That all houses be bomb shelters and also be made of gold

It really isn't all that puzzling why Councils run such pedantic building consenting rules if they're on the hook for all the downside costs if anybody doesn't bother getting a building inspection report later on.

Here's the NBR's Victoria Young:

Auckland Council says it has reservations over a High Court decision which means it has to pay $25 million to leaky building owners.

Claims manager Sally Grey says the decision is “complex and lengthy” and the council will take time to consider an appeal.

Justice Murray Gilbert ruled substantially in favour of apartment owners in the Nautilus apartment building case.

The lawyer who took the suit, Tim Rainey, says Auckland Council will be left with the bill as other defendants in the case have been relieved of liability or are unable to pay.

Read the whole thing. Fixing liability here and legislating around the Supreme Court ruling on leaky buildings might be important.

Sheep guts

Exciting new developments over in the Ag Sciences area: new compounds to cut livestock methane emissions.

This week researchers at the New Zealand Agricultural Greenhouse Gas Mitigation Conference announced that they had identified several promising compounds which could cut livestock emissions. The compounds inhibit the activity of methane-producing bacteria that live in the gut of sheep and cows.

Speaking to Radio New Zealand, Agresearch Principal Scientist Dr Peter Janssen said the results so far show impressive reductions in two-day trials in sheep.

“These initial steps are relatively short-term trials in sheep and they show that you get a reduction of methane between 30 to 90 per cent,” he said. “It’s a very exciting result but there’s still a lot of checking to be done before you actually get something that a farmer can use safely.”

Now if this pans out, the New Zealand government should consider releasing the technology for everybody in the world to use, as New Zealand's substantive contribution to the fight against greenhouse gasses.

If high-end methane reductions maintain, New Zealand on net very likely will have done far more good in reducing agricultural methane than it could have done with a $30/tonne carbon charge.

I'd written:

If everyone in the world were doing carbon trading or carbon taxes, we'd want to as well. But, realistically, if New Zealand were to disappear into outer space tomorrow, it's pretty unclear that the entire abolition of New Zealand's net greenhouse gas emissions would do much on aggregate warming outcomes. Maybe we'd delay the onset of any particular level of GHG accumulation by a half day over a century. In that case, New Zealand could perhaps do better by picking high variance plays despite their lower expected mean. Pour money into biotech research for low GHG pastoral systems and give the resulting technology away to anybody who wants to use it. Lower expected returns, but if it pans out, it could reduce GHG emissions by a heck of a lot more than NZ could achieve on its own via domestic incremental reductions in carbon or methane emissions.

Some lotto investments are worthwhile.

Dairy costs?

No, the external costs of dairying in New Zealand are nowhere near either dairy's export earnings or dairy's contribution to GST GDP [my typo, sorry].

A peer-reviewed study authored by Massey University scientists has claimed that worst-case scenario costs to society from environmental harm caused by farming could equal the economic benefits of the dairy industry, creating a "zero-sum" situation for the country.

However, the paper, titled NZ Dairy Farming -- Milking Our Environment for All Its Worth, has come under heavy criticism by economics academics approached by the New Zealand Herald today.

...
Their analysis stated that in a worst case scenario, using the limited number of impacts valued, the costs to society were approximately equal to the export revenue and GDP.

"In other words, the industry is a zero-sum gain for New Zealand if the costs are included," Dr Joy said.

The authors reported that the estimated cost of some environmental externalities surpasses the 2012 dairy export revenue of $11.6 billion and almost reached the combined export revenue and dairy's contribution to GDP in 2010 of $5 billion.

...
But academics have questioned the study's methodology and findings.

"The report does a good job in identifying some of the environmental harms from dairying, but, at least on a first reading, does not provide a reliable estimate of the value of those harms," said Dr Eric Crampton, head of research at the New Zealand Institute Initiative [correction added].

He believed some of the tallied costs used in the calculations -- such as harm a farmer might do to his or her own pasture through soil compaction where stocking rates were too high -- should have never been considered "external" costs, while other costs appeared "over-estimated".

"The high-end estimates of the costs of nitrogen leaching, estimated at over $10 billion, seem to assume we would need to remediate all water in New Zealand to a drinking water standard -- however, very few sites currently exceed nitrogen standards for drinking water."

Dr Crampton also took issue with the upper-bound cost of the second largest cost component factored into the report, national dairy greenhouse gas emissions, which was put at over $3 billion.

"But that figure cannot be relevant for policy without considering relative greenhouse-gas intensity of dairy production in different countries and without considering the alternative uses to which dairy land would be put if it were not in dairying -- and especially where the paper notes that dairy makes up half of New Zealand's agricultural emissions," he said.

"If every dairy cow in New Zealand disappeared, we would see more cows elsewhere and more beef and sheep production here. The net effect on greenhouse gas emissions is not particularly clear.

"Finally, the paper suggests that demand for New Zealand dairy product could be cut in half were New Zealand's agriculture viewed abroad as being less than clean and green.

"But estimated high-end costs of over $500 million should be accompanied by a clearer picture of how much worse things here would need to be before exports were really at risk."

Professor Frank Scrimgeour, director of the Institute for Business Research at Waikato University, slammed the research as "sloppy" and argued its bold claims could not be substantiated.

"The authors do not do any original data collection, estimation or modelling," he said.

"They synthesised existing data without ensuring that measurements are consistent through space or time.

"Foote, Joy and Death are right that there needs to be holistic conversation in New Zealand regarding performance of the dairy industry but papers like this do not enhance the conversation."

University of Waikato professor of agribusiness Jacqueline Rowarth said it was "naive" to expect water quality in waterways could be restored to drinking water standards, and she noted people reading the study needed "to consider alternatives and relativities".

"This sort of research doesn't actually get us anywhere, and that's disappointing."

It's nice when news outlets ask economists for comment on "cost of" studies rather than just copying the initial press release.

I expect there's a good case for further investigation of nutrient management regimes like the one in place around Taupo; working out a pricing regime for water extraction rights could also be well worthwhile. But $15 billion in external costs, including costs dairy farmers might impose on their own paddocks through soil compaction? Nah.

Update: the study is here.

Difficulties in Kaldor-Hicks compensation

Tyler Cowen's right: the TPP will be great for poor East Asian countries like Vietnam, who would get both improved access to American markets and stronger domestic liberalisation.

Here is an assessment from the Peterson Institute that Vietnam will be the biggest gainer from TPP.  Do you get that, progressives?  Poorest country = biggest gainer.  Isn’t that what we are looking for?  And if you are a deontologist, Vietnam is a country we have been especially unjust to in the past.

Yes, I am familiar with the IP and tech criticisms of TPP, and I agree with many of them.  But if you add those costs up, in utilitarian terms I doubt if they amount to more than a fraction of the potential benefit for the ninety million people of Vietnam.  TPP is more of a “no brainer” than a close call.

Most generally, one of the big dangers today is “The Great Unraveling of Globalization.”  Is the passing or the striking down of TPP more likely to contribute to that trend?  People, you are allowed only three guesses on that one.

