Saturday 24 December 2022

Not the Outside of the Asylum

Time flies.

From the time I got here, until relatively recently, NZ really seemed to be Douglas Adams's Outside of the Asylum. The last sane place as the rest of the world goes mad. Or at least the place going mad more slowly than other places.

I think we've left the Outside of the Asylum and have taken up camp with another of Adams's tribes: the Golgafrinchans.

Remember the Golgafrinchans? They're the ones who convinced their planet's useless people that their planet was doomed, loaded them up on Arkship B, and sent them off on a collision course with Earth. Once here, they displaced the cavemen who'd been working away at providing the ultimate answer to the ultimate question of life, the universe and everything. 

After crash-landing, they did the thing that useless people do: have loads of committee meetings rather than get on with doing anything useful, like inventing fire or the wheel. 

Like so:

The Captain made a sort of conciliatory harrumphing noise. 

"I would like to call to order," he said pleasantly, "the five hundred and seventy-third meeting of the colonization committee of Fintlewoodlewix..." 

Ten seconds, thought Ford as he leapt to his feet again. 

"This is futile," he exclaimed, "five hundred and seventy-three committee meetings and you haven't even discovered fire yet " 

"If you would care," said the girl with the strident voice, "to examine the agenda sheet..." 

"Agenda rock," trilled the hairdresser happily. 

"Thank you, I've made that point," muttered Ford. 

"... you... will... see..." continued the girl firmly, "that we are having a report from the hairdressers' Fire Development Sub-Committee today." 

"Oh... ah - " said the hairdresser with a sheepish look which is recognized the whole Galaxy over as meaning "Er, will next Tuesday do?" 

"Alright," said Ford, rounding on him, "what have you done? What are you going to do? What are your thoughts on fire development?" 

"Well I don't know," said the hairdresser, "All they gave me was a couple of sticks..." 

"So what have you done with them?" 

Nervously, the hairdresser fished in his track suit top and handed over the fruits of his labour to Ford. 

Ford held them up for all to see. 

"Curling tongs," he said. 

The crowd applauded. 

"Never mind," said Ford, "Rome wasn't burnt in a day." 

The crowd hadn't the faintest idea what he was talking about, but they loved it nevertheless. They applauded. 

"Well, you're obviously being totally naive of course," said the girl, "When you've been in marketing as long as I have you'll know that before any new product can be developed it has to be properly researched. We've got to find out what people want from fire, how they relate to it, what sort of image it has for them." 

The crowd were tense. They were expecting something wonderful from Ford. 

"Stick it up your nose," he said. 

"Which is precisely the sort of thing we need to know," insisted the girl, "Do people want fire that can be applied nasally?" 

"Do you?" Ford asked the crowd. 

"Yes " shouted some. 

"No " shouted others happily. 

They didn't know, they just thought it was great. 

"And the wheel," said the Captain, "What about this wheel thingy? It sounds a terribly interesting project." 

"Ah," said the marketing girl, "Well, we're having a little difficulty there." 

"Difficulty?" exclaimed Ford, "Difficulty? What do you mean, difficulty? It's the single simplest machine in the entire Universe " 

The marketing girl soured him with a look. 

"Alright, Mr. Wiseguy," she said, "you're so clever, you tell us what colour it should have." 

The crowd went wild. One up to the home team, they thought. 

Ford shrugged his shoulders and sat down again. 

"Almighty Zarquon," he said, "have none of you done anything?" 

NZ's Energy News has been documenting our decline. Read this and tell me that Kiwis are not the true descendants of the Golgafrinchans. Remember that nobody (except me) likes landfills, and that we are looking at energy shortages. 

Environment Canterbury has declined to process the revised application for a proposed waste-to-energy plant in South Canterbury.

“This is due to insufficient information being supplied relating to the activity and its effects on the environment – in particular, the lack of a cultural impact assessment,” the regional council body says.

In November 2022, South Island Resource Recovery Limited lodged seven applications for reassessment, after its initial applications were returned in October.

ECan regional leader of consents delivery Hayleigh Brereton acknowledges the resubmitted application addresses many of the matters raised in the previous version regarding adverse effects of the discharges to air, stormwater and wastewater. But she says one critical issue has not been addressed.

“This is a very large proposal and the first of its kind in New Zealand, and would have some wide-reaching potential effects, including many unknown effects on mana whenua,” Brereton says.

“A site-specific Cultural Impact Assessment is required to be completed either by, or in close consultation with Te Rūnanga o Waihao. This remains an outstanding matter, and we, therefore, consider the application incomplete.”

