Friday 24 December 2021

A year in columns

I'm back in Christchurch for the summer. When I lectured at Canterbury, I often helped coordinate and host Erskine visiting fellows. With international borders closed, Canterbury's had to scrape the bottom of some barrels. So, I'm back as an Erskine. 

I'll be talking with the students in the Masters "Advanced Applications in Finance and Economics" on writing in economics. 

I figured I should look back over the columns I'd written this year. There are more of them than I'd thought. I've bolded some of the better ones. I'm sure I forgot to blog some of these; apologies.

Thursday 23 December 2021

How can Immigration NZ keep being this bad?

RNZ reports:

Immigration New Zealand has received more than 10,000 applications for the one-off 2021 Resident Visa since it opened on 1 December.

It was set up to streamline the residency process for critical workers already onshore but has left some ICU nurses, already in priority queues, in limbo.

An ICU nurse - RNZ is calling Anna - moved to New Zealand with her partner two years ago with a plan to settle permanently.

She applied for a working residency visa last month and got put on a priority list as an essential worker, but this process has now stalled.

Anna said INZ had emailed to say her application was on hold so immigration officials can work through applications for the 2021 Resident Visa.

She has been told to apply for this newly-introduced visa, but while waiting on her residency application she missed the cut-off for its first phase.

"We don't qualify for that just yet. We will do next year but it's just another application with another set of paperwork and another fee we have to pay them.

"And it's just another wait when we were already on the pathway to residency which I find a bit frustrating," she said.


Anna said, although she would like to stay in New Zealand, her experience with the residency process doesn't make her feel like part of the team of 5 million.

"It's just incredibly frustrating to feel that you're just undervalued. You're needed somewhere else, you know. I could go somewhere else.

"I will try not to because we really love New Zealand but loving New Zealand if New Zealand doesn't love you back doesn't work."

RNZ understands there are 10-15 ICU nurses in Wellington alone in similar situations, and the problem is not isolated to the capital.

College of Critical Care Nurses chair Tania Mitchell said New Zealand was competing with other countries and must cut through bureaucracy and financially incentivise ICU nurses to stay.

The borders have been effectively closed since March 2020. The government failed to find adequate ways for critical medical staff to get through the system and enter. I hate that entry winds up being by government largesse. But priority entry for health workers ultimately helps the system accept more visitors: health system capacity is one of the many binding constraints floating around. 

But these cases don't even require finding an MIQ space. They only need someone at Immigration NZ to pull out the file, blow the dust off it, and stamp it. 

And they aren't managing it.

Tuesday 21 December 2021

Medsafe Delenda Est?

Medsafe finally signed off on the Pfizer vaccine for 5-11 year olds.

Approval really was a forgone conclusion. It had been approved by the US, Canada, Israel, and others weeks or months ago. The odds that Medsafe was going to find something that bigger and better-resourced agencies hadn't found were close to nil. The only thing Medsafe provided was further delay in getting kids vaccinated, and Omicron is banging at the door. 

Over in the Dom (and the other Stuff papers), I wondered whether we need Medsafe at all. We could replace their approval process with a simple rule: if at least two trusted regulators abroad have approved something, we approve it automatically. 

I don't know what Medsafe adds after it's been approved in two places. 

Alternatively, rather than replace Medsafe entirely, you could augment it. Keep Medsafe on the off chance that somebody wants to work an approval through our system before others. But set a rule that, if a drug has been approved by two trusted regulators, Medsafe must follow suit immediately or provide exceptional justification as to why delay is warranted in this particular case.

I wrote:
Now imagine that Medsafe had never existed. New Zealand could rely on approvals provided by trusted regulators elsewhere.

If at least two of Australia, Canada, the United States, the UK, Singapore, the European Union, Israel, Switzerland or Japan approved a drug, it would automatically be approved here too. There are a lot of approval agencies out there. New Zealand would never be slower than the second-slowest trusted agency.

Why replicate the efforts of better resourced agencies elsewhere who are already on the task?

There could be a good reason.

If international regulators err on the side of being too slow, a New Zealand agency could be faster and nimbler than others. Where other agencies harm their public by taking too long to approve drugs, ours could avoid such errors.

That does not seem to be the role Medsafe plays.

Instead, Medsafe adds further delay on top of delays seen abroad.

Delayed approvals put us at the back of procurement queues for effective Covid treatments that will be in high demand. Those treatments keep patients out of scarce intensive care beds. Delays will matter.

Former head of the Salaried Medical Professionals Ian Powell gives the standard establishment line in response with a piece in BusinessDesk.  

My column began by noting that agencies optimally balance two risks. If they just approved everything, some bad drugs would get through despite pharmaceutical companies' reputational incentives to avoid that. I wrote:

Pharmaceutical companies have strong reputational reasons to avoid releasing unsafe drugs – not to mention liability concerns in some jurisdictions.

But an approval agency that simply rubber-stamped every application it received would risk approving a lot of unsafe drugs. And some people would be hurt or die as consequence.

That was the one polar extreme. The other is the agency that takes half a century to approve anything. No bad drugs get through, but a lot of people are harmed through treatment denied. 

I wrote:

But you could also imagine an agency that took half a century to approve any application. No drug would be approved unless the agency could determine, with certainty, that no adverse effects were encountered for decades after taking a drug.

So of course Powell chooses to pretend that my first polar case is actually me arguing for complete deregulation. Here's Powell:

I don’t know whether Crampton is familiar with Victorian satire but, if he is, he may have had the Charles Dickens novel ‘Bleak House’ in mind. In particular, the fictional Jarndyce and Jarndyce probate case progressing in the English Court of Chancery. The case has become a byword for seemingly interminable legal proceedings. The closest Crampton gets to satire is his metaphoric use of “half a century” to describe Medsafe’s approval process.

In the context of extending Pfizer coverage to children over five years, Crampton argued the pharmaceutical companies had sufficient motivation to give confidence over safety. He is right to the extent that it is not in the interest of pharmaceutical companies to intentionally or otherwise produce ineffective or dangerous vaccines. At the very least the reputational damage would be bad for business. Similarly, it is counter-intuitive for them not to employ competent scientists.