Tyler's writing for an American audience, where TPP opposition is concentrated among the anti-trade left. But that's not the only source of opposition: some foreign opposition comes from the silly IP and tech provisions, though we won't really know what's all in there until the full deal is released.

New Zealand, as best we understand things, has been working hard to ensure that American copyright interests not appropriate too substantial a share of the gains here at stake.

I don't get what's going on in the US domestic politics on this one. The deal is important to Obama, not just for the good economic reasons but also for the geopolitical "maintain US relative influence in the Pacific" considerations. The deal will produce a fair bit of surplus, both in the US and elsewhere. There seem to be some side-payments to US labour interests in mandating environmental and labour standards; the budget for American domestic side-payments is a bit leaner than it could have been where there are big chunks carved out for Hollywood - which also annoy a bunch of the potential trading partners. Maybe it's just harder to put together a package that appropriately divvies up sidepayments where negotiations drag on for years and years.

I still think NZ does better in being prepared to walk away from the whole deal and try for an alternative Pacific free-trade area that leaves the US out if the copyright provisions would block parallel importation or commit New Zealand to other absurdities.

All your health is belong to us

If the one paying the piper calls the tune, be careful who you let pay for dinner.

Britain's NHS is considering rationing healthcare by a measure of deservingness. Here's The Guardian:

The NHS plans to dramatically increase rationing of patients’ access to care and treatment in an effort to balance its books, a new survey of health bosses reveals.

Almost two in five of England’s 211 clinical commissioning groups (CCGs) are considering imposing new limits this year on eligibility for services such as IVF, footcare and hip and knee replacements.

Smokers and those who are obese will be among those denied surgery and other treatment, according to a survey of 80 CCG leaders conducted by the Health Service Journal, in an extension of the controversial policy of “lifestyle rationing”.

So. We get tobacco excise taxes to defray the health costs of the public health system. You cannot opt out of the NHS but through the costly route of paying for NHS through your income taxes and excise taxes and then paying separately for private health care. Then smokers could be denied service because of the smoking.

Meanwhile, more paternalism's being rolled into welfare services. There are pretty reasonable justifications for targeting paternalism towards those who've demonstrated a need for extra help in financial planning. Plus, a strongly paternalistic approach could have similar effect to the kind of separating equilibrium that Mill talked about. But it's still not a nice call. If you've been stuck in a crappy school and then disemployed by minimum wages above your marginal product, you then get choice taken away from you on more of the remaining margins.

Now think about Guaranteed Income Proposals. I wonder what private behaviours would become of public regulatory interest when we all reckon not only that the neighbour is doing something we don't like, but that we're helping subsidise him to do it.

Cycling benefits?

So, would a new $156 million Christchurch cycleway really provide an 8:1 benefit to cost ratio? Here's Lois Cairns at The Press:

A $156-million Christchurch cycleway plan is under attack from two economists, who say the city council could buy new cars for every convert to cycling for the same amount of money.

University of Canterbury finance professor Glenn Boyle and PhD student James Hill have analysed the Christchurch City Council's business case for the major cycleways programme and say it is "excessively optimistic".

Boyle said the 18,000 increase in cycling trips expected as a result of the new cycleway network roughly translated into an additional 9000 people cycling. For $156m, the council could buy all those people brand new Suzuki Altos. 

"Every Christchurch household is faced with an average bill of at least $1100 in present value terms for facilities that are predicted to only attract a relatively small number of cyclists, will result in more cyclist accidents and deaths, have at best zero impact on congestion, and yield highly uncertain health benefits," the pair said.

The cost of building Christchurch's proposed major cycleway network has jumped in price from an original estimate of $69m to $156m but a business case presented by the council earlier this year claimed every dollar invested would give a $5 to $8 return. 

Boyle and Hill studied the assumptions those figures were based on and have concluded the likely return was almost certainly less than $2 and probably less than $1.

Boyle and Hill's paper is here. A couple fun bits:

• The original cost-benefit analysis depended on a 40% increase in real fuel costs. Maybe that would happen if we had a large and sustained depreciation in the NZ dollar, but nobody's betting on that right now.
• The time savings estimates amount to 6 seconds per trip, but those are aggregated up to being worth $316m; Boyle and Hill dismiss these as too small to matter. On this point, I'll thank Julie-Anne Genter for having pointed me to Metz last year.

I like this part of the executive summary:

The overall prognosis looks grim. Every Christchurch household is faced with an average bill of at least $1100 in present value terms for facilities that are predicted to attract only a relatively small and insignificant number of new cyclists, will result in more cyclist accidents and deaths, have at best zero impact on congestion, and yield highly uncertain health benefits. At current expected capital costs and cycleway uptake, it would be cheaper to provide every projected new cyclist with a Suzuki Alto.

I still would love to see a cycleway from New Brighton along the abandoned Avon River through to downtown, but not at any price.

For a contrary view on Boyle and Hill's work, Cairns has this:

University of Canterbury geography professor Simon Kingham said he had read Boyle and Hill's research and believed they had gone into it determined to pick holes in the business case.

I tend to think that Christchurch could use a few more people willing to pick holes in shonky business cases.

Utilitarian abortion

Bryan Caplan asks:

Pro-life utilitarians are very scarce.  A philosophy professor recently told me that he knows of zero pro-life utilitarians in the entire philosophy profession.  

This is deeply puzzling.  While I'm not a utilitarian, the utilitarian case against abortion seems very strong.  Consider: Even if a pregnant woman deeply resents her pregnancy, she is only pregnant for nine months.  How could this outweigh the lifetime's worth of utility the unwanted child gets to enjoy if he's carried to term?  

I expect it hinges on your model of whether abortion simply changes the identity of which children a woman bears or the number of children that would be born.

I don't have any strong priors on which is true on average, but in some cases it would simply be a shifting in timing of births where a woman intends on having a family of fixed size and isn't ready yet to start it. In those cases, and where the woman has reasonable expectations that a child later would be happier than a child now, pro-choice utilitarianism makes a lot of sense.

If instead we're considering options where the number of children isn't fixed and where abortion reduces the number of kids who get to be born, then Bryan's puzzle holds - but doesn't utilitarianism run into trouble where n isn't fixed?

20 years ahead

New Zealand filmmaking inspires Canadians. Here's the Winnipeg Free Press's Randall King:

At the newly launched Bandwidth Theatre on the corner of Sherbrook and Ellice, a new film from New Zealand has the potential to show aboriginal Canadian filmmakers the way.
Since it opened late in 2014, the Bandwidth has been playing an assortment of movies, from low-budget horror to high-minded documentaries. But as it's connected to the Adam Beach Film Institute, it also has an agenda, under the stewardship of founding partners Beach, producer Jim Compton and filmmaker Jeremy Torrie, to inspire young filmmakers, especially young First Nations filmmakers.
In that capacity, The Dead Lands is not just an exciting movie, it's a fine example of how an indigenous culture can tell its stories on film, Torrie says.
"The Maori are 20 years ahead of us as far as cinematic storytelling," Torrie says. "We absolutely should be seeing these kind of films here. We've got all these great locations. The problem is they've had the opportunity to make films; we've not had that opportunity."