The application has been returned under Section 88(3A) of the RMA. Waimate District Council has also returned the application.

ECan says if South Island Resource Recovery Limited wishes to proceed with an application, it must submit a new one in full.

“If it disagrees with our decision, it can lodge an official objection.”

We can't have a waste-to-energy plant because it didn't have a site-specific Cultural Impact Assessment. Declined by Environment Canterbury. After it provided all the paperwork necessary showing that it didn't cause problems for air or water - the traditional environmental concerns. 

Almighty Zarquon. We're doomed. 

Thursday 22 December 2022

Economics of regulation and medical licensing

The economic theory of regulation, following Peltzman, highlights regulation as a bargain that's subject to cost pressures. Change the cost conditions enough and you'll change the equilibrium.

Regulation of medical services seems ripe for disruption.

Over at The Conversation, Johanna Thomas-Maude documents the problems facing foreign-trained medical professionals wanting to work in New Zealand. It's basically impossible. And that's by design. 

The system is set, deliberately, to frustrate entry, with chokepoint after chokepoint. The player at each chokepoint will blame all the other chokepoints for the problem. 

Want to train more doctors? Ah, we can't. Only two med schools and they only can train so many.

Want to open a new med school? Ah, we can't. The universities' cartel reminds us that there aren't enough supervised positions at the hospitals, so even if more graduates were trained, there wouldn't be places at the hospitals for them to get their final sign-off. We'd just be training doctors to go and practice abroad. And who wants to put taxpayer money into that?

Want to solve it with foreign-trained doctors? Can't do that either. Not enough supervised positions at the hospitals. And even if someone's demonstrated competence elsewhere, that's just not good enough for New Zealand. No. They have to prove it in a supervised role here too. But there aren't any supervised roles for them. 

Want to increase the number of supervised slots? Afraid we also can't do that. None of the doctors want to take on more supervisions, you see. They're all flat out because there aren't enough doctors. 

It has long been a horrible cartel - one of the ones protected against ComCom action by the Commerce Act exemption of statutory regimes, even if they are absolutely a cartel. 

But the conditions seem ripe for change. When doctors are leaving the profession or the country because working conditions are terrible because there aren't enough doctors, there's opportunity to fix the regulations so that competent doctors from elsewhere could practice more easily. 

Here's Johanna:

Potentially hundreds of other doctors already in New Zealand are also waiting to take the required local clinical skills exam (NZREX), which is only open to 30 people at a time. The exam has only been offered four times – instead of the usual nine – in the past three years, with only one currently scheduled for 2023.

A few hundred doctors may not sound like much, but patients are being turned away from GPs all over New Zealand. Up to half of practices are not accepting any new patients.

Just one GP can safely have around 1,400 patients on their books, although this number is currently up to 2,500 for many overworked GPs.

Dr Orna McGinn, Chair of the New Zealand Women in Medicine (NZWIM) Charitable Trust, recently surveyed almost a thousand doctors working in New Zealand. McGinn noted that doctors’ concerns around a medical workforce crisis have been dismissed and diminished.

Read her whole column; I'd chatted with Johanna a few months ago as she was getting going on this project. She's been interviewing foreign-trained doctors who want to practice here. Simplest seems to be to pass the exam here, then go and practice in the UK for three years, and then consider coming back. 

All of it feels like it's ripe for change. The doctors' survey suggests lack of colleagues is biting, and that'll eventually have to feed its' way up into the licensing cartel. 

If the Commerce Commission did decide to take up medical services for its next market study rather than some populist boondoggle demanded by the Minister in an election year, it could do an awful lot of good. 

To be rescued from the Wellness Regime

TVNZ's "Creamerie" series was excellent. In it, a virus has killed off all the men. The surviving women implement a dictatorship of wellness. 

I wonder if its writers spent too much time dealing with the New Zealand public service. 

Josie Pagani skewers some dripping work out of Treasury.

The Treasury has released a new report to accompany its Living Standards Framework.

The framework is a salad of abstract concepts like ‘’knowledge’’, ‘’voice’’ and ‘’subjective wellbeing’’ attractively arranged in columns and bubbles with no development of logical relationships between them. Nor any use of old-fashioned analytic tools such as whole sentences.


I expect policy advice to highlight the costs and benefits of alternatives, to strip bare tradeoffs, and present practical menus of options. I expect sophisticated evaluation of whether policies are achieving what they are meant to.

When advice instead hides choices behind wellbeing mush, no political constituency is ever built for underlying ideas. If no-one can disagree with ‘’wellbeing’’ then no-one can ever win an argument for it either.