But these companies are driven by profit-maximisation. Not just profitability. They are a risky fit for the provision of a universal public good such as vaccines. Until the current coronavirus pandemic this meant their vaccine research and development was a lower investment priority. However, the pandemic generated a new lucrative market opportunity. Unfortunately profit-maximisation creates opportunities for standards and carefulness to slide.

I guess I must be worse at writing clearly than I'd thought because Powell completely failed to understand what I was getting at, or pretends not to. 

I was saying that agencies' processes can lie on a continuum from "approve everything" to "take half a century to approve anything". In the former case you get harms from drugs being released that shouldn't have been approved but no harms from delays; in the latter case you get zero harms from bad drugs being released but lots of harms from delayed access. The trick is finding processes that minimise the sum of those harms. 

Powell goes on to provide some examples of one agency or another getting things wrong. Fortunately, I did not suggest "Approve anything the FDA approves." I suggested automatically approving if two other agencies had approved. 

But he gives a great example of how medical types think about this stuff. Harms from delay seem not to factor into his thinking.

Crampton could not be more wrong. Medsafe should take as long as is needed before approving a vaccine application because the risk of harm to the innocent is too great. Efficacy is important. However, relying on what the results of clinical trials reveal or what other regulatory authorities in a small number of ‘approved’ countries decide is insufficient when there is an opportunity to drill down further.

I view a death or harm caused by releasing a drug that shouldn't have been released (in some perfect-omniscience world) as being just as bad as a death or harm caused by delaying a drug or treatment. But for people like Powell, only one kind of harm exists. Unfortunately, they're the exact kind of people who set the system and processes here, resulting in futile harmful delay. They're the reason we need a rule requiring approval of drugs approved elsewhere, and they're also the reason we won't get that kind of rule. 

"As long as it takes" is the wrong standard. "Investigate until another day's worth of process results in as many expected reduced harms from the drug as expected increased harms from delayed access" is the better standard. 

What would have been a first-best with kid-vax, where popular acceptance is a factor and where people here put some value on Medsafe that I don't? Simple. Allow the vanguard of the willing to be vaccinated early, while holding the broad rollout until Medsafe had done it's useless-but-for-building-public-confidence thing. There was a non-crazy case for saving the big rollout until a couple weeks of US and Canadian data showed that kids weren't having a pile of adverse reactions. That would have had rollout of first doses at school before the end of the school year. But we're having to wait for freaking January now. 

And I note, not for the first time, that neither Covid Classic, nor Delta, nor Omicron, had to pass any MedSafe approval process to be allowed to infect children. They could just go ahead and do it, without any clinical trial or assessment of potential long-term harm. 

Monday 13 December 2021

Offers that should be refused

This week's column over at Stuff looks at the media companies' request of ComCom for Aussie-style regulation

A snippet:

The real problem is not tech platforms’ bargaining power.

The problem rather is media companies wishing for government to use force of law to restore market conditions that slipped away with technological change.


Taxing a sector you do not like to fund a sector you do like is not a good basis for tax policy. One might as well impose a tax on hipsters’ beard oil to fund tīeke (saddleback) recovery programmes.

If you think that tech companies do not pay enough in local tax, you should want Inland Revenue to make sure the tax code is rigorous.

If you think good journalism deserves better funding, you should contribute to it yourself and encourage others to do likewise.

There may be a public interest case in tax-funding public interest journalism. But no principle of public finance in existence says that funding should be compelled from Google or Facebook through compulsory arbitration rather than being provided from the public purse more generally.

Breaking basic principles of public finance, and the basic principles on which the web was founded, to compel tech companies to fund journalism – that belongs only in bad modern-day gangster movies. Not in New Zealand public policy.

Thursday 9 December 2021

Chronic confusion and disappointment

Looks like Canada is facing similar pressures around central banking and mission creep. Here's Steven Ambler, Jeremy Kronick and William Robson in Canada's Financial Times:

A more overtly inflationary recommendation is to add something else – usually a labour-market indicator, such as the unemployment rate, to the Bank’s framework. Proponents often argue that inflation control hurts jobs and, more specifically, that central banks have been too quick to tighten before the economy reaches full employment. But unemployment in Canada has been lower and less volatile since the two-per cent target came into force. And the blow-out jobs report last week just underlines the problem of determining what full employment actually is, especially after a major disruption like the pandemic.

As for other goals, such as reducing inequality and or slowing global warming, we need to keep people’s expectations about monetary policy in line with what it can actually do. Monetary policy is about short-term interest rates, the growth of money and credit, the pace of spending, and the results of all this for inflation. While the Bank must assess how inequality and global warming impact its ability to hit the inflation target, asking it to target the price of assets held mainly by the wealthy or favour credit for some industries at the expense of others will lead to chronic confusion and disappointment.

The two-per cent inflation target has been a signal success in Canadian economic policy for a quarter century. We know it is achievable, and with inflation currently running close to five per cent, we are getting a timely reminder that alternatives can easily be worse. It is time to reassure Canadians that their government and central bank are committed to low and stable inflation in the future.

Emphasis added.

Nick Rowe quips:


Wednesday 8 December 2021

Stupid government tricks

Last night's chat with Bryan Crump on RNZ Nights covered the ComCom supermarket inquiry.

Remember the old Johnny Carson Stupid Pet Tricks bit?

This stuff should be classed as stupid government tricks.

Here's the trick.

First, set a pile of rules that make it neigh-on impossible for new competitors to really set up. If you want to open up a new supermarket chain in New Zealand, just think through how impossible it would be. Not many sites have the right zoning. Of those that are zoned, many will be tied up in covenants preventing them from being supermarkets.

If you find a network of sites that might work, you face impossible-to-gauge months to years of consenting processes before you find out whether you'd be allowed to put a supermarket on the spot. So you can't plan out a distribution network. And remember that consenting processes treat competition as a harm to be mitigated rather than a benefit to be sought. 

And who knows whether the Overseas Investment Office would decide that, because your proposed site is adjacent to a reserve, everything gets additional holdups. 

Small countries with difficult logistics can't set up these kinds of regulatory barriers to entry if they want people to consider opening here.

The whole thing is set up to make it effectively impossible to enter. Maybe that wasn't the intention of anyone along the way, but it's the effect.

So government sets a pile of rules that act in restraint of competition. 

