Friday, 13 March 2020

IRD and the OIA

This one has been dragging on for a while, but it's coming to a rather nice resolution.

Recall that, rather some time ago, I'd made an OIA request of Inland Revenue for the data that they had collected on tax attitudes. IRD was under fire for what was considered to be partisan polling. I'd never considered it to have been partisan; tax attitudes and how they align with political party affiliation is interesting for both the tax department and more generally.

So I figured that IRD's best move would have been simply to release the data broadly, so they couldn't be accused of having gathered it for Labour.

IRD didn't do that, so I put in an OIA request for the data.

And waited.

That whole saga and appeals to the Ombudsman are summarised here.

And now I've a very nice letter back from the Ombudsman, copied below. There are a few very nice slaps in there about IRD's needing to remember its duties.

I will be interested to see how IRD replies to this.

Tuesday, 10 March 2020

Quarantine leave

I'm more of a sceptic about generalised bailouts during the coming downturn.

But there is a good case for support for quarantined workers.

In short, staying home when you're at risk of infecting others is a public good. If you're on unpaid leave because sick leave doesn't cover when you're not actually sick and you're out of annual leave, you'll have incentive to show up at work regardless of a stay-home notice. If your employer bears costs if you're out for a couple of weeks when you're probably fine, your employer will also have some incentive to ignore quarantine.

Singapore pays employers $100 per day per worker stuck home on quarantine, on proof that they're still paying their workers.

We could consider a variant of that here if we wanted to encourage stronger compliance with quarantine.

I go through some of that in this week's column at the Dom - published today but submitted last Thursday, so it doesn't include anything on the government's proposed support packages.
Singapore has maintained a tight lid on its outbreak. There, quarantine carries both a carrot and stick. Contacts of people with Covid-19 are placed under Quarantine Orders; workers returning from places with the virus are placed under precautionary Leaves of Absence; those recently returning from risky places with symptoms face a Stay-Home Notice.

Breach of these orders can result in hefty penalties, including firms' being barred from hiring foreign workers in future. Equally, businesses and self-employed persons are eligible for support: $100 per day per affected worker.

The combination of carrots and sticks has some nice effects.

Staying home when you pose a risk to others during a pandemic is a substantial public good. The benefits of an infected person staying home are shared by everyone else but the costs are borne by the worker and the employer.

Singapore's scheme providing compensation for this public good, combined with penalties, changes the calculus.

By helping firms continue to pay furloughed workers, it can mitigate some of the flow-on effects that otherwise result when reduced earnings lead to reductions in demand, leading to layoffs elsewhere.

The Government could consider similar programmes in New Zealand. We could follow Singapore, whose government has already worked through an awful lot of the policy fishhooks. Or, it could consider a government-funded annual leave programme only available during a declared pandemic for those under quarantine orders where work-from-home options are not possible.

Kiwisaver divestments

I really wish there were some way to leave Kiwisaver. The government's proposed changes to it introduce political risk I find to be entirely too great.

And, it's for something basically futile: trying to reduce greenhouse gas emissions by divestment.

I go through it in last week's print NBR; an ungated version should be on our website tomorrow is here.

Some snippets:
The government has crossed a bright-line rule in its proposed changes to Kiwisaver.

Its proposal to require default funds to divest of any fossil fuel stocks is incredibly unlikely to have any direct effect on greenhouse gas emissions.

To the extent it does, it will only be by reducing returns for investors who stuck with the default funds. Even in that case, it is doubtful to be cost-effective. The government could do more by working through the Emissions Trading Scheme.

And it sets bad precedents for political interference in Kiwisaver investment.

If that were not bad enough, it also means writing climate policy could be done on-the-hoof in response to political demands rather than after careful assessment to ensure our collective efforts to reduce greenhouse gas emissions do the most possible good.

Climate change is too important to address with half-baked initiatives, and retirement savings are too important to become political footballs.

Let’s take each of these in turn.

The government is laudably working to strengthen the emissions trading scheme (ETS). Under the strengthened scheme with a binding cap, there will be a comprehensive and rising price on carbon which will incentivise innovation.

As American economist Alex Tabarrok puts it, a price is a signal wrapped in an incentive. Anyone able to reduce greenhouse gas emissions at a lower cost than the current price in the trading scheme can profit by reducing their emissions and selling the resulting credits – or avoid purchasing costly credits. That ensures the lowest-hanging fruit are the fruit first picked, rather than reaching first for the apples higher up the tree.

Divestment mandates, by contrast, are unlikely to have any direct effect on global carbon emissions. The only direct way they might is by raising the cost of capital for fossil fuel industries, increasing the hurdle rate for new investment projects. That cannot happen unless the mandates push down returns for the funds making those divestments. But as those funds divest, other investors will be attracted to invest by slightly higher returns.

In other words, the mandates push against price signals whereas a carbon price works with price signals. 
I then go through the silliness of basing council consenting decisions on greenhouse gas implications of the project, where those gases are already accounted in the ETS.
We need to be establishing precedents that carbon mitigation measures are properly costed.

Government needs to know the cost per tonne of emissions avoided by different measures so that we can focus on the areas where the most good can be done. Instead, we have a politically driven initiative unlikely to do anything to reduce emissions.

The precedent for Kiwisaver is also destructive. It ignores the entire economic rationale for the investment scheme and invites future depredations.

The behavioural economics underpinning Kiwisaver holds that default options can matter. They are ‘sticky’ – people can be slow to switch to the option they really want. Setting default options to line up with most people’s preferences reduces those switching costs. If most people wind up opting into a retirement scheme eventually, at fairly high cost, why not switch the default?

A wide variety of ethical investment funds are already out there, each catering to different preferences. Mindful Money provides a helpful tool for people choosing a fund which best matches their ethical preferences. But how many people really want to opt into them? Switching the default will only increase switching costs rather than reduce them.

And where the precedent is established for forcing default Kiwisavers into funds matching the ethical preferences of the government of the day, it is easier to justify further changes with changes in government. Mandates requiring that funds prioritise domestic investment are far too easy to imagine.

Monday, 9 March 2020

The coming Covid-crisis

Oliver Hartwich, at Newsroom ($), on the consequences of Covid-19 for the Eurozone. This stuff really is Oliver's beat. 
To start with a disclaimer, I am not a medical expert. I have no degree in epidemiology, nor can I claim any expertise in public health management.

In these difficult times, it is perhaps useful to lay one’s qualifications on the table. There is too much misinformation about the medical aspects of the virus out there. Worse than that, when even the experts contradict each other, what chance would laypeople have to understand what is happening?

That said, there is one aspect of the crisis which relates to my expertise as a commentator on Europe. And that aspect, frankly, scares the hell out of me: It is what the virus does to Italy – and by proxy to the eurozone.


When the euro crisis struck in the wake of the Global Financial Crisis, Italy was one of the hardest hit countries in Europe. Indeed, it never properly recovered from that crisis. Per capita (and in constant prices), GDP is still lower than it was in 2011. Industrial output collapsed at that time and never returned to its previous levels.

On top of the problems in Italy’s real economy, there has long been a banking crisis. It is a banking crisis that has been simmering under the surface, mainly because the European Central Bank kept it there.

For the past decade, the ECB introduced a range of programmes with the more-or-less explicit aim of stabilising the Italian banking system. Banks were enabled to access cheap, fresh money from the ECB so they could purchase Italian government bonds and pocket the interest rate difference. That way, the ECB kept both the Italian banks and the Italian government afloat. Only every now and then were these policies not enough and Italian banks had to be bailed out like Banca Monte dei Paschi or Banca Popolare di Bari.

The Italian government certainly benefited from the implicit ECB support. It is one of the most indebted governments in the world. Thanks to the ECB’s help, 10-year government bonds currently trade around 1 percent and thus much lower than a decade ago when they peaked at more than 7 percent. Even so, Italy’s debt-to-GDP ratio kept going up and has hovered around 135 percent since 2015.

Politically, it has been a turbulent time for Italy as well. After the wasted Berlusconi years, the EU interfered directly with Italian politics during the GFC and even installed a new Prime Minister by exercising pressure. Ever since, the Italian political system has been characterised by the rise of populism, both from the left and the right. Only very recently, after the exit of the Lega party from government, did the country see a return to a more moderate and conventional form of government.