The idea of ‘’wellbeing’’ as a political project has emerged from the takeover of our social institutions by an educated middle class that thinks it's being progressive. Instead it signals its elite status.

Treasury is meant to be the government's lead economic advisor. Parts of it seem unfit for purpose. 

Wednesday 14 December 2022

Raising rivals' costs - research edition

Leave aside for the moment noble intentions and think through effects. 

Academics have discretion over what research questions get pursued, and over approaches for answering them. Some questions are general and could find useful data anywhere. Others are more specific.

Suppose you substantially increase the cost of pursuing quantitative work on a subset of the population in a country that has only ever been of peripheral research interest to the major journals in any field. 

What are the likely effects?

Academics with discretion shift from topics that can only be answered using data on that population subset to questions that can be answered using other groups, and from using data involving those groups for answering more general questions to using data from other groups.

And research focused on that group is left to qualitative researchers, and those quantitative researchers with the strongest idiosyncratic interest in that subgroup. 


Colonial approaches to data by universities are harming Indigenous communities throughout the world.

That’s a finding from the 10th International Indigenous Research Conference, hosted in Aotearoa last month and attended by more than 600 researchers from across the globe.

Now, a collaboration of academics from the conference are urging universities to fundamentally shift the way they collect, analyse, store and distribute indigenous data.

AUT Professor Jacquie Kidd (Ngāpuhi) was part of that collaboration and said a key problem for universities was a lack of involvement in the research process.

“So we know that ethics committees are really interested in how indigenous data is collected and managed and made available,” she said.

“Increasingly, they're looking at the principles of data sovereignty, but universities tend to step outside of that.”

If this goes ahead, expect fewer research projects that answer questions relating to outcomes among indigenous peoples, that research in those areas becomes less quantitative, and that any findings in the area become less open to being examined and contested by external views. 

If you don't want those outcomes, you're going to need substantial funding boosts for research in these areas if you want to encourage quantitative researchers to front those costs. 

Tuesday 13 December 2022

Underemployment and immigration

Alexandra Turcu over at the Asymmetric Information substack goes through some of the underemployment figures

The answer matters. One story I'm regularly given about why Labour wants to maintain very tight immigration settings is that Labour ministers believe there is still a lot of slack in the labour force, despite inflation and despite the positive output gap, because of the seemingly high underemployment figures. 

Turcu finds:

We analysed data from New Zealand's Household Labour Force Survey (HLFS) spanning the six years between Q2 of 2016 to Q2 of 2021, finding that under-employed workers were only working one hour per week less than their fully-utilised counterparts. For those working full-time, this equates to 40 hours worked by the underemployed compared to 41 hours worked by the fully-utilised.

The key difference between the underemployed and the fully-utilised is not hours worked; rather it seems to be household and individual income. As an example, part-time underemployed workers earn 28% less than their fully-utilised counterparts, and this gap widens to 32% when we compare the full-time underemployed to to fully-utilised full-time.3

These findings challenge the tempting assumption that underemployed workers are just not working enough. It also begs the question: Is the issue that underemployed individuals aren’t working enough hours, or that they can’t increase their incomes while working a 40-hour week? We cannot determine this from the HLFS, as a “not enough income” option was not offered to respondents.

If you click through to the full paper, you find that there are about as many underemployed full-time workers as there are underemployed part-time workers and that the average underemployed worker puts in about one fewer hour per week than the average fully-employed worker - whether full-time or part-time. So a part-time worker who says they're underemployed works about an hour less than a part-time worker who says they're fully utilised. 

If Minister Wood thinks that there are a pile of underemployed workers who could put in a lot more hours if it weren't for those dirty dirty immigrants, well, there ain't much slack there. The paper suggests that a lot of reported underemployment is dissatisfaction about current income rather than hours.

Monday 12 December 2022

Pure waste

Richard Harmon over at Politik (via his daily newsletter) reports that the government put $30 million into Auckland Film Studio upgrades via the Infrastructure Reference Group, and that Auckland Council also threw in some money. 

Make you weep. They'd have done better by burning the money. Zero joke.

Every dollar spent on that, given the state of the labour market, has pulled a construction worker away from more valuable tasks. How do we know the other tasks are more valuable? They didn't need to be subsidised. 

It's not just a waste of money, it's a destruction of real resources relative to what could have been done instead.

Worse, the infrastructure goes to support an industry that only exists at current scale by virtue of gigantic government subsidies to international film production. 

Had the government burned the money instead, it might have at least reduced inflation by a tiny amount. 