Then it observes that grocery prices are higher than government would like.

So it sics the Commerce Commission onto the supermarkets to run a two-week beat-up of supermarket chief executives about the apparent lack of competition. They didn't haul a single Council Planner over the coals for making it impossible to build a new supermarket. Funny that. 

Government gets to play the hero coming to the rescue, and nobody much notices that there'd have been no monster there to fight in the first place if government hadn't put it there. None of the proposed remedies will help either, except ones that free up entry. That's the underlying problem. Some government-backed KiwiGrocer would fail for exactly the same reason KiwiBuild failed - it didn't address the underlying problem. 

So that's the stupid government trick. Cause a problem in a way that nobody will blame you for, then come charging out with a bunch of nonsense populist purported solutions that draw plaudits from those who neither understand the underlying problem nor care that the proposed solutions won't work. All they care about is the perceived monster-fighting. 

Bit depressing. 

But makes for a fun chat with Crump. You can listen here.  

Tuesday 7 December 2021

Solutions in search of problems

Proper policy starts with problem definition. Define the problem that needs to be solved, establish that it really is a problem, assess alternatives including the option of just leaving things be, and go from there.

If you start instead with a solution, you then have to go looking for problems. 

And so we come to New Zealand Post's new fleet of electric vehicles. 

Stuff reports that NZ Post is shifting to electric vans. And that could be a great move - they're currently not paying road user charges, and could work out to be a bargain for the state-owned delivery company. I certainly wouldn't second-guess that commercial decision. 

NZ Post isn't a small shop. They've recently invested $170m in processing infrastructure. 

But to get the vans, they're going through another state-owned outfit. NZ Green Investment Finance. Here's how they describe themselves.

New Zealand Green Investment Finance is a green investment bank established by the New Zealand Government to accelerate investment that can help to reduce greenhouse gas emissions in New Zealand.

NZ Post is working with NZ Green Investment Finance to fund the fleet vehicle purchase though a complicated lease plan. 

The state-owned postal service and the state-owned green finance investor will each put up $10 million through Sustainable Fleet Finance to provide attractive and competitive finance for electric vans or low-emission vehicles. Sustainable Fleet Finance is majority owned by NZ Green Investment Finance.

The investment will initially be used to finance an order for 60 Mercedes eVito panel vans for the NZ Post fleet which will arrive in the second half of 2022. Under a four-year tiered lease plan, the vehicles will first be leased by NZ Post and then offered by Sustainable Fleet Finance to NZ Post’s delivery contractors at more affordable rates as second and third owners.

Ok. So one SOE with the implicit backing of the Crown against losses, and with a balance sheet big enough to handle fleet renewal, is running financing for fleet renewal through a finance company part-owned by another government outfit, all aimed at preventing 7.8 tonnes of emissions per diesel van per year.

Every tonne of which is already covered by the ETS, which has a binding cap.

And the annual value of the emission reduction, per vehicle, is about $500. 

So if NZ Post, backed by NZ Green Investment Finance, fails to purchase 8 carbon credits per vehicle per year, somebody else will buy the credits instead. 

I've occasionally heard arguments around credit market barriers that might be some kind of market failure. They seem ridiculous when there are plenty of non-government outfits that will finance your car for you, whether privately or for a company fleet. There's a whole industry association of the outfits that finance peoples' cars for them. And EVs being expensive isn't a market failure. They're just expensive. 

Using a government-backed investment fund to finance vehicle purchases by an SOE that doesn't have obvious barriers against just buying its own vans - that's the kind of mess you get when you set up a policy without really thinking through the problem you're trying to solve. 

This place is rapidly losing its "Outside of the Asylum" status. At least they haven't yet gone for anything as absolutely stupid as cash for clunkers. 

Monday 6 December 2021

Afternoon roundup

High time the computer gets a reboot. And so, the closing of (some of) the browser tabs:

A politicised central bank

Politik this morning reports that the Reserve Bank Governor has lost the support of the National and ACT Parties. Or, at least, they would not be keen on his being reappointed.

Now that Simon Bridges is National’s finance spokesperson, the future of Reserve Bank Governor Adrian Orr will be an issue.

Orr’s contract as Governor expires in March 2023, outside the three months prior to an election when Governments normally defer significant appointments.

But with the election expected in September that year, a move in March to reappoint him would be bound to be an election-year issue.

If the decision were to be left to ACT and National, Orr would go. Both ACT Leader David Seymour and Bridges confirmed that on a podcast last week, and Bridges has confirmed again to POLITIK that was his position.

But at the same time, Bridges has to be careful.

The Bank is supposed to be independent, and one of National’s criticisms of Orr is that he has allowed it to become a little less so under Labour and Finance Minister Grant Robertson.
And this is why Reserve Bank Governors ought to stick to monetary policy and why prudential regulation colonising other policy areas far outside of their proper domain without any evidential basis is risky.

Last week, we hosted John Cochrane to talk about central bank independence and the problems they can get themselves into. 

The video is here:


My column in our Insights newsletter summed it up:

Central bank independence matters.

The grand bargain struck between governments and their central banks, coming out of the turmoil of the 1970s, and led by New Zealand in the late 1980s, was simple.

Governments stopped meddling in monetary policy. Central banks were given operational independence to pursue low and stable inflation. It was a difficult bargain for governments who preferred to avoid interest rate hikes as elections loomed.

That independence required Banks stay within limited bounds.

Monetary policy and prudential bank regulation are powerful tools with economy-wide consequences. They need to be used only toward the core ends of central banking: low and stable inflation, and the stability of the financial system.

Straying to pursue other objectives, regardless of whether they match the goals of the government of the day, is dangerous.

On Thursday, the Initiative hosted a webinar with John Cochrane – one of the world’s leading experts working at the intersection of macroeconomics and monetary policy and financial regulation. That he has a stronger record of published work in this area than the entirety of the Reserve Bank of New Zealand is a safe bet. Whether he has three times the work in the area might depend on how you weigh pages in different journals.

John has been increasingly critical of worldwide moves by reserve banks to consider climate change as a risk to financial stability. While it is very clear that temperatures are rising and that sea levels will rise with them, with obvious consequences for storms and beachfront properties, evidence of risks to the financial system is wanting.