So, Italy has long been a troubled place on many fronts. Even that is an understatement. We haven’t even mentioned Italy’s demography. Or migration. Or corruption.

But all that was before the coronavirus hit. And the situation now is worse. Much worse.

Despite Italy’s many, many problems, the country could always rely on its inherent appeal. There is only one David – and he stands in the Galleria dell’Accademia in Florence. There is only one Venice in the world. There is no equivalent of Rome anywhere else.

No wonder that tourism had become one of Italy’s most important industries. It was practically the only industry still growing and accounted for about one seventh of Italian GDP. Just for comparison, agriculture accounts for not even half that in New Zealand.
Tourism collapses; Italy's public finances collapse; its debt ratio jumps; the zombie firms fall over along with the banks to whom they owe money.
To say it clearly, Italy is too big to fail – in ordinary times. But it is definitely too big to be bailed out – in extraordinary times.

If Italy fails – and there is a temptation to write ‘When’ instead of ‘If’ – it will be a catastrophe not just for Italy. It will be the end of the Euro as Europe’s currency. It will be the return of the euro crisis on steroids.

I have been covering the euro crisis for a decade now for various publications. But I have never seen a situation as dramatic as Italy’s today. The only reason why you may not have read about the new coronavirus-induced Italian euro crisis just yet is that there are so many other coronavirus-induced crises around.

As for my Italian friends, I am afraid I have to finish with a quote from your national poet, Dante Alighieri: Lasciate ogni speranza voi ch′entrate. (Abandon hope, all ye who enter). This will not end well.

Friday, 6 March 2020

An Air Travel Lemons Problem

I wonder whether allowing airports and gate agents to deny entry and travel to those ticket-holders who are coughing and sneezing all over the place could prevent a pretty nasty lemons problem.

Specify that risk aversion about contagious disease correlates with riskiness: the risk averse are more likely to take actions that prevent their being infectious. They'll wash their hands more regularly. They'll be careful about coughs and the like. And they'll be a bit quicker than others to avoid places that look risky.

Prior to any pandemic, only Howard Hughes refuses to fly. It takes extreme risk aversion to not get on the plane. So the airplane's population mirrors the general population.

When the pandemic hits, the most risk averse and consequently least risky take a look out the window and decide not to fly. Being stuck on a plane for an hour next to someone who is coughing - the risks of that are just too high for them, even though the absolute risk of being in that situation aren't really all that high.

When they leave, the remaining passengers on the plane are a bit riskier than the general population.

That makes flying a bit riskier than it otherwise was.

That makes the next tranche of risk-averse people avoid travelling.

And the whole thing unravels quickly from there until the plane only contains people who are coughing, or the risk-preferring. And air travel collapses.

The unravelling is less likely to happen if people expect that the gate agent would deny entry to someone who is coughing, and that the airport would actively be kicking out sick people.

It only works if people are more worried about being seated next to a cougher than about being mistakenly kicked off a flight. But I'd be pretty happy to be denied boarding for several flights to avoid the risk of being seated next to a sneezing person for one flight; perhaps I'm just among the more risk averse.

Is there any law or regulation that would prevent airlines from actively denying entry? Can they change their conditions of carriage to allow this discretion? Is it possible to block the unravelling?

Update: Note that this also applies to public transport. But at least you can get off of a bus if someone is sneezing.

RNZ and the damage done

Last spring, Radio New Zealand engaged in a lot of scaremongering about vaping. 

Whether it was deliberate, or whether it was due to hurried journalists relying on bad reporting by the CDC, who knows. Probably the latter, but that they refused to consider contrary evidence may suggest the former.

But RNZ's reporting would have left Kiwis with the distinct impression that regular nicotine vaping in the United States was causing fatalities. Those fatalities were really due to use of contaminated illicit THC cartridges. And it was obvious really early on that this wasn't a vaping thing. Vaping had been around for a decade prior to this fast outbreak in the United States. Why did it show up all of a sudden? Why in the US and not the UK? It very quickly looked far more like poisoning from a contaminant rather than some long-term consequence of vaping finally showing up.

Public Health England's now released a report on the damage done by media scaremongering about the US outbreak. The Otago Daily Times covers it well. I haven't seen anything on it from Radio New Zealand. Alas.

Some relevant findings:
The spate of lung injuries and deaths in the US is not attributable to the regulated nicotine vaping products currently sold in England. But all suspected adverse reactions or suspected deaths need to be assessed.

The conclusions of our previous reports are still important messages for preventing harm. These can be broadly summarised as:
  1. Vaping regulated nicotine products has a small fraction of the risks of smoking, but this does not mean it is safe.
  2. Smokers should be encouraged to try regulated nicotine vaping products along with smoking cessation medications and behavioural support. This will greatly increase their chances of successfully stopping smoking.
  3. People who have never smoked should be encouraged not to smoke and not to vape.
  4. Vapers should be encouraged to use regulated nicotine products only and stop smoking completely.
The data presented here suggest that vaping has not undermined the declines in adult smoking.

Increasingly incorrect perceptions among the public about the harms of vaping could prevent some smokers using vaping products to quit smoking.

A ban on flavoured liquids could have adverse effects and unintended consequences for smokers using vaping products to quit. It should only be considered with caution. 
The study also suggests youth vaping is rare; fewer than 1% of young people who have never smoked are current vapers. And there has been substantial decline in youth smoking. But:
Current smoking prevalence (weekly or less than weekly) among 11- to 15-year-olds halved between 2009 (11%) and 2018 (5%) but has remained relatively steady since 2014.

Young people’s perceptions of the relative harms of vaping compared with smoking are increasingly out of line with the evidence. The proportion of 11- to 18-year-olds who thought that vaping was less harmful than cigarettes declined from 68% in 2014 to 52% in 2019.
Increasingly incorrect perceptions among the public about the harms of vaping. Whatever could be causing that?

I wish there were similar data here.


Thursday, 5 March 2020

Rights to Housing

The United Nations' special rapporteur told us that there exists a right to housing, and that New Zealand is violating it. 

She went on to recommend the kinds of things that are utterly useless in increasing housing supply: more rules on landlords, capital gains taxes and the like.

The whole concept is ludicrous. A right to housing, taken as a positive right, implies an obligation on someone to provide it. And why would you even start there when government so regularly violates basic property rights through processes that make it effectively impossible to build? How can we go around damning landlords, while being utterly inured to the regularised processes that block new housing from being built?

In last week's Fairfax papers, I decided to see what happens if we take this kind of rights-talk more seriously than it deserves. If a landlord evicting a tenant is violating human right, according to the United Nations, what should we think about council bureaucrats who forbid building?
[UN Special Rapporteur] Farha urges us to take the housing crisis seriously as a human rights issue.

What should we think about Hutt City Council taking extreme efforts to prevent Jono Voss from building a tiny home on a trailer, and the Environment Court backing this rights violation?

Laura Wiltshire reported on the case just this past week. Should we not consider both Hutt City Council's acting general manager of city transformation Helen Oram, and Environment Court judge Brian Dwyer, as human rights violators?

I rather think we should. If Voss has a right to a home, council and the Environment Court are the ones preventing him from having one, no matter how you might wish to couch it.

Their joint insistence on rules that would make it too expensive for him to build his tiny home are denying him a fundamental human right. And we should remember that their following the rules of the system is little defence when it comes to fundamental rights violations.

The Nuremberg Defence did not work for those who tried to invoke it in the 1940s.

What should we think about cases where prominent and politically powerful people lodge objections against new construction near them, and especially new construction for poorer people, and the councils that heed those complaints?

A columnist last week reminded us of the former prime minister Helen Clark's 2000 submission in opposition to a dwelling house in her neighbourhood.

The homeowners in her neighbourhood, according to her submission, "have no desire to see their neighbourhood downgraded by the unwelcome and unwarranted intrusion of a very large number of unsupervised, yet needy, transient tenants".

But those needy and transient people have human rights too.

Isn't blocking the place where they might have lived a violation of their human rights?

Should this kind of human rights violation lead to charges in New Zealand courts, or a United Nations Human Rights Tribunal?

Don't those who want to build housing for transients and the poor have rights too?

By contrast, when an upzoning was proposed for my neighbourhood of Khandallah, I submitted strongly in favour of allowing greater density. I did not want to suffer the fate that should rightly befall human rights violators. 
My YIMBY submission for Khandallah is here.

