tag:blogger.com,1999:blog-28300842534015704722024-03-18T15:42:44.577+13:00Offsetting BehaviourEconomics and Policy in New ZealandEric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.comBlogger4491125tag:blogger.com,1999:blog-2830084253401570472.post-21006269312760921132024-03-08T13:51:00.001+13:002024-03-08T13:51:04.718+13:00Afternoon roundup<p>The afternoon's worthies:</p><p></p><ul style="text-align: left;"><li><a href="https://unherd.com/2024/03/how-universities-killed-the-academic/">How universities killed the academic</a>. Great piece. </li><li><a href="https://drugfoundation.org.nz/assets/PageBlocks/Downloads/Drug-use-in-Aotearoa-2022-23.pdf">NZ Drug Foundation's report on drug use in 2022/23</a>. One fun bit if you check back against the NZ Health Survey data: more people aged 15-24 (7.7%) use cannabis at least weekly than smoke tobacco (5.8%) at least monthly.</li><li><a href="https://www.thepost.co.nz/business/350201874/kiwis-want-kiwisaver-be-compulsory-survey-shows">Making Kiwisaver compulsory will be great for the default providers who get to clip tickets on fees I suppose</a>. Not so hot for those with US tax entanglements. </li><li>Mayor Whanau presides over a council that blew hundreds of millions of dollars on town hall, library, convention centre, and is turning itself into a bank to provide cut-rate loans to a multinational movie theatre company, <a href="https://www.thepost.co.nz/nz-news/350203635/wellington-ratepayers-face-potential-164-increase">and blames stingy ratepayers for the pipes falling apart.</a></li><li><a href="https://www.theatlantic.com/international/archive/2024/03/zaporizhzhia-nuclear-power-plant-torture-meltdown/677612/">Probably not good that Russia's still occupying that Ukrainian nuclear plant.</a></li><li>Really <a href="https://docs.iza.org/dp15820.pdf">neat paper on the adoption of property tax codes across Canadian First Nations, along with institutional detail on the First Nations Tax Commission and the First Nations Fiscal Management Act</a>. </li></ul><p></p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-42009975554417984972024-03-05T17:53:00.002+13:002024-03-05T17:53:34.189+13:00Even Lowerer HuttOne annoying thing about writing a Saturday column for the Stuff papers is never knowing whether a piece will show up in print.<div><br /></div><div>I'd thought this one was a banger. </div><div><br /></div><div><a href="https://www.eventbrite.co.nz/e/city-for-people-public-meeting-protect-wellingtons-future-tickets-847704766777?fbclid=IwAR1-dlf1essxOv-1_1B0QOhAhbg9405sGgqEB2hoMIfdhvi-Hu42DiEf_6E">I'll be talking about related issues tomorrow night as part of a panel for A City for People.</a> </div><blockquote class="twitter-tweet"><p dir="ltr" lang="en">🟨🟪 Our speaker line up has dropped! 🟪🟨<br /><br />Join us on Thursday to express your concerns about the District Plan recommendations, demand action from Councillors, and learn from the experts 💡<br /><br />Make sure your voice is heard by registering here: <a href="https://t.co/bRv7lfvs4v">https://t.co/bRv7lfvs4v</a> <a href="https://t.co/J7yO4eElfB">pic.twitter.com/J7yO4eElfB</a></p>— A City for People (@CityforPeopleNZ) <a href="https://twitter.com/CityforPeopleNZ/status/1764719960675254288?ref_src=twsrc%5Etfw">March 4, 2024</a></blockquote> <script async="" charset="utf-8" src="https://platform.twitter.com/widgets.js"></script>
Anyway - <a href="https://www.thepost.co.nz/business/350189357/why-wellington-should-be-called-lowerer-hutt">the column</a>.<div><br /></div><div><b></b></div><blockquote><div><b>Even Lower Hutt</b> </div><div><br /></div><div><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><a href="https://twitter.com/DrDreHistorian/status/1754390322719899714" style="border: 0px; color: #3189c7; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; outline: none; padding: 0px; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Transport historian Dr André Brett has suggested that Wellington</span></a><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> be renamed Lowerer Hutt, perhaps to help avoid confusion within the region. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> <br /><br /></span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Economists Matthew Maltman and Ryan Greenaway-McGrevy have been looking at Lower Hutt’s housing boom. </span><a href="https://www.auckland.ac.nz/assets/business/our-research/docs/economic-policy-centre/Going%20it%20Alone%20The%20Impact%20of%20Upzoning%20on%20Housing%20Construction%20in%20Lower%20Hutt.pdf" style="border: 0px; color: #3189c7; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; outline: none; padding: 0px; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Their paper</span></a><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">, released this week by the Economic Policy Centre at Auckland University, suggests Brett was onto something. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />Wellington City could use a bit more Huttite thinking. And especially while Wellington’s response to the Independent Hearings Panel’s report on the district plan is still in play. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />While Wellington City mulled over whether it should be legal to turn rotting wooden tents into townhouses and apartments, Lower Hutt started building. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />From late 2016, Lower Hutt started a sequence of plan changes. They reduced parking requirements and introduced new zones allowing taller mixed-use developments and medium density housing. They allowed greater density within general residential zoning. And they quickly implemented policy changes set as part of Labour’s urban growth agenda – like medium density rules and upzoning requirements near public transport.</span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />The paper tests whether those changes to zoning had any effect on building. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />It might sound like testing whether water flows downhill. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />The New Zealand Association of Economists surveyed its members this month. 96% of economists agreed or strongly agreed that district plan land use restrictions reduce housing supply. 94% agreed or strongly agreed those restrictions reduce affordability. And 98% agreed or strongly agreed that easing district plan restrictions will tend to increase housing supply and affordability.</span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />But Wellington’s Independent Hearings Panel instead seemed convinced by one expert’s odd argument that zoning to allow more building, even in an obvious housing shortage, may not lead to more building. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />And perhaps the Commissioners saw no reason to believe that evidence from faraway places like Auckland could also apply in Wellington. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />So the Lower Hutt evidence is important. At least for those who need very specific local proof that water also flows downhill in the Wellington region. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />On notification of the plan changes, and especially after the changes started taking effect, Lower Hutt started issuing a lot more consents for townhouses and rowhouses. In the new zones enabling medium density and mixed use, there was the same jump in consents for townhouses and rowhouses – and also apartments. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />But perhaps that was just coincidence and Lower Hutt was only following the same trend as other councils. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />The authors used a variety of ways of checking that the zoning changes made the difference. For example, after the plan change, Lower Hutt shifted from being a moderate fraction of overall consents in the Wellington region to overtaking Wellington City. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><img alt="" class="leftAlone ss-htmleditorfield-file image center" height="403" loading="lazy" src="https://www.nzinitiative.org.nz/assets/Picture1-graph__ResizedImageWzYwMCw0MDNd.png" style="border: 0px; display: block; float: none; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; height: auto; line-height: inherit; margin: 0px auto; max-width: 100%; padding: 0px; text-align: center; vertical-align: baseline;" width="600" /></span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />The economists also built a synthetic Lower Hutt and compared what happened there with the actual city. This method basically sets a complicated average of patterns in other cities that tracks how Lower Hutt’s consenting rates behaved before the change. Following that ‘synthetic’ Lower Hutt after the zoning change gives a comparison. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />Lower Hutt consented approximately 3260 more units than expected – a tripling the number of housing starts over the six-year period. More houses. More apartments. A few more retirement village units. And an awful lot more townhouses and rowhouses. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />It also affected building in Wellington City. Because it became relatively easier to build in Lower Hutt, some development shifted to the Hutt. Overall, about a quarter of the new consents in Lower Hutt were consents that might have happened in other places otherwise. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />This also matters for theories that a region may only have so much ‘absorptive capacity’ – another dubious argument relied on by Wellington’s hearings panel. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />The vast majority of new consenting in Lower Hutt, about three quarters of it, was new building. It did not just displace building that would otherwise have happened elsewhere. Lower Hutt’s reforms, all on their own, provided a 12 to 17% increase in housing starts for the whole metropolitan area. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />Lower Hutt then helps to keep rents in Wellington lower than they might otherwise be, by providing some of the housing that Wellington City would otherwise block. Every renter in Wellington owes a bit of thanks to Lower Hutt council. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />If Wellington Council cannot see fit to propose a district plan more enabling than the economically illiterate plan proposed by the Independent Hearings Panel, the combined Upper and Lower Hutt populations could well wind up exceeding Wellington’s.</span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />If that happens, I think we should look back at the good Dr Brett’s suggestion. The Hutts’ ascendancy ought to be properly recognised. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />Wellington would become Lowerer Hutt, as Dr Brett suggested – or perhaps my preferred ‘Even Lower Hutt’. All of it would be part of the Greater Hutt Regional Council. Somes Island would of course become Hutt Island. </span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><br />And the ‘special character’ that drove Wellington’s residents, and tax base, out to the Hutts could stand as warning to other cities to at least try to be less stupid than the country’s capital.</span><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span></p></div></blockquote><p>Meanwhile, <a href="https://thespinoff.co.nz/wellington/05-03-2024/if-wellington-wont-allow-new-housing-should-we-all-move-to-upper-hutt">The Spinoff's suggesting abandoning Wellington for the Hutts</a> and young professionals are <a href="https://www.thepost.co.nz/nz-news/350199433/wellington-teachers-home-owning-dreams-lured-him-south">abandoning Wellington for points farther afield like Christchurch</a>. </p><p></p><blockquote><p>Buchanan said Christchurch felt more vibrant and there were plenty of young families who’d moved from the likes of Wellington and Auckland.</p><p>“Talking to my peers, former colleagues, family, and being out and about around the city, Wellington has a brain drain.</p><p>“Whether it be young teachers, firefighters or psychologists, people are unhappy or moving.”</p><p>Christchurch offered about 1000 housing options to choose from, Buchanan said, thanks to an increased supply of medium density homes in suburbs close to the city.</p><p>In Wellington, he was left with just 190. Most were in places like Wainuiomata, a Lower Hutt suburb with notoriously poor links to the city centre for commuters. A friend had recently paid $1.1 million for a small section and an old three-bedroom house in Upper Hutt.</p></blockquote><p>...</p><p></p><blockquote><p>According to a December 2023 Infometrics report, the average house price in Wellington City is $1,023,966 – roughly $100,000 more than the national average.</p><p>By contrast, CoreLogic measured the average house price in Christchurch as $757,881.</p><p>Wellington has long fought new-build developments, especially in the older inner city suburbs.</p><p>These “character areas” where Victorian villas still cling to the hills were described in a recent opinion piece in <a href="https://www.thepost.co.nz/business/350189357/why-wellington-should-be-called-lowerer-hutt"><i>The Post</i> by Eric Crampton as “wooden tents”</a>, while by contrast he praised Lower Hutt’s initiative at constructing new-builds.</p><p>Buchanan attested to this, arguing the new builds in Christchurch only added to the character of the area.</p></blockquote><p></p><p></p><div><p style="border: 0px; font-family: "Open Sans", sans-serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.5em; margin: 0px; padding: 0px 0px 0.65em; vertical-align: baseline;"><span style="border: 0px; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"></span></p></div>I also had a podcast chat with Danyl McLauchlan on related issues - though we ranged a bit more broadly.
