Tuesday, 19 November 2019

Really protecting tenants

The government is making it harder for landlords to evict tenants, among a few other changes to the Residential Tenancies Act. 

It's a brilliant bit of politics. 

Suppose that successive governments have so screwed up the rules around getting new housing built and the incentives facing councils to consent new housing that we wound up with a housing shortage. 

Suppose further that your government got elected on a promise to fix the mess - but has achieved close to nothing on the file after two years with an election coming. Kiwibuild was never going to work, and wound up being a costly distraction from the real supply issues at play.

And suppose further that you really need anger about broken housing markets to be directed away from the government. 

What better play than changes to the Residential Tenancies Act? You get a lovely set piece then where landlords yell about the changes, and everybody who's mad about the status quo gets to blame landlords for the mess rather than sheeting that blame home to where it belongs. 

Of course it won't do much to protect tenants. It's palliative. When Auckland is deep in a housing shortage, it doesn't really matter how you fiddle with the Residential Tenancies Act. It's all second-order stuff. 

If you really care about protecting tenants, you need to have massive increases in housing supply. You need to have landlords competing for tenants. You need to have the run-down, damp, grotty dungers left vacant because people have other places that they can afford to live instead. When you're in a massive housing shortage and the alternative to a crappy house is a garage or a car, crappy houses get rented out. If we instead had a surplus of housing, those places would be left vacant and their owners would have to decide whether to refurbish or tear down. 

If you look over at the car leasing market, the provisions in standard lease agreements are way more friendly to the car's owner than are the provisions in house rental agreements. But consumers don't get shafted in those markets because there's ample competition among suppliers and it's easy to set up shop and import more cars if the others are doing a poor job. Like, if the only cars available for lease here were 30 year old Holdens with holes in the roof and a heater that would only work if you held your knee against the centre console just right - somebody would make a buck by opening a new company leasing better cars. 

But importing a car is pretty easy. If you want to build a new house, there are years of process. Auckland Council will make you hold everything up while deciding on street names FFS. We don't make car dealers hold the cars at the port until they've come up with unique names for each car that are culturally sensitive and have passed community consultation, but we hold up housing supply for it. 

I go through all of that over in my Newsroom Pro column this week. Well, not the political conspiracy theory part of it. I expect that the Prime Minister sincerely believes that this will help. And parts of it might. It could just be convenient coincidence that it gives them a nice set piece for landlords and tenants to yell at each other rather than noticing the lack of action on the substantial housing shortage. 

A snippet:
Charles Dickens quipped that an annual income of twenty pounds would result in happiness if annual expenditure were six pence less than twenty pounds, but misery if expenditures were instead six pence over twenty pounds.

Housing is a bit like that.

If we had 600,000 dwellings in Auckland and some 580,000 households needing housing, the result would be happiness. Instead we have about 540,000 dwellings and 580,000 households needing housing, and the result is obviously miserable.

...Tenancy regulation will not build more houses. It can only address some of the current symptoms of a fundamentally broken housing market.

Worse, it is the kind of move that makes the most sense if the Government is pessimistic about its chances of fixing the real underlying problem – making it easier to get new housing built.
Those numbers are a bit rough. The household estimate comes out of the 2013 Census because I've not seen yet any release of TA-level household counts from the 2018 Census - I used the 2013 midpoint estimate which I expects lowballs things. But the number of dwellings count is current.  

Police and guns

If this is right, it looks like New Zealand needs better police rather than stricter firearms laws. 

The man accused of the March 15 terror attack was supplied 2300 rounds of ammunition by using a police mail order form that also revealed to police he had an AR-15, a parliamentary select committee has been told.

The information was part of a submission from licensed firearms dealer Paul McNeill to the finance and expenditure committee, which is considering the Government's second tranche of gun law reform.

McNeill, who is also director of the Aoraki Ammunition Company, appeared before the committee on Friday via video link, but his submission was quickly taken offline in case it might affect the accused's right to a fair trial.

He told the committee he received a police mail order form from the Dunedin arms officer in December 2017 to supply the accused with 2300 rounds of ammunition.

"At the time, Brenton Tarrant was issued with a 10 year [firearms] licence, expired 8 September 2027, indicating he was issued a licence in September of 2017, which from my information was only a matter of five or six weeks after he arrived in the country," McNeill told the committee.

"This time, he has no family, no partner, no job, no footprint in the community, yet he was vetted as being fit and proper and obviously given a full licence which allowed him to arm himself."

McNeill said the mail order form also said the accused was in possession of a Norinco semi-automatic rifle as well as an AR-15 - the type of military-style semi-automatic firearm the Government made illegal in the aftermath of the March 15 attacks.