I expanded on things for the Dom this week:
It's now a commonplace for people to view see a positive right to housing, and a commensurate obligation on government to provide it. Even our chief human rights commissioner Paul Hunt said, in response to the report, that the housing crisis is a human rights crisis, and that present conditions violate our right to housing.

But Farha's recommendations start with a positive right. And that is not where we should begin.

New Zealand's housing system is entirely out of order and has been for some time. Every incentive in the system seems designed to stymie councils accommodating growth. The costs of growth are borne by councils while increases in tax revenue go to central government. When councils and ratepayers see growth as a cost, they set rules and make decisions to minimise those costs.

If accommodating more housing requires taking on infrastructure costs that the council cannot bear, councils will find ways of preventing urban expansion and densification.

If liability rules mean councils are left with the total cost if a build goes wrong, they will be extremely risk averse in just what it allows to be built – with the resulting costs falling sharply on people who can no longer afford housing.

This all accumulates to give us a horrible, horrible mess. Every mundane decision to not approve an extra floor on an apartment building here, or to prevent a row of townhouses from replacing a couple of houses there, or to block someone from building a tiny house on a trailer frame in his friend's back yard – they all add up.

It creates a situation that nobody wants and that cannot have been anyone's intention, but is the inexorable outcome when everyone works within the system as they face it in response to the incentives that they are given. Dozens and dozens of decisions made every day within that system really do amount to a substantial rights violation. They prevent people from exercising their right to housing by making construction far too difficult.
I don't really think there's a right to housing. But Councils and central government really are jointly responsible for egregious rights violations. Central government sets a system that makes it much to hard for councils to accommodate growth. Councils respond by having bureaucrats set and enforce rules that work to make housing far too expensive. The consequences are severe, even though every one of the council bureaucrats is only following orders.

And if the United Nations really wants to get serious about rights to housing, well, things could get interesting.

Wednesday, 4 March 2020

The flu normal?

Over at Newsroom (drafted before the first case here was confirmed), I worry about what happens if Covid-19 isn't a one-off but a new normal with a regular season, like the flu season, that comes each year.

Policy designed around a one-off might be different than policy designed around something that will recur annually and that will require annual preventative measures.

In both cases, measures to reduce the peak load will save a lot of lives: New Zealand's health system is too easily swamped if the peak is high.

But if travel restrictions, and likely school closures, and likely regional quarantines, and likely work stoppages - if all of that has to happen every year, rather than just as a one-off, you're pretty quickly reducing the benefit side of the calculus.
Imagine that Covid-19 is a one-off. Those who’d catch it would be immune forever, the vaccine under development will be deployed broadly by the middle of next year, and if we just hunker down for a while we could all take a really big economic hit – but eventually it would be over.

In that situation, strict quarantines, school closures and even internal travel restrictions might make sense. The costs would be borne once, but the benefits of protecting people from the virus would extend over a long period. Temporary quarantine clinics for those with milder cases could be established. Elective surgery could be delayed until the crisis had passed as the hospitals in affected areas would be overwhelmed and staff may need to rotate in from other regions to help share the load.

If about 5 percent of cases wind up in the Intensive Care Unit, Wellington Hospital’s 29 ICU beds would serve only Covid-19 cases if 600 people in the region caught it. And remember, Italy went from 16 confirmed cases in Lombardy on February 21, to 60 cases the next day, to 400 cases on the 26th.

The costs in the short term would be severe. In addition to the obvious difficulties facing the health system and the human tragedy of deaths and severe illness, tourism would collapse, regions dependent on tourism would falter, businesses would struggle with loss of staff when schools are closed along with loss of access to critical materials and affected universities would likely demand hefty bailouts.

But the threat would pass. The country could wear the short-term costs because the benefits would be substantial. If 2 percent of those catching the disease die and if every adult is susceptible, preventing it from spreading everywhere has enormous value.

For every million people protected against catching Covid-19, 20,000 lives would be saved. And if you will forgive an economist for being gauche enough to put a dollar value on that, that’s about $87 billion, using standard New Zealand figures. A proper accounting would reduce the figure somewhat because of the age profile of those most affected by Covid-19, but even very costly measures can be justified on that kind of accounting.

This would change if Covid-19 instead is the flu normal. This week, James Hamblin warned in The Atlantic that epidemiologists are starting to see it as a fifth “endemic” coronavirus. Just as we have cold and flu seasons now, we could have a Covid-19 season.

Future waves would likely be less fatal, as those most susceptible would tragically have died in earlier waves. But it would mean that measures taken this year would need to be repeated again, and again, and again.
Measures that would make a lot of sense if they are seen as saving 20,000 lives full-stop would perhaps make less sense if they save 20,000 lives for a year, and then need to be repeated. If Hamblin is right about the flu normal, the response might need to be different.
I am really rather amazed that we have not yet had a real outbreak here. I had expected that at least one case would have made it in ahead of, or despite, the travel ban. If that case was a mild one, as most are, it would be chalked up as just a normal cold. It would spread and not be noticed until a more serious case showed up at hospital.

The ban has been in place almost a month. Symptoms normally come up within a week; 21 days at an outside edge (with rare cases beyond that). There could be cases of NZ citizens or residents coming home with it and that kind of scenario still playing out from it. But either nobody came in ahead of the ban that was infected, or they've not passed it on, or any cases that have passed on have been mild.

Tuesday, 3 March 2020

Testing scarcity

There could be a good explanation for this; it would be nice if the government would explain precisely what that explanation is. 
People with coronavirus-type symptoms are reportedly being turned away from testing at Wellington Hospital because they don't fit strict criteria.

As the Government awaits the results of two more people "highly suspicious" of having the virus, a senior Wellington Hospital doctor has told Stuff, under the condition of anonymity, that tests for Covid-19 were being refused for patients, even if they were showing symptoms of the virus.

These are people who had been to countries including the United States, parts of Europe, Vietnam, and Australia.

"Each of these regions has instances of apparent community coronavirus spread," the doctor said. 
My current null is that the government has just hunkered down with a pandemic plan not suited to a virus that can transmit for a week or two before showing up with symptoms.

But it could be that the tests are actually really scarce and so they're rationing them very heavily.

It would be very nice if the government would consider fronting on a story that's on the front page of the Dom Post.

Update: this afternoon's press conference said there's been no rationing of tests, it's just that cases presented aren't meeting the criteria. Dr Balm noted that the tests aren't useful when there aren't symptoms. But the headline story on the front page of the Dom said tests were being refused even if the person was showing symptoms. Maybe they need a bigger combination of symptoms?

Friday, 28 February 2020

The budget fiasco

33. The Inquiry considers the senior leadership did not actively consider or promote a view of the Treasury’s appropriate obligations in relation to the production of Budget information. The organisation has faced ever increasing demands for greater volume and more complex Budget products. This resulted in:
a. Managers and teams feeling they had no option but to deliver whatever was requested of them, irrespective of the impact on resourcing and potential organisational risk; and
b. Critical decisions being made for expediency’s sake, in the absence of consideration of the wider organisation and security risk.

34. The Inquiry considers some of the above findings may be indicative of wider issues within the Treasury and invites the current Secretary of the Treasury to consider these matters further. 
The potential for snippets to be indexed from the clone site was known in 2018, but not addressed for 2019.
72. When the cloned Treasury website was subsequently created, approximately 2 weeks before Budget Day 2018, the clone was configured to use the shared index with the live website, thus breaking the “vault” as per the stipulated configuration. W&P team members responsible for producing Budget documents worked to develop those documents on the cloned website, and once finalised documents were set to “published” state on the cloned website. Because the cloned website and live website used a shared index, document headline and snippet information on the clone website where documents were set to “published” were able to be accessed by search users.