ComCom's punt on building materials

The Commerce Commission's final report on building materials supply recommends some patches that would make a bad situation less bad, but fails to strike on important root of the problem.

Councils under joint-and-several liability stand very high odds of being last-man-standing if anything goes wrong with a building. Work by Sapere, commissioned by MBIE not too long ago, found that councils wind up 100% liable in 48% of cases in which damages are assessed. 

That drives councils to avoid risks. They bear zero upside for allowing anything new and innovative and have about even odds of being 100% responsible if anything goes wrong.

And a pile of pathologies flow on from there.

Because councils are reluctant to sign off on anything new, architects and engineers specify plans with materials and methods that council officers are comfortable with. That's a huge advantage for incumbents, and especially where councils won't easily sign off on equivalent substitutions by the builder because council can wind up liable for that too. 

Getting councils out from under joint and several liability would start fixing the problem. Lots of ways of doing it. They could be carved out and held only proportionately liable, but that requires that you trust that the courts wouldn't decide that the council's proportion is 100% if there's nobody else with pockets deep enough to compensate someone who didn't get insurance. Capping councils' proportion could be less risky. Or taking them out entirely and setting a compulsory builders' warranty or insurance programme that would shift liability over to insurers. 

I covered the mess in this week's column for the Sunday Star Times. 

The Commerce Commission’s own findings suggested that liability is a far bigger issue than MBIE has claimed.

But the commission presumably saw the area as politically futile, saying: “Given the previous consideration of these matters, the position statement, the ongoing work of the reform programme, and the lack of any clearly better alternatives, we have not focused in this study on the nature of liability faced by BCAs or its impact on competition.”

But there is a rather obvious alternative – like the plug for the leaky boat.

Exempting councils from joint and several liability would encourage sharper diligence when purchasing and commissioning homes. If that kind of bare caveat emptor regime were too harsh on its own, the Government could add the kinds of building insurance or warranty requirements that are common internationally.

Liability would shift from councils to insurers or warranty guarantors who would have stronger reasons to weigh both the costs and the benefits of new materials, making them easier to use. A warranty or insurance scheme would add to the cost of a house but could pay for itself through lower building material costs and better buildings.

The commission’s recommendations will help. But the boat will still be leaking. A closer look at the most obvious plug for that hole would have been warranted.

Tuesday 6 December 2022

Morning roundup

Another 'everything is stupid and broken' compilation from the closing of the browser tabs.

Friday 2 December 2022


A group get together for their regular poker game.

Before dealing the cards, they agree on the rules.

Anything within the game, following the rules, is fair play. Bluffing and misleading each other is all part of the game. 

But if one of them, after looking at her cards, snuck through a change to the rules making Queens wild, and nobody noticed the rule change until after the next round of betting - that just wouldn't be on. 

Constitutions are sets of rules and conventions about how rules are made. They're the metarules of the game. 

Bluffing, misleading, and sharp play are all expected in in-period politics. 

But lying about constitutional changes snuck through under urgency is the kind of thing that threatens the constitutional order.

There are no edifying explanations for last week's shenanigans, only varying degrees of badness.

In the least bad potential version of what happened, Minister Mahuta failed to understand the importance of Eugenie Sage's SOP that would entrench parts of the Three Waters legislation. She then failed to convey to Caucus the importance of what was at play, and nobody in Caucus read Sage's SOP.

This isn't completely implausible. It is very bad, and the reasons for it are bad. Ardern has an army of policy staffers at DPMC and DIA whose whole job is making sure this kind of thing does not happen. The only way that this could happen is when the system is overwhelmed because Ardern decided to try and rush thirty pieces of legislation through Parliament under urgency in the couple of weeks before Christmas. 

If I ran over a dozen kids crossing the street because I'd slept in, was driving at triple the speed limit to make it in on time, and was distracted while trying to do three different conference calls at the same time, it wouldn't be like I was trying to run over all those kids. It would be reckless disregard and manslaughter. 

This kind of reckless disregard is the least bad explanation for what happened. If this is what happened, then Ardern should immediately have fired Mahuta for failing to make caucus aware of what was going on in her area of policy responsibility. Either Mahuta never understood it, or managed to fail to explain it to her colleagues.

Either way, the result was a cast Labour vote for entrenching a piece of policy. The Minister must be fired.

The worse version would be if Ardern did understand. In that case the Prime Minister would have at least tacitly supported this kind of play. It is difficult to consider a government legitimate that engages in this kind of play. 

Would you keep at the poker table people who made a habit of scribbling changes to the rules onto the rule-sheet while nobody was looking? Or would politely ask them to leave the table and have a think?