Not everything that is a globally consequential risk is also a risk to the financial system. Systemic financial risk requires a particular kind of fragility. And the financial system, here and abroad, simply appears to be robust to the kinds of shocks that climate change will bring.

Indeed, earlier this month, the Federal Reserve Bank of New York published work showing that storms increase, rather than reduce, bank profits. People take out loans for rebuilding. Storms are bad, but they are not a risk to the financial system.

Using prudential regulation to address political concerns takes the regulator’s eye off the ball. More substantial risks can be missed. But, more importantly, doing so politicises their operations, putting their independence at risk.

And that may yet be the biggest systematic risk of them all.

Shortly after the webinar, one of the RBNZ's board members decided to weigh in. Draw your own conclusions about the adequacy and rigor of governance at the Bank. 

Wednesday 1 December 2021

Cochrane on Reserve Banks

John Cochrane will be joining us at the Initiative for a webinar tomorrow. The topic: What central banks should and shouldn't do. 

We've been increasingly concerned by the Reserve Bank of New Zealand focusing on a rather wide range of policy areas far from their remits in monetary policy and prudential bank regulation. 

The case for incorporating climate change into prudential regulation looks particularly weak; the Bank simply hasn't any evidence of systematic risk to the banking system from either rising sea levels or carbon price risk that might justify its expeditions into climate regulation. There's plenty of evidence that sea levels will rise and that carbon prices will as well. But that doesn't in itself make a case for the Bank's getting involved. 

Central bank independence in the matters properly in its jurisdiction matters. But the deal has been that Banks get necessary independence, with a quid pro quo that they don't abuse that independence to stray into areas that are really Parliament's concern. 

John Cochrane has been looking at similar issues in Europe, and at the Federal Reserve. 

And I'll be very keen to hear what he has to say about it. 

The blurb for the event, along with Zoom links and Slido links for questions, is below. Note that times are New Zealand time. Not Pacific Time. 

Webinar tomorrow with John H. Cochrane: What central banks should and shouldn't do

Central bank independence in monetary policy was hard fought and desperately needed. The deal was simple. Central government would stay out of a Reserve Bank’s way as it dealt with monetary policy, and the Bank would not abuse its independence in pursuing other agendas.

That deal is fraying badly, if it has not fundamentally broken. If central bank independence in monetary policy is lost as consequence, rebuilding the institutions will be costly.

Join us for an insightful webinar with John H. Cochrane, Senior Fellow at Stanford University's Hoover Institution.

Event details:
Time: 11.00am – 12.00pm
Date: Thursday, 2 December
Registration: Please register for this event via Zoom.

We encourage you to ask questions you have through Slido.
The access code for our event is: #024262

About the speaker:
John H. Cochrane is the Rose-Marie and Jack Anderson Senior Fellow at the Hoover Institution. He is also a research associate of the National Bureau of Economic Research and an adjunct scholar of the CATO Institute.

Before joining Hoover, Cochrane was a Professor of Finance at the University of Chicago’s Booth School of Business, and earlier at its Economics Department. Cochrane earned a bachelor’s degree in physics at MIT and his PhD in economics at the University of California at Berkeley. He was a junior staff economist on the Council of Economic Advisers (1982–83).

Cochrane’s recent publications include the book Asset Pricing and articles on dynamics in stock and bond markets, the volatility of exchange rates, the term structure of interest rates, the returns to venture capital, liquidity premiums in stock prices, the relation between stock prices and business cycles, and option pricing when investors can’t perfectly hedge. His monetary economics publications include articles on the relationship between deficits and inflation, the effects of monetary policy, and the fiscal theory of the price level.

Cochrane frequently contributes editorial opinion essays to the Wall Street Journal,, and other publications. He maintains the Grumpy Economist blog.

If you wanted to hear John range more broadly, his conversation with Tyler is here. We'll be keeping to a narrower remit. 

Tuesday 30 November 2021

Afternoon roundup

The closing of the browser tabs brings some worthies:

  • The shift to Zoom, and away from face-to-face, is costly. Fund managers losing access to the kind of information you can get through local contact reduces fund returns. "We show that soft information originates mainly from physical human interactions, primarily in cafes, restaurants, bars, and fitness centers; and the virtual world based on Zoom/Skype/Team fails to substitute physical interactions fully, thus cannot provide sufficient soft information." Now think about NZ firms seeking capital internationally, and the long-term effects of border systems that prioritise Ministerial pet projects over business travel. 
  • The blackouts back in August? It was a Transpower screwup. Here's what we'd said at the time.
  • Wellington ICU's co-director pleads that ICU nurses be added to the immigration skill shortages list.
  • Avoiding Tarras while on any South Island holidays might be advisable. If they haven't enough vaccinated people to staff a cafe...
  • Another Commerce Commission market study is coming: building materials. Like supermarkets, any lack of competition here is mainly due to crazy regulatory barriers to entry. For supermarkets: zoning and the Overseas Investment Act and consenting processes and uncertainties around liquor permits make it hard to be a new at-scale entrant. For building materials supply: good luck getting a house signed off by council if you've built it with imported materials. Ideally ComCom will recommend fixing the regulatory barriers to entry and easing councils out of joint-and-several liability for buildings they consent. But they could instead recommend breaking up each of the existing suppliers into little pieces and forcing separation between them and retailers. The latter would be stupid. The starting question really should be: if I get a container ship in Vancouver, fill it up with all the pieces needed to build a house there (flipping the 110 volt electrics to 220), would I be able to use it to build a house? If not, why not?

Enabling housing and the longer term

Right now, there's bipartisan consensus on the Enabling Housing Supply legislation that basically abolishes single family zoning across most urban centres. 

I hope that that consensus survives the National Party's current leadership turmoil.

While Labour has the votes to just pass the thing on its own, bipartisan consensus matters in setting longer-term expectations. And I worry that National pulling out from the thing could bring about the kinds of development that the legislation's opponents feared all along.

Suppose everyone expects that, because there's consensus on the legislation, it is politically durable. It will stick across changes in government. That sets expectations about ongoing development priorities, infrastructure needs, and the kinds of housing that's worth developing. 