<iframe width="100%" height="166" scrolling="no" frameborder="no" allow="autoplay" src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/1765398654&color=ff5500"></iframe><div style="font-size: 10px; color: #cccccc;line-break: anywhere;word-break: normal;overflow: hidden;white-space: nowrap;text-overflow: ellipsis; font-family: Interstate,Lucida Grande,Lucida Sans Unicode,Lucida Sans,Garuda,Verdana,Tahoma,sans-serif;font-weight: 100;"><a href="https://soundcloud.com/user-447292370" title="The New Zealand Initiative" target="_blank" style="color: #cccccc; text-decoration: none;">The New Zealand Initiative</a> · <a href="https://soundcloud.com/user-447292370/whats-going-on-with-wellington" title="What's going on with Wellington?" target="_blank" style="color: #cccccc; text-decoration: none;">What's going on with Wellington?</a></div><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-76365030858987830442024-03-01T16:11:00.000+13:002024-03-01T16:11:17.928+13:00The Uncompetitive Urban Land Markets Theory of Everything<p><a href="https://worksinprogress.co/issue/the-housing-theory-of-everything/" rel="noreferrer noopener" style="box-sizing: inherit; font-family: "Source Sans Pro", Helvetica, "sans-serif"; font-size: 0.9rem; transition: color 110ms ease-in-out 0s;" target="_blank"><em style="box-sizing: inherit;"></em></a></p><blockquote><p class="MsoNormal"><a href="https://worksinprogress.co/issue/the-housing-theory-of-everything/"><i>The
Housing Theory of Everything</i></a> has one of those wonderful
self-explanatory titles. A good title matters. The recent and thorough essay
explains how the anglosphere’s unnecessarily expensive housing affects, well,
everything. Or at least almost everything.<o:p></o:p></p><p class="MsoNormal">Zoning makes it too hard to build houses where people want
to build. Urban containment policies block new subdivisions, so downtown land
no longer competes with land further out for developers’ attention and for
residents. Land prices then inflate across the whole urban land market. Zoning that
blocks new townhouses and apartment towers in places where people want to live
further worsens scarcity and affordability. <o:p></o:p></p><p class="MsoNormal">It's at the root of a host of pathologies. <o:p></o:p></p><p class="MsoNormal">People aren’t left with much to live on after housing costs;
inadequate housing causes misery.<o:p></o:p></p><p class="MsoNormal">The most productive cities could be even more productive if
more people were allowed to live near each other. Bans on density are then
taxes on productivity improvement, with existing landowners reaping the
rewards. Those bans also make it harder than it should be to reduce carbon
emissions. <o:p></o:p></p><p class="MsoNormal">The essay is superb. And it has been influential. <o:p></o:p></p><p class="MsoNormal">I’ve heard it cited by both Labour and National MPs, which
shouldn’t be surprising as it explains a whole lot about New Zealand. <o:p></o:p></p><p>
</p><p class="MsoNormal">Uncompetitive urban land markets are at the core of the
problem. Current practice requires council plans to demonstrate that they have
zoned for about twenty percent more housing supply than expected demand. But
expected demand will depend on whether housing is affordable, and tight zoning
means unaffordable housing. <o:p></o:p></p></blockquote><p>Me over in Newsroom this week. </p><p>I riff on a <a href="https://soundcloud.com/user-447292370/competition-and-land-use-planning">chat I'd had with Kevin Counsell on our podcast series</a> about the economic consultancy reports that developers have to put up showing that there's massive excess demand if they want to get a building consent. </p><p><span style="background-color: white; color: #111111; font-family: "Source Sans Pro", Helvetica, "sans-serif"; font-size: 0.9rem;"></span></p><blockquote><p class="MsoNormal">A new supermarket then has to prove that there is so much
excess demand that the new supermarket will not impinge on existing
competitors’ viability.<o:p></o:p></p><p class="MsoNormal">And maybe that kind of outcome sounds great to the kinds of
people who get involved in town planning. There’s already a supermarket, why
should there be another one unless there’s enough customers for it? <o:p></o:p></p><p class="MsoNormal">The result is the neutering of competition, and substantial
harm to consumers. If an existing business is seriously underperforming, a new
entrant provides a service by driving it out of business. Even the <i>threat</i>
of that kind of entry provides competitive discipline. <o:p></o:p></p><p class="MsoNormal">However, in New Zealand, that kind of entry would have a
hard time getting a resource consent. The government likes to wring its hands
about poor productivity performance while, at the very same time, making it
almost impossible for new competitors to drive unproductive incumbents out of
business. <o:p></o:p></p><p class="MsoNormal">Last week, <a href="https://soundcloud.com/user-447292370/competition-and-land-use-planning?utm_source=clipboard&utm_campaign=wtshare&utm_medium=widget&utm_content=https%253A%252F%252Fsoundcloud.com%252Fuser-447292370%252Fcompetition-and-land-use-planning">I
chatted with NERA director Kevin Counsell</a> for the Initiative’s podcast
series. When councils require evidence that a new development provides
overwhelming benefits, someone has to write the economic analysis. Counsell
writes a lot of the reports demonstrating whether there would be sufficient
demand.<o:p></o:p></p><p class="MsoNormal">It isn’t just supermarkets. Consider potential entrants who
need land at the edges of town. <o:p></o:p></p><p class="MsoNormal">In 2022, the government set a <a href="https://www.stuff.co.nz/business/opinion-analysis/300713553/a-confusion-of-national-policy-statements">National
Policy Statement on Highly Productive Land</a>. That statement sets a very high
hurdle if anyone wants to do anything other than farming on the 14% of the
country that is classified in the top three soil categories. <o:p></o:p></p><p class="MsoNormal">Most of that protected land is dairy and sheep paddocks. Converting
it to any other use requires proving a substantial benefit from that
conversion. <o:p></o:p></p><p class="MsoNormal">Counsell has been working on a proposed new industrial park
outside of Morrinsville. The National Policy Statement on Highly Productive
Land requires that there be substantial benefit before anyone can build
anything on a paddock. <o:p></o:p></p><p class="MsoNormal">How can you demonstrate substantial benefit? You have to
prove that there is huge demand for the new use. The dynamic benefits of
competition in forcing everyone to strengthen their game aren’t enough. They
would be harder to prove in any case. Entrants wind up having to show that
there is excess demand given current supply.<o:p></o:p></p><p class="MsoNormal">The effect is harshly anticompetitive. If a group of
existing businesses organised in a smoke-filled room to block a new
competitor’s entry, they could face criminal cartel prosecution. But resource
management provides even stronger protection against competition whenever
resource consents are required. <o:p></o:p></p><p>
</p><p class="MsoNormal">I titled this column ‘The Uncompetitive Urban Land Markets Theory
of Everything’, but it’s never easy to tell whether a columnist’s draft
headline will survive. The uncompetitive urban land markets theory of
everything subsumes the housing theory of everything. Just about everything
wrong in housing is downstream of uncompetitive urban land markets. But the
same processes that block new housing also block new supermarkets, new
commercial premises and new industrial parks. <o:p></o:p></p></blockquote><p>Go listen to the podcast. Our resource consenting systems entrench anticompetitive effects by making it difficult to set a new competitor unless the incumbent's existing rents are above a threshold, and dynamic Schumpeterian competition is largely blocked. </p><p>Maybe, just maybe, if the government is worried that NZ markets are often less competitive than they'd like, and if they're also worried that the country's less productive than it should be, it could have a look at this?</p><p>Maybe would-be competitors shouldn't have to produce reports like this?</p><p>I swear a good third of government activity is creating giant problems, not noticing that they caused the problem, then running endless inquiries about the consequences. </p><p style="-webkit-font-smoothing: antialiased; background-color: white; box-sizing: inherit; color: #111111; font-family: "Source Sans Pro", Helvetica, "sans-serif"; font-size: 0.9rem; margin: 20px 0px; max-width: 100%; overflow-wrap: break-word;"></p><p style="-webkit-font-smoothing: antialiased; background-color: white; box-sizing: inherit; color: #111111; font-family: "Source Sans Pro", Helvetica, "sans-serif"; font-size: 0.9rem; margin: 20px 0px; max-width: 100%; overflow-wrap: break-word;"></p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-43942446330220508532024-02-19T10:33:00.004+13:002024-02-19T10:33:54.665+13:00Tino Rangatiratanga and localismMy piece <a href="https://www.thepost.co.nz/business/350173573/new-localist-approach-can-be-more-responsive-local-needs">for the Saturday papers weekend before last</a>, <a href="https://www.nzinitiative.org.nz/reports-and-media/opinion/new-localist-approach-can-be-more-responsive-to-local-needs/">and now ungated here</a>, went back to a theme that <a href="https://www.politik.co.nz/now-for-the-big-debate-about-maori-sovereignty/">Richard Harman had noticed in the Waitangi speeches</a>. <div><blockquote><div>Minister Shane Jones argued fuller debate on the meaning of Tino Rangatiratanga is inevitable, saying, “There is a deep, committed view from Pita Tipene and others that article two is a charter for iwi sovereignty. And at some point in time, that debate is going to be flushed out. It’s not a conception that I share. I conceive it to be more localised.”</div><div><br /></div><div>Prime Minister Luxon said, “We are a party and particularly a government that is actually about making sure there is localism and devolution and that those closest to the problem should solve the problems. …Our fundamental belief is localism and devolution. We do not believe in centralization and control through Wellington.”</div><div><br /></div><div>It is certainly not for a Canadian economist to weigh in on Treaty interpretation. I have neither the standing nor the understanding.</div><div><br /></div><div>But one bit of the Canadian experience might be interesting.</div><div><br /></div><div>Canada’s overall policies regarding its First Nations have been abysmal. But Canada’s First Nations nevertheless have some rights comparable to Canadian municipalities.</div></blockquote><p>Basically, Canada's First Nations Band Councils have powers on reserves comparable to municipalities, except under federal rather than provincial jurisdiction. </p><p>Decades ago, Manny Jules did the work to get band councils the authority to levy property taxes on reserve to fund band council activities. </p><p>And look at this section of the Indian Act - I've bolded the interesting bits.</p><p></p><blockquote><p>81 (1) The council of a band may make by-laws not inconsistent with this Act or with any regulation made by the Governor in Council or the Minister, for any or all of the following purposes, namely,</p><p>(a) to provide for the health of residents on the reserve and to prevent the spreading of contagious and infectious diseases;</p><p>(b) the regulation of traffic;</p><p>(c) the observance of law and order;</p><p>(d) the prevention of disorderly conduct and nuisances;</p><p>(e) the protection against and prevention of trespass by cattle and other domestic animals, the establishment of pounds, the appointment of pound-keepers, the regulation of their duties and the provision for fees and charges for their services;</p><p>(f) <b>the construction and maintenance of watercourses, roads, bridges, ditches, fences and other local works</b>;</p><p>(g) <b>the dividing of the reserve or a portion thereof into zones and the prohibition of the construction or maintenance of any class of buildings or the carrying on of any class of business, trade or calling in any zone</b>;</p><p>(h) <b>the regulation of the construction, repair and use of buildings, whether owned by the band or by individual members of the band</b>;</p><p>(i) the survey and allotment of reserve lands among the members of the band and the establishment of a register of Certificates of Possession and Certificates of Occupation relating to allotments and the setting apart of reserve lands for common use, if authority therefor has been granted under section 60;</p><p>(j) the destruction and control of noxious weeds;</p><p>(k) the regulation of bee-keeping and poultry raising;</p><p>(l) <b>the construction and regulation of the use of public wells, cisterns, reservoirs and other water supplies</b>;</p><p>(m) the control or prohibition of public games, sports, races, athletic contests and other amusements;</p><p>(n) the regulation of the conduct and activities of hawkers, peddlers or others who enter the reserve to buy, sell or otherwise deal in wares or merchandise;</p><p>(o) the preservation, protection and management of fur-bearing animals, fish and other game on the reserve;</p><p>(p) the removal and punishment of persons trespassing on the reserve or frequenting the reserve for prohibited purposes;</p><p>(p.1) the residence of band members and other persons on the reserve;</p><p>(p.2) to provide for the rights of spouses or common-law partners and children who reside with members of the band on the reserve with respect to any matter in relation to which the council may make by-laws in respect of members of the band;</p><p>(p.3) to authorize the Minister to make payments out of capital or revenue moneys to persons whose names were deleted from the Band List of the band;</p><p>(p.4) to bring subsection 10(3) or 64.1(2) into effect in respect of the band;</p><p>(q) with respect to any matter arising out of or ancillary to the exercise of powers under this section; and</p><p>(r) the imposition on summary conviction of a fine not exceeding one thousand dollars or imprisonment for a term not exceeding thirty days, or both, for violation of a by-law made under this section.