"So the police were aware he had these firearms," McNeill said in video footage that was removed from the Parliamentary website, but was later posted on social media.
So. The police granted the guy a 10-year firearms licence on minimal background check. They approved his getting 2300 rounds of ammunition. They knew or ought to have known that he had an AR-15.

I don't think the problem here at all is the lack of a gun registry. The problem instead seems to be that the unit in police that dealt with firearms checking stuffed up.

And I wonder how much police pushing for tighter gun control is to distract from that.

In last week's Insights newsletter, I noted some related problems: 
Policing by Consent

New Zealand’s basic bargain around firearms ownership and policing always seemed rather sensible. It was very much a feature of New Zealand’s general “Outside of the Asylum” approach to policy.

Background checks on potential firearm owners limit access to firearms in the interest of public safety. The police then have no need to be routinely armed. It seems a far more sensible approach than America’s, where a heavily armed public has increasingly led to a militarised police force.

New Zealand’s bargain seems to be breaking down with an increasingly armed police force coinciding with far tighter restrictions on civilian firearm ownership. It puts at risk basic principles of good policing dating back to London’s Metropolitan Police Force in 1829.

New Zealand is one of the few countries that has maintained an unarmed constabulary. Police Commissioner Mike Bush put things well in 2009 after a rare shooting of a police officer led to calls for arming the police. He described our unarmed constabulary as a unique and cherished feature of New Zealand policing, and warned that routine arming of police would make community policing considerably more difficult.

The fundamental relationship between police officers and members of the public changes when one of them has a sidearm at the ready. The trial of roving squads of armed police ready in case of armed incidents has already led to their use in more routine stops.

Sir Robert Peel outlined the basic principles of policing that have stood for almost two centuries as the foundation for policing by consent. Those principles recognise that policing and good order depends on the public approval of police actions and the willing cooperation of the public, and that both of those are diminished when police are too quick to resort to force and shows of force.

Policing is challenging. But there has been no surge in violent or property crime involving firearms; police statistics going back to 2015 suggest a flat or somewhat declining trend in court action. And restrictions on private firearms ownership have strengthened considerably over the past year.

New Zealand’s experiment with roving armed police should end. It is an unneeded show of force. And it is contrary to Peel’s dictum that the best test of police efficacy is the absence of crime and disorder rather than the visible evidence of police action in dealing with them.

Friday, 15 November 2019

Confusing the Monster-Ometer with the Frog Exaggerator - again

The latest results from the NZ Health Survey are up.

And so is Alcohol Healthwatch's take on those stats. They take it all as reason for tightening control on alcohol.

Go and have a look at the stats for yourself. For each of a pile of indicators, MoH slices up the data by gender, by age, and by ethnicity. It then says whether the difference between the latest stat and last year's stats, or 2014/15's stats, or the 2011/12 stats for the series that go back that far, are statistically significant.

Now one immediate problem is that if you've sliced up the data two dozen ways and you're running comparisons between three pairs of years for each of those slices, you've got a lot of potential comparisons. 24 comparisons per indicator times 3 year-pairs of comparisons, for the indicators where they have data going back over the whole period - which they don't for some because they changed their definition of hazardous drinking along the way. 

When you're slicing the data that way, you need to adjust your statistical tests for the problem of multiple comparisons. Why? Jellybeans. I'm pretty sure that MoH hasn't done that and that they're just running naive tests for each one.*  

So keep that in mind when noting changes that pop up as significant. Some of those will really just be noise. 

While the mean prevalence figures cited in each group are not age-standardised, the p-values are. 