There's a housing shortage and a building boom currently. With the legislative change, townhouses will be allowed everywhere. But if you slap something together in a hurry that isn't great quality (but still meets code), you shouldn't expect much buyer interest. They'll know that more houses are coming. And they could just wait for one that doesn't suck. 

Developers will know that and optimise accordingly.

Now suppose instead people expect a 40% chance that the legislation flips in 2023 and a 60% chance it flips in 2026. Under those incentives, you might want to rush to have things all signed off before any potential legislative change that would thwart you. You might at least want to get projects started, so that they'd be in ahead of any legislative change, on expectation that they can't retrospectively require that started projects need consent to finish. 

And that risks getting you a bit of a mess. Projects will start where they can get going in a hurry, rather than where they might make more sense if developers knew they'd be competing also against the new homes that buyers would be expecting to come on-stream after 2023. 

Or another way of thinking about it. Suppose you expected that, after the election, import of all non-electric cars would be banned. Do you maintain or lower the standards of cars that you might want to rush into the country ahead of the ban?

And if that happens, and it's all a consequence of short-term incentives provided by the prospect of a hammer coming down, nobody will see that that's what happened. They'll just blame liberalisation and work to stop its ever happening again. 

Anyway. I'd said on Twitter that I don't care about anything in the National leadership race other than that cross-party consensus on the Enabling Housing Supply legislation is maintained. I just can't care about the internal faction stuff. I hate soap operas. But it would be nice if they didn't wind up breaking important stuff in the process. 

Wednesday 24 November 2021

Missed opportunities

Kate MacNamara keeps digging into New Zealand's botched vaccine procurement last year. 

Things could have been so different.

Labour Minister David Clark was sent a key Pfizer letter on June 30 last year, in which the drug company pressed the head of New Zealand's "vaccine taskforce" to meet and discuss its vaccine candidate.

Taskforce officials, however, were not equipped at the time to begin talks with the drug company, and over six weeks elapsed before a first meeting took place.

The Cabinet finally armed the taskforce with funds both to contract specialist negotiation expertise and to make vaccine purchases on August 10; officials signed a non-disclosure agreement with Pfizer on August 13 and a first meeting with the company took place the following day, on August 14.

Clark, the then Health Minister, refused to answer questions about the letter, including whether he read it at the time and whether he made any effort to hasten the readiness of the taskforce to begin meetings and negotiations with the drug company.

Clark was beset by calls to quit his post at the time the Pfizer letter arrived and he resigned as Health Minister two days later, on July 2. An upcoming election, then scheduled for September 19, added sensitivity to Clark's predicament.


Pfizer's June letter noted: "We have the potential to supply millions of vaccine doses by the end of 2020, subject to technical success and regulatory approvals, then rapidly scale up to produce hundreds of millions of doses in 2021.

"I would welcome an opportunity to discuss our candidate vaccine development in more detail, and open discussions on how we might work together to support planning for potential Covid-19 vaccinations in New Zealand and continue to build a strong partnership for the future," the letter said.


It's unclear whether earlier engagement with Pfizer could have secured a larger quantity of early vaccine doses for New Zealand.

New Zealand contracted to buy 1.5 million doses of the Pfizer vaccine candidate on October 6, 2020.

Earlier this year an Auditor-General Report noted that "the Taskforce wanted to purchase more doses of the Pfizer vaccine [in its first contract] but, at the time the agreement was signed, Pfizer was in negotiations with other potential purchasers and could not commit to supplying more doses of the vaccine to New Zealand. However, the purchase agreement included an option to purchase further doses of the vaccine if they became available."

By October, New Zealand lagged many of its peers in signing so-called bilateral advance purchase agreements with drug companies for vaccine candidates.

The delay in starting negotiations, because Clark was distracted and because, for incomprehensible reasons, the bureaus hadn't prepped themselves to think about vaccine procurement, meant we were competing against other places for supply. 

If we'd started when Pfizer sent the letter, decent odds we could have started the vax rollout with a lot more doses a lot sooner.  

Think about what that means.

The government made a laudable effort to push vaccines out to elderly Māori in remote communities. But they had hardly any doses at the time and were also trying to vaccinate border and health workers. They could have made that push a vaccination event, vaccinating whanau at the same time. The vax rates by ethnicity by age, at least when I'd last looked at them, had no particular ethnic gap for Māori at older ages - because of that push. But the gap at younger ages is substantial. How much of that gap could have been bridged if they'd had enough doses to vaccinate the whole community while they were out there? 

Here's the most recent data.

The lowest vaccination rates are for younger Maori in more remote places. 

But their grandparents are vaccinated. 

They could have been vaccinated at the same time, or at least everyone 16+ could have been.

But the government didn't have enough doses. 

And it's awful likely that that's because Clark, Bloomfield, and Crabtree sat on a letter from Pfizer for 6 weeks.

When the letter was released, only its main recipient was noted: Dr Peter Crabtree, the chair of the vaccine taskforce.

However, in response to a subsequent written question by Bishop last month, Hipkins revealed that the letter, delivered by email, was copied to Minister Clark and also to Bloomfield.

You'd think they'd have learned by now. But while Canada's vaccinating 5-11 year olds, and the US has been for weeks, New Zealand just isn't. And the odds-on bet on why we aren't is that they screwed up procurement again, because they didn't see any need to hurry.  

Tuesday 23 November 2021

NIMBY tears

The taste of NIMBY tears. It's palpable in Simon Wilson's latest Herald column. 

But by my reckoning this new bill subverts the NPS-UD in at least nine ways.

Julie Stout, a leading architect and member of the Urban Design Forum (UDF), a coalition of design professionals, calls it "a slum enabling act".

Those nine factors:

1. While "up to three" dwellings can be built on any site, there are to be no minimum section sizes. You could put two extra dwellings on your section, or subdivide it into two, or three, or more, and put three dwellings on each new site.

That allows for more housing so more awesomeness. 

2. The "do it anywhere" provision is an invitation to developers to build where it's easiest and cheapest.

That also enables more housing so more awesomeness.

That, says Auckland Council, "would see widespread intensification dispersed across the city in places not served by essential public transport, water and community infrastructure and in areas located far away from employment centres. This includes smaller coastal and rural towns on the outskirts of the city." It's an invitation to urban sprawl.