The story notes that Torrie's writing a Canadian adaptation of Once Were Warriors.

"In New Zealand, they have a much greater budget with their equivalent of Telefilm Canada, the New Zealand Film Commission," Torrie says. "They also have a language fund in Maori, that organization has been around for 15 years or more and they've become another important equity source for Maori film, whereas we can't do that yet. There's a lot of institutional barriers."

Always interesting to note how other countries see what goes on here.

One cringey and wrong bit, though:

In New Zealand, the remnants of Maori tradition are primarily visible to the world in rugby matches, where the national team, the All Blacks, perform the haka, a dance designed to terrorize opponents, going back to warrior tradition.

The haka would be the bit known outside of New Zealand. Inside of New Zealand, well, it's a bit more than that.

HT: Mom.

A new eating disorder

Paul Henry's show this morning highlighted Orthorexia Nervosa: an eating disorder characterised by an obsession with healthy eating.

I'd not heard of it before.

I'm far more familiar with its hitherto unnamed, and more serious, cousin. I'll call it XenoOrthrexia Nervosa: an obsession with other people's healthy eating.

It seems endemic in the Anglosphere countries. Can't we get these poor souls the help they need to relax about other peoples' diets? In its extreme form, it's even been associated (in film) with starting nuclear wars.

Empty houses?

Metro Mag ran a feature on empty houses in Auckland, pointing a finger at empty houses with overseas owners as a cause of Auckland's skyrocketing housing cost.

In Auckland, more than 33,000 houses were registered as unoccupied in the most recent data from 2013. A breakdown shows about a third had residents away. The remaining 22,152 properties are listed as empty.

Who owns them and why no one lives there is information that’s not readily apparent, although ask around and you’ll hear all sorts of theories – from land banking by foreign investors who see New Zealand as a bargain-priced bolt hole to families future-proofing their children’s education by buying a second house in a desirable school zone.

Whatever the real story, it’s not that the owners (or tenants) just happened to be out when the collectors knocked at the door. Census workers are given clear criteria on the various definitions of an “unoccupied” house and need evidence no one lives there (the appearance of the property, talking to neighbours) before it’s officially classified.

The rest of the article is pretty heavy on anecdote. Little of it made sense to me: why would you forgo rental earnings in a house you'd decided to buy as an investment or bolt-hole? Maybe legislation being too tenant-friendly could do it, but it seemed odd.

So I checked the figures. From Auckland Council's report on the 2013 census.

2.3 Very small increase in number of unoccupied dwellings 

There was almost no change in the number of unoccupied dwellings in Auckland between 2006 and 2013 – the number increased by only 30 to a total of 33,360 across the region. This was a significantly smaller increase than the previous inter-censal period, when the number of unoccupied dwellings had increased 3,744, or 12.7 per cent, and was also significantly smaller than other regions across New Zealand.

This could be a reflection of the housing shortage in Auckland at a time of economic slow-down and a contraction in the construction sector.

In 2013, the local board areas with the highest number of unoccupied dwellings were:

• Rodney - 4,185 unoccupied dwellings
• Waitematā – 3,696
• Hibiscus and Bays – 2,274
• Franklin – 2,055
• Orākei – 1,929

A third of unoccupied dwellings in Auckland (33.6%) were due to the residents being away, while two thirds (66.4%) were empty. The five local board areas with the highest proportions of empty dwellings were:

• Great Barrier – 87.4 per cent of unoccupied dwellings were empty (396 empty dwellings)
• Rodney - 80.6 per cent (3,375 empty dwellings)
• Waiheke – 73.4 per cent (1,323 empty dwellings)
• Ōtara-Papatoetoe – 73.0 per cent (615 empty dwellings)
• Franklin – 72.8 per cent (1,497 empty dwellings)

If the number of unoccupied houses increased by 30 from 2006 to 2013, the proportion of unoccupied houses would have dropped significantly. Further, if there are about 470,000 dwellings in Auckland and about 22,000 were unoccupied at the time of census, that's under 5%. That's not really inconsistent with houses being empty during sale or between tenancies, is it?

How can a decreasing proportion of empty-on-census-night houses be the cause of increasing housing costs in Auckland?

Theories about Conspiracy theories

Four nationally representative survey samples collected in 2006, 2010, and 2011 indicate that over half of the American population consistently endorse some kind of conspiratorial narrative about a current political event or phenomenon and that these attitudes are predicted by supernatural, paranormal, and Manichean sentiments. These findings suggest that conspiracism is not only an important element in American political culture, but also is expressive of some latent and powerful organizing principles behind American mass opinion.

So say J. Eric Oliver and Thomas Wood in the AJPS, in an article I missed when it came out last October.

Read this table and weep.

TABLE 1 Percentage of Americans Agreeing with Various Conspiracy Theories, 2011
Conspiratorial Narrative	Heard Before?	Strongly Agree	Agree	Neither	Disagree	Strongly Disagree
The U.S. invasion of Iraq was not part of a campaign to fight terrorism, but was driven by oil companies and Jews in the U.S. and Israel (Iraq War)	44	6	13	33	22	27
Certain U.S. government officials planned the attacks of September 11, 2001, because they wanted the United States to go to war in the Middle East (Truther)	67	7	12	22	18	41
President Barack Obama was not really born in the United States and does not have an authentic Hawaiian birth certificate (Birther)	94	11	13	24	14	38
The current financial crisis was secretly orchestrated by a small group of Wall Street bankers to extend the power of the Federal Reserve and further their control of the world’s economy (Financial Crisis)	47	8	17	38	20	17
Vapor trails left by aircraft are actually chemical agents deliberately sprayed in a clandestine program directed by government officials (Chem Trails)	17	4	5	28	21	42
Billionaire George Soros is behind a hidden plot to destabilize the American government, take control of the media, and put the world under his control (Soros)	31	9	10	44	16	21
The U.S. government is mandating the switch to compact fluorescent light bulbs because such lights make people more obedient and easier to control (CFLB)	17	4	7	24	24	41
Note: N = 1,935 cases.
Source: Modules of the 2011 Cooperative Congressional Election Surveys.

Table 3 is even worse: 27% believe we're in End Times; 33% believe in ESP.

All that's left is figuring out how to do away with Manichean dualism and superstition; education seems to be the strongest preventative measure, along with having political knowledge.

Or maybe that's just what they want us to believe.

Really, all the voting boxes are rigged and that the Illuminati are not only making sure your vote won't count but also keeping track of how you vote? Haven't you noticed that the chemtrail planes are concentrated in areas where your preferred party's support is undercounted because of the Illuminati? Think about it. Voting's dangerous. Chemtrails.

 

Harden up, Auckland Uni

Ok. So an Auckland University security expert, Bridgette Sullivan-Taylor, thinks we need bag checks at shopping malls and basically wants to import to New Zealand every dumb knee-jerk bit of the security state I moved here to avoid. She writes:

So how might this affect New Zealand consumers? Hardening or toughening soft targets could mean that if you are going to the mall, you might have your bag checked at the entrances, and there might be restrictions on how long you can stay in the carpark. Employees might require security passes, and purchases might be checked on leaving the mall.