Here is the full list of all statistically significant changes across the indicators. They always compare 2018/19 to 2014/15 and to 2011/12 when those years can be compared; I don't know why they don't run comparisons to the start of the series in 2006/07. The 2006/07 figures are almost always higher than the current ones. For most stuff, there was a big drop between 06/07 and 11/12, then a flattening. 
  • Past year drinking. There are 72 potential comparisons. One is down. Twelve are up. And 59 are unchanged. 
    • Up from 78.7% last year to 80.3% this year, an increase significant at p=.05. But not significantly different from 2011/12 (lower, but not significantly) and not significantly different from 2014/15 (higher, but not significantly). 
    • Down among 55-64 year olds when compared to 2011/12 (but not when compared to 2014/15 or 2017/18)
    • Up among 75+ when compared to 2011/2 or 2017/18, but not when compared to 2014/15
    • Up among Maori when compared to 2011/12 or 2017/18 but not when compared to 2014/15.
    • Up among Maori men when compared to 2017/18, and up among Maori women when compared to 2011/12 (but not the other years for either)
    • Up among Pacific when compared to 2017/18, and up among Pacific women in every year comparison
    • Up among Asian women when compared to 2017/18, but not when compared to 2014/15 or 2011/12
    • Overall this looks like a bit of an increase on last year's stats, but still more than three percentage points down on 2006/07 (to which they don't make comparisons). 
  • Hazardous drinkers (AUDIT score 8 or higher, among total population). Here there are only 24 potential comparisons because their data doesn't go back earlier than 2015/16 because of a data redefinition. 
    • Across those 24 potential comparisons, there are zero statistically significant changes. 
    • Looking at the changes without looking at significance, compared to the start of the period, 8 of the 24 are higher and the rest are lower. Compared to last year, 17 of the 24 are higher and the rest are lower. 
  • Hazardous drinkers again, but this time restricted to the set of those who consumed alcohol in the past year. Same drill as last time on the years of data. And, same as last time, zero significant changes out of 24 comparisons.
  • Heavy episodic drinking (at least 6 standard drinks), at least monthly, total population. I don't think 3 pints of decent beer is heavy, but I suppose these things are subjective. 24 potential comparisons because of year restrictions. One statistically significant change over last year: a drop among those aged 75+. That's it.
  • Same thing again, but restricted to past-year drinkers: identical. A drop among those aged 75+, no other statistically significant changes. 
  • Heavy episodic drinking, defined as before, total population, except this time at least weekly. 
    • Up among men; Up among those aged 18-24, Up among those aged 15-24, Up among European/other men - all as compared to 2017/18. The remaining 20 comparisons are unchanged. Doesn't look much different for those as compared to 2015/16, but they don't run that comparison. 
  • Heavy episodic drinking, at least weekly, among past-year drinkers.
    • This time, it's only up among European/other men. None of the remaining 23 comparisons are significant. 
So. We've got 240 comparisons. Of those, 17 show statistically significant increases, 3 show statistically significant decreases, and 220 show no change. I was doing eyeball-counting here, so let me know if you've caught a miscount. 

If they've not adjusted the p-stats for multiple comparisons, we've likely overstated the number of significant results. 

If you want to use a Frog Exaggerator, you can point to some of the significant changes among the 240 potential comparisons and say that they're big. But folks should know you're using a Frog Exaggerator rather than a Monster-Ometer.


And while the old and new indicators on hazardous drinking aren't comparable, we might expect that the direction of change in the measures would be comparable. There were big drops in hazardous drinking among youths 15-17 from 2006/7 to 2011/12 on that earlier measure, then a flattish trend after that - and similarly for those aged 18-24. Over the longer period, drops among youths are washed out by increases in older cohorts. Hazardous drinkers, among those 15-17, dropped by over 40% from 2006/7 to 2015/16, and dropped by about a quarter among those aged 18-24. Any recent flatlining should be read in context of prior unmentioned drops in youth hazardous drinking. 

Similarly, consumption of 6+ drinks at least weekly on the old measure showed that 25.6% of 18-24 year olds were in that category in 2006/07, with prevalence dropping to 20.6% in 2011/12 and then bouncing around to land at 15.1% in 2015/16 - a drop of over ten percentage points over the interval. By the new measure, prevalence in 2015/16 was 20.4%, dropped to under 17%, then came back up to 21.1% in 2018/19. So that's an increase on last year, but it will still be a decline on 06/07.

* Update: MoH confirms that they're reporting the unadjusted stats. That's all fine - there are plenty of folks who'd need the naive t-stats. But it does mean that if you're looking across the set of them, you need to remember that you probably need a tighter threshold for the p-values. 

** For those who don't know that excellent Simpsons episode: Professor Frink thought he'd found the Loch Ness monster. The machine was going nuts with beeping. But it was just a frog. Why? He was using the Frog Exaggerator rather than the Monster-Ometer. One might ask why he bothered bringing a Frog Exaggerator out on that scientific expedition in the first place. But good on Frink for letting everyone know he'd accidentally pulled out the Frog Exaggerator. Not everyone does that. 

Thursday, 14 November 2019

Film subsidies are stupid, a continuing series


The New Zealand government, committed to wellbeing, believing that tax is love, wanting to ensure that every loving tax dollar spent provides the greatest possible increase in wellbeing, and fronting the Christchurch Call to stop harmful speech, has put $243,000 towards a Chinese propaganda film with the tagline "Anyone who offends China, no matter how remote, must be exterminated."

Thomas Coughlin has the story over at Stuff:
The film was not made directly by the Chinese Government, but by a slew of Chinese state-owned enterprises, including the China Film Group Corporation, China's largest film producer, and Bona Films.