</p></blockquote><p>It is fun to think about what could happen here if iwi had similar authority over building and development on iwi-held land, or Māori land more generally. </p><p>For further fun, <a href="https://vancouver.ca/files/cov/senakw-services-agreement.pdf">look at the 250 page services agreement between Vancouver City and the Squamish First Nation for the Sen̓áḵw development</a>. That development is on Reserve land right next door to downtown Vancouver. </p><p>It's very typical for Kiwi bureaucrats, or bureaucrat-adjacent types, to find the first hurdle that might cause an issue and just give up. Well, here's 250 pages of legal text working through difficulties and finding solutions. </p><p>Back to the column.</p><p></p><blockquote><p>A First Nations Band has autonomy over the Band’s land.</p><p>It isn’t mere parchment. The listed rights have consequences.</p><p>When Sḵwx̱wú7mesh Úxwumixw, the Squamish Nation, finally had five hectares of their land returned to them near downtown Vancouver, the Band had authority over that land. Not the city.</p><p>Vancouver has a housing shortage. And Sḵwx̱wú7mesh Úxwumixw wanted to build.</p><p>In Auckland, Section H27 of Auckland’s Unitary Plan sets out the Special Purpose - Māori Purpose Zone. A Marae is prescribed by H27.6.2 to be no more than 10 metres in height; height of buildings in relation to boundaries is prescribed by H27.6.3, and even the location of rainwater tanks is prescribed by H27.6.9.</p><p>Even if every one of those sections enjoyed the full agreement of every hapū when the rules were written, if a hapū’s needs changed over time, council would have to agree to any change. And City Council issues the consents.</p><p>Meanwhile, the Squamish Nation’s website describing the Sen̓áḵw development explains that “Sen̓áḵw is not part of the City of Vancouver, and is not subject to the City's typical development approval process.”</p><p>It appears that, in practice, collaboration with Vancouver City has been required in order to effect interconnection to water networks. But bargaining over such things is a bit different when the Band has real autonomy over its own lands.</p></blockquote><p>The service agreement goes well beyond water of course. The Band Council levies a property tax on Sen̓áḵw to pay Vancouver for other services that Sen̓áḵw residents will enjoy. This stuff can be worked out. </p><p></p><blockquote><p>Localist approaches can be more responsive to local needs.</p><p>In 2015, the New Zealand Initiative put up <a href="https://www.nzinitiative.org.nz/reports-and-media/reports/in-the-zone-creating-a-toolbox-for-regional-prosperity/">a report on devolution</a>. We argued that, if a local community saw central government’s regulations or policies as being unfit for local purposes, they should be able to negotiate their own carve-out. If the policy experiment proved successful, others could take it up. If it failed, the experiment would have been relatively small. Bespoke devolution options can make more sense where councils vary widely in capacity.</p><p>But nothing in that report needed to imply that local or regional councils are the only voices of local community. Devolution to iwi or hapū could also fit within the framework.</p><p>New Zealand has a housing shortage. Council zoning and consenting rules have obviously been part of the problem.</p><p>Devolving zoning, consenting, and rating authority over iwi-held land to iwi wishing that authority may be a longshot. And it would take a lot of work.</p><p>But it seems worth thinking about.</p><p>I have no expertise or experience in arguments around Treaty interpretation.</p><p>I just find it very hard to believe that iwi leaders signing onto the Treaty believed their descendants would wind up needing to beg a bureaucrat’s permission to build houses on their own land.</p></blockquote><p></p><p></p><p></p><div></div></div><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-16027315221002991332024-02-19T10:16:00.005+13:002024-02-19T10:16:54.676+13:00Morning roundup<p>The tabs did accumulate. A couple of worthies. </p><p></p><ul style="text-align: left;"><li><a href="https://newsroom.co.nz/2024/02/05/no-bailing-out-water-says-minister">There will be no bailouts of local councils that neglected their pipes. Good. </a></li><li>Me, <a href="https://newsroom.co.nz/2024/02/13/o-canada-what-have-you-done-to-news-platforms/">over in Newsroom</a>, reminding everyone of the mess Canada made by trying to turn Facebook into a media funding entity. It's now sounding like National, who had been very sceptical about the proposal during the election campaign, are warming to the darned thing. Pretty disappointing if so.</li><li><a href="https://newsroom.co.nz/2023/10/24/on-water-reform-national-and-act-are-sailing-on-same-course/">Like I told y'all last year</a>, it was always pretty obvious what <a href="https://www.politik.co.nz/national-calls-in-its-preferred-consultants-again">National's plan for council water reform</a> would be. It would be based on Castalia's work with Communities for Local Democracy. Like they said it would be. </li><li><a href="https://twitter.com/Lianne_Rood/status/1758890759221051633">Canada's Conservative Party pandering to loonies on the right. </a></li><li>Alison Andrew's talk at the Waikato Economics Forum was excellent. She's CE of Transpower. Transpower just works in ways that council water just doesn't. Consider the incentives both face. Transpower is self-funding through charges on users of its transmission lines, under standard utilities regulation that allows them a return on their capital. Council water, well, no. But that doesn't meant there aren't problems for Transpower. <a href="https://www.energynews.co.nz/news/national-grid/152042/weak-property-rights-impeding-grid-expansion-transpower">I hope that the proposed fast-track consenting solves some of this mess</a>.</li></ul><p></p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-16085114589857485412024-02-19T09:45:00.000+13:002024-02-19T09:45:00.721+13:00YIMBY opt-outs<p><a href="https://yesinourbackyards.substack.com/p/how-national-can-save-the-medium">Marko Garlick makes the case for keeping the Medium Density Residential Standards but allowing small blocks to opt out through petition, with deed restrictions expiring within 25-30 years.</a> </p><p></p><blockquote><p>If Houston was anything like cities in New Zealand (or Australia, the UK, or other big US cities) these density-enabling changes would’ve been fiercely resisted by density-hating homeowners. But by most accounts, these changes were largely uncontroversial. Why? Perhaps because Houston allowed pockets of homeowners to ‘opt out’ of these city-wide changes.</p><p>Anya Martin’s excellent article in Works in Progress goes through this opt-out process. Landowners within small blocks could collectively opt out of the density-enabling rules via private deed restrictions – similar to covenants in New Zealand – which are automatically recognised by the city. These deeds could be used to, amongst other things, set a higher minimum lot size than the new city minimum – effectively banning townhouses. A simple petition needed to attract just 51% support from landowners. These private deed restrictions would typically expire after 25–30 years.</p><p>In short the opt outs:</p><p></p><ul style="text-align: left;"><li>Apply to small geographic areas only; a block, not a whole suburb.</li><li>Require a majority consent from landowners in that area; a few people can’t decide for everyone.</li><li>Have a sunset clause; they don’t last forever.</li></ul><p></p></blockquote><p>It seems an easier way of operationalising opt-outs from MDRS than having it at district plan level, subject to easy-to-game requirements for immediately releasing 30-years worth of supply. </p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-19791831427422648562024-02-19T08:53:00.003+13:002024-02-19T08:53:57.621+13:00Higgsean worldsI was a panelist after Treasury Secretary McLiesh's talk at the Waikato Economics Forum on Friday morning.<div><br /></div><div>I'd made a few notes to myself for my opening 5 minutes. I never quite say what I'd written down. But this is what I'd written down.</div><div><blockquote><div><b>Fiscal consolidation and ratchet effects</b></div><div><br /></div><div>Covid has taught us two awful lessons.</div><div><br /></div><div>First, when Parliament gives government a loose rein to deal with a crisis as it sees necessary, trusting that fiscal capacity will be used to necessary purposes, that flexibility will be abused. Core agencies may provide veiled, and sometimes not-so-veiled, warnings that spending is difficult to justify. But ultimately neither they, nor the Public Finance Act, provide discipline. </div><div><br /></div><div>Second, New Zealand may well sit in a Bob Higgs world. And I certainly hope we aren’t.</div><div><br /></div><div>Let’s take the latter first before looking back to the former.</div><div><br /></div><div>In the late 1980s, Robert Higgs argued, in Crisis & Leviathan, that public spending exhibits a ratchet effect. It is easy for spending to go up in a crisis. Much of it may even be justified for dealing with the crisis. But fiscal consolidation after the crisis maintains a larger government share of overall economic activity than before the crisis: a one-way ratchet effect.</div><div><br /></div><div>That isn’t a very good world to be in. If you’re in that world, it is harder to get agreement on giving the government the flexibility it might need in dealing with a crisis. There are always tradeoffs between speed and oversight. If you can trust the government to do its best honest job and to retrench after the crisis, then you can afford to cut the government a lot of slack – and get closer to a first best. If you can’t, then those who do not want a permanent expansion in the size and scope of the state have to trade off losses from an inadequate crisis response against losses after the crisis from the permanent part of that increase.</div><div><br /></div><div>Treasury’s charts in the BIM showed that we might not have been crazy, ex ante, to think we weren’t in a Higgs world. After the Asian currency crisis, Core Crown expenses retrenched, under a Labour government to almost 28% of GDP. The GFC and then Christchurch earthquakes saw them hitting 34% of GDP before retrenching to below 28% of GDP by 2017. </div><div><br /></div><div>And the Great Wellbeing Budget promised that every social problem in the world could be solved, with Core Crown Spend projected at 28.8% of GDP by 2023. <span style="white-space: pre;"> </span></div><div><br /></div><div>In early 2020, there was phenomenal agreement that the government needed to be given the room it needed for dealing with the crisis. It had authorisation to issue the debt necessary for dealing with it. And it had widespread support across the business community. Few atheists in that foxhole. Core Crown spend topped 35% of GDP. </div><div><br /></div><div>During the 2023 election campaign, the National Party’s aspirational goal was to get Core Crown spending down to 30% of GDP – above what Ardern’s wellbeing budget had promised. </div><div><br /></div><div>And Treasury’s briefing to the government suggested a mix of spending cuts and tax increases would be needed to fill the gap. Inflation, all on its own, increased Crown revenue through fiscal drag by perhaps a billion dollars from Q1 2021 to Q2 2022 – if we can trust Treasury’s tax calculator for changes that large.</div><div><br /></div><div>Those who prefer a larger size of government have painted normal fiscal consolidation after a crisis as being terrible austerity, and that that austerity’s purpose is to deliver tax cuts. </div><div><br /></div><div>It is a dangerous partisan game. </div><div><br /></div><div>If returning Core Crown spending, after a crisis, to a level higher than it was before the crisis is going to be painted as austerity, good luck getting social licence for government to have the flexibility it needs to deal with the next crisis. </div><div><br /></div><div>Worse, in the crisis, our institutions proved unable to constrain the government against diverting debt raised for dealing with Covid into party-preference spending, like school lunches, and into destructive measures like Envirojobs. </div><div><br /></div><div>When New Zealand was running a substantially positive output gap and the country’s lowest unemployment rates on record, the government was running make-work schemes. </div><div><br /></div><div>While Treasury did provide some warnings against misguided spending, it also provided the Finance Minister with substantial cover for his initiatives. Measures of fiscal impulse in budget documents seemed designed not to enlighten, but to provide the Minister with a way to claim that massive deficits fuelled by non-Covid spending were, in fact, fiscally responsible – because he was spending slightly less than the year before.