73. From interviews with relevant Treasury staff it is apparent that the ability to view Budget Sensitive document headline and snippet information in response to specifically worded search activity followed by an Error 404 script was known by individuals involved in determining to deploy the clone as the BDS solution for the Treasury website in 2018. There is no evidence to indicate the risk associated with visibility of document headlines and snippet information was formally escalated outside of this group. While it was contemplated not linking the index and cloning the index as well as the site, the testing method employed by CASS staff indicated it would take approximately three days to re-index the clone site prior to Budget Day which did not meet business requirements and consequently this option was disregarded. On the day of the incident the platform vendor was able to deploy an alternative method that re-indexed the clone site within one hour. The CASS IT team had not previously sought any advice from the vendor regarding methodology for re-index.
I think I've heard similar grumbles elsewhere in the public sector: business requirements that don't quite get why something that's just-released won't be immediately indexed. 
86. Upon observing the configuration which drove both site searches to the shared index, the vendor recommended changing the configuration to remove the link to the shared index. The CASS IT team raised concerns regarding the time to rebuild the index. The vendor was able to show the IT team a standard command line which took just one hour to re-index the site (not three days as experienced by the CASS team in testing their own method). 
And the whole thing goes then to governance:
91. In the view of the Inquirer, this flawed technical solution coupled with a lack of good practice was able to occur as a consequence of failures in the application and appropriateness of Treasury wider security, risk, control and governance settings. In the Inquirer’s view, those issues created an environment in which similar incidents are possible until such time as the Treasury improves the application of its systems, processes and governance of similar activities. The adequacy of action taken by the Treasury post the incident was outside the scope of the Inquiry and has not been assessed.
The report suggests that the problem would have been fixed if someone had escalated the clone design up to the IT Security Manager.  
113. The Inquiry did not find evidence of effective oversight in relation to the teams involved in the  incident and many of the people spoken to in relation to the incident raised concerns regarding the inability of managers to successfully escalate to senior managers matters such as the non-engagement by the wider organisation in the Treasury Website project or the descoping of the BDS from the same.

114. The Inquiry considers the organisational structure contributed to the incident particularly in relation to the operation of the Treasury/CASS IT team. As the senior manager of the Treasury and CASS IT function, the CIO was not a member of Kaiurungi at the time of the incident. The CIO reported to Kaiurungi on operational matters via monthly reporting on IT and Information Management however the Inquiry was told that corporate services was not a priority area of focus for Kaiurungi.
Kaiurungi is chaired by the Chief Operating Officer - Fiona Ross at the time. The CIO also reports to the COO. 
115. The Inquiry heard from a number of interviewees of the challenge within the organisation of gaining senior level engagement or commitment on matters associated with organisational functioning or performance, particularly where it related to corporate services. Furthermore the Inquiry observed an apparent organisational divide between “the business” and corporate services. In the Inquiry’s view, a disregard for the role of corporate services coupled with a lack of prioritisation of delivering organisational objectives contributed to the incident in a number of ways as evidenced by:
a. The inability of the Treasury Website Project to gain engagement from “the business” in the design, content and management of the new Treasury Website;
b. The lack of consideration of the impact on the W&P team of the continual increase in demand for the production of Budget documents in the final 6 weeks of the Budget preparation and subsequent impact on organisational risk profile;
c. The non-involvement of W&P in the BOG;
d. The failure to develop end-to-end process or governance oversight of the Budget process;
e. The failure to undertake effective close-out or other review procedures to inform organisational performance
f. The non-inclusion of the CIO on Kaiurungi.

116. The vulnerability in this area was further exacerbated by a reported organisational belief that work on core business operations is less valued or important than policy work or other core economic or fiscal functions of the Treasury and therefore not prioritised.
The CIO reports to the COO and the COO is on Kaiurungi.

Things start looking bleak as we read on.
121. Interviewees reported struggling to gain regular, consistent engagement with the Steering Group of the Treasury Website Project (subsequently renamed the Treasury Website Migration Project). Documentary evidence supports the assertion that meetings were held infrequently, not well attended and ultimately reduced to the COO and Project Manager in composition.

122. The Inquiry considers that the Treasury Website Project Steering Group (subsequently renamed Treasury Website Migration Project Steering Group) did not provide effective governance oversight of the project and failed to alert the wider organisation to the significant risks associated with the project.

Lack of Post-Implementation/Close-out Review

123. Based on the information reviewed by the Inquiry, had the Treasury undertaken a robust post implementation review of the TWMP and a review of the BDS solution in 2018 it may have highlighted the risk created by the visibility of document headline and snippet information. This may have led the Treasury to consider how it could improve the BDS solution for 2019 and thus averted the incident.

124. The lack of post project review in relation to the TWMP and BDS solution for 2018 is consistent with findings from a number of independent reports commissioned by the Treasury and reviewed by the Inquiry in relation to the Budget Process and other risk matters. Furthermore the Inquiry observes that the Treasury has not implemented recommendations contained in a number of independent reviews commissioned by the Treasury. This is consistent with the Treasury’s lack of prioritisation of working on core business operations and in implementing systems and governance to pursue the same.

Increasing Pressure on Treasury Staff working on the Budget

125. Following discussions with relevant Treasury staff, the Inquiry considers the Treasury’s senior leadership did not adequately consider the impact on staff of ever increasing production expectations, milestone slippage outside of the Treasury’s control or the impact on the risk profile for the Treasury itself of its unquestioning approach.

126. The Inquiry considers the lack of senior leadership consideration of the demands on the organisation contributed to an environment whereby:
a. managers and teams felt they had no option but to deliver whatever was requested of them, irrespective of the impact on resourcing and potential organisational risk; and
b. in which critical decisions were made for expediency’s sake, in the absence of consideration of the wider organisation and security risk.
The report goes on to note rather a few initiatives underway at Treasury to strengthen processes.

Overall it looks like a governance issue. The IT guys figured nobody up the chain wanted to hear about risks, and they didn't know that there was a solution to the up-the-chain problem of folks who wanted stuff kept strictly confidential but immediately (or almost immediately) indexed for search when released.

I wonder whether the IT team would have punted the thing up the chain had they known that they could de-risk it at the cost of only an hour's delay on indexing rather than a likely-to-be-shot-down 3-day wait. And I wonder whether, had they mentioned it earlier, someone might have told them to check if there were alternatives like that.

The Inquiry points to failure at senior leadership levels. They don't name names as such, but you'd think that would have to be the Chief Information Officer, and the Chief Operations Officer to whom he reported, and if you wanted to go up to the top, well, Makhlouf. They'd know more about what all happened than I do.

I just keep remembering that Treasury had Fiona Ross fronting a workshop and sun and moon feelings a few weeks before the budget fiasco. Danyl's reporting on that was withering.
Fiona Ross is a thought leader in the public service; an articulate and engaging public speaker. She stands at the front of the room: a seminar space on the third floor of Treasury. The 30 people in the audience fall silent. She begins. “We all know we live in a DEVUCA world.”

Everyone nods thoughtfully. Except me. I raise my hand. “We live in a what?”

Ross looks at me and blinks. “DEVUCA.”

I try to imitate the sound, unsuccessfully. Someone at my table explains the acronym in a low voice. “It stands for diverse, ambiguous, volatile, uncertain …”

“I think complexity is in there,” another person suggests. There is some disagreement. No one is quite sure exactly what kind of diverse complex ambiguous world we occupy.

“Google it,” Ross advises.

“I will. How do you spell …?”

“And in a DEVUCA world we all need to be more empathic and inclusive. That’s why Heartwork is so exciting.”
Maybe the whole card game thing really only took 15 minutes of her time. But you read this, and then you look at the IT mess that came under Ops at Treasury, and it's hard not to wonder if they maybe needed to be a bit more focused on core business than on DEVUCA worlds and card games.

Very glad that Treasury's now under new management. 

Tuesday, 25 February 2020


The government this week extended the COVID-19 (coronavirus) travel ban barring foreign nationals from arriving in New Zealand from mainland China and suggesting self-quarantine for Kiwis returning.

The continued ban feels like the right decision for a highly contagious disease with mortality rates that appear to be around twenty times higher than the seasonal flu. But feels are a poor basis for policy.

The disease has some very worrying features.

Oral swab testing can miss cases detected by a blood test. And while the virus can be detected in most people within three to seven days, it takes up to 24 days for others. Quarantine for those who have been in contact with anyone who has been infected will be long.

Where about 5% of similar patients in Singapore wind up in intensive care, Wellington’s 29 ICU beds are starting to look just a bit inadequate. The health system will very likely quickly be overwhelmed if there is any serious outbreak.

So, preventing an outbreak seems important, if it is possible.

As more cases emerge internationally, any travel-ban strategy would have to expand rapidly but would become far less effective. And, as NZIER pointed out this week, delaying COVID-19’s arrival to coincide with the local flu season could make things worse rather than better.