Bona Films is a subsidiary of China Poly Group, another state-owned enterprise. China Poly Group is an unusual conglomerate housing the world's third largest art auction house and a real estate business, and has "longstanding ties to the military and the family of the former Chinese leader Deng Xiaoping," according to The New York Times.

The strong allegations made against the Chinese film industry's activities in New Zealand are made in forthcoming research from China expert Professor Anne-Marie Brady.

In it, she says growing cooperation between the Chinese and New Zealand film industries, combined with New Zealand's screen production grant means "taxpayers are now subsidising China's propaganda films".

Her concerns aren't just confined to Chinese films — she said the growing ties could have a chilling effect on New Zealand's own cinematic output. 
I don't know quite how you get around this if you're going to have an international film subsidy regime.

Like, maybe you could imagine some vetting to make sure we're not subsidising the production of propaganda films (dammit, I always misspell this and have to go back and correct, and I blame these guys) for authoritarian governments. But can you imagine the diplomatic mess where an arm of the NZ government tells film companies linked to the Chinese military and linked to the high echelons of the Chinese Communist Party folks that the NZ government considers their film to be authoritarian propaganda?

Not having international film subsidies would be a pretty clean way of not having to make those kinds of calls.

And, as reminder, the arguments for the subsidies are largely bunk.

You'll most frequently hear the argument that the subsidy is just a rebate on taxes paid here on activity that otherwise wouldn't have occurred here, so it's costless.

But that's wrong in general equilibrium. In the absence of film subsidies there would be fewer films made here, but people would work in other industries instead. Industries that do not get a tax subsidy. Those other industries are smaller than they otherwise would be because resources have been competed away by the subsidised industry. The subsidy won't increase total employment, it'll rather shift the kinds of tasks that are undertaken here as compared to abroad.

The more sophisticated argument is that the artificially-large film sector makes it cheaper and more feasible to produce NZ content here. International film subsidies have brought production that's built facilities and expanded capabilities, so it's then easier for NZ On Screen to get actual New Zealand work produced.

And that's certainly true. But we have to ask about value for money. International film subsidies cost on the order of $100 per household per year - or at least that's what it worked out to when I'd looked at the budgeted spend for 2020 earlier this year. Add in additional cost for training subsidies to work in that industry to keep it at that scale. And think about what other valuable services all the smart folks working in that industry, because of subsidies, could have been providing elsewhere if they hadn't been pulled into film work because of the subsidy regime.

Is it really plausible that the typical household, if offered the chance to decide, would really want $100 from their annual tax bill going to pay for international film production here rather than being shifted to health, to education, to Pharmac, or to themselves in lower taxes?

2020's budgeted international film subsidies are $171.6 million. Pharmac's budget is around a billion per year. You could then increase Pharmac's budget by around 17% if you stopped paying international film companies to make movies here instead of elsewhere, and put the money instead into Pharmac.

Is it plausible that whatever benefits are generated by international film subsidies, including that it makes it easier to produce great stuff like Wellington Paranormal and Hunt for the Wilderpeople, are higher than what we'd get by giving the money instead to Pharmac?

As for the argument that we have to keep subsidising the film industry because so many people now work in that industry... my column in our Insights newsletter earlier this year:
We all know that best policy is not paying off the kidnappers. Countries that get in the habit of paying the kidnappers encourage the taking of more of their nationals as hostages. It’s a dangerous game to get into because it’s so hard to stop.

But would any country be so daft as to not only pay the kidnappers, but also deliver to them the next round of hostages as part of the bargain?

If you think no country would be so mad, think again. It’s how the film subsidy regime in New Zealand works – as it does in every other place that chooses to play the game.

Last September, The Herald’s Matt Nippert reported that the Labour-led government had decided to continue the previous National government’s film subsidy scheme. Minister Parker ruled out changes where thousands of jobs could be at risk because business viability was threatened by ending subsidies, and where commitments by the National government risked lawsuits if the subsidies ended.

So there are your hostages: thousands of workers in the film industry who would have to shift to other employment, or shift offshore, if the subsidies ended. And here’s the payment to the kidnappers: the budget estimated that New Zealand will spend $113.6 million on screen production grants targeting international productions this year, with $171.6 million budgeted for 2020 – or about $100 per household.

Meanwhile, a host of New Zealand government-funded polytechs and universities train students towards diplomas and bachelors in screen production, diplomas in on-screen acting, bachelors of design (stage and screen), certificates in applied filmmaking and television, and more.