</div><div><br /></div><div>It is hard to avoid the conclusion that the only real fiscal discipline that our institutions provide is the need for vote allocations to compete with each other for a limited pool of resources. When a strong focus on value for money drives Cabinet decisions, Ministries will provide evidence in support of that. When other drivers determine allocations, Ministries will target those other drivers. And when budget constraints disappear because government has taken on tens of billions of dollars in debt, there simply is no restraint. </div></blockquote><div></div><div>Because Secretary McLiesh's opening pointed to the Treasury's view on the criteria for successful fiscal stimulus, with some emphasis on the need to get spending now back down (the limited party), I quoted back what she'd said at the June 2021 workshop Treasury and the Reserve Bank ran on the lessons of Covid. The first sentence is pretty much word for word what the Secretary said this time. The second bolded sentence, well, I wonder whether they've reconsidered that part.</div></div><div><blockquote>"The well-accepted objectives for effective fiscal stimulus are that it is timely, temporary, and targeted. <b>Overall, New Zealand's fiscal response is meeting those objectives perhaps better than most.</b>"</blockquote><p><a href="https://twitter.com/EricCrampton/status/1757854040573251635">My Twitter thread on the full conference is here</a>.</p><p>After my session, I was reminded by an attendee that previous large structural deficits meant the end of two careers in politics for those who had to clean up the mess. That attendee wondered where the hell Treasury was when the structural deficits were being locked in, this time. </p><p>I wonder that too. </p><p>It's like Treasury entirely forgot that regardless of whether one accepts the economic merits of Keynesian fiscal stimulus, the political economy of it just doesn't work. Government has a much harder time scaling back spending in the upswing than it has in scaling up spending in the downturn. And so it just doesn't work. </p></div><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-39804197629368731862024-02-13T10:43:00.000+13:002024-02-13T10:43:01.659+13:00Chris Trotter's brain hasn't melted<p>After the 2017 election, the brains of some folks on the NZ right seemed to melt. They imagined that Ardern was controlled by Davos, or the World Economic Forum, or the International Socialist Youth of which she had been President, or Soros. </p><p>It was all just stupid. Labour had won the election, there were no conspiracies, and that people with similar outlooks chat with each other is hardly scandalous no matter how much crazy people want to claim that it is. </p><p>Same thing's happening now with National's election. </p><p>Chris Trotter figures it fills a psychological need on the left: someone external to blame for the loss.</p><p></p><blockquote>THE ATLAS NETWORK has been trending lately – in the minds of the New Zealand Left. Devastated by the election result, and further demoralised by recent polling showing the Right increasing its grip on New Zealanders’ political imagination, the Atlas Network has provided the Left with what it most needs – an explanation for its failure.</blockquote><p></p><p>I expect that's a reasonable part of it. But also a general view that throwing mud can make one's ideological opponents less effective regardless of whether any of it makes a darned bit of sense.</p><p>Trotter concludes, but read the whole thing:</p><p></p><blockquote><p>It is highly instructive that left-wing politicians with CVs that show them working for “progressive” organisations, NGOs and yes, even left-wing think tanks with links to billionaire donors, are not portrayed as evil-doers by the mainstream media. Having a background in the trade unions, student organisations, environmental groups, etc, is seen as perfectly natural. Where else are left-wingers going to learn their trade? Exxon? British & American Tobacco? Pfizer?</p><p>David Seymour’s links to the Atlas Network do not make him a villain. Working for the Frontier Centre for Public Policy is not the same as working for Hamas. Morally speaking, is taking money from oil companies really all that distinguishable from giving money to oil companies every time we fill up our petrol tank? Getting from A to B; winning the battle of ideas; the Devil clips our tickets either way.</p><p>The Left’s election defeat is not the work of the Atlas Network. It is not even the work of David Seymour and Act. It is the work of ordinary citizens who liked the Right’s stories better than they liked the Left’s. If the Right’s stories were made more convincing by a sympathetic think tank, then the Left should not be getting mad at their opponent’s effective apparatus, it should be getting mad at itself for not having one of its own.</p></blockquote><p>After you've read Trotter, watch this excellent 1985 documentary about a real conspiracy. </p><p><br /></p><p></p><iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/XEaFLdK_e64?si=PY6iYmuVTUUd9901" title="YouTube video player" width="560"></iframe><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com1tag:blogger.com,1999:blog-2830084253401570472.post-27145584536106765742024-02-12T16:13:00.000+13:002024-02-12T16:13:35.781+13:00Around the traps on housing<p>Wellington's Independent Hearings Panel put up its recommendations on the Wellington District Plan. </p><p>They note that Council's plan provides far more than the minimum required zoned housing to keep up with projected demand and so scaled it back.</p><p>A few bits from me on all this.</p><p><a href="https://businessdesk.co.nz/article/infrastructure/wellington-housing-report-under-fire-infrastructure-commission-points-out-critical-gaps">Oli Lewis and Dileepa Fonseca at BusinessDesk</a></p><blockquote><p>Wellington already suffers from infrastructure challenges, and restricting housing development in existing areas may worsen it. </p><p>That’s the view of Geoff Cooper, general manager for strategy at the Infrastructure Commission, Te Waihanga, who commented to BusinessDesk expressing surprise at recommendations made by an independent hearings panel (IHP) convened to hear submissions on a proposed district plan put forward by the Wellington city council.</p><p>...</p><p>Cooper said that the NZ infrastructure strategy, produced by the commission, also highlighted a need for national direction to help guide planning decisions. </p><p>“The aim of this national direction is often about balancing economic matters, like enabling housing supply for future New Zealanders, with other factors.” </p><p>Economic considerations needed to be given appropriate weight, he said. </p><p>“We note that as of today, the list of 999 accredited RMA independent commissioners includes just 12 that report having expertise in economics – amounting to 1.2%.” </p><p>Crampton was far more scathing, saying the Wellington IHP clearly needed economic assistance. </p><p>“Their engagement with the economic evidence presented was incredibly poor; they were unable to distinguish academically credible arguments from academically risible arguments, and they provided a series of recommendations that will worsen housing affordability,” he said. </p><p>“All in all, the report discredits the IHP process and the methods used to select panellists. Wellington council would be right in dismissing the IHP report’s conclusions.”</p></blockquote><p></p><p><a href="https://www.thepost.co.nz/nz-news/350170825/our-wits-end-group-fumes-housing-recommendations">Tom Hunt asked what I'd thought about it:</a></p><p></p><blockquote><p>The New Zealand Initiative chief economist Eric Crampton said the council’s proposed district plan had a larger buffer between planned-for supply and projected housing demand in Wellington in coming decades. The new recommendations significantly reduced that buffer, which particularly mattered when Wellington was starting from a housing shortage.</p><p>But he believed the whole system may need to change to rely less on forecasts of whether housing demand would be met by zoned supply. If housing was unaffordable, people could be expected to leave town, reducing forecast demand, he said.</p><p>Instead, councils and the Government could watch land values. If those prices showed that zoned land was scarce, as work by the Infrastructure Commission had shown, then the Government could get councils to zone for more development.</p></blockquote><p>There had been <a href="https://environment.govt.nz/assets/Publications/Files/signals-of-under-capacity-consultant-report.pdf">2016 work by Covec and MRCagney for MfE</a> looking at how prices could be used as signals of zoned scarcity. This was part of the prep for the older National Policy Statement on Urban Development Capacity. NPS-UDC was replaced by NPS-UD, and none of it took price signals as seriously as it should have. They're mentioned as one of many possible things to look at when they should be a trigger compelling release of more zoned land. </p><p><a href="https://www.nzherald.co.nz/business/the-incapacity-of-development-capacity-eric-crampton/XDGAJ7WORJAURGMYGS2BTULTCY/">I talked about this a bit more over at The Herald.</a> The full column is gated but I've snipped a couple bits. </p><p></p><blockquote><p>In short, it’s a backward kind of way of setting urban plans. Forecasts of demand are not only highly uncertain, they also depend on housing affordability.</p><p>If you start with overcrowded, poor-quality housing, you will have a hard time fixing it. And if the resulting unaffordability discourages people from moving here while encouraging young families to flee, projected demand is the wrong measure entirely.</p><p>None of it faces a simple sanity check. Land prices can quickly show whether councils have zoned sufficient land for development. Last year, the Infrastructure Commission compared the 2021 price of land just outside of city limits to the price of land just inside the boundary. They accounted for the cost of turning rural land into urban land, like earthworks, surveying, planning, and development contributions. And they found urban zoning quadruples the price of land inside Auckland and Tauranga’s boundaries, while more than tripling land value in Wellington, Hamilton and Queenstown.</p><p>Those ratios had increased substantially since 2010.</p><p>Since the commission’s work accounted for land development costs, the price multiples at the boundary largely reflect scarcity caused by zoning.</p><p>If it were legal to turn rural land around Wellington, like in Ōhāriu, into housing, land zoned for housing in Wellington would not cost $490 per square metre more than land just outside the boundary. As the typical Wellington section is about 600sq m, the commission’s figures mean zoning at the boundary added almost $300,000 to a Wellington section’s price in 2021.</p><p>This simply would not happen if the council had really zoned enough land for development.</p><p>But the problem is not just at rural-urban boundaries. It will also be at every other zoning boundary where zoning creates scarcity.</p></blockquote><p>On the plus side, the IHP work really didn't mess around. Some reports are just kinda bad. And then inertia sees them adopted. But this one's bad enough that it's unified everyone other than the more hopeless NIMBYs against it. So it's more likely to be tossed.</p><p>It also seems to have inspired the latest NZ Association of Economists member's survey. If you're an NZAE member, do check your inbox for that survey. It asks member whether zoning provides a binding constraint against housing supply and consequently affects prices. </p><p>And on the fun side, Twitter urbanist Boxcar Joey mapped the conspiracy of Twitter urbanists against the IHP proposal.</p><p></p><p></p>