If you're going to the cinema, there could be more security screening, including bag-checking machines. You might see more CCTV or facial recognition software being used inside the mall and in carparks that are watching all your movements. Security or police staff might ask for proof of identification, carparks might be occasionally restricted directly under or on top of the mall, and we might see more information in the media informing customers about raised security threats at particular locations.

I have a proposal.

The real soft underbelly in New Zealand isn't the shopping mall, it's Auckland University itself.

Think about it. Universities have been targeted by extremists in Africa, and American universities keep being targets for shooters. You have tons of people walking around with backpacks all the time, many of whom seem to make a point of looking suspicious just for the sake of it. It would be really easy for a terrorist to blend in, plant backpack bombs all over campus, then watch the mayhem. Plus, there's all those risky international students from suspicious places.

And so I propose that we completely lock-down Auckland University. Every person going into or out of the campus should pass through a metal detector, those "see you naked" scanners, the TSA air-puff sniffer things, and have thorough backpack checks. If it takes an hour to clear security to go to class, that's not really that big a deal as compared to the huge losses we'd suffer without that kind of security, in some folks' fevered imaginings. Lots of cameras too, everywhere, on the Auckland Uni campus. And every car parking on campus should have to have extra checks to make sure it isn't a bomb too.

Plus, the Auckland Uni chemistry building should have extra hardened security in case anybody decides it's easier to build a bomb on campus using standard chem kit than to bring one in.

Everything that Bridgette Sullivan-Taylor wants to impose on Auckland shoppers should be imposed on Auckland University staff and students, double-hard.

I further propose that we only do this at the University of Auckland as a test. If we find that there are then terrorist attacks at the other universities, that will be evidence that we need to roll out protections more broadly to the other universities. Why roll it out everywhere until we know?

Disclosure: I maintain an adjunct senior fellowship with the University of Canterbury. That Canterbury's Economics department would potentially benefit from any exodus of students from Auckland has not affected my analysis here. Surely, if security is as important as Bridgette Sullivan-Taylor thinks, students would be running from dangerous Canterbury to Auckland anyway, so this really probably hurts my quasi-interests. Right?

GST at the border

Bronwyn Howell kindly walked me through what seems the least hassle-ridden way of collecting GST at the border (other than Seamus's proposal): offload it onto the domestic end of the good's shipment. The mechanism, if I understand it properly, would work as follows, with all confusions being mine.

When you order something online from a foreign shipper, they have to get it to you. Whoever they're using for the international leg has arrangements with a domestic shipper to get it to your door. And there aren't that many courier companies running the domestic side of things here, plus NZ Post.

On the local delivery agent getting a heads-up that a package is on its way, it would also have to get a heads-up on the goods' stated value. The delivery agent would then be liable for GST on the shipped item.

That agent would then contact the recipient of the good seeking payment - when you order something online, you're giving them an email address anyway. When you get the email, you'd go to another website to pay the tax so that the shipment could get to you immediately on landing in NZ. If you don't get around to doing it before the product gets here, or if it gets lost in your spam filter, you'd have to pay the courier when the item gets to you or pick it up from the courier office and pay there. In a competitive shipping market, we'd expect the shippers to figure out easy ways to facilitate payment, like keeping your credit card details on file (if you agree) so that you can be automatically billed for any future GST charges without having to get an email.

So, in a best-case world, if you'd already paid GST once through that shipper and hadn't changed credit cards since, you'd just get an email noting that the shipping company was going to charge your card GST on a shipment that's coming through, with opportunity for you to object if something didn't make sense.

That would be pretty hassle-free, after the initial hassle of having to set up accounts with the different shippers.

I note, though, that UPS in Canada always managed to charge us about $40 for the service of paying the duties and tax on our behalf at the border. Note that these fees are over and above any actual taxes collected. One hopes that New Zealand's domestic shipping industry is sufficiently competitive that that wouldn't happen here, but I doubt that the shippers would agree to become tax collectors for free either.

I also wonder whether the process might provide a mechanism for griefing shippers and others, if anyone were so inclined: ship a thousand envelopes each with a very high customs valuation for a photocopied picture inside to a bunch of unwitting recipients. The automated systems would either charge them automatically for the GST on something they'd never ordered, or would trigger collection and confusions, or would require the shipper to send back the envelopes while explaining to Customs that no GST was collected on the items. Maybe there are no griefers out there who'd try it though.

We're then weighing up the transaction-deterring hassle costs (albeit perhaps smallish in this case), combined with the extra cost imposed on consumers by turning the shipping companies into tax agents, against the allocative efficiency gains from removing a tax distortion and the prevention of the erosion of a part of the tax base. And, at the same time floating around in the background, the expectation that if the system does wind up doing too much to deter consumer-led parallel importation, domestic retail prices would likely go up proportionately.

The system seems worth IRD's investigation. But assessing the benefits of it really shouldn't begin with the numbers in the ISCR report commissioned by BooksellersNZ. The report has a lot of good stuff in it - it's where I saw the scheme noted above, and why I got in touch with Bronwyn.

But the report does have a few ...issues.

1. The report gives, as one option, requiring foreign sellers to register with IRD. While I can buy that a lot of large online retailers would find it worthwhile to sign up to the kind of multilateral system they describe, I doubt that that is also true for lots of the smaller online US retailers. For many of them, any international shipping already seems a hassle: that’s one reason YouShop was set up, right? To forward on packages from US retailers who don’t want the hassle of international shipment?


2. The report suggests that, under the system where foreign firms would register with IRD, local firms would have to pay taxes to the US on shipment there through some OECD coordinating mechanism. But wouldn’t that kind of system, for shipping to the US, be next to impossible absent the US sorting out its mess of local sales taxes? I mean, they’ve not yet been able to sort things out for internet sales taxes within the US; there was some talk a couple years ago about having a set of states that agree to a reasonably common base also agree to collect sales taxes for each other, but I don’t think it’s gone anywhere, has it? There are thousands of local taxing jurisdictions in the US with really divergent rules over, for example, what precisely counts as an ice-cream sandwich (and what doesn’t) for sales tax purposes.


3. They suggest a few methods for evaluating whether shifting the regime would be a good idea and argue that a social welfare maximisation approach is strongly preferable to a government-centric approach in calculating the appropriate de minimus value or in setting other parts of the collection regime. I agree, but have a couple of worries on this front.


1. Absent a system that is able to collect these fees pretty seamlessly, from the consumer’s perspective, we need to watch for spots where we might impose fixed costs on purchases from abroad that do not obtain for shopping domestically. For example, it seems likely to be pretty distortionary and welfare-reducing if customers are deterred from buying from abroad because of a few days’ processing lag at the border, or because of a requirement to go pick up the item at a NZ Post Office across town and there pay the duties, or an additional step when shopping requiring you to go buy a customs stamp from a Customs website.