The government is subsidising specialised training students for jobs in an industry that would shrink dramatically in the absence of further subsidies to that industry, and further subsidies to that industry are justified on the basis of the jobs that would be put at risk if the subsidies ever ended.

To put it plainly, the government is teeing up the next round of hostages.

Had governments been this smart in the early 1900s, subsidies for training in the fine art of making buggy-whips would have been accompanied with bans on cars to protect the jobs of the whip-makers.

To crib a line from an excellent ’80s Cold War film, the only winning move in the international film subsidy game is not to play.

Semester Abroad Sanctuary

The Chinese University of Hong Kong does not look like a safe place for students.

After the Canterbury earthquakes, a lot of universities, both here in NZ and elsewhere, made it really really easy for Canterbury students to do a semester as visiting students.

I don't know how many students at the Chinese University of Hong Kong would want a semester abroad in New Zealand. And it could be that the messes there will be over by the time university starts up again in New Zealand.

But it could be good if New Zealand's universities had a chat with each other, and with Immigration New Zealand, about what they could do in hosting students from Hong Kong needing a safe space come the next semester, should it remain unsafe in Hong Kong.

Update: Why not consider semester-abroad students from Hong Kong for summer semester?

Wednesday, 13 November 2019

Campaign finance balloons

I used to spend a bit of time on campaign finance when I taught public choice - the evidence on whether money buys politicians' votes, extent to which campaign expenditure influences outcomes, different models of lobbying activity and the like. 

I liked there to note that campaign finance reform is a bit like squeezing on a balloon. Things will always pop back out in other places, and you have to watch for that.

Guyon Espiner's found one spot where the balloon has bulged out:
A mysterious foundation that loans money to New Zealand First is under scrutiny, with a university law professor saying although it's lawful, it fails to provide the transparency voters need in a democracy.

Records show New Zealand First has disclosed three loans from the New Zealand First Foundation. In 2017, it received $73,000. Then in 2018, it received a separate loan of $76,622, in what the Electoral Commission says was a loan executed to "replace the first loan". In 2019, it received another loan for $44,923.

The only information known about the foundation is the names and addresses of the two men who are trustees. They are Brian Henry, who acts as a lawyer for the New Zealand First leader Winston Peters, and Doug Woolerton, a former New Zealand First MP.

When contacted by RNZ, Mr Henry said, "There is nothing to talk about. That's the end of the conversation," and hung up.

As well as his role as a trustee for the New Zealand First Foundation which loans money to the party, Henry is also the "judicial officer" for New Zealand First. The position means Mr Henry gives legal advice to the board of the party, serves as a member of the constitution committee and chairs the disputes committee.

Mr Woolerton left Parliament in 2008 and now runs a lobbying firm. His company is called The Lobbyist and its website offers media strategies, services in "drafting changes for legislation" and "personal introductions" where appropriate.

"I am not prepared to talk about it at all," Mr Woolerton said of the New Zealand First Foundation. "It is not something that I am able to talk about. It is not something that you talk about at all."

Mr Woolerton wouldn't say what the foundation was, what his role as a trustee involved or whether he believed he had conflicts of interest given he also ran a lobbying firm.
So. The guy who runs the foundation that can take anonymous donations and make loans to New Zealand First on the back of those donations is the same guy who can be hired as a lobbyist to suggest drafting changes for legislation and make personal introductions.

And New Zealand First has a fair bit of sway over legislation given the current coalition environment.

There is no corruption in New Zealand....

Monday, 11 November 2019

No pressure

I'd failed to keep up with South Park and have finally caught up with most of the excellent Season 19. 

After a Whole Foods opens up, Randy Marsh finds himself charity-shamed for not wanting to add $1 to his purchase to help increasingly dubious causes, then shamed for only adding a dollar.

In my reader mailbag, I find the following. It was emailed to parents at one of the Wellington primary schools:
November 8, 2019

Support Staff Make a Significant Difference For All Our Children

I know you will all agree that this talented team of staff make a significant positive difference to our school, including our library and teacher aide staff. Their collective agreement is currently being negotiated between NZEI and the Government. These staff are currently employed directly by the school but we are reliant on the Operational Grant and our parent donations to pay them.

To increase their pay rate to better reflect the vital contribution they make to the school we require a change in the Government funding.  Schools must be resourced to pay staff fairly, ensure secure employment and provide high quality learning support.

As part of a national day of action I encourage staff and students to wear something orange on Monday 11th November in support of our wonderful support staff.

Ngā mihi nui,
I have no view on the merits of the pay rate claims in that sector. But it seems off to require primary school children to do this. 

Oh, you're not wearing orange. Why do you hate our support staff?