its credit card. Good thinking. 
 
After all, inflation is up because Government drew so heavily on the RBNZ’s ATM in responding to COVID. The remedy for too much government spending yesterday is obvious - more spending today.
 
The magical thing about the 71 spending items on this list is that they are all good. No one is harmed. Every item is beneficial. Why, otherwise, would it make the list?
 
Why is it magic? Well anytime you or I spend our money we give up something – the chance to spend it on something else. We have to think about that.
 
Government is different. It can and does create more money out of nothing. Today’s government borrowing, like tomorrow’s inflation, is the next government’s problem. What did future generations ever do for us?
 
There is more. Another 21 items in the list use regulations to spend other people’s money.
 
Item 2 on the list is making Matariki a public holiday. Who could object to that? Certainly not public servants. One less workday for unchanged pay.
 
Those malcontents who want to know who is paying for the lost public service productivity should be asking themselves why they think it is lost.
 
Increases in the minimum wage also illustrate the regulatory genre. Those who cannot get work at the higher minimum wage are as magically invisible as are its other costs.
 
If prices go up as a result, the obvious remedy is – you guessed it – a further magically-painless increase in the minimum wage. We have been doing this since 1894. It must be good.
 
The list includes many things that a different government would also have achieved, for example, finishing Transmission Gully and free trade agreements.
 
Given this feature, we should acknowledge Labour’s modesty in excluding sunshine and fresh air from its list of achievements. They are free lunches too.

 
On The Record
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