We need to be thinking beyond the ban.

The government is contemplating support for exporters. But that seems only the start of the problem. How many businesses depend on timely deliveries of critical parts, tools and materials from China? Inventories will be running low and China’s shutdown will not end soon. Will everyone get a bailout?

There may be a case for compensating workers and firms affected by quarantine requirements for workers who have been exposed. Not providing that compensation makes it far too tempting for firms to tell workers to come into the office regardless of quarantine requirements, as a SkyCity manager reportedly did with an employee under quarantine after returning from Wuhan.

Singapore compensates firms for quarantined workers while applying sharp penalties to firms and workers who break quarantine. It is managing to keep something of a handle on its outbreak. The government should be considering that kind of model.

Businesses should be preparing to deal with short-notice work-from-home arrangements in addition to supply chain disruption.

The travel ban has bought us a bit of time, nothing more. Use it wisely.
Italy went from 3 cases to 130 in 48 hours, including 26 in intensive care and three deaths. And Bocconi University is now closed, along with schools in Milan. There's also a ban on public events.

It looks to be not under control in South Korea, and not even close to being under control in Iran.

The government today announced another extension of the travel ban with China. It seems almost pointless. There are still far more cases in China than elsewhere, but folks could fly in from Milan, or Iran, or bring it back from a trip to Bali where nobody seems to believe the official stats that there aren't any cases.

I would be surprised if the virus were not already here.

It has a long incubation period and exhibits similarly to a cold for a lot of people after that. I am surprised that we have not yet had a confirmed case.

It doesn't seem implausible that the first case that presents here will quickly open up a pile of additional diagnoses among close contacts, and their close contacts. Numbers rising quickly consequent to knowing where to be testing will require the government to move quickly. It would be best if they had already mapped out what they plan on doing in that event.

The government does have a pandemic plan.

It isn't communicating anything from it.

Under what conditions will schools be closed?

What provisions will be in place to support those placed under quarantine, and their employers?

What penalties will apply to workers and employers who allow breaching of quarantine?

What facilities is the government putting in place for quarantine for those who are ill?

How much isolation-ward capacity do the hospitals have, and what happens if that becomes overwhelmed? Do we know whether the spread to almost all patients in the psychiatric ward in one South Korean hospital was a function of the perhaps greater difficulty of hygiene control in a psychiatric ward, or something more endemic to hospitals in places that are not Singapore?

Has the government sought assurances from providers of critical infrastructure that they are prepared for potential loss of critical workers and for breaks in supply chains?

A lot of GPs require people to show up in person for a re-up on a regular scrip, probably because that's how they get the fees. Might the government consider requiring that regular scrips be issued on request in the lead up to and during a pandemic so as to reduce the number of people showing up at the GP? Like, maybe there's some sense in having the GP check that my daughter still has asthma and that the meds are appropriate, but making people show up at the doctor's right now seems silly to dangerous.

There seems to be a lot of stuff that could be being sorted out during this brief respite in which it feels like we're just waiting for the Mask of the Red Death to make his appearance. If the government is onto it, I haven't heard about it.

Thursday, 20 February 2020

Giving SkyCity the convention centre was a very big mistake - Peter Singer edition

Another for the Eric was wrong file.

I had thought that the SkyCity deal was the least bad way of getting a convention centre conditional on the government wishing to be involved in paying to have a convention centre.

I don't think that governments should be involved in paying for convention centres.

And we should view the regulatory concessions granted to SkyCity in that deal as having an opportunity cost to the state equivalent to what those regulatory concessions would have been valued at had they been put up for auction. So while the SkyCity deal was meant to mean that the government didn't have to "pay" as cash payment, it did provide very valuable regulatory concessions. It wasn't free. People would pay a lot for the regulatory concessions that SkyCity bought? How much? Well, think about how much governments have to pay in other places to get convention centres built. It would be surprising if it were a lot less than that.

There are complementarities between casino operation and convention centre operation which could mean it would be less expensive to have the convention centre there. When I'd looked at that lit at the time, convention centres tied to or near casinos seemed to fare less badly than ones that were not. It can be part of the draw in getting some of the bigger conventions.

So I'd figured that the whole thing was the least bad outcome.

I hadn't reckoned on cancel culture coming to New Zealand, and the implications of that where a very important venue would be managed by an operator with incredible sensitivity to its perceptions of the social preferences of its various regulators.

SkyCity did secure some incredible regulatory abatement in its deal to provide the casino. But there are always a hundred margins on which the regulators could cause them to cease to be. Just how the money laundering regulations would be applied to them, for example, and at what kind of cost and stringency. How liquor licences will be handled in a venue where there is gambling going on and the effects of alcohol on continued gambling may be a concern. How the sinking lid policy on video lottery terminals would apply to their competitors, where they have some security on their own numbers - the worse for others, the better for them. Just what penalties and sanction might apply when they are not seen to have done enough about problem gambling. There will always be margins.

One hears incredible-sounding, but utterly utterly credible, stories about just what sorts of things companies operating under the shadow of the regulators here will get up to in attempts to buy the goodwill of the regulators. I'm not talking about payoffs or corruption or stuff like that. I'm talking rather about expensive measures taken expressly because they think it will leave the regulators with a warm feeling about them when next their particular regulatory issues come up for discussion.

I guarantee you it is happening in general.

And I suspect that that is what is driving Sky City's very very public campaign around inclusion and diversity. Everyone sees an incongruity between 'social justice' pushes and the company's core gambling business. It isn't incongruity, it's self-defence.

And so we get SkyCity's hair-trigger response to a minor amount of complaint about their hosting Peter Singer.

Disabled rights activists protested that Singer would be talking at SkyCity's venue. This sort of thing is rather common. But SkyCity cancelled him.

Danyl Mclauchlan covers it well at The Spinoff. I disagree with some of what he says but, unlike Singer's other critics, Danyl has read and understood Singer's project. I disagree with Danyl on two points - one minor to the case at hand, and one substantive.

On the minor point, I think it is important that Singer presents his arguments in the way he does because it forces the moral reckonings and thinking - the benefits of that outweigh the discomfort among those who choose to read him badly.

But the major point is a bit different.

Danyl argues that SkyCity is a private venue and should be able to choose who it hosts.

I agree with that. Every private venue and platform has to decide on what works for them, and what doesn't. A church hall should not be compelled to rent out its facilities for an erotica event, and a gay bar should not be forced to host a homophobic comedian just because it rents its facilities to other comedians. Property rights matter. And if the loss in future profits from hosting one particular event outweighs the profit of that particular event, that gives a way of weighing things. It speaks to effective demand.

But SkyCity they had a contract with Singer, and abandoned it under pressure.

I think that they abandoned it because they live in the shadow of the regulator. It is not a normal commercial decision. Even if SkyCity thought there would be zero consequence in attendance at their venue, they would fear the ill-will of the regulator.
"Oh, SkyCity. Yeah. We have to look at their renewals. What was that thing a couple of years ago where disabled people were furious with them? Like, what's wrong with them if they managed to make those people angry? Maybe we should look a bit more closely."
Avoiding that is the simplest explanation.

And it is consistent with other things SkyCity has been up to.

And it is also a very good reason that they should never have gotten the concession to run the Convention Centre. I hope that anyone considering booking anything with them for any reason will take very seriously the risk that SkyCity will cancel their event at the slightest pressure, because the regulatory risk they face will not be going away.

Does it seem plausible that cancelling Singer, who was to be talking about effective altruism and charity and the importance of doing the most good possible in the world, was a normal commercial decision?

Is it a free venue choice thing when they fear the hammer of the state? I don't really think so.

And it is a kind of a testable hypothesis. Here's the Masters thesis project, for those who choose to accept it. I bet the result would publish reasonably.
There exist company Corporate Social Responsibility rankings. How do company CSR rankings vary by the regulatory threats facing those companies and the industries in which they operate? You could use surprise state-level election results to identify effects for companies subject to state-level regulation, or changes in the composition of the relevant congressional oversight committees. 
I talked about some of this with Mike Hosking this morning.* Not about the broader potential research question, but about this particular instance.