2. There's no note of that easy ability to parallel import from abroad can serve as substantial constraint on price-setting in domestic retail markets. That magnifies that harm that could be done if we unduly deter customers from using foreign shopping options due to expected hassle-costs. Sure, it's a second-best-worlds consideration, but we'd need some accounting for it in a social-welfare-maximisation setup.
4. I’m really not sure that the elasticities they're using from Einav et al, for example, would really apply here - they're there used to estimate how much change there would be to shopping patters with the 15% GST being applied on international low-value purchases based on tax elasticities across US states. Shipment from different US states, from the point of view of the consumer – there’s really not much difference other than price. Whether you buy in-state or from out-of-state, you’ll have whatever you ordered in 2-5 days. Here, that’s not quite so: domestic shopping is far more immediate than shipping in from abroad. Since they’re not nearly as close of substitutes for one another, the price elasticity of demand between foreign and domestic should be lower, right? Further, because the NZ market is much thinner, there are plenty of products you just can’t get here: again, this lowers the expected price elasticity and means that you might be overestimating the effects of the de minimus thresholds.


1.  On this one, I’m really willing to put money on it with any of the authors. If a seamless collection of 15% GST at the border is implemented, I am willing to bet that the decline in demand for Book Depository in New Zealand is less than 20% (they predict 45-60%). It’s range of products and ease of getting the books that’s driving demand for Book Depository, as well as price differences well in excess of 15%; an extra 15% charge is trivial – or at least that’s my bet. But only conditional on shipment’s being seamless. I’m more than happy to bet that you could kill demand for Book Depository by making it a hassle to receive shipment.


5. I am curious that they're counting as benefit the jobs that would be created in New Zealand subsequent to deterring imports by imposing substantial delays on importation. Mightn’t we need some modelling of whether those workers would be drawn from other actually productive sectors? It looks to me like we’d be imposing large and real costs here to effect a transfer from domestic consumers and foreign retailers to domestic retailers. Some accounting for the elasticity of domestic prices with respect to degree of foreign competition also seems likely to be relevant.


6. I was interested in their choice of counterfactual at the end where they invite the reader to imagine the benefits of a $5k tax-free threshold if only we could lower the de minimus threshold. Do they believe that this is the relevant counterfactual? Really?

In particular, I was very surprised to see this line in a report that had either Bronwyn's or Norm Gemmell's name on it:

“This enhanced demand at domestic retailers not only results in increased producer surpluses, but firm growth leading to increased employment. Jobs created by a reduction in the de minimis threshold increase the economy’s productive capacity, clearly benefiting the rest of the country. Enhanced domestic employment results in increased consumer spending, and through the multiplier effect, enhanced growth throughout the economy.”

Emphasis added. Jeez.

Deadweight costs and ACC

This week's Initiative column at Interest.co.nz takes on deadweight costs and ACC. A snippet:

Andrew Little is right to be worried about the deadweight costs of this tax. The extra 0.33 percent that workers and firms pay in ACC levies would be better left in employer and employee pockets.



The Infometrics analysis uses standard Treasury methods where raising a dollar in tax is assumed to cost the country $0.20 over and above the value of the raised dollar: $0.20 in ‘deadweight’ costs, as economists put it. These are not primarily the administrative costs of collecting taxes but rather the costs the economy faces when a payroll tax makes employees more expensive for employers and makes employment less rewarding for employees.

An extra 0.33% in payroll tax will not be a make-or-break issue for most employees or employers, but would be enough to kill just under 600 jobs in a country with just under 2.4 million employed persons. As Little warns, excess taxation by ACC “costs jobs and growth and holds New Zealand back.”

...
But while we are considering changes to ACC to avoid the 0.33 percent excess tax, we could perhaps consider more ambitious changes. In particular, does New Zealand really need strongly prescriptive workplace safety rules if ACC premiums are set correctly? ACC offers reasonable discounts and penalty rates based on firms’ claims histories, with additional discounts for complying with best practice standards in safety.

The New Zealand Initiative’s Dr Bryce Wilkinson provided back-of-the-envelope indicative calculations thatthe additional costs of more stringent scaffolding regulations alone could be of the order of $180 million. If ACC has its levies set correctly, construction companies (and others) would already have strong incentive to provide a safe work environment, and could tailor their safety practices to reduce accidents by whatever method is most cost-effective in their particular situations rather than having to comply with standards that might not always be fit for purpose.

If Little could ensure that ACC gets its pricing right, and uses that mechanism to help ensure worker safety rather than prescriptive standards, the benefits to the economy could be much greater than the savings from reducing the average ACC levy from 2.16 percent to 1.83 percent.

RBNZ on Housing

I knew that Mike Reddell's now being free to blog on monetary policy and the RBNZ was going to be good.

Here's Reddell's take on the Deputy Governor's statements on housing.

We should expect the Reserve Bank to provide in-depth analysis to back its claims around the housing market.  But in a 19 page speech, only five paragraphs are devoted to the “housing pressures are a threat to stability” section.  And if not everything can elaborated in a speech, we might expect to see links to recent Reserve Bank research in the area – but there are no such links, and not even references to the issue of the Bulletin published only a few weeks ago which cited international research suggesting that housing mortgage loans have rarely played a major role in systemic banking crises. Issues of the Bulletin are generally regarded as speaking for the Bank, so it might be useful for the Bank to clarify just where it stands, and why.  New Zealand might be different, but if so why does the Bank think this is likely?   Perhaps the Bank can point us to countries in which private sector credit growth of around 5 per cent per annum, from starting levels of PSC/GDP that are still materially below the peaks reached 7-8 years ago, have led to serious threats to financial system soundness, or even to wider economic stability.

The Deputy Governor has been consistently reluctant to engage with the proposition that any financial stability risks must have been much greater in 2007 than they are now.  In the years leading up to 2007 we had seen:

• Very rapid nationwide growth in real house prices, on a scale not seen previously in modern New Zealand history
• Very rapid growth in credit and credit-to-GDP, on scales consistent with some of the international indicators that have been taken as suggesting heightened risk of crisis.
• Much lower overall bank capital ratios (actual and required)
• A move (in the adoption of Basle II) towards lower risk weights on housing.
• A long-running period of economic expansion and consistently high levels of optimism
• High levels of real investment in housing
• Rapid growth in commercial property and farm prices, and in the associated stocks of credit.

All of which was followed by one of the nastier recessions New Zealand has seen in the post-war period, and a double-dip recession in 2010.  GDP per capita (real and nominal) settled onto a much lower track than had previously been expected – so that many borrowers’ income expectations proved to be quite severely disappointed.   

Nominal house prices did fall during the recession, and by more than the Reserve Bank projected at the time.  And yet with all these factors, the soundness of our systemic institutions was never questioned (even in the midst of a global panic centred on concerns around housing) and the level of impaired housing loans rose only modestly to extremely low levels.

The current climate just does not bear comparison.  If the Reserve Bank disagrees, it would be helpful for them to lay out their arguments and evidence. 

Go read the whole thing. He also hits on whether any tax advantage lies with unleveraged owner-occupiers or those nasty investors.