<blockquote class="twitter-tweet"><p dir="ltr" lang="en">Felicity Wong trying to ‘Atlas Network’ YIMBY twitter. <a href="https://t.co/5GFAL0c0QN">pic.twitter.com/5GFAL0c0QN</a></p>— joey🦫 (@boxcar_joey) <a href="https://twitter.com/boxcar_joey/status/1755814818685284659?ref_src=twsrc%5Etfw">February 9, 2024</a></blockquote> <script async="" charset="utf-8" src="https://platform.twitter.com/widgets.js"></script><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-65142624044008050152024-01-26T07:00:00.013+13:002024-01-26T07:00:00.139+13:00Demand bringing forth supply<p><a href="https://www.energynews.co.nz/news/electric-vehicles/151400/holidays-drive-ev-charging-demand-marlborough-lines">Marlborough's lines company saw an opportunity to sell more electricity.</a></p><p></p><blockquote><p>The EV hub – believed to be the largest currently operating nationwide – was installed by the distributor after the 658-square-metre parcel of industrial land came up for sale last March. </p><p>Chief executive Tim Cosgrove last month told Energy News the narrow strip of land had been leased to Marlborough District Council for car parking and was of "little use for anything else”. When it came up for sale, the distributor saw it was ideal for EV charging.</p><p>“It’s located right in town, right off State Highway 1, next to a supermarket, a café, The Warehouse, an easy walk into town,” he says. </p><p>“We get a lot of vehicles coming through with people coming on and off the ferries, going to Nelson, and those sorts of things.”</p><p>“It’s come together really well.”</p><p>The Park Terrace EV Charge Hub has three 150-kilowatt chargers with two sockets each, capable of charging six EVs simultaneously. Cosgrove says Tesla was invited to install its three 300 kW units “right alongside”. </p><p>Customers pay through their ChargeNet phone app, RFID fob or card.</p></blockquote><p><a href="https://newsroom.co.nz/2024/01/24/ev-holiday-power-blowouts-put-pressure-on-lines-network/">Some holiday parks might find it worthwhile to pay for upgraded power supply</a> and put in charging stations. </p><p>Meanwhile, <a href="https://www.energynews.co.nz/news/electric-vehicles/151193/solar-powered-ev-park-n-charge-gains-consent-wanaka">others are coming up with innovative supply strategies</a> - but do read the whole piece for fun council consenting issues, including whether the charge station counts as a 'service station'. </p><p></p><blockquote><p>Saegers is now finalising the business model and working out the technology required.</p><p>A key point is not all 78 cars will be “charging at 250 kilowatts” at once, he notes.</p><p>“That’s never going to happen – it's totally impractical and we wouldn’t put that infrastructure in for that to happen.</p><p>“You might have four or five simultaneous fast charging activities.”</p><p>ROA will offer a flexible pricing structure – “similar to the way that the wholesale energy market works” with pricing depending on supply and demand.</p><p>Short stays using fast charging would pay more, while people parking there while they work could receive cheaper or even free power when there is abundant production.</p><p>“If that facility existed now, I might plug my car in, but I don’t necessarily want to pay for a charge. But if there's any spare power, I’ll take it," he says.</p><p>“It’s about creating flexibility. There’s no need to charge a car and potentially crash the grid, when you don’t need it fully charged, and it might be sitting out there for four hours.”</p></blockquote><p></p><p></p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-74409946194881974402024-01-25T13:09:00.004+13:002024-01-25T13:09:53.726+13:00Afternoon roundup<p>Sure doesn't take long for the tabs to pile up after summer break.</p><p>Some worthies:</p><p></p><ul style="text-align: left;"><li><a href="https://www.stats.govt.nz/news/annual-inflation-at-4-7-percent/">CPI y/y now at 4.7%, q/q 0.5%.</a> Remember that the y/y figures will be comparing current CPI, where fuel has full excise, with Dec quarter 2022, when fuel had a substantial excise discount. Treasury had figured that removing excise had meant something like a half percentage point effect on y/y CPI figures when Labour put in the discount; should be roughly the same in reverse currently. So y/y is overstated relative to actual inflation. It's still over the top of the target band. But the quarterly result is encouraging: annualising 0.5% gets you a titch over 2%. </li><li>While talking about CPI, remember that normal drill has annual inflation adjustments to tobacco excise from the accumulated prior-year inflation. And that would feed through into the subsequent year CPI figures. <a href="https://www.rnz.co.nz/news/in-depth/507471/official-documents-suggest-a-nz-first-minister-wants-to-freeze-excise-tax-on-cigarettes-but-she-denies-it">RNZ says the government may pause the CPI increases to tobacco excise</a>. If you think that tobacco excise is set at a level commensurate with social cost, then you'd want the real value of excise to not be affected by inflation. If you, like me, think that <a href="https://offsettingbehaviour.blogspot.com/2012/04/cant-kill-bad-stat.html">excise is multiples of actual social cost</a> while <a href="https://offsettingbehaviour.blogspot.com/2018/05/regressive-excise.html">incredibly punitive for lower-income smoking households</a>, then you'd be happy with holding it and happier with reducing it explicitly. </li><li><a href="https://gen.org.nz/professionalisation/">The Government Economics Network is surveying government-employed economists and non-economists about what training they might be needing</a>. I think they need a lot more background in what the mainstream consensus actually is, rather than a pile of heterodox conference keynotes. There's an important place for heterodox thinking: in the academic economics departments, which then sort out which bits have to be incorporated into the academic mainstream. </li><li><a href="https://gen.org.nz/wp/wp-content/uploads/2023/12/Economics-in-Government-Interviews-with-Chief-Economists.pdf">GEN's survey of Ministry chief economists was interesting though</a>. They note difficulty in matching market rates for economists, which can't be good for the quality of economic policy advice. I liked this bit: "Economics is not the
only area where the prize for being good at something is to be promoted to another job with less of
the thing one was promoted for and more meetings. Nevertheless, respondents said that this
seemed to be more apparent in economics than general policy roles."</li><li><a href="https://www.farmersweekly.co.nz/markets/shipping-rates-soar-amid-disruptions/">Farmers Weekly on some of the issues for NZ with the pirates/terrorists having closed the Red Sea</a>. <a href="https://businessdesk.co.nz/article/primary-sector/shippers-tack-on-us1000-surcharge-because-of-panama-canal-drought-and-red-sea-attacks">BusinessDesk notes a $1600/container surcharge because of it</a>. That NZ has sent six (6) NZDF staff to help reopen that route has melted some peoples' brains. </li><li>Walking around town, I notice a whole lot of leaks that were around before we left on summer holiday are still there, some worsening. The one on Tinakore Road outside the daycare is going to wreck the road where it's been bubbling out for months. Wellington Water is also not proving itself particularly competent: <a href="https://www.thepost.co.nz/nz-news/350155791/big-bang-slip-caused-leak">a pressure valve installation led to a new leak, repeatedly reported by residents, culminating in an explosion with trees knocked over and footpath wrecked</a>. Wellington's power lines are owned by a private company; they're fine....</li><li>I hadn't seen this before. <a href="https://commuter.waka.app/#">App that traces out how people commute to and from various suburbs, from Census 2018.</a> </li><li><a href="https://www.nytimes.com/2024/01/23/health/deaf-gene-therapy.html">We live in an age of wonders.</a></li><li><a href="https://cityforpeople.nz/p/our-asks">I endorse every one of the City for People's recommendations for the Wellington district plan.</a> Would go further, but each of these is good. </li></ul><p></p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-89157588083556406472024-01-25T07:00:00.000+13:002024-01-25T11:31:58.332+13:00Summer dispatchWe had a summer winter holiday. <div><br /></div><div>Kids out of school for summer holidays, we headed properly North (and East) for the first time since maybe 2016. A few weeks with my family now on Vancouver Island; a few weeks with Susan's in Pittsburgh.</div><div><br /></div><div>Minor highlights and travel notes:</div><div><ul style="text-align: left;"><li>Cannabis shops are ubiquitous on Vancouver Island. They don't seem to cause any problem. They do seem to affect the ads I get served on Twitter.</li><ul><li>There are, however, an awful lot of vagrants around, who seem to be affected by substances that aren't cannabis. </li></ul><li>Huge amount of mixed-used building going on around Parksville and Qualicum. Fourplexes. 3-6 story condos with retail below. Concerns about whether water infrastructure was up to the increased development, but didn't meet anyone who knew how that was funded or financed.</li><li>There are a lot of bald eagles on Vancouver Island. They sound nothing like the eagles one hears on television.</li><li>We hit a Costco and normal grocery shopping. Overs and unders on pricing relative to New Zealand, no clear advantage all-up. Beef particularly expensive on the Island relative to other meat, as compared to the price of beef vs other meats in NZ. Prices there for cheap cuts were higher than what we pay in NZ for good cuts. </li><li>Getting the 15 year old a dose of the updated Pfizer shot was quick and easy at pharmacy. Canadian rules precluded the 13 year old (she had Covid in late October). Sue and I were boosted in early October so figured we'd wait until the Pittsburgh leg of the trip to get our new-version boosters. </li><li>Cannabis shops are also ubiquitous in Pittsburgh, where they're dispensaries for medical cannabis. They also seem to affect the ads I get served on Twitter. There were also a fair few people around who seemed affected by </li><li>We hit a Costco, Aldi, Whole Foods, Ikea, pile of other spots. Again, overs and unders on pricing, hard to see systematic advantages. Beef again very expensive. $10 USD/lb for low-end cuts was common. $10 USD / lb = $35 / kg NZD, and remember that I haven't added GST. On getting home I bought scotch fillet for $29.90 / kg at New World, including GST. A need a new blazer; decent ones there were running $250 - $400 USD. We responded to relative prices. Did relatively little shopping while there. Was told that one reason for high US beef prices is changes to BLM lease access to grazing land but that is hardly satisfactory: why aren't more good NZ cuts being exported to get to global law of one price? A good roast there is crazy expensive. Like "We'll do this for Christmas but only for Christmas for special" expensive. Chicken/pork/eggs cheaper for low-end stuff, but a lot of that would be from farming reg differences like cage-free eggs, pig crates and the like. </li><li>The rest of us got our vaccine re-ups while there. You can get Covid vax at Target. Target has an in-house pharmacy. You just walk up. They get a bit confused by people who just want to pay cash; they're used to dealing with a lot of insurance forms. But pay your $190 and they'll give you the jab. In NZ, we'd have had to have convinced our GP that we had a special medical reason. Daughter had had the low-dose shot when they first came out, as under-12 and it was impossible to get a booster. In the US, we could just get the shots. New Zealand policy is really abysmal on this one. Medsafe Delenda Est, and same for the vaccine recommendations outfit that makes it impossible for GPs to enable access. </li><li>Mask use as low there as it is here, but lots of Covid around. </li><li>2 Degrees charges $8/day for international roaming. I wanted that so I could be available on my NZ number. Downside: your IP address still shows up as being in NZ, so you can't do a pile of normal stuff like order takeaway food at restaurants, download apps for McDonalds - anything where they figure you're in NZ because of your IP address.</li><li>Work from home has been <i style="font-weight: bold;">way stickier </i>in the US. Most friends we caught up with were regularly working from home. They also had a way worse Covid schooling experience, with learning from home for a couple years rather than the short bursts we had in NZ. </li></ul></div><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-62452434815602973402024-01-24T15:32:00.000+13:002024-01-24T15:32:27.983+13:00Water metering - a small piece of silver buckshot<p>Chris Parker at Treasury sometimes quips that there are no silver bullets for solving housing in NZ, only pieces of silver buckshot. Basically you've got to do a lot of things to solve the problem; any one of them on their own won't do it. </p><p>I was on RNZ's The Panel yesterday afternoon (<a href="https://www.rnz.co.nz/audio/player?audio_id=2018923081">here, from around the 11 minute mark</a>) talking volumetric charging for water and water metering. It's come up as a solution for Wellington's <a href="https://www.nzherald.co.nz/nz/are-more-restrictions-needed-pivotal-week-in-wellington-water-crisis/IFXKXTBS2ZDD3NCZ5PCURAMGRA/">increasingly obvious water problems</a>. </p><p>It's good. But it's only a small piece of silver buckshot. The other bits of shot are more important. </p><p>Currently, Wellington Water manages pipes it doesn't own on what bits of funding it can beg from the councils that own the pipes and set the levies for water. It also currently seems to be terribly managed, with atrocious-sounding costs for repairs. Councils have to give them more money to fix the pipes, but need to be able to trust that it won't just be eaten up by having (purely hypothetically) engineers spend days of paperwork on minor repairs. </p><p>If you added water levies into the mix, it'd be good, but it wouldn't solve the main problem. I love volumetric charging. But if the water agency has limited capacity, and the same kinds of folks fix pipes as put meters onto pipes, I'm not convinced it's the first thing that should be done. </p><p>One great feature of water metering is identifying leaks. Wellington Water cannot keep up with very obvious known leaks. The leak on Tinakore Road that I'd walk by every morning I walked to work for months before Christmas was still there when I got back from Christmas break. Eyeballing it, the volume would be comparable to what might come out of a couple of garden hoses put together, fully open, 24/7. That leak hasn't been big enough to hit their priority list. </p><p>Do you want the next Wellington Water employee fixing leaks like that, or installing meters? How many meters would you have to install before households would reduce water use by an amount comparable to what's flowing out of that one leak? </p><p><a href="https://www.nzinitiative.org.nz/reports-and-media/opinion/time-to-restructure-wellington-water-to-fix-the-regions-creaking-pipes/">The first-order problem is still that the water company doesn't own the pipes or decide on its own charges, subject to ComCom oversight on charging, with ability to back independent debt with water system revenues.