It looks like Peter Singer's found another venue. In the interim, those keen might want to listen to my own chat with him in 2015 at the Christchurch WORD Festival. The link takes you to my post at the time that excerpted the best bits, including some fun around whether vegans should consider eating Canterbury lamb.

And if you get the chance to attend in Auckland, you should.

* Hosking introduced me as a member of the Free Speech Coalition. I'm broadly supportive of the Free Speech Coalition, as I am very much a fan of free speech, but I don't think I ever signed up with them. I don't really join things. I don't know whether my own position on this stuff corresponds with theirs, but I'd hope it does. And I don't keep close enough tabs on every position they've taken to necessarily endorse every bit of it. That's one reason I don't join things - it requires too much attention.

Radio Games

It looks like RNZ's trick to fund both RNZ Concert and the new Youth station would also have worked on former Broadcasting Minister Steve Maharey, who writes:
For now, Concert FM is safe. When the news broke that Radio New Zealand (RNZ) was considering turning Concert FM into an automated station on an AM frequency so it could use the FM frequency to establish a ‘youth oriented’ station, discordant notes immediately emanated from classical music fans all over the nation.

For those new to the story, let me recap. Radio New Zealand has for some time, under the capable leadership of its CE Paul Thompson, been trying to make itself more interesting to 21st century audiences: particularly younger audiences who will, hopefully, turn into lifelong faithful listeners.

This is a reasonable objective but not easy to implement when you have no money (1).

As any good CE knows if you are looking for real money from a tight budget the place to go is people. Accordingly, RNZ made it known that Concert FM staff would be made redundant, a new automated classical music service would take its place and new staff would be employed to run youth programming.

That any of the folks at RNZ thought this would be an easy sell is difficult to understand. They might have realised their mistake if they had made it clear to their Minister and the wider Government. It is a fact of political life that to touch Concert FM is akin to peeing on an electric fence.

It appears that RNZ thought that they told their Minister, but they now say the communication might not have been clear enough.

(A note about communication at this point might be useful. Informing someone is not communication. At a minimum, communication requires feedback from the person being communicated with to be sure they both got the message and understood it).

Back to the story. As a former Broadcasting Minister (disclaimer!), I learnt about the need to tread carefully around Concert FM from the formidable Right Honourable Jonathan Hunt. Rt. Hon. Hunt was the Minister who oversaw the market based reforms to broadcasting during the heady days of the fourth Labour Government. Significantly, despite the preferences of the day for throwing everything open to the market, Concert FM survived unscathed. When I asked how this happened, I was informed that the audience for Concert FM made it political suicide to do anything other than leave it alone.
I really don't get how folks see this play and go "What was Radio NZ thinking, threatening to knife something that is politically untouchable in order to fund a daft youth thing? How could they think it would be easy to convince anyone they could do that?"

It looked, from the start, like an obvious play to extort funding for both programmes. No government would let them kill Concert FM. The government freaking out and funding both Concert FM and the new youth thing seems a daft response though. Or, at least, you'd think that the government could convey back to RNZ that its entire Board would be sacked for running this kind of game against the government if the Board allowed it to proceed. Operational independence is one thing. Creating hostage situations for the government is another.

But the play worked. It'll be interesting to watch to see what other government agencies learned from this episode.

I covered things in my column this week for Newsroom. You can get it here now, ungated; they're worth the subscription though. I conclude:
As Newsroom reported last week, RNZ’s chief executive Paul Thompson worried that going down normal channels to secure the use of the 102 FM band would “bog down our plans for five years and nothing would happen.” A game of chicken in an election year would be much quicker.

It has been a bit strange to see this episode reported as a “debacle” on RNZ’s part, and the reversal of the planned cuts at Concert FM as “embarrassing.” It would have been daft to vandalise Concert FM in favour of a new youth service. That now looks unlikely. But was it ever really the intended outcome?

Rochester University political scientist William Riker studied what he called ‘heresthetics’ – the manipulation of the context or structure of a political decision-making process to get the outcome one wants. Political entrepreneurs are attuned to seeing heresthetical moves, reshaping the political environment to make possible that which was previously impossible.

Rather than castigate RNZ’s boss for the “debacle,” we might instead recognise and even, perhaps, applaud his spectacular feat of political entrepreneurship. If getting everything one wants is a debacle, we might ponder just how wonderful a catastrophe might have been. Sir Humphrey would be proud.

The Government may now have a bit of a problem if other Crown agencies take the appropriate lesson from this little episode. Successful entrepreneurs often attract imitators.

Should the Government not wish this play to be repeated, it might need to find ways of demonstrating these kinds of moves do not pay off for those who choose to play them.

Thursday, 13 February 2020

Public health and vaccination

There could well be a case for having a public agency focused comprehensively on vaccination and communicable disease. 

But the proposal that the folks over at Public Health Expert isn't that. In a post framed around the recent measles outbreak and noting the risks around antimicrobial resistance and pandemics, we get this conclusion:
Business as usual is not a rational or viable option for NZ. There are almost daily reminders about the large current and impending public health challenges faced by this country. These challenges include the health consequence of persistent inequalities, the increasing burden from rising obesity and non-communicable diseases such as diabetes, and persisting problems of poor mental health and suicide. Possibly even more alarming are the rising environmental consequences of climate change and ecological collapse that take us beyond ‘planetary boundaries’, and emerging infectious diseases including rising levels of antimicrobial resistance and the emerging coronavirus pandemic. The current national measles epidemic is just another reminder that our national public health capacity and systems are no longer fit for purpose.

The good news is that the present Health and Disability System Review could map out the design for a new kind of public health agency to lead the transformative change that NZ needs to achieve its goals of improved public health and equity, and support its shift to a sustainable future.  Public Health Aotearoa could well provide the high quality sustained public health leadership needed to eliminate measles, improve our health security, and manage other long-term public health challenges.
It would be ...surprising... if this kind of agency maintained any kind of focus on pandemic prevention and vaccination promotion. It would quickly instead become an agency pushing for greater controls around lifestyle issues related to noncommunicable disease and, from the description above, social justice issues. And when that shift resulted in another great forgetting of the importance of vaccination and core public health, it would complain come the next measles outbreak that it simply hadn't had enough funding.

I could rather strongly favour there being an agency solely responsible for reducing the risk of communicable disease. That's core public health work. It would encourage research into vaccination uptake - finding ways to get folks vaccinated who are averse to vaccination. It would have targets around vaccination rates. It would make sure that public health nurses get into the schools to make vaccination routine. If it ever came to it, it could help coordinate quarantine regimes.

I really like the kinds of things that Nick Wilson writes about pandemics and preparedness. But I have no confidence that a new public health agency would pay any attention to pandemics or vaccination rates outside of a crisis.

Like, why would it be any different than the general focus of the current regime, in which it is dead simple to find millions of dollars in grants to Otago Uni to run focus groups about smoking (while Marewa does the real work out on her own) but hard to find much evidence of support for research into encouraging vaccination?

I'd put in an OIA request last year asking the Ministry of Health to list any research it's commissioned around vaccination. This is what I got back. It isn't much, despite waning vaccination rates.

Vaccination just seems to be low priority until there's a crisis. I wonder whether one tobacco researcher, by herself, has gotten more funding than the whole vaccination research agenda noted below.

Wednesday, 12 February 2020

Conversations with Atwood

Not everyone seems to have enjoyed Margaret Atwood's book forum in Auckland with Chloe Swarbrick.

I wasn't there.

