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Insights 1: 27 January 2023
Newsroom: Michael Johnston on AI chatbots and educational assessment
Podcast: Eric Crampton and Christian van der Pump on the causes of building 'market failure'
NZ Herald: Matthew Birchall on cautionary tales from the history of our critical infrastructure

Dr Eric Crampton | Chief Economist |
When the government broke for the summer, Prime Minister Ardern told her Cabinet to cut its legislative cloth to suit the government’s election-year capacity.

The government was attempting complex reform of the resource management system, council water infrastructure, and the entire health system. It was also setting up an income insurance scheme while shifting the labour market towards an Australian-style wage awards system. And dozens of smaller but still tricky initiatives.

Doing a limited number of things well might just be better than failing at many things simultaneously.

At the first post-Cabinet press conference after the break, Prime Minister Hipkins announced that the government would focus on measures that might help bring down living costs. Sensibly, he would not get into details before working them through with his colleagues.

There are a few things the government could do this year to help sustainably bring down living costs.

Most importantly, housing costs should have a stronger focus in resource management reform. The Natural and Built Environment Act includes eighteen different outcomes that planners must consider. The National Planning Framework, yet to be announced, should set ample supply of land for development, and housing affordability, as the highest priority. And councils must be provided with the incentives and infrastructure funding and financing tools necessary to help them say yes to new housing.

Moreover, it could adopt measures supported by the Initiative and recently recommended by the Council of Trade Unions: opening up the Overseas Investment Act to encourage more competition, simplifying the use of foreign-sourced building materials, and looking at private building certification as an alternative to council monopolies.

For a more immediate boost, the government could announce a carbon dividend instead of extending the petrol excise holiday. Every dollar the government earns when it auctions ETS credits could, and should, be rebated back to households. It could also index income tax thresholds and undo recent bracket creep while reducing New Zealand’s remaining tariffs to zero.

But with the Australian bookmakers putting Labour’s chances at around 30%, populist measures might be more tempting. Supermarkets were a convenient target in 2022; the government might similarly target the banks as mortgage interest rates rise. Subsidies targeted at politically sensitive groups could be preferred to a broader carbon dividend.

A pared-down legislative agenda is welcome. A government choosing the more sustainable of those agendas would be more deserving of re-election.

Labour’s problematic new blasphemy laws
Roger Partridge | Senior Fellow & Chairman |
Hate speech is back on the Parliamentary agenda for 2023. Justice Minister Kiri Allan’s slimmed down reform proposals are expected to pass into law before the election. Yet her reform is still fraught.
New Zealand’s existing hate speech laws apply only to inviolable characteristics. The protected traits are skin colour, race, ethnicity and national origin.
Allan’s predecessor, Kris Faafoi, proposed adding to these protected characteristics a raft of others, including religious and ethical beliefs, employment and family status, age, sex and gender - and even political opinion.
Faafoi’s reforms floundered when their full implications became apparent.
The prohibition on hate speech applies to speech that is intended to be "threatening, abusive, or insulting" and that is "likely to excite hostility or ill-will against, or bring into contempt or ridicule" any group of people based on their protected characteristics.
Adding “age” would catch a hostile slur like “OK boomer.” Adding “political opinion” would cover insulting and contemptuous comments about political opponents based on their left-wing or right-wing views. “Pale, male and stale” would count as three strikes.
It’s little wonder that neither Faafoi nor the Prime Minister could explain why criminalizing everyday speech made sense.
Allan’s ambitions are much narrower than those of her predecessor. In response to the Christchurch massacre, the Minister proposes merely to add “religious beliefs” to the list of protected characteristics.
Yet even this narrower reform is ill-conceived.
To understand why, you need only think back to the sad case of Israel Folau. The former rugby star’s career as a Wallaby came to an end following a repugnant tweet. Folau infamously claimed that a long list of “sinners,” including homosexuals, faced hell unless they repented.
Folau is an evangelical Christian. His views reflect scripture. And his religious beliefs command him to spread the word.
Not surprisingly, Folau’s evangelizing was widely condemned.
Yet to anyone sharing Folau’s religious beliefs, the condemnation was insulting. It consigned their sacred views to the dustbin, as those of a less tolerant age.
The criticism was also undoubtedly intended to excite ill-will towards Folau and those who share his views. Not to mention bringing them into contempt or ridicule.
Allan’s reform proposals will criminalise Folau’s critics. Are new blasphemy laws really what the Minister of Justice wants?

This one takes the cake
Dr James Kierstead | Research Fellow |
Going public with a complaint against your employer is always difficult. But enough is enough. And what better place to do it than in the always-serious Insights 3 column?

Susan Jebb, the head of the UK’s Food Standards Agency, has spoken out against that gravest of office dangers: colleagues who bring cake in to share. ‘If nobody brought cakes into the office, I would not eat cakes in the day,’ Jebb said, ‘but because people do bring cakes in, I eat them.’

I am sorry to declare, in the light of Jebb’s comments, that the New Zealand Initiative is an unsafe work environment. On several occasions, I have been offered croissants, muffins, and even pains au chocolat. A few times I was even openly offered slices of cake – and by colleagues who must have been aware of my inability to say no to a gateau.

As Jebb has pointed out, this is comparable to being forced to go into a smoke-filled pub. As she told The Times, passive smoking inflicts harm on others, ‘and exactly the same is true of food.’

Luckily, Jebb’s comments didn’t stop there. Because cake-filled environments like the New Zealand Initiative’s offices are implicated in wider systems of oppression.

As Jebb said, ‘at the moment we allow advertising for commercial gain, with no health controls on it whatsoever.’ Because of this ‘we’ve ended up with a complete market failure because what you get advertised is chocolate and not cauliflower.’

She’s right. I can’t remember a single advert for cauliflower. Nor, in our society, do we give boxes of individually-wrapped cauliflower to our Valentines. But why not?

It can’t, obviously, be that people get more enjoyment about some things than others, and that making your own mind up about what you’re going to enjoy, and in what measure, is part of the joy of being part of a free society.

The last thing we would want to do, of course, is to organize a whole economic system around that idea.

The advertising of junk food is, to quote Jebb one final time, ‘undermining people’s free will.’ What we need to do, and fast, is to crack down on the office profiterole-profferers and Schwarzwaldkuchen-suppliers and put an immediate ban on all advertising of nice, tempting things.

Only then will be truly free of the scourge of office cake.

On The Record

Initiative Activities:   
All Things Considered
  • Graph of the week: Inflation looks worse when you exclude energy and food. So stop blaming war and bad weather for high inflation
  • Josie Pagani: Why ‘Wellbeing’ is hurting us
  • NZ’s medical licensing system is still a major hurdle for desperately needed foreign-trained doctors
  • Ira Glasser on why even hate speech is free speech
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