</a> </p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-77137533610020990542023-12-08T16:52:00.003+13:002023-12-08T16:52:46.119+13:00A belated look at the coalition agreementsThings got a bit busy after the National-ACT and National-NZ First Coalition Agreements were released. <div><br /></div><div>A fair few things showed up in those agreements that we've been working on at the Initiative for rather some time, whether through reports, submissions, columns, panels and whatnot.</div><div><br /></div><div>So that's been a bit busy, and I've been trying to clear through a few other bits before heading back to Canada and the US for a few weeks over the school holidays. So posting has been unduly light.</div><div><br /></div><div>But I've been particularly pleased that these showed up in the agreements. </div><blockquote><div><b>A Rule of Two for Drug Certification</b></div><div><b><br /></b></div><div>The government will require Medsafe to approve new pharmaceuticals within 30 days of them being approved by at least two overseas regulatory agencies recognised by New Zealand.</div><div><br /></div><div>Loyal readers may recall series of tweets, blog posts, and columns from me on this one. I worked with a couple student teams at Canterbury to get a report up on the likely effects of a Rule of Two. </div><div><br /></div><div>It is in both coalition agreements and will be legislated. No "will investigate" or "will consider". It will happen. </div><div><br /></div><div>I am rather pleased about this one. </div></blockquote><blockquote><div><b>Incentives for Growth</b></div><div><b><br /></b></div><div>Weak incentives for councils to encourage housing development hasn't been the only problem blocking housing growth, but getting more housing despite current incentives requires heroes. And policy can't reliably depend on there being heroes around. The coalition agreements will introduce financial incentives for councils to enable more housing.</div><div><br /></div><div>This has been core for the Initiative since before I got here. And now it will happen.</div><div><br /></div><div><b>Easing Foreign Investment</b></div><div><b><br /></b></div><div>The Overseas Investment Act will limit ministerial decision-making to national security concerns and make such decision-making more timely.</div><div><br /></div><div>NZ has one of the OECD's most restrictive FDI regimes. Other places try to attract foreign investment; NZ does the opposite. </div><div><b><br /></b></div><div>Easing restrictions on FDI have been core for the Initiative since before I got here. Fingers crossed that the legislation interprets this as broadly as is implied by the text of the coalition agreements. </div><div><br /></div><div><b>Market Studies</b></div><div><b><br /></b></div><div>Commerce Commission market studies will focus on reducing regulatory barriers to new entrants to drive competition. </div><div><br /></div><div>So far, ComCom has produced about one giant study per year. But the first-order problem is going to be in areas where ComCom has hitherto been precluded against poking around: matters falling under statutory exception. If a matter is authorised by Parliament, it doesn't get cartel investigation even if it is definitely behaving as a cartel. </div><div><br /></div><div>Instead of doing one giant study per year, ComCom would do a larger number of short studies focused simply on checking whether it is actually possible for a new entrant to get through NZ's regulatory and land use hurdles to provide potential competition. </div><div><br /></div><div>So here I disagree with my friend <a href="https://economicsnz.blogspot.com/2023/12/competition-and-coalition-of-chaos.html">Donal Curtin</a>. He worries about instances where the issue isn't regulatory barriers. Maybe I'll agree with Donal after the revised regime has run for a few years. But the low-hanging fruit simply is not going to be in places where ComCom has been able to use other tools. <a href="https://www.nzherald.co.nz/business/dr-eric-crampton-taking-a-closer-look-at-commerce-commissions-market-studies/HHWJJFTW6CVDEBUMTWFDQS2WOM/">It will be in the place where they've been unable to shorten the way.</a></div><div><br /></div><div>This shift in approach is something I've argued for in columns, submissions, at a CLIPNZ session, and in various conversations around town. </div><div><br /></div><div>Ben Hamlin and I have been, I think, the only ones really worried about the statutory exceptions. <a href="https://www.ingentaconnect.com/contentone/lrf/nzlr/2023/00002023/00000002/art00006#">Ben's piece on it in the latest Law Review is very good</a>; his gratuitous citing of my columns is inframarginal to that assessment. </div><div><br /></div><div><div><b>Monetary Policy</b></div></div><div><b><br /></b></div><div>The Remit will be narrowed to focus only on price stability.</div><div><br /></div><div>This too is excellent. In a normal environment, a dual mandate shouldn't matter. The long-run Philips curve is vertical. Maintaining price stability <i>is </i>the best way the bank has to ensure maximum sustainable long-term employment. </div><div><b><br /></b></div><div>We have worried about the broad Remit, which includes a preamble that encourages the Bank to give regard to basically the entirety of the government's policy agenda, for some time. </div><div><br /></div><div><b>Employment </b></div><div><b><br /></b></div><div>The government will consider setting an income threshold above which a personal grievance could not be pursued.</div><div><br /></div><div>Our Chair, Roger Partridge, has been writing on this for some time. The measure would make it far simpler for firms to dismiss underperforming high-paid managers who really aren't the people that employment law protections should focus on anyway. </div><div><br /></div><div><b>Pseudoephedrine</b></div><div><b><br /></b></div><div>The government will allow the sale of cold medicine containing pseudoephedrine.</div><div><br /></div><div>This is another one that loyal readers may recognise. I think me and Twitter's @BoxcarJoey have been the only ones making the case for this obviously sensible move. And now it will happen. </div></blockquote><div></div><div><br /></div><div>There's a lot of other stuff in the agreements, mostly good, some less good. </div><div><br /></div><div>As another bit of fun, the Dom Post put out its latest 'Wellington Power' list. I think it needs an accompanying 'Wellington Mystery' list so we can figure out whose power is exceeded only by their mystery, or vice-versa, or both, somehow, simultaneously. </div><div><br /></div><div><a href="https://www.thepost.co.nz/politics/350119811/wellington-power-list">But in any case</a>, I made the cut for inclusion this time. But only barely. And possibly only because I also write a column for them. </div><div><div></div><blockquote><div>45. Eric Crampton</div><div><br /></div><div>The stocks of think tank New Zealand Initiative’s chief economist have soared, with the ascendancy of ACT into Government. The Canadian is a prolific report-writer and commentator, with a free market bent, and incoming ministers are sure to be paying attention to his sharp, original (and often witty) thinking.</div></blockquote></div><div><br /></div><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-66269139460412127372023-11-17T12:56:00.000+13:002023-11-17T12:56:05.947+13:00Volcano powered<p>I love that GNS is looking at supercritical geothermal generation.</p><p><a href="https://www.geothermalnextgeneration.com/knowledge/supercritical-nz-economic-opportunity">They've commissioned Castalia to look at timelines and economic feasibility.</a> It's looking good, from 2037, if we can get fast-track consenting - and if there aren't other substantial hiccups. </p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEj9aK46KeU2bRP-FzH6sqWlEkc8z-mkBVEmrqsxkgHrnM6qfDvM2anWzWy8jPSpLdkeyj_OsFlFySJtDu6yXphyCMZnLN02kYYQT6trZImGDGb1MbisCrXlNFyFdtJ-fDc_F7nQNXAZxGEP6s7K-YJPenrcTZ05qXhXB7D_G0bcXMhl_wNzlP_HTrnMrSQ" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="587" data-original-width="1067" height="346" src="https://blogger.googleusercontent.com/img/a/AVvXsEj9aK46KeU2bRP-FzH6sqWlEkc8z-mkBVEmrqsxkgHrnM6qfDvM2anWzWy8jPSpLdkeyj_OsFlFySJtDu6yXphyCMZnLN02kYYQT6trZImGDGb1MbisCrXlNFyFdtJ-fDc_F7nQNXAZxGEP6s7K-YJPenrcTZ05qXhXB7D_G0bcXMhl_wNzlP_HTrnMrSQ=w628-h346" width="628" /></a></div><div class="separator" style="clear: both; text-align: left;"><br /></div><br />NZ will need a whole lot more generation as carbon prices rise and folks shift away from carbon-intensive energy sources.<p></p><p>Great thing about geothermal is that it just runs. It doesn't care if the wind blows or the sun shines.</p><p>Waste heat can be used for other processes - like milk powder drying, or making wood pellets.</p><p><a href="https://www.elidourado.com/p/geothermal">As reminder, here's Eli Dourado's piece from a couple years ago on the big-picture on this stuff.</a></p><p><br /></p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-27459352345263710132023-11-16T17:41:00.002+13:002023-11-16T17:41:21.796+13:00Afternoon roundup<p>The tabs!</p><p></p><ul style="text-align: left;"><li>“<a href="https://www.stuff.co.nz/national/301008975/wayne-brown-calls-congestion-charge-consultation-and-equity-bollocks?utm_source=Newsroom+Pro&utm_campaign=c484773a1f-Newsroom+Pro+8+Things+16.11.2023&utm_medium=email&utm_term=0_-41c1b1e3d3-%5BLIST_EMAIL_ID%5D&ct=t%28Newsroom+Pro+8+Things+16.11.2023%29&mc_cid=c484773a1f&mc_eid=35f9169810">Is it unfair on everybody else that has paid for that road and doesn't use it? I mean, this equity stuff's bollocks, this is about traffic. ...Consultation’s bollocks as well.</a>” Mayor Brown ain't wrong.</li><li><a href="https://newsroom.co.nz/2023/11/16/why-we-could-see-a-127-seat-parliament-at-the-next-election">Predictions that Labour and Te Pati Maori will strike a deal where TPM seeks only the electorate votes in Maori districts and Labour seeks only the party vote in those districts</a>. Biggest question is why MMP has avoided these kinds of rorts so far. They're the obvious play. </li><li><a href="https://newsroom.co.nz/2023/11/16/liquidation-boom-a-boon-for-liquidators">Good time to be a liquidator</a>.</li><li><a href="https://insidegovernment.co.nz/35kg-of-cocaine-seized-at-tauranga-port">35 kilograms seems like a lot of cocaine to seize in one go for a country of 5m people</a>. Are there reasonable measures of demand elasticity? One could perhaps work out the size of the market based on price movement. If the price doesn't move much, either the market is huge or suppliers are able to quickly plug even a 35kg hole. If it moves a lot and stays high for a long time, less so.</li><li>My normal drill on carbon forests and biodiversity is that if you want more biodiversity, don't screw up the ETS accounting - use a separate policy instrument. <a href="https://phys.org/news/2023-11-forests-multiple-tree-species-effective.html">But if this is right,</a> then biodiverse forests sequester more carbon. And if it also applies to NZ forests, then making sure the settings accurately reflected sequestration <i>would</i> encourage greater biodiversity. </li><li>Don't envy Shane Reti this hospital pass. <a href="https://www.thepost.co.nz/nz-news/350111139/dreadful-state-our-health-system-revealed-te-whatu-ora">The health system is not in good shape</a>. </li><li><a href="https://worksinprogress.co/issue/upzoning-new-zealand">Works in Progress on Upzoning NZ</a></li><li><a href="https://www.nzherald.co.nz/nz/man-who-sexually-assaulted-woman-swung-penis-around-in-supermarket-wins-appeal-against-eso/XI4YXSLJ7FHMVFFAIR4WHQAF4I/">Maybe post-prison half-way houses should be next door to judges' primary residences</a>. Skin in the game and all that.</li><li><a href="https://www.nzherald.co.nz/nz/new-zealand-needs-centre-for-disease-control-for-future-pandemics-experts/37KI7GTM6VA45EQHMYGJNFSREA/">NZ needs a dedicated agency whose only task is infectious disease.</a> <a href="https://www.nzinitiative.org.nz/reports-and-media/opinion/health-body-needs-one-priority-vaccines/">Indeed</a>.</li><li><a href="https://www.cis.org.au/publication/job-ready-graduates-2-0-the-universities-accord-and-centralised-control-of-universities-and-courses/">Andrew Norton on Australian attempts to centrally plan higher ed.</a></li><li><a href="https://alethios.substack.com/p/why-we-need-taiwan">Why We Need Taiwan.</a></li><li><a href="https://www.mercatus.org/research/working-papers/cutting-zoning-down-size">Mercatus on cutting zoning down to size</a>. Tons of good stuff in here on problems with single-family zoning. </li><li>Good News! <a href="https://ipa.org.au/publications-ipa/media-releases/australias-economic-competitiveness-plummets">New Zealand is at less of a competitive disadvantage relative to Australia! Bad news: it's because they dropped by more than we did.