The nice thing about bus routes is that you can redraw them if people move to different places. 

The Environmental Defence Society (EDS) says this could even lead to "areas with significant landscape and environmental values, like Waiheke Island, being destroyed".

The map of Waiheke already has piles of land cordoned off as sites of ecological significance.

3. Developers will no longer be required to consider sunlight, privacy, safe pedestrian access, access to nature, servicing and the interface with the street.

Buyers of the properties will consider those. Along with whether the house is comfortable, well-built, and everything else. 

4. There are standards governing size and location, but even they are flawed. They'll encourage what's called "sausage flats": rows of apartment blocks running back at right angles from the street, with little usable land for a garden or backyard.

The Coalition for More Homes submission encouraged getting rid of setbacks so that perimeter blocks could emerge as alternative. 

5. Want to object? Sorry, it's all "permitted activity". The council can't do much, either. Even on matters of national environmental significance, there's no recourse to the Environment Court. The minister for the environment will decide.

Housing should be a permitted activity. 

6. Will developers have to include any social housing in their projects? Nope. What about universal design standards, so at least some of the units are fit for people with disabilities? No again.

If you allow building everywhere, housing costs come down. Social housing issues will all get easier. Developers wanting to sell houses will build them to suit what people want. Shifting from housing scarcity to ample housing means developments compete for buyers. We have an aging population. Plenty of developers will want to cater to those needs to attract more buyers. And even if none of them did, there would still be far less pressure on existing accessible homes as buyers who didn't need those amenities would be looking elsewhere. 

7. Are they preserving environmental standards or keeping up with the demands of a changing climate? Also no. Encouraging urban sprawl fails that test. So do the lack of standards for construction techniques and emissions over the life of the building. There's no requirement for trees or other vegetation, either on sections or in public spaces near larger projects. "The first casualty," says Stout, "will be the trees of the city."

Oh come on. The building code still applies. That covers construction techniques. The Emissions Trading Scheme covers urban emissions, including building and transport. The city can put trees on the verges by the sidewalk if it wants. If a developer is putting in a larger project with public spaces, and figures the sections will have an easier time selling if there are trees in the public spaces, there'll be trees in the public spaces. 

8. The "rules and standards one might expect to find in a district plan", as the EDS puts it, now rest with the Government. It means councils could become bystanders in the development of the cities they are supposed to be running.

The rules and standards that one might expect to find in a district plan are the problem the legislation seeks to fix. 

9. Why the rush? The announcement was just over a month ago and already the deadline for submissions has passed.

Here I won't disagree. I will note though that this is a general problem. Lots of legislation is going through in rather hasty fashion. 

Our submission on it all is here. We're supportive of the legislation, and propose a few measures to make it even better. 

Update: the more I look at this piece, the weirder the framing is. The column's structure is "Here are a pile of people who initially said nice things about the legislation but then, on reading it, recanted or had second thoughts. The first half of the column cites politicians (Woods, Collins, Parker, Willis), organisations (NZ Initiative, Coalition for More Homes, and Infrastructure Commission), and an academic (Tookey) as supportive.

Then there's the bridge. It initially read, "Then they all read the bill. And were appalled." It's since been updated to "many" being appalled. 

After the bridge, it cites an architect, Stout, who says it enables slums. It cites Auckland Council/Mayor in opposition, along with EDS. 

It cites Tookey noting an urgent need for more "strategic investment, skills training and availability of finance. That's what the NZI said too." That's about right on our side, but hardly counts as opposition. It's more of a "Yes, and". I can't speak for Tookey, who may or may not have changed views. I don't know Tookey. 

And it cites Coalition for More Homes supporting the intent of the bill but wanting some tweaks.

I wonder whether a single one of the people or organisations cited at the outset would agree that they were appalled. 

International Ed

Australia's reopening to international students.

New Zealand isn't. 

This is just getting crazy. 

There are safe protocols that can be run here. 

New Zealand could allow travel from safer countries, with a pile of testing and vaccination requirements. 

Start by requiring up-to-date full Covid vaccination for getting a student visa. That's pretty simple. Vaccination requirements have been part of international student visa requirements all over the place long before Covid. 

Then add in some testing. Require the standard PCR test a couple days before travel. Add a requirement that travelers pass a rapid antigen test administered at the gate before boarding, with Covid-positive students denied boarding. Add another RAT on arrival, with any remaining positive cases shunted into isolation. Remember that this is the protocol that was used in a trial for travel between the US and Italy late last year through early this year. There were just under 10,000 travelers. The RATs caught 4 positive cases at the airport before boarding and one more on arrival - among a group of people who'd all recently passed a PCR test. The folks running the trial concluded the RATs were pointless because 5/10,000 wasn't that risky. But we could do it. We could require it for airlines departing for New Zealand. 

And we could make it even safer. Take a saliva sample on arrival for PCR testing, require everyone to get the Covid tracer app, and require them to provide contact details. Add in a requirement to present for a Covid test a few days after arrival. 

Sequences of tests make it increasingly less likely that anyone passing all the tests are infected. There's just no way that someone coming in on that regimen is more risky than the random-draw person in Auckland currently. 

Or do all that and have the universities run a few days of MIQ, as they proposed doing back at the start of all this. It's far less risky now that vaccination is available. 

The borders are looking increasingly absurd. There are safe ways of doing all this. 

Friday 19 November 2021

Risk assessment of risk assessment

Great piece out today in Science on vaccination for kids.

I've copied it below, with a couple of updates for New Zealand. The strikethroughs are mine. So are the bolded bits. 

Earlier this month, the US Centers for Disease Control and Prevention (CDC) recommended Pfizer’s COVID-19 messenger RNA (mRNA) vaccine for children between 5 and 11 years of age—that’s 28 million children. Yet surveys show that 42 to 66% of parents of these children The Ministry of Health and MedSafe are reluctant or opposed to happy to impose substantial delays on seeking this protection. Without vaccination, it is likely that almost everyone—including young children—will be infected with severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) at some point in their lives. So, the question for parents and caregivers The Ministry of Health and MedSafe is: Which is worse, vaccination or natural infection?

