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Insights 35: 16 September 2016
Our latest report: What's the Catch? The state of recreational fisheries management in New Zealand
Dr Randall Bess discusses What's the Catch? on TV3's Story
Central government's bid to corporatise council assets raises more questions that it answers

What’s the Catch? What the initial feedback says
Dr Randall Bess | Research Fellow |
The launch of the first report on recreational fisheries caused quite a stir. The media sent alarms that decreasing daily bag limits were inevitable, and that we were running out of fish. Also, what cheekiness to blame recreational fishers for fisheries problems; what about the pillaging done by commercial fishers?  

These responses were expected given that recreational fishing is an integral aspect of the Kiwi way of life. But, who wants to contemplate it will increasingly come under threat as the population and tourist numbers continue to grow, unless we do things differently? 

I appreciated Graeme Sinclair, from Gone Fishin’, confirming our concern regarding the impact on recreational fishing should Auckland’s population double in the next 30 to 40 years. He also confirmed that the burden of responsibility for fisheries problems is complicated, and all fishing sectors should plan for more effective fisheries management.

Terry Williams-King, from The Fishing Show on RadioLive, stated his concern about the wastefulness of both commercial and recreational fishers when discarding and high grading. He stressed the importance of everyone doing their part to fix the problems, and the need to look after what we have. 

Terry also stressed the importance of reviewing some recreational fishing rules. He proposed that we do without the minimum legal size for snapper to reduce discarding and high grading, and implement a maximum legal size to protect the large-size breeders that produce the most eggs. He proposed the seven fish daily bag limit should continue in SNA1, and replace the 30 centimetre minimum size limit with a maximum limit of 40 centimetres.

I have repeatedly heard tangata whenua state that protecting large-size breeders, whether finfish or shellfish, is a good sustainable practice. Nevertheless, the Ministry for Primary Industries does not use it. I have been told the reason is to avoid creating markets for small fish, but for whose benefit?

Maximum legal sizes are used in some overseas fisheries. For example, the halibut fishery in British Columbia, Canada, has a recreational maximum legal size of 133 centimetres (head on). The daily bag limit is one per person, and the license restricts each person to six fish for the season.

For the next report, I will travel to the United States, British Columbia, and Australia to research how these nations have addressed similar problems in managing recreational and commercial fisheries – and what we can learn from their experiences. 

Help the poor by fixing housing
Jason Krupp | Research Fellow |
Open the pages of any major newspaper and you will be inundated with reasons why New Zealand needs to tackle its housing affordability crisis. It needs to be fixed to stop bank balance sheets from imploding, to free capital trapped in unproductive assets, or to put that all-important first rung on the housing ladder within greater reach of first home buyers.

How about doing it because it would help the poor? 

This emerged from the latest edition of the Ministry of Social Development’s report on income inequality and hardship trends. Written by Bryan Perry, it is notable for its attention to detail and the use of various sophisticated measures of the issue (which is probably why it has not received much media attention).

A notable point was that in 2015, 28% of households had a high housing-cost-to-income ratio (where the threshold is 30%). That compares to 24% of households in the mid-1990s, and only 11% in the late 1980s. The report notes that the higher this ratio, the more stress households experience.

Unsurprisingly, poor households are hit hardest. Perry’s report shows that in 1988 only 16% of households in the lowest earnings quintile had a high housing-cost-to-income ratio. By 2015 the proportion was 43%.

Quite simply, if helping the least well off in society is a priority, then fixing housing should be the focus. 

This may sound obvious, but it is a point that is often missed. For example, Jonathan Boston and Simon Chapple noted the effect of high accommodation costs on the poor in their book Child Poverty in New Zealand. Their policy fix was to increase welfare payments. 

That might work in the short-term or in a well-functioning property market, but in a supply constrained one like Auckland, all it ultimately does is push property prices higher to the sole benefit of landlords.

A more lasting solution would be to free the housing market from its regulatory fetters so that more houses can be built, a position that the Initiative has long argued. To do otherwise is to materially contribute to the hardship experienced by the least well-off in our society.

A tale of two markets
Dr Eric Crampton | Head of Research |
New Zealand maintained its third place ranking in this year’s Economic Freedom of the World reports, but it’s hardly a place allowing markets in everything. And that can be costly.
This week, The Guardian picked up on New Zealand’s shortage of donor sperm. And the UK’s Adam Smith Institute was pretty quick to see the cause

In 2004, New Zealand banned giving or receiving valuable consideration for providing human sperm or eggs to someone in need of either – on pain of up to a year in jail, $100,000 in fines, or both. At the same time, donor anonymity was taken away. Donors would be identified to the children when they turned 18. 

Result? Donations dried up. 

Being able to find out who your biological father is at age 18 is surely a nice thing. But even nicer is getting the chance to be born in the first place because donors had not been scared away. 

Meanwhile, in Denmark, there was such a surplus that they were turning some donors away. Said Ole Schou, one facility’s director, “There are too many redheads in relation to demand.”

The difference? The Danish fertility clinic could pay its donors. Donors there earned up to 500 Krona. Danish product was then shipped to 65 countries. Schou noted that their redhaired product remained in high demand in Ireland, where it sold “like hot cakes.”

Meanwhile, in America, not only are donors compensated, but there is also wide price dispersion. As of 2010, egg donors could expect an extra USD$2,350 in compensation for every 100-point increase in that donor’s Scholastic Aptitude Test score. For men, a PhD donor’s submission would draw USD$165 more than the discount brand. 

With one small tweak to New Zealand’s legislation, the government could not only fix a very serious problem for a whole lot of desperate couples, but also potentially open up lucrative new export markets. The government might want to protect New Zealand’s dominance in rugby by restricting export of some strategic supplies, but otherwise there are opportunities out there. 

Governments can pretend that incentives don’t matter when they pass legislation like the Human Assisted Reproductive Technology Act 2004. But reality does exist, regardless of legislative wants. And it does come to bite eventually. 

Liberalising this market would do a lot of good. And if we move a fractional point up the economic freedom rankings as consequence, so much the better. 
On The Record
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