</a></li></ul><p></p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-69315147749141028802023-11-16T12:09:00.000+13:002023-11-16T12:09:00.847+13:00Advice to an incoming government from Dominic Cummings<p>Or, at least, some very sharp observations on how the system works. It won't be much different in New Zealand. </p><p><a href="https://www.dwarkeshpatel.com/p/dominic-cummings">Here's Cummings on Dwarkesh Patel's podcast</a>, and some snippets from the transcript. Superb throughout. If an incoming National government wanted to know what they're getting into, listening to this would be a decent start. </p><p></p><blockquote><p>Dominic Cummings 00:04:08</p><p>A fundamental problem with how the British state works is this question of prioritization and the Prime Minister’s time. So you have all of these normal parts of the system that essentially can’t really do anything quickly at all, even in a crisis. So the Prime Minister’s time and the Prime Minister’s prioritization is the most important asset. But also it’s something which is constantly pulled hither and thither by all of this craziness.</p><p>One of the things that obviously we wanted to do was fundamentally reorient Number 10, away from what it’s been since Thatcher, which is a kind of press entertainment service. Where the whole building is just built to respond to what the media says and instead say, “What do we actually think is important?” And what is the management system you’re going to build that actually can maintain focus on those things whilst the inevitable chaos goes on?</p></blockquote><p> ...</p><p></p><blockquote>Again, one of the funny conversations I had with Boris was, you know, we should say to the ministers that here’s your actual priorities as defined by us. Whether or not you get promoted and whether or not your career goes well is going to be defined by how well your department actually fulfills these goals. We don’t care about all of your interviews. We don’t care if you are on TV or never on TV. That’s not how we’re going to judge. Because they’ve all grown up in a culture where they think whether or not they’re going to be promoted really depends on: Are they seen as a good media performer? Or do they botch things on the media? Well, that’s just a fundamentally bad criteria, not least because their definitions of what’s good on the media are themselves terrible. By approaching government like that, you’re incentivizing them to think that their goal is making friends with the media. So then they get good interviews. That also incentivizes them to leak everything. So again, the culture and the incentives are self reinforcing in a very negative way.</blockquote><p>...</p><p></p><p></p><blockquote><p></p><p>I’ll tell you a story about it that kind of summarizes it. At the peak of COVID craziness in March 2020, on the day itself that the PM tested positive for CoVID, a bunch of people come into Number 10 sit around the table and we have a meeting and it’s about supplies of PPE to the NHS.</p><p></p><p>They say, “None of this ppe that we’ve ordered is going to be here until the summer.”</p><p>“But the peak demand is over the next three to four weeks.”</p><p>“Sorry, Dominic, but it’s not going to be here.”</p><p>“Why not?”</p><p>“Well, because that’s how long it takes to ship from China.”</p><p>“Why are you shipping from China?”</p><p>“Well, because that’s what we always do. We ship it from China.”</p><p>But A, we need it now and B, all of the airlines are grounded. No one’s flying anything.</p><p>“So call up the airlines, tell them that we’re taking their planes, we’re flying all the planes to China, we’re picking up all our shit, we’re bringing it back here. Do that now. Do that today. Send the planes today.”</p><p>We did that. But only the Prime Minister could actually cut through all the bureaucracy and say, Ignore these EU rules on Blah. Ignore treasury guidance on Blah. Ignore this. Ignore that. “I am personally saying do this and I will accept full legal responsibility for everything.”</p><p>You multiply that kind of problem by hundreds and thousands of problems, you get a sense of partly why COVID was so crazy. This is normal government. But in a crisis, when no part of the system can actually move fast, all of these bottlenecks end up very dramatically escalating to the PM’s office. And if you read Jared Kushner’s book, Memoir about the White House, there are very, very similar tales there. That a lot of things that obviously should have been solved elsewhere couldn’t be solved at any other part of the system. They all end up cascading upwards in these centralized bureaucracies, because ultimately only the president or only the Prime Minister can give certain kinds of orders.</p></blockquote><p>...</p><p></p><blockquote><p>And in fact, In 2020, for example, when we did some things very differently, it was extremely disruptive and extremely unwelcome to the large part of the system. Hence why a lot of what we did was closed down.</p><p>Did they say, “Okay, the vaccine task force and operation warp speed and the state have been great successes. We should massively reinforce them. We should build the next generation of vaccines. We should spread the lessons of how the task force operated.”?</p><p>No, they basically closed the task force. Sewage monitoring closed. Rapid testing, basically closed and forgot to order enough tests the following year.</p><p>So if you look back at 2020, most of the people who were most wrong were given awards and honors by the system and promoted to new jobs. The people who were most obviously repeatedly right have almost all left.</p><p>What incentive is there for people to speak out about how these things work? No one expects anything to change. Even after something as big as COVID, when you see what the reaction is, everyone can now see the truth. You can have a once century pandemic. It can kill tens of thousands of people unnecessarily. It can be a complete carnage for the economy, and everyone will just basically go back to normal. MPs will ignore it and nothing much will change.</p><p>So if you’re a standard official inside the system, all the signals to you are very clear. In fact, in 2021, it was even more powerful than that. There were a whole load of legal actions brought to say that the real problem with 2020 was that we went too fast and we did things too quickly. People actually brought legal actions against the vaccine task force. They brought legal actions against rapid testing. They brought legal actions against all sorts of activities.</p><p>The system didn’t say “This is completely insane. Actually, the bureaucracy and the sloth killed thousands of voters.” It said “Yes, we’re going to investigate all of this.” Every signal propagated through the system was essentially back to normal. You will be promoted for being the most insane process, and you will be demoted and blacklisted if you say this process is insane and try to do better.</p></blockquote><p>...</p><p>Dominic Cummings 00:24:16</p><p></p><blockquote><p>Manhattan Project is much in the news with the Oppenheimer movie. If you look at the very last bit of General Grove’s book on Manhattan Project, he talks about what are the most fundamental principles about why it succeeded? And one of those principles is relevant to government. Actually, they’re all relevant to government.</p><p>One of the principles is that the quality of the people is fundamental. Another one is that responsibility and authority are always delegated together. The entire British constitutional system and management structure is based on the fundamentally opposite principle. Responsibility and authority are not delegated together. So if you’re asking about something like the vaccine task force, in the normal system, nobody really is in charge of anything. Lots of people can criticize, lots of people can complain, lots of people can argue about things. Lots of people can veto. Almost nobody ever has the authority just to build something or just to do something.</p><p>Why did we create the vaccine task force the way we did? Well, because we were trying to actually embody principles like responsibility and authority pulled together. We brought one person in, we said “You are responsible.” But once we’d gone, then what happens to that entity? It’s sitting there amid Whitehall while all the normal parts of Whitehall just start going back to being normal. So what happens? They say, well, they are exempt from all of these rules on HR that the Cabinet Office imposes on every part of Government. This should change because it’s going back to normal. They have to do the following things properly. We gave them special dispensations because of the extraordinary circumstances of summer 2020, but these now come to an end.</p><p>So those sorts of things come in. The treasury says, “The spending rules and how the people in the vaccine task force make decisions, that was an emergency thing. Now the normal rules apply again.” So before you know it, all the different parts of the system have basically said, the thing that you created outside of the normal system now has to obey all of the things that it was specifically created to avoid.</p><p>Now, the system will just do that automatically unless there is a very powerful counterforce. Fundamentally, again, only the PM can say,”No, we’re not having that. In fact, I want to strengthen the vaccine task force. We want to move on to the next generation of vaccines. etc.” If they don’t do that, and if the people in charge of it can’t call on the PM’s authority, the system will just devour the new entity very, very quickly and force it to conform with all of the normal system.</p><p>I’ll give you another example of this on rapid testing. One of the things that we did to get the rapid testing to work was we got a guy who formerly was commanding officer of the SAS, British Special Forces, and this guy got a bunch of his friends from Special Forces also to work on rapid testing. When we first got this pushing from Number 10, I got the critical people from procurement, commercial HR, etc, into the Cabinet room with the Cabinet Secretary, the single most important official in the whole country, and the two of us said, “The PM wants rapid testing dealt with as if this is a wartime crisis.” We’re going to have a second wave. There’s going to be thousands more people getting CoViD, there’s NHS. People are dying, etc. We can’t have any of the normal civil service HR. We can’t have any of the normal civil service bullshit on procurement. Exactly the same as with the vaccine task force. Everyone sits around the cabinet table, they all nod their heads.</p><p>A week later, I call this guy, a former SAS boss and say, “So, how’s it going? Are you getting who you want and is everything working great?”</p><p>He says, “No, it’s all the same shit show.”</p><p>So I have to get all the people back in the same room with the country’s most senior official and say, who the fuck have we got to fire around here to make clear that these people doing testing don’t have to do all of your bullshit HR?</p><p>That’s how extreme things have to be. It was only by doing that a second time and making clear that I would get the PM to actually just start firing senior people in the Cabinet office. It’s only then that the system will kind of part and go, “Okay, this element is allowed to.” But you imagine as soon as that countervailing force is removed, all the normal sea floods back.</p></blockquote><p>...</p><p></p><blockquote><p>Dominic Cummings 00:31:25</p><p>Sorry to interrupt, but imagine as well what the promotion system is like and who ends up getting to the top of these systems. A lot of people say, “Oh, you’re so negative about the civil service. You’re all saying that everyone there is rubbish, and it’s not fair.” That’s not my view. In fact, if you look at the civil service, you actually see a lot of very able people, but most of them are young. What happens is the young, excellent people get weeded out by self-selection, largely because they go in idealistic, they’re there for a few years, but then they look at what the process is to be promoted, and they look at their bosses, and the best of them look at it and go, “I don’t want to be like that.” I don’t want to have to make those decisions. I don’t want to have to make those compromises. I don’t want the job like that, where it’s almost all bullshit. We can’t actually build anything.</p><p>The most entrepreneurial, the kind of people who actually want to get on and do stuff now, leave and the most HR compliant, disastrous people to be in charge of supposedly fast moving agencies are the ones who are promoted to take over. And then that culture itself becomes highly self reinforcing. Once you get a whole cadre of leadership at the top that’s like that, it’s extremely difficult to break out of.</p></blockquote><p>I'll stop clipping there or I'll wind up just having the whole darned thing. </p><p></p><p></p><p></p><p></p><p></p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-61364398036110859962023-11-13T17:30:00.001+13:002023-11-13T17:30:00.138+13:00Afternoon roundup<p>The tabs!</p><p></p><ul style="text-align: left;"><li><a href="https://www.thepost.co.nz/nz-news/350106239/aut-axed-event-booking-after-nonsense-email-claiming-group-be-criminal-network">Universities continue to be very quick to cancel events.