But I did catch Tyler Cowen's superb talk with her. The podcast and transcript are all up here. A few highlights below. Cowen's breadth always amazes. You look across the range of folks he's interviewed, and the depth he'll cover...
COWEN: I’m a big fan of your novel, Hag-Seed, which I believe is your latest. A few questions about that and Shakespeare: How sympathetic is Shakespeare to Caliban in The Tempest?
ATWOOD: Shakespeare himself, when he was doing The Tempest, I think, saw Caliban as one of his comic figures. But as always with Shakespeare, nothing is two-dimensional. So The Tempest underwent a number of different metamorphoses in performance since Shakespeare. We have The Tempest. Then we have Oliver Cromwell. The theater gets shut down. The tradition is broken.
When the theaters come back, they can’t actually remember how these things were done. So in the 18th century, The Tempest was an opera, and they added some people. They added a person called Dorinda, who is Miranda’s sister, so that they could have an ensemble group of singers, obviously. Then they added another guy so that Dorinda would have somebody to marry. Then they learned how to fly Ariel, and Ariel flew around.
Then when they tried to bring back the original Tempest, nobody liked it because they wanted the opera. They wanted Dorinda and the flying Ariel. In the 19th century, when Ariel was always played by a woman who flew around, Caliban became a romantic sort of Byronic hero, oddly enough. Because by that time, people had caught up with slavery in the United States, and noble savages and other things like that that were of the 19th century.
COWEN: And he has real charisma.
ATWOOD: Well, it depends how he’s played. It really depends, and I’ve seen, by this time, a lot of performances of The Tempest, including film ones. One by Julie Taymor, in which Prospero is Prospera — she’s the duchess of Milan — has a pretty good Caliban.
But he has a lot of resonance. He’s given the most poetic lines in the play, actually. There’s a big question about him, which is, what happens to him at the end? We’re not told. It’s another of these open questions. We just don’t know.
COWEN: How sympathetic are you to Prospero? There’s a line in Hag-Seed: “He would seem to be the top jailer in this play.”
ATWOOD: Well, he is.
COWEN: Do you like him?
ATWOOD: Like or dislike, it kind of doesn’t matter. Whether I like or dislike him, I’m sympathetic to him in some ways. But he says himself that he got himself into this. He was the duke. He didn’t do his dukely duties. He didn’t behave in a duke-like way. He went off to study magic instead, and he let his brother usurp the kingdom. By doing so, of course, he threw his young child into danger and ended them up on this island.
If you want to know why he wants to get off of it, look at the menus, which I did. I did a little foodie piece for a food magazine on what they were actually eating. It’s not fun.
COWEN: As Leggs suggests in Hag-Seed, is there any chance that Prospero is Caliban’s dad?
ATWOOD: Think about it.
COWEN: Someone has to be, right?
ATWOOD: Think about it. Somebody has to be his dad. So, if we’re not accepting the devil as being the progenitor of Caliban, who is? I ask you. They’re both in the magic business. Why would they have not met up at a convention? Sort of a one-night stand producing Caliban.

COWEN: Handmaid’s Tale — is it an accident that you started it in West Berlin in, I think, 1984?
ATWOOD: Wasn’t that corny? It was very corny, but I couldn’t avoid it. If I had been able to do it in some other year, I would have because, inevitably, this question comes up. But I just happened to be in West Berlin. I didn’t go there on purpose to do that. But there I was, and how handy it was because it was the wall all around. And being Canadian, I could go into places like East Germany and Czechoslovakia and Poland easier than German nationals could. So I did.
COWEN: You had had a prior trip to Afghanistan. Did that influence the book at all?
ATWOOD: A bit, yeah. I was lucky enough to see Afghanistan six weeks before the present unpleasantness started. Six weeks before they assassinated Daoud. It was clear, and it always has been a crossroads, and it’s always been desirable. It’s always been desired by China, by Russia, and by anybody else in the vicinity because things went through it.
At the time we were there, there was a great big Chinese embassy. There was a great big USSR embassy. And there was a great big American embassy. Daoud was doing quite well by playing them off against each other and getting stuff out of them. They should have stuck with him. But it’s been chaos ever since. I saw it at the last minute before a lot of things just got blown up.
COWEN: Did reading the Book of Genesis serve as an actual influence on Handmaid’s Tale? Or it’s just a connection you noticed later?
ATWOOD: Oh, no, it’s right there in the epigraph. So the question to you is, if you’re going to take the Bible literally, how literally would you like to take it?
COWEN: Is it the Jacob version of this story or the Abraham-Sarah-Hagar version of the story that grabbed you? Usually you mention the Jacob version of the story.
COWEN: There’s the second one. Why?
ATWOOD: Because it’s got more people in it.
COWEN: But the first version has a happy ending, right? You get Isaac, you get Ishmael. They each found tribes.
ATWOOD: Why would I write a book with a happy ending?
ATWOOD: Yeah, it’s not such a happy ending. It’s a very ambivalent ending, I would say. Abraham is a very dicey character in the Bible. But there’s a wonderful book called God: A Biography, which is by Jack —
COWEN: The Miles book, yeah.
ATWOOD: Yeah, it’s a wonderful book. I love it. It’s got the best exploration of the Book of Job that I’ve ever read. I think it’s brilliant.
But remember where my roots are. I’m Canadian. We took the Bible in school. There wasn’t any separation of church and state. Then I went to college and studied with Northrop Frye. Then I went to Harvard and studied with Perry Miller. And for all those people, you had to know the Bible.
Go read or listen to the whole thing. I had no clue about her entrepreneurial ventures and patents.

Tuesday, 11 February 2020

Jacinda says I'm wrong

I'd had a chat with Breakfast TV on Monday morning on the back of Matt Nippert's absolutely excellent continued sleuthing into those subsidies.  
Currently, Mr Crampton says there is around $170 million spent in subsidies to international films. He says other industries are also affected by not getting a slice of that money, because they aren’t getting the people they need in the right jobs.

“The video game industry at the end of last year was complaining that they can’t get workers because they’re all being sucked in to video animation in the subsidised film industry,” he says.

“Where does it end? We shouldn’t be on this kind of rollercoaster. Every country in the world competes on these kinds of subsidies and it’s a mistake to be in that game.”

Jacinda Ardern disagrees. She says she believes the flow on affect of the film sector is worth it for New Zealand.

"You ask anyone who works in the industry whether or not it makes a difference... the flow on affect is huge," the Prime Minister said today.

"The film industry is completely unique."
The big problem that I had with the government's "wellbeing" budget is that it made absolutely no attempt to gauge whether anything in it was particularly useful in improving wellbeing. Funding went into areas where there were demonstrated problems, but with no particular way of telling whether those were also the areas where more spending could do the most good.

I guess I was hopelessly optimistic in expecting that a government that professed to care about wellbeing actually were serious about it.

If the Prime Minister's method for evaluating whether giant film subsidies are the best possible use of tax money is to go and ask the recipients of the subsidies whether they make a difference, well, I suppose we should all ratchet down our expectations for Budget 2020.

You might have thought that putting a couple hundred million dollars a year into Pharmac might do more good than film subsidies - it would be a 20% boost to that budget. Or any of a pile of different areas, including an education system that has trouble teaching graduates the difference between effect and affect. But no. Film subsidies.

It makes for fun syllogisms though. If tax is love and Avatar sequels are tax, are we required to love the Avatar sequels? I hope not.

Previously: Film subsidies are stupid

Monday, 10 February 2020

Congestion charging

The same kind of technology that lets commercial trucks handle road user charges painlessly could be installed on petrol vehicles. Petrol excise would go away, with road user charges taking their place to collect the same amount of money for the land transport fund.

Carbon charges on petrol would, of course, remain.

The purpose of a congestion charge would not be to fund new roads, or road expansions, or public transport, or anything else. The purpose of a congestion charge would be to get rid of the hassle and time and frustration cost that each of us bears when stuck in traffic, and to replace it with a monetary charge instead that would allow traffic to flow freely.

If you'd like an analogy, think about the old Soviet Union. Prices were officially very low in the government's stores, but everyone had to sit in queues for hours if they wanted to be able to buy toilet paper. That's how we run our roads: the government's set price for getting onto the road is zero, but you have to queue.

Ideally, congestion charging would be revenue-neutral. Road user charges would fund the roads, but congestion charges' only job is to alleviate congestion. The government could take every dollar collected in congestion charges, net of the cost of running the system, and give every person in the country an equal payment out of the collected funds.

Letting prices work can solve a lot of problems. It can also then make additional investments in roads rather less necessary. Traffic engineers like building roads to handle times of peak use. Charges that spread that traffic load more evenly over the day mean that you don't need to invest as much in increasing capacity in the first place.

Even better, the collected congestion charges can start to tell you when it does make sense to increase capacity – to twin Wellington's Mt Vic tunnel, for example, or to turn some of the chokepoint traffic circles on Johns Road in Christchurch into offramps and flyovers. If collected congestion charges around the chokepoint signal that people really put a lot of value on getting across town, that starts making the case for increasing capacity.

If instead we see that the congestion charge needed to for traffic to flow freely around the chokepoint at peak hours is rather low, then the economics of fixes like a second tunnel are likely rather poor.