The relevant RBNZ paper is here.

I wonder whether any old Lyndon Johnson quotes are being circulated over at #2 The Terrace.

More things that aren't ironic: pub discounts

Somebody's not been listening to Weird Al's grammar advice: irony is not coincidence.

Alcohol Healthwatch's Christine Rogan's mad about a loyalty card scheme that would rebate 5% of members' purchases as student loan repayments. Why? Some of the retailers involved are pubs.

Alcohol Healthwatch health promotions adviser Christine Rogan said it exploited the vulnerable.

"[It's] increasing the risk that alcohol consumption is going to be encouraged through this marketing promotion.

"How ironic that the first [merchants involved] are the ones that encourage students to drink," Rogan said.

Massey University professor Sally Cresswell, who specialises in alcohol policy, said there was a "feelgood" factor to the card but the initial focus on businesses selling alcohol was a sign society still saw alcohol as an ordinary commodity, rather than a drug that should be treated with caution.

"You could just imagine situations where people are saying, 'Oh, well, let's get another round, it's all paying off so-and-so's loan', and I think that's really not appropriate."

But the card's founders say it is aimed at everyone with student loans, which included ex-students.

For a better alcohol-themed use of the word, watch the Canadian classic Strange Brew. Bob & Doug McKenzie go to Elsinore Brewery with a mouse in an empty bottle, trying to wheedle their way into getting a free case. After inadvertently stumbling on Brewmaster Smith's plans on using a special addictive drug in the beer as part of his plans for world domination, Doug McKenzie finds himself with Pam Elsinore, trapped in one of the beer vats, about to be drowned. Brewmaster Smith opens the vat, saying

How ironic. You came here with a mouse in a bottle. Now you are the mouse. ... It's really too bad you won't be around to see the whole world become addicted to Elsinore beer. In a few hours I will introduce my special formula to the public at Oktoberfest. When they drink enough, they will do whatever I tell them.

 See? It's not just coincidence. It's coincidence with that special kinda twist.

Gender-blind economists

In a new audit study, male economists are the only ones who came out as gender-blind in hiring preferences.

The underrepresentation of women in academic science is typically attributed, both in scientific literature and in the media, to sexist hiring. Here we report five hiring experiments in which faculty evaluated hypothetical female and male applicants, using systematically varied profiles disguising identical scholarship, for assistant professorships in biology, engineering, economics, and psychology. Contrary to prevailing assumptions, men and women faculty members from all four fields preferred female applicants 2:1 over identically qualified males with matching lifestyles (single, married, divorced), with the exception of male economists, who showed no gender preference.Comparing different lifestyles revealed that women preferred divorced mothers to married fathers and that men preferred mothers who took parental leaves to mothers who did not. Our findings, supported by real-world academic hiring data, suggest advantages for women launching academic science careers.

Via @clairlemon

GST confusion

In last week's NZ Initiative "Insights" newsletter, I'd hit on public misunderstandings around GST. People think taking GST off food would be strongly progressive, because poor people spend a greater fraction of their income on food, but richer cohorts get a much larger fraction of the total benefit because they spend more in total on food. If you want to help poorer people, run the redistribution directly rather than taking GST off food.

I have never been a fan of the old prayer wishing confusion upon one’s opponents. In a real war, your enemy’s confusion helps. But in policy battles, it rather seems to me that that confusion hurts everybody.

Take GST. New Zealand is blessed with what is about the world’s cleanest value-added tax. Australia’s GST is in dire need of modernisation – their tax exemption regime around food, for one, makes ridiculous and arcane distinctions between bread and crackers and around just what gets to count as a pizza, as noted by the Australian Broadcasting Corporation this week.

Nevertheless, it is not hard to find local advocates of exempting ‘healthy’ food from GST to change peoples’ diets, or for exempting food entirely to help poorer people. Both proposals are hopelessly confused: they are very costly ways to fail to achieve the desired objectives.

To start with, so long as richer people spend more money on food than do poorer people, exempting food from GST does more to help richer people than it does to help poorer people. If your goal is to help poorer families be able to afford more food, policies that reduce the cost of housing leave more space in the budget – but we will come to that later. Food exemptions from GST are a very expensive way of helping poorer people as compared to just using our existing income transfer programmes – or making jobs easier to get.

Further, exemption regimes make a mess of GST accounting. If you think that we should tax people until they eat the way you want them to eat, it is better done with an excise regime than by wrecking GST. We will be taking on the case for and against food taxes later in the year.

I hadn't known it at the time, but John Creedy and co-authors have run the numbers on this one. Their abstract, in a forthcoming NZEP piece:

This paper investigates the welfare effects on New Zealand households of zero-rating food in a goods and services tax (GST). The detailed effects, for a range of household types, are investigated using Household Economic Survey data. Demand responses to consumer price changes are estimated and welfare changes, in terms of equivalent variations, are obtained. Comparisons are also made across clusters, consisting of groups of households with similar characteristics. A tax change is found to produce a very small amount of progressivity in the GST. Redistribution is from households without children and with high total expenditure to households with children and low total expenditure, and towards older households.

You get far more progressivity, if that's what you want, by transferring more money to poor people. Their bottom line?

The analysis supports earlier studies suggesting that the use of zero-rating in an indirect tax structure provides a poor redistributive instrument compared with direct taxes and transfers

Preventive detention or proactive monitoring?

Some folks, you just can't reach. David Farrar's pessimistic in this case:

Stuff reports:

A man believed to be New Zealand’s worst recidivist drink-driver will be released from prison next month, despite describing himself as a “danger to the community”.

Raymond Charles Laing was jailed for three years in 2012 after notching up his 26th conviction for driving under the influence of alcohol. He was also convicted for the 31st time for driving while disqualified.

This would suggest he has driven drunk on several thousand occasions.

Drink Driving Interventions Trust co-director Roger Brooking said punishment for the offence in New Zealand was lenient compared to many other countries, and perhaps there was a need to keep certain people behind bars.

“In terms of dealing with the problem on a larger scale, I think there needs to be a law change so judges can impose preventive detention on them, so they can lock them up in prison for the rest of their lives.

“We do this to people who sexually offend, why can’t we do this to drunk drivers?”

That’s not a bad suggestion. Only use it for the worst of the worst, but if they fail to respond to anything else, that may be the only way to stop them killing someone while driving drunk.

Wouldn't it make more sense to have a prisoner reintegration regime, for those with very clear histories of offending while intoxicated, barring their consumption of alcohol or other drugs?

There are monitoring solutions that are seem much cheaper than keeping somebody in jail.

Turning the Tide of Drunk Driving Through 24/7 Accountability

In 2005, then-South Dakota Attorney General Larry Long launched a statewide program aimed at tackling the state’s epidemic DUI issue. At the time, South Dakota had one of the highest DUI rates in the nation, with 21.6% of adults admitting to having driven drunk. In addition, 75% of individual involved in fatal crashes had a BAC of 0.15 or higher.