Make no mistake—COVID-19 is a childhood illness. When SARS-CoV-2 entered the United States early in 2020, children accounted for fewer than 3% of cases; today, they account for more than 25%. More than 6 million US children have been infected with SARS-CoV-2, including 2 million between the ages of 5 and 11. At the end of October 2021, about 100,000 children per week were infected. Of the tens of thousands of children who have been hospitalized, about one-third had no preexisting medical conditions, and many have required the intensive care unit. Almost 700 children have died from COVID-19, placing SARS-CoV-2 infection among the top 10 causes of death in US children. No children have died from vaccination.

Many parents New Zealand officials are concerned that Pfizer’s mRNA vaccine was not adequately tested in young children. In a study of approximately 2400 children between 5 and 11 years of age, performed when the Delta variant was the dominant strain, vaccine efficacy was 90.7% against symptomatic disease. However, Pfizer’s phase 3 study in adults involved about 40,000 participants. How could the CDC be certain that the vaccine was safe in children given the small size of the study, specifically regarding the problem of myocarditis? In postauthorization studies, myocarditis occurred in approximately 5 per 1,000,000 individuals receiving mRNA COVID-19 vaccines, possibly as high as 1 per 10,000 in young men. But context is important. Vaccine-associated myocarditis has been relatively mild and self-limited—an outcome fundamentally different from the cardiac effects associated with acute COVID-19 or multisystem inflammatory syndrome, which typically involve cardiac dysfunction and require critical care. Moreover, both in Israel and the United States, the incidence of myocarditis in children 12 to 15 years of age receiving mRNA vaccines is less than that in the 16- to 25-year-old age group. And because the dose of Pfizer’s mRNA is one-third that given to older adolescents, myocarditis in the younger age group will likely be even rarer.

Myocarditis is only one piece of the risk-benefit analysis. Children need to go to school, play with friends, and participate in extracurricular activities for their social and emotional development. This is their life. Since August 2021, more than 2000 schools in the US have been forced to close because of COVID-19 outbreaks, affecting more than 1 million students. The disruption of school activities has harmed children more than any detectable vaccine side effect, including worsening of mental health, widening education gaps, and decreased physical activity. These harms have disproportionately affected people of color, Indigenous persons, and individuals of lower socioeconomic status, further exacerbating inequities. Avoidance of routine health care and routine vaccination has also emerged, with potentially devastating future consequences. Furthermore, children live closely with and rely on adults to whom they can pass SARS-CoV-2 infection—adults who can be overwhelmed by this infection. And children grow up. Countries are going to need a highly protected population for as long as COVID-19 exists in the world, which will likely be for years if not decades. Vaccinating all children against SARS-CoV-2 could be among the most impactful public health efforts the US New Zealand has seen in decades.

Although it is true that most children experience asymptomatic or mild disease, some will get quite sick, and a small number will die. It’s why children are vaccinated against influenza, meningitis, chickenpox, and hepatitis—none of which, even before vaccines were available, killed as many as SARS-CoV-2 per year.

Some parents regulators are understandably hesitant to allow parents to vaccinate their young children. However, a choice not to allow children to get a vaccine, or to delay vaccinating kids until 2022, is not a risk-free choice; rather, it’s a choice to take a different and more serious risk. The biomedical community must strive to make this clear to MedSafe the public. It could be one of the most important health decisions a parent Medsafe will make.

In the past two weeks, almost 10% of American kids aged 5-11 have been vaccinated. 2.6 million children

Canada is expected to approve on Friday, and they expect to receive about 3 million doses in the next few days

MedSafe might have a risk assessment paper ready in the next two to three weeks. We might get a small number of doses in December. 

I can understand wanting to delay a broad rollout until we had more data out of the US, if only to increase confidence.

I can't understand not making it available to those eager for it.

Thursday 18 November 2021

MoH and Testing

I wasn't particularly kind about the Ministry of Health's approach to Covid testing in this week's Dom Post. 

A snippet.

The Ministry of Health’s approach to Covid testing is going to kill people.

For the past year, the ministry has been horribly wrong about Covid testing systems. It has ignored substantial reviews of testing policy.

And it has allowed petty resentment against the only appropriately validated provider of rapid saliva-based PCR testing to drive its procurement policies.

A new Covid case popped up in Christchurch yesterday. 

Christchurch has about 400k people on over 1400 square kilometers. People can get a Covid test through their GP, but that's a substantial barrier for a lot of people. 

The city has two testing sites running limited hours taking swabs.

One is out near the airport, which will be impossible for anyone without a car to get to. It is open 9 am to 4pm, seven days a week, and can run later "if demand requires". I take that to mean that they'll stay open if they still have a queue to serve. 

The other one is on Pages Road in Wainoni, I believe at the National Marae. Unless you live nearby, you're not going to be walking there. It's about an hour's walk from downtown. It runs 9am to 3.30pm, 7 days a week, with the same "or later if demand requires" note. 

If the kid comes home from school with a sniffle, you'll be waiting until 9am the next day to get a test. And you're forbidden against using a rapid antigen test in the meantime. 

The University of Illinois's Urbana campus serves about 50,000 people and sits on some 2500 hectares. Presumably students there could also choose to go to their GP for a Covid test. But the University runs four different testing sites on that campus. You can be tested from 6 am to 6 pm, Monday to Friday, 8-3 on Saturday, and 10-3 on Sunday - but not all sites run the longer hours. 

So if it is between 3 and 3.30 on a weekend, and you live really close to a testing site in Wainoni, you may have an easier time being tested in Christchurch than at the University of Illinois. 

If it is between 6 am and 9am, or 4 pm and 6 pm, on a weekday, or between 8 am and 9am on a weekend, or if you do not have access to a car, it is far far easier to be tested as a university student at Illinois. 

Why can the University of Illinois run testing like this? Because they have a testing system built around simple saliva collection. Saliva collection isn't nearly as complicated as the swabs. It's easier to train people up to do it. That makes it easier and cheaper to have stations running all the time. 

That also then makes it easy for Illinois to have fairly comprehensive testing requirements. Vaccinated students only need to be tested if they've been in contact with a case (or have symptoms, or in case of outbreak). Unvaccinated students need to be tested every other day. You can do that when testing is cheap and easy. 

We could have it here too. It's the testing system that Rako Science here runs under licence. But the Ministry of Health isn't interested. 