It's hard to tell which is true until we start pricing congestion.
Like carbon prices, congestion prices are one of those things where the economic merits are obvious, but the politics in getting there are hard. Heck, Mark Blaug explained the case for them in a public lecture at Canterbury more than a decade ago.

Making the charge revenue neutral will be important in making the thing feasible. If people expect this to be a tax grab to fund all manner of new initiatives, they'll rightly balk. Using a congestion charge that way makes a hash of it. If you use the thing with revenue as an objective rather than a byproduct, you'll set the prices incorrectly. I like the idea of just giving everyone a cheque for their equal share of the collected net revenues.

At the same time, we do need better ways of funding roading infrastructure. And that's where Road User Charges could come in. If we have the transponders in place for congestion charging, we can use them to set different base prices for different roads. If it turns out that a second Mount Vic tunnel makes sense, which we'd quickly see if the congestion charge necessary to ease traffic around the tunnel were high, then you could fund the second tunnel with a dedicated charge on that route - that dedicated road-specific RUC could pay off the bond that funds the tunnel. And if it looks like there's no way that driver demand, as demonstrated by willingness to pay to use that route, would cover the cost - well, then digging would be a waste of money and shouldn't be done.

Friday, 7 February 2020


In this week's column in our Insights newsletter, I wonder a bit about whether T20 matches really need tie-breakers. 
I’m not convinced there’s anything wrong with a tie. Why are we always trying to break them?

We left Friday’s T20 match between the Black Caps and India after the 16th over. New Zealand needed only 26 runs from 24 balls with plenty of wickets in hand. The WASP had New Zealand almost certain to win. It was well past 11 pm, and our 9-year-old was dozing off.

I read CricInfo’s commentary aloud to my rather more awake son and his friend as we walked to the car. Back at the stadium, the roars we heard from a crowd heavy with India’s supporters during the final over probably meant wickets rather than boundaries, as CricInfo eventually confirmed.

So they were off to another Super Over that would take the game to a too-familiar outcome, well past midnight. And we were off to get the kids to bed.

The drive home had me wondering about tiebreakers.

If both teams end a match with an identical score, is there any fair way of determining which side deserved to win?

Deciding a match on the number of boundaries tends to reward the flashier team over a patient one grinding forward on ones and twos. Is the former really better than the latter?

Equally, handing a win to the team with more wickets in hand says that it’s worse to run out of wickets than to run out of overs in a limited-overs game. Both are surely valuable, so why set the one above the other?

But going to a Super Over is plainly a mistake – not simply because of any recent and repeated unpleasantness. You might think that, because an extra over in a twenty-over game gives us 5% more information about which team is really the better one, it is a fair way of resolving a tie. But this format privileges the team with top-heavy talent over the side with talent spread across its order.

Ties are more likely to happen when both teams have comparable skill, so it is no surprise that picking a winner between them involves some arbitrariness. Worse, every method of choosing can skew the pitch.

Yet nothing in cricket demands every match have a winner or loser. We could just accept that both teams were equally decent on the night.

At least that's better than being forced to consider New Zealand’s performance in the Super Overs. 
I tend to run cricket stuff past Scott Brooker to make sure I'm not beclowning myself too badly as a relatively recent convert to the game. 

Scott had an excellent suggestion for a way of avoiding ties, should one wish to avoid ties. 

At the start of the second innings, flip a coin. The coin flip determines whether the chasing team needs to meet the defending team's score to win, or exceed that score. Both teams then have the full inning to chase or defend a known target. No chance of a tie. And nothing that skews play. I rather like it. If you don't want to allow ties.

And this idea also has merit:

Wednesday, 5 February 2020

Purity Spirals

Lately we’ve been witnessing more and more small worlds fall apart under the weight of their vast moral centre of gravity. In the past year, the middle-class, middle-aged, overwhelmingly female knitters of Instagram have descended into internecine conflict over racism allegations. Young adult fiction has exploded into an ethical gazumping war over who is allowed to write about what colour of character. In Canada, the music business has become so consumed by ethical etiquette that a juror who submitted the band Viet Cong for the nation’s top music prize was compelled to write a lengthy apology over how culturally insensitive his action was.

I’ve become fascinated by the link between what we see in examples like these, and a dynamic we’ve seen play out through history.

In 1967, Mao’s Red Guards took to the streets determined to root out the ‘four olds’ of traditional Chinese culture, killing hundreds of thousands in the process. By 1968, they had fallen apart as factions fought each other to represent the truest version of Maoism. In 1794, Robespierre found himself on the same tumbrel he had prescribed for so many other problematic persons. In both cases, a bidding war for morality turned into a proxy war for power.

In my new BBC Radio 4 documentary I wanted to join the psychological dots between history’s pinnacle nightmares and what happens at the end of your road. I decided to call both the phenomenon and the documentary, “The Purity Spiral”. A purity spiral occurs when a community becomes fixated on implementing a single value that has no upper limit, and no single agreed interpretation. The result is a moral feeding frenzy.

But while a purity spiral often concerns morality, it is not about morality. It’s about purity — a very different concept. Morality doesn’t need to exist with reference to anything other than itself. Purity, on the other hand, is an inherently relative value — the game is always one of purer-than-thou.
Read the whole thing. And catch the BBC podcast as well.

The entire dynamic may also have consequences for dating markets.

Tuesday, 4 February 2020

Ports and Portability

Alas, Bernard didn't keep the headline I'd picked for this week's Newsroom column

It's about whether it makes sense to move Auckland's Port. I don't know whether it makes sense to move it or not, but I do think that the first step is figuring out just how much value could be unlocked by turning 55 hectares of waterfront real estate over to other uses, whether residential, commercial, or anything else other than a stadium.

So: Ports and Portability.

Bernard went with "Hard numbers needed before 'blue sky' Port talk".

Ah well. I still like Ports and Portability. He's the expert though.

A snippet:
Moving Auckland’s port might make sense – someday.

But I do wonder about some of the talk of moving Auckland’s port to put in a waterfront stadium, or museum, or other large, iconic, and expensive facility.

Stadium maths are almost invariably bad. Rather than revitalising cities, stadiums more typically become white elephants needing ongoing financial support. Putting one on some of the city’s most valuable property would not only ensure it could never cover its own real costs, but would also forgo far better uses for prime commercial and residential land.

If you owned a quarter-acre section in Epsom, with a sprawling ramshackle workshop and shed in the back yard, rising property prices might eventually convince you to make some changes. Clearing the workshop out could be a bit expensive – and especially if you needed to find some other facilities for your projects. But subdividing could let you clear the mortgage and pay off a few other bills.

Unless you had money to burn, deciding to take on all the expense of clearing out the shed and finding another place to work might be a bit silly if you decided instead to put in a swimming pool. It could be nice on a warm evening, but it certainly would not help with the problem of covering the mortgage. And the bank might have something to say about it.

As downtown property values rise, eventually the Council-owned Port’s fifty-five hectares of land and wharves will be valuable enough in other uses to cover the cost of clearing the land and building new facilities elsewhere. Those costs will not be small, with consultancy reports battling over just how close to $10 billion the bill might wind up being. But the value of the underlying property will not be small either.
I worry that where the government wants to decide on whether to move the port before deciding on what to do with the waterfront land, we could too easily wind up with a waterfront stadium.
In the Hitchhiker’s Guide to the Galaxy, Douglas Adams wrote of how numbers written on restaurant bills within the confines of restaurants do not follow normal the laws of normal mathematics but instead follow Bistromathics. He imagined spaceships powered by this new math. Numbers used in economic impact assessments of stadiums are even stranger than bistromaths. To put the academic economic consensus simply, public investments in stadiums do not deliver the promised benefits.

A waterfront stadium the size of Eden Park would sit on about $600 million dollars’ worth of property, if that waterfront land winds up being worth about $10,000 per square metre; construction and running costs of a stadium would be additional. If the stadium had zero running cost and zero construction cost, it would still need to generate revenues of almost $50 million per year to cover the capital cost of the land alone.

And Eden Park’s total operating income last year was just short of $16 million. A stadium might not be the best possible use of waterfront land. It is just too easy to imagine combined governments spending billions of dollars to move the port based on business cases involving selling the port’s land, only to then spend easily over a billion dollars on a new stadium for the site instead.