In the 24/7 Program model, every single DUI offender is either tested twice daily (seven days a week) at a breath-testing center, or they wear SCRAM Continuous Alcohol Monitoring technology. The majority of the testing is offender funded, and a state indigent fund subsidizes costs for participants who qualify. The most important element of the program is simple, yet effective: If you fail or miss a test, or you have a confirmed drinking event on SCRAM CAM, you are swiftly, immediately escorted to the local jail.

Today, state level 24/7 Sobriety Programs are proliferating. North Dakota and Montana are already online, and a half-dozen programs are in the research and planning phases.

The device looks like one of the GPS-tracker ones worn by those on home detention: it can detect alcohol consumption transdermally.

It seems the kind of solution that addresses the problem while not imposing undue costs on others. Those who've demonstrated an inability to handle their alcohol get it taken away for a while; the rest of us get left alone.

Here's a PBS write-up of a similar program in Hawaii: HOPE.

Why does there seem little constituency here for this kind of solution?

Update: Here's RAND's page on 24/7 research.

Ideology and high demanders

Ideology could be what winds up killing Campbell Live, but it could save it too.

To recap: Twitter's been a-buzz with speculation that there some vast right wing conspiracy within TV3 that's out to get John Campbell. If it were true, I expect I'd be called up for comment on TV3 a lot more than the ... almost never... that happens now. Richard Meadows' take over at Stuff is likely the right one: it's just ratings.

But that doesn't necessarily mean that ideology doesn't matter.

Fox News went from zero percent market share to almost half the market in about two years because all the other media outlets sat a bit to the left of centre: a big chunk of the potential audience wasn't being served. On the other side, if you go a bit too far out in advocacy journalism of a certain bent, you're left with a tail of potential viewership consisting of a lot of people who don't seem much interested in watching live TV. I don't mean that in any derogatory sense - John Campbell seemed about the only person able to help anybody in a fight with EQC during the Christchurch quakes. But the crusading-activism television has a limited, albeit intense, audience.

And so being a bit too far on an ideological fringe can hurt viewership while ensuring a very deep and committed loyalty among those who do view and among those who are just happy it exists. That is not a model consistent with advertising-based funding, unless the committed viewership are also an especially advertising-targeted demographic. But it does sound like something that could be funded by an annual subscription fee among supporters.

I wonder why nobody who's launching petitions has instead considered trying a PledgeMe campaign. It wouldn't have to cover all of the costs of Campbell Live, just the difference between what MediaWorks would get from Campbell Live and what it would get from the better rating alternative.

Seems a more effective thing to try than internet petitions and speculations about whether the guy who owns the network is evil. I wonder how much each of the 60,000 petitioners would need to pledge to make this work.

The Health Veto

Police and DHB objections to individual liquor permits seem to be turning into a mechanism for the cops and the docs to impose their policy preferences more directly. Where the alcohol reform legislation didn't give them everything they wanted, and where local alcohol policies don't always give them what they wanted, the potential to hold up a licencee's permit can give them that power through the back door.

Here in Wellington, the police and DHB stopped opposing a new bottle shop when it promised only to sell the expensive stuff. 

Beer snobbery has reached a new height in the capital, with a proposed bottle store granted a license only if it sticks to selling top-shelf brews.

And approval could signal a big change for buying a drink throughout the capital, as regulators seek to clamp down on selling cheap alcohol and "nudge" people away from binge drinking.

Plans to set-up a new off-license, to be known as Capital Craft Beer Co, on Manners St in Wellington were initially opposed by Police and Regional Public Heath during a district licensing committee hearing this morning.

...

However both the police and regional public health agreed to drop their opposition after the bottle store owner, James Tucker, agreed to sell only high quality alcohol and close at 9pm.

Were this to become a trend, it would be minimum alcohol unit pricing via a rather dubious process.

And if the allegations here are true, that's also rather worrying:

A bar owner fighting to keep his licence believed he was targeted by police because of his opposition to stricter alcohol laws, the Dunedin district licence committee heard. 

Dave Goosselink provides some relevant context.

The latest on this front comes from @Feminoptimal. Auckland DHB is opposing the liquor licence at a maternity hospital that caters to the posher end of the NZ market. Here's their current menu. Guests can come in and share a meal with the new mother and have a glass of wine. Very nice.

Feminoptimal writes:

So why is Birthcare maternity hospital having to fight to renew its liquor license?

An Auckland District Health Board spokeswoman said:”The medical officer of health is bringing this appeal because the evidence is clear that the consumption of alcohol harms unborn and newborn infants and considers that the decision to grant the licence to Birthcare is inconsistent with the alcohol legislation whose object is to minimise harm.”

So people having a meal at a maternity hospital – which could safely include new dads or other family members, as well as new mums that cannot breastfeed – can’t be trusted to drink responsibly. After all, responsibility is the core tenet of the liquor licensing guidelines:

Now the Auckland District Health Board has announced it will appeal the case further, to the High Court – despite police and the district licensing committee’s inspector expressing confidence that Birthcare is a responsible licensee.

In fact, decisions about licensing are supposed to be guided by potential impacts on the wider community, not just costs to the individual alcohol consumer. Could it be that Birthcare is already taking steps to ensure its patients are informed about the risks?

Birthcare general manager Ann Hanson defended the hospital’s longstanding policy of offering alcohol with meals.

“There’s a very big highlighted sign on the menu saying we recommend that those breastfeeding don’t drink alcohol,” she said.

So Birthcare is doing its bit to give its patients the best possible care and information (which is, in fact, its job as a hospital). The Police and licensing authority have done their bit in assessing any risks to the community from the hospital’s liquor license. But Auckland DHB just can’t leave it alone: a Message Must Be Sent about the evils of drinking, regardless of whether the law provides grounds for doing so.

Interesting that the police aren't supporting Auckland DHB's push in this case.

DHBs and Police have very large budgets, relative to any individual licensee, to tie things up. The threat of extended processes, or of extra-vigilant enforcement, gives them power to dictate licensing conditions just as the Presidential veto gives him power over some of the composition of the budget. Veto power is legislative power, within bounds.

Disclosure: I was expert witness on bar closing hours for the hospitality association in Wellington and in Tasman.

A potential compromise to bring Easter out of the Asylum

Currently, Good Friday and Easter Monday are statutory holidays. That means that workers rostered for those days have to be paid penalty rates and get to pick another day off instead. Easter Sunday is not a statutory holiday. I presume that when Easter Monday was set up, nobody much contemplated working on Easter Sunday.

Currently, it is illegal to open some shops on Good Friday and Easter Sunday. The main defence for this is the protection of retail workers who could otherwise be "forced" to work Easter Sunday. Well, retail workers other than those in the exempt sectors.

And so I have a very simple proposal.

Make Easter Sunday a statutory holiday while lifting the shopping bans on Good Friday, Easter Sunday, and Christmas.

Statutory holidays only attract payment to workers if the workers would otherwise normally be working on Sundays, so it is costless to the majority of firms that close on Sundays anyway. It would impose some wage costs on those companies currently allowed to be open on Sundays, but provide good opportunities for those firms currently banned from being open on Sundays. Workers choosing to work Easter Sunday or Good Friday (or Easter Monday for that matter, when shops already can be open) would get a day in lieu and extra pay.