FWIW, I have zero conflicts of interest here. Rako isn't a member of the Initiative, and neither is APHG.  It wouldn't affect how I've read this stuff in any case. 

The Ministry of Health's procurement panel sure cannot say the same thing.

Multiple poorly managed conflicts of interest, no formal procurement plan, and a failure to properly appoint a probity auditor are among the failings in the health ministry’s procurement of saliva testing in a report published today by the Office of the Auditor General (OAG). 

The watchdog makes a number of damning findings and expresses “serious concerns” about the way the ministry conducted the highly controversial $60 million contract to provide saliva testing that was awarded to Asia Pacific Healthcare Group (APHG) in May. 

Among key findings was that four of the five people on the panel selecting the saliva testing provider had declared possible conflicts of interest, including “past and current employment relationships with staff from potential respondents or associated laboratories”. 

The OAG also caned the ministry over its approach to the appointment of a probity auditor to oversee the process, as is required by public sector procurement rules.

From TEU to FSU

Jack Heinemann's take on academic freedom in New Zealand provides an excellent on-campus recruitment opportunity for New Zealand's Free Speech Union. 

The Free Speech Union, as a registered union, has rights to enter workplaces to talk to workers. They should plan a round of campus visits.

Here's Jack:

Making conscience central in all activities of a critic and conscience of society might avoid some future clashes in Aotearoa. Academic freedom is the right to bring forth unpopular or controversial opinions, not to promote opinions popular with those who have social or financial privileges.

For example, white/Pākehā academics making comment on mātauranga Māori in defence of “science” don’t need to use academic freedom because the westernized institution of science already has disproportionate power and influence in any clash with indigenous knowledge systems. So when a university takes a neutral position, treating the academic protagonists and academic responders equally based on narrow ideas of a right to free speech, the institution stumbles as critic and conscience of society. Moreover, it fails to both preserve and enhance academic freedom.

Other examples include attempts to use university campuses as platforms for racially or genderised “forums”. Those without power or privilege don’t need tertiary institutions to criticize them, turn their backs on criticisms of them, or to host it. The desire of majority members of white paternalistic societies to have their ideas spoken on campus is not equal to the right of minority ethnic and non-binary groups to feel accepted and safe there.

Privilege is an asymmetry of power that marginalizes and excludes others. No history of academic freedom is consistent with the notion that it speaks privilege to power.

So. If your research shows that claims of oppression in the case you're studying are overstated, or that an institution isn't as colonialist and evil as others have suggested, you should probably shut up about it because that doesn't count under critic and conscience. Because it reinforces power or something. 

If you haven't joined the Free Speech Union yet, and you're a New Zealand academic, they may be more likely to have your back than the TEU, if it comes to it.  

Monday 15 November 2021

Teetotaling documentaries

The latest anti-drinking documentary will be on tonight. Would for a world in which we'd also get documentaries from former teetotalers extolling the merits of light to moderate drinking. Instead we just get ones going the other way. 

In anticipation of some of what we might expect to hear:

  1. Price elasticity of demand varies by whether you’re looking at moderate or heavier drinkers. Heavier drinkers are less price responsive. Hiking excise does more to get moderate/light drinkers to cut back than it does to get heavy drinkers to stop. It doesn’t make sense to use a linear excise tax to address a harm that’s heavily nonlinear in consumption. It’s like trying to stop speeding by increasing petrol excise on the theory that speeding uses more fuel. Excise on spirits in New Zealand, if we were ranked against the European Union, would have New Zealand at third or fourth highest.
  2. When you’ve got something that has minor baseline costs but harms that rise sharply with consumption, you need some kind of two-part tariff structure. Basically, use excise to offset the low-level stuff but use other targeted policies for the rest. There are available proven policy tools that directly address harms. The 24/7 sobriety project, run in South Dakota and then expanded to other states, imposes a monitored non-consumption condition on parole/probation for offenders who’ve shown a pattern of alcohol-related crime. In South Dakota it was aimed at repeat drink drivers. The thing just works. New Zealand is set up to do it. We have the Drug & Alcohol Courts that could be perfect for it. But the thing that makes the project work in the US is the certainty of spending a night in the cells if you breach the condition. Here it’s all airy. You’ll have to talk to your probation officer who may or may not do anything, and if he does something, who knows whether the judge will impose a night in the cells or not. It’s the certainty of a very small penalty that drives better outcomes elsewhere, and here we’ve just been reluctant to do that for whatever reason. I think I’m the only one the country that beats the drum for this one, and it’s just bizarre. It works. When Mark Kleiman talked with the NZ Drug Foundation about it circa 2014, he noted that some parolees coming off the programme asked to be kept on it to help them stay on the straight and narrow. There are some folks who just have a very very bad relationship with alcohol. Excise isn’t the way to solve that. 
  3. Measures of social cost are kinda dumb just on their own. You might as well tally up all the money people pay for skis, lift tickets, food while they’re at the hill, the time off work, the ambulance and hospital and ACC bills and call that the social cost of skiing. Would it help with anything? No. You certainly wouldn’t ban skiing on the basis of it. But regardless of the number you come up with, it’s entirely possible that some safety measures pass cost-benefit analysis. Whatever the social cost of skiing, it might make sense to put padding around the pillars that hold up the chair lifts so people don’t hurt themselves too badly when they crash into them. If the measure is cheap, it could be worth doing regardless of whether the social cost of skiing is a big number or a small number. And even if the cost is a big number, putting a $1000 per lift ticket tax on skiing would be stupid. Similarly, regardless of some shonky tallied total social cost figure that ignores benefits, some measures could easily be cost effective. Like 24/7. They have to be evaluated on their own basis. Why spend time and effort on a process that’s just designed to come up with a big number to drive blunt policy measures when you could instead weigh up whether particular promising interventions really stack up?
  4. There's likely to be complaining about alcohol advertising and such. That's all already regulated. And it's hard to see that more regs would pass muster - at least on the evidence I'd seen as of 2014 when I wrote this
I worry that watching tonight's show might require heavy drinking. And it's late enough at night that my usual barman will be in bed (it's a school night) and unavailable to make me a Manhattan. Maybe I could request one earlier in anticipation.