I expect that, had anybody expected Sunday to be a work day when stat holidays were set up, they'd have set Easter Sunday as a stat in the first place. Making the Sunday a stat provides greater protection for the bible people who want the stronger protection for the day off, and for the pagans who want some kind of southern hemisphere harvest-of-chocolate-eggs festival. And recall that stats don't attract pay-for-a-day-off unless you'd otherwise normally have been working that day, so effect on firms is pretty small.

We currently allow shopping on other statutory holidays like Labour Day, Easter Monday, Provincial Anniversary Days, Boxing Day, New Year's Day, Waitangi Day and half of ANZAC day. And Queen's Birthday. And the day after New Year's Day. Lots of shops choose not to open; totally fair call and up to them. The ones where it's worth the penalty rates will open; the ones where it isn't worth it won't.

Deal?

What potential objection is left?

• Religious stuff about forcing everybody to pay special observance to one group's special day - I think we can dismiss that out of hand. Either that, or I start wanting everybody to have to start airing grievances on Festivus.
• Coordination benefits of having everybody having a day off at the same time and knowing they can do family stuff.
• There are (counting) 11 current stat holidays. I'm proposing adding one, Easter Sunday, to make it 12. Like, maybe there'll be some people with really large families where they can't find one of these where everybody takes the stat rather than taking the time-and-a-half pay and day in lieu, and maybe it'll also be the case that a tiny fraction of them can't figure out how to all take one day out of the four remaining weeks of annual leave at the same time, but do we set the whole country's shopping around those (guessing, looking up and down the country) 10 people?
• And there are coordination costs where everybody holidays at the same time anyway.
• Wage costs for piles of the hospitality industry, like hotels and such, that are open on Easter Sunday. 

Can we please make this so? Or maybe a tweaked version that also makes Easter Saturday a stat while letting us shop on ANZAC morning and also making Church land subject to property tax. 

The Easter Asylum

I love @feminoptimal's compilation of the bits of insanity that apply under New Zealand's Easter trading laws.

* You can’t buy alcohol off-license on Friday, you can on Saturday, but you can’t on Sunday.
* Unless you’re at a tavern with the primary intention of dining, in which case they can serve alcohol with your meal.
* But the tavern is only allowed to be open to sell ready-to-eat food, and whether or not that counts as dining is hard to tell.
* If you’re at a restaurant or on a ferry, alcohol is fine. But they can only sell ready-to-eat food, too.
* After your meal, you can visit a hairdresser to get your hair cut, but you can’t buy any hair product to take home with you. Except on Saturday, when you can.
* On your way home you can’t get a takeaway coffee, but you can buy a muffin from a coffee cart.
* Your afternoon plans in the garden are sweet as, no problem, so long as you visit a garden centre for your supplies, and so long as it’s Sunday. On Friday, gardening is right out.
* Even on Sunday you’ll be out of luck at your local hardware store, which can’t open at all, despite being 50% garden centre.
* Unless you’re in Queenstown, where none of the above restrictions apply.
* And this is all in aid of a religious celebration with limited observance even among its followers, who are rapidly falling in importance within New Zealand (from 69% of the population in 1991 to 43% in 2013), and yet who still get to inflict bizarre and groundless religious prohibitions on the majority.

This is now a secular country. The 2013 Census recorded more than half of New Zealanders as being without religion. How much longer before we can hope for a referendum to do away with these crazy religious restrictions?

I agree entirely with her assessment.

I know the Easter-apologists say it's easy to plan around these bits and that they like it that everybody's forced to have the same day off at the same time where the costs are low by their assumption.

One minor anecdote as counter to that. We went up to Auckland for the Easter weekend, figuring all the Auckland people would have headed north. We rented a holiday house in Eastern Bay that was advertised as having the linens supplied. On arrival Friday morning, we found no towels and no sheets. And it was illegal for anybody to sell us a freaking towel or sheet on the Friday. We made do for the night - luckily, we'd brought a couple of spare towels along for the beach - then bought some on the Saturday.

If you think your god says it should illegal for me to buy a towel on a Friday, or to be able to get sheets for the kids when a rental house screws things up, are you really sure that you're worshipping one of the good deities?

We did enjoy Kelly Tartans' aquarium on the Sunday though. Illegal to buy a towel but legal to look at fish.

Update: A stab at a compromise solution

Croaking Cassandra

Michael Reddell's blog started so quietly that I didn't notice it until it was pointed out to me last week. But he's now on my feedly Must Read list.

Michael has a wealth of institutional knowledge from a long career advising central banks, working with the IMF, the RBNZ and Treasury. I expect I will find his coming series of posts on immigration to be the most challenging; Michael believes that too high of immigration has been substantially detrimental for New Zealand, where I'm rather pro-immigration. But his is the anti-immigration case worth taking seriously.

Here's a 'best of' round-up of his posts thus far:

• New Zealand's entry into WW1 was preceded, by one day, by the suspension of gold convertibility of New Zealand bank notes. And, until 1934, there was no central bank and only customary practice in which the banks ensured that their own notes remained convertible into sterling.


• Maybe, just maybe, having central government get out of the way in the regions and stop there imposing costly regulatory mandates would help regional economies. 


• A review of Saint-Paul's The Tyranny of Utility and Micklethwait and Wooldridge's The Fourth Revolution.


• New Zealand's economic performance relative to Australia doesn't look so hot in terms of real GDP per hour worked since 2012. 
• And what is perhaps the most terse Executive Summary of a discussion note.


• Reddell's first salvo against immigration. I agree with Reddell that immigration cannot solve underlying economic problems in the vast majority of cases, but with two potential exceptions: if agglomeration is becoming more important and size and distance are now hurting New Zealand more, a bigger country can help to solve that. And migration can potentially help a bit with an ageing domestic population. But it is important that complementary policies be reasonable: we have to be willing to allow more house and apartment building if immigration is strong.


• A caution that we shouldn't be too quick to take all the praise that the Oz press wishes to heap upon New Zealand:

  "Yes, the labour market is a bit easier in New Zealand at present than it is in Australia, although at 5.7% our unemployment rate is not something to be complacent about.  But nothing has happened to even begin to reverse the decades-long widening in the now very large gap between New Zealand and Australian incomes and productivity.  And favourable commentary from the other side of the Tasman will be a false friend if it distracts from the serious economic challenges that our own policymakers should be grappling with.

  I would note, though, that that 5.7% unemployment rate is in the midst of strengthening labour force participation.


• Is the IMF becoming obsolete?


• Further reasonable scepticism about New Zealand's performance relative to Oz - this time on government consumption as fraction of GDP. See Michael's graph below.
  Is it really enough for a rightish National Party coalition government to get government consumption back down to only being a bit more than it was at the start of its term in office, which was preceded by a really substantial expansion in government spending in the third term of Helen Clark's government?

I'm very glad to see Michael blogging. I'll look forward to his future posts.