</a> </li><li><a href="https://www.thepost.co.nz/nz-news/350108838/pharmacists-urge-new-government-keep-free-prescriptions">NZ Pharmacists warn that if the $5 co-pay on prescriptions returns, customers might start using Chemist Warehouse again rather than community pharmacies</a>. </li><li><a href="https://djhdcj.substack.com/p/regulation-in-the-online-space">David Harvey argues for a licensing regime instead of the Fair Digital News Bargaining Bill</a>. <a href="https://open.substack.com/pub/djhdcj/p/regulation-in-the-online-space?r=75h9n&utm_campaign=comment-list-share-cta&utm_medium=web&comments=true&commentId=43543600">I don't think it'll work either</a>. If the fee is high enough to save the media, the platforms would probably block news links altogether. Just let the Bill die at committee.</li><li>Reasonable Covid wave coming through; <a href="https://covidaction.nz/en/whattodoifyoucatchcovid">your reminder of what to do</a>.</li><li>Which cuisine will reign supreme? <a href="https://www.cato.org/publications/trade-cuisine">All of them, thanks to globalisation</a>. </li><li><a href="https://businessdesk.co.nz/article/health/self-regulated-hearing-aid-market-in-need-of-overhaul-says-advocate">Consumer NZ wants to turn audiology into a government-enforced cartel</a>. That outfit's becoming increasingly reliable as a "do the opposite of whatever they're on about" signal. </li></ul><p></p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-31318737133015156652023-11-13T16:02:00.001+13:002023-11-13T16:05:03.473+13:00Preparing for the new government<p><a href="https://www.stuff.co.nz/national/politics/301007285/ministry-leak-christmas-party-hit-plans-for-voluntary-redundancy-ahead-of-new-government">Tova O'Brien at Stuff reports on leaked emails at MBIE that point to preparations for downsizings.</a></p><p></p><blockquote><p>In a statement, MBIE said the cuts were in response to the savings targets imposed by the outgoing Labour government and being mindful of the cost of living crisis.</p><p>“This work to date has been based on the targets and expectations set by the current Government. We will have conversations with the new Government when it is formed on how we have worked to date to achieve the fiscal savings target,” Tremain told Stuff.</p><p>In late August, just ahead of the election campaign, Labour’s Finance Minister Grant Robertson announced $4b in public service savings including cutting back on contractors and consultants and trimming agencies’ baselines by 1 and 2% of which MBIE faced the largest cut at $110.8m</p><p>But further changes being considered may be in anticipation of the new government making good on its “cut the waste” campaign rhetoric; in the email, Tremain says “we are preparing for change” and that “this is inevitable as we get ready to support a new government and new Ministers”.</p></blockquote><p>I was curious where some of this might be going and had put in an OIA a while back. </p><p>Treasury had started a pre-election information exercise to help them prep for Budget 2024. I figured that whatever they got back from the Ministries would be a heck of a lot more informative than what's served up in Briefings to the Incoming Ministers. </p><p>Because it would be a lot more informative, Treasury withheld all of it. And fair enough. </p><p>But they did give me the questions they'd asked. I'll copy it all here. </p><p>It's relevant to today's story from O'Brien because a lot of this process started before the election, and there was a Baseline Savings Proposal that was underway. </p><p>But Treasury was also asking for substantive changes to stop or scale down current services or activities - as it ought to be. </p><p>Also interesting - Treasury was asking what projects hadn't yet been started, presumably so they could be cut if needed. I wonder if any agencies started scrambling to start spending on projects to lock them in.</p><p><br /></p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiFHMznAuxps_htFRu-im4dyVjsLtYillTcpGBvEn4KIpUOfKwjorm6XL4iP1MJB4VKlV-7iSUZ1LkjToSFpSudnPDdSSBwaRtTNe6ag8FOPVZJoqePirGgayoW3xoS7Od9gYjIMK2HzDf8q9cV74g59V-NAKecBntFT4o2w3_3R8XQR7OylQOT1hdO2VM" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="1830" data-original-width="1410" height="530" src="https://blogger.googleusercontent.com/img/a/AVvXsEiFHMznAuxps_htFRu-im4dyVjsLtYillTcpGBvEn4KIpUOfKwjorm6XL4iP1MJB4VKlV-7iSUZ1LkjToSFpSudnPDdSSBwaRtTNe6ag8FOPVZJoqePirGgayoW3xoS7Od9gYjIMK2HzDf8q9cV74g59V-NAKecBntFT4o2w3_3R8XQR7OylQOT1hdO2VM=w409-h530" width="409" /></a></div><div class="separator" style="clear: both; text-align: center;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEhVeP34-nLKWZwbV7DZtBR37IH6om2iqozfyAImva0A4Rj2pSwBi74W9w-Yk_ibSMqOBV8VAV2r--kX41j0ZCVXYnVjcA0atUMt7P7lnKaY3VsRRgV1vJBQDJHz60iTG4P90rl0-p-8Jf3depfr2S13tczvesu3EA7uEQuouMhtTyK8gqANSbZiCnKd7WI" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="1075" data-original-width="1410" height="299" src="https://blogger.googleusercontent.com/img/a/AVvXsEhVeP34-nLKWZwbV7DZtBR37IH6om2iqozfyAImva0A4Rj2pSwBi74W9w-Yk_ibSMqOBV8VAV2r--kX41j0ZCVXYnVjcA0atUMt7P7lnKaY3VsRRgV1vJBQDJHz60iTG4P90rl0-p-8Jf3depfr2S13tczvesu3EA7uEQuouMhtTyK8gqANSbZiCnKd7WI=w392-h299" width="392" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEirsQPqMDrFEOBNjE2nUcqTCVj0fDDtywAjF1d1O6ftiY97AgEN52CiojHynFjQsFgkRR62T3ck6NMb0gTaQPuStaZdGMnACfiKaCLL4JhF1F8iKeyDyHQ-HCq0njGybf_8vfaInyGdYOmAa7sAOIE5zS9VESx291kVzGbUCbZZGxFDlF8Ix27aC_eVSM4" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="1437" data-original-width="2200" height="319" src="https://blogger.googleusercontent.com/img/a/AVvXsEirsQPqMDrFEOBNjE2nUcqTCVj0fDDtywAjF1d1O6ftiY97AgEN52CiojHynFjQsFgkRR62T3ck6NMb0gTaQPuStaZdGMnACfiKaCLL4JhF1F8iKeyDyHQ-HCq0njGybf_8vfaInyGdYOmAa7sAOIE5zS9VESx291kVzGbUCbZZGxFDlF8Ix27aC_eVSM4=w489-h319" width="489" /></a></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjvVgeRDmeikoHlFJRwLPHcVyk20L9QlhhLT_6SR2mUpdsFOGEwTMtX3kFINKI8-57vkYOgwVYCFn6iBrfLFrEGXx_YWNDXjg9WU-9p1v_KkyRX-jC2l-xxuxfzDHbMfwWANZwZ5Ocp92PoTyKqo81ZcKjeCuY203eibhF7i7k9sUSfWvFMNzuI9gVMESI" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="1565" data-original-width="2265" height="330" src="https://blogger.googleusercontent.com/img/a/AVvXsEjvVgeRDmeikoHlFJRwLPHcVyk20L9QlhhLT_6SR2mUpdsFOGEwTMtX3kFINKI8-57vkYOgwVYCFn6iBrfLFrEGXx_YWNDXjg9WU-9p1v_KkyRX-jC2l-xxuxfzDHbMfwWANZwZ5Ocp92PoTyKqo81ZcKjeCuY203eibhF7i7k9sUSfWvFMNzuI9gVMESI=w477-h330" width="477" /></a><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjvVgeRDmeikoHlFJRwLPHcVyk20L9QlhhLT_6SR2mUpdsFOGEwTMtX3kFINKI8-57vkYOgwVYCFn6iBrfLFrEGXx_YWNDXjg9WU-9p1v_KkyRX-jC2l-xxuxfzDHbMfwWANZwZ5Ocp92PoTyKqo81ZcKjeCuY203eibhF7i7k9sUSfWvFMNzuI9gVMESI" style="margin-left: 1em; margin-right: 1em;"></a><img alt="" data-original-height="1539" data-original-width="2257" height="330" src="https://blogger.googleusercontent.com/img/a/AVvXsEioXlzHlAaivGL2eq6ARNUJhug7XtTzjNLWeGyKvlnnCzx2CmiLjFD_ENAaE8Gz4B-_vQaWy7f-nUu3Vzn7ehR1N5tM_w0ZrT4QcxlNDJWDVQV7ecMsndG49nHRwpkdnjcoTxi9TuqR5j-I3BJmYHNsNfPosma4Osa7S_omZ3yBm6y1QuGKxq1JC5yRqjc=w485-h330" width="485" /><div class="separator" style="clear: both; text-align: center;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEha6A554s6zHZCRhHmRyiGNrMJl8SyA6d0n7ugxHTRDBwosR5sfJcrRoBZk4LiA3zq5Ftl1s61BvEvE5hp7CgSU6QyFHhQmH6mL6d1K0Uz4pB83E77xjOM7LvdUXFTrhvLASkaaZ1Hb91jG04qaYuxZoNi2eCuADxw2rEkmRWanCCUvKsm_LdRRgt_9kjY" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="1675" data-original-width="2301" height="346" src="https://blogger.googleusercontent.com/img/a/AVvXsEha6A554s6zHZCRhHmRyiGNrMJl8SyA6d0n7ugxHTRDBwosR5sfJcrRoBZk4LiA3zq5Ftl1s61BvEvE5hp7CgSU6QyFHhQmH6mL6d1K0Uz4pB83E77xjOM7LvdUXFTrhvLASkaaZ1Hb91jG04qaYuxZoNi2eCuADxw2rEkmRWanCCUvKsm_LdRRgt_9kjY=w475-h346" width="475" /></a></div><div class="separator" style="clear: both; text-align: center;"><div class="separator" style="clear: both; text-align: center;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiAUOWWlKTjdSiZbJPzBGtcRKZZ4WZtUoTuMXiAcMKp7c2x3xMN7KeeOubpI8POA6JmornvEHX0M_eGZlEtn5liLrEEmVsC2WyD8atTaJofMKS4Oj6Vkn2LdIsW44AeKsV7LvYVDQpEImc_RVT6jK2YhObFZ66qa8w29MIXSBtssU1X7Mr2bqO29b-mljE" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="1500" data-original-width="2224" height="289" src="https://blogger.googleusercontent.com/img/a/AVvXsEiAUOWWlKTjdSiZbJPzBGtcRKZZ4WZtUoTuMXiAcMKp7c2x3xMN7KeeOubpI8POA6JmornvEHX0M_eGZlEtn5liLrEEmVsC2WyD8atTaJofMKS4Oj6Vkn2LdIsW44AeKsV7LvYVDQpEImc_RVT6jK2YhObFZ66qa8w29MIXSBtssU1X7Mr2bqO29b-mljE=w428-h289" width="428" /></a></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjPmWZbMoBx7b0GnAnpXoBAzb4_iMwHfol0aus385g4p9LV5w0rnvFapSciX8p0UM2t69CGJ1D_hO5m10y4FpUf9A6j8JZrhPjJZ3o-ZCh4-arULdj2xbI8kYtuAGpGkTkwin_mHT5zZWyWz_kTWCk71P-0aWvvH4DYCJhpO17aMGRmF27FZ3eqyXIDMYI" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="1373" data-original-width="2272" height="296" src="https://blogger.googleusercontent.com/img/a/AVvXsEjPmWZbMoBx7b0GnAnpXoBAzb4_iMwHfol0aus385g4p9LV5w0rnvFapSciX8p0UM2t69CGJ1D_hO5m10y4FpUf9A6j8JZrhPjJZ3o-ZCh4-arULdj2xbI8kYtuAGpGkTkwin_mHT5zZWyWz_kTWCk71P-0aWvvH4DYCJhpO17aMGRmF27FZ3eqyXIDMYI=w491-h296" width="491" /></a></div><br /><br /></div><div class="separator" style="clear: both; text-align: center;"><p>I wonder what all showed up as savings options in Section Two.</p></div></div></div></div></div></div><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-24665148941379212762023-11-10T17:34:00.000+13:002023-11-10T17:34:00.130+13:00Afternoon roundup<p>The end-of-week closing of the browser tabs</p><p></p><ul style="text-align: left;"><li><a href="https://www.bitsaboutmoney.com/archive/seeing-like-a-bank/">Seeing like a Bank</a>. Superb explanation of bank IT systems, tradeoffs between customer fees and customer experience, how helpdesks actually work, and problems in cobbled-together systems. It explains a lot more than banks. </li><li><a href="https://www.sganapati.com/files/Ganapati_McKibbin_Draft_2020.pdf">Interesting piece on price dispersion in generic pharmaceuticals</a>. One snip: "Regulations around pharmacy
ownership in Australia and New Zealand make them more difficult to compare." Indeed. </li><li>If you think the social discount rate should be very low, you should support reductions in transfers to the elderly. <a href="https://t.co/YjwYAYhZEU">Forthcoming in Econometrica.</a> </li><li><a href="https://businessdesk.co.nz/article/markets/rocket-lab-recovers-from-launch-failure">The Rocket Lab launch failure a while back comes down to an electrical arc in a power supply under partial vacuum</a>; they're enclosing and pressurising the power supply system. </li><li><a href="https://businessdesk.co.nz/article/infrastructure/wellington-council-to-consult-public-on-airport-sale">Wellington Council selling its shares in the airport to have less exposure to quake risk seems sensible</a>. </li><li><a href="https://www.nzherald.co.nz/nz/school-attendance-more-than-half-of-students-not-regularly-attending-in-term-2-2023/QDSV6SPBWJECJC2AV4PDM23RQM/">Low attendance at school, Covid is given as one reason</a>. Meanwhile, schools still aren't properly ventilated, nobody uses masks, and the government bans boosters for those under 16. Kinda crazy. Government requires scaffolding for jobs where a ladder would be perfectly safe, with company directors liable for risks. But government bears no liability for unsafe schools and prohibitions on full youth vaccination. </li><li><a href="https://businessdesk.co.nz/article/policy/business-of-government-know-your-rights-edition?utm_source=Digest&utm_medium=email">"What's so scary about Bryce Wilkinson?</a>" The caption under a smiling picture of Bryce. What indeed! Bryce is lovely. </li><li><a href="https://www.newsroom.co.nz/mackenzie-solar-farm-rejected">An 88 megawatt solar farm blocked in the Mackenzie Basin</a>. There's uncertainty about how some native plants might change because of shading and sheltering from the panels <i>on a sheep paddock</i>. NZ officials do not want net zero. They want a return to the Pleistocene. </li><li><a href="https://thespinoff.co.nz/politics/09-11-2023/a-warm-weekend-at-the-summer-camp-for-activists">Turns out that there's a summer camp for training left-wing activists in NZ</a>. Wonder whether the reporting on a pro-liberty version would be as friendly.</li></ul><p></p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-45853798024433927572023-11-10T13:14:00.002+13:002023-11-10T13:14:29.040+13:00Making coal<p>Trees are very good at sucking carbon out of the atmosphere. Unfortunately, they eventually release it back into the atmosphere. Some gets stored for the longer term, but our ETS pretends it's all released at point of harvest. And there can be a good case for that if most of it does and if it's hard to track.</p><p>But there are other options.</p><p>I have no clue whether the economics of this option would stack up, but it should be allowed in principle.</p><p>Suppose a carbon forest owner harvested the forest, dug a very deep pit, put the harvested trees into the pit, and covered them with layers of clay so no gasses would seep up. The process takes carbon from the atmosphere and sticks it back into the geosphere. Give it time and it'll be coal.</p><p>I've always figured that if a carbon forest owner did that properly, that permanent sequestration ought to count against any surrender obligations that come with cutting down a carbon forest. For every tonne durably sequestered, a one NZU reduction in surrender obligation.</p><p><a href="https://www.technologyreview.com/2022/12/15/1065016/a-stealth-effort-to-bury-wood-for-carbon-removal-has-just-raised-millions/">Turns out Bill Gates is backing a neater version of this.</a> Story from December 2022 but I only just caught it.</p><p></p><blockquote><p>A California startup is pursuing a novel, if simple, plan for ensuring that dead trees keep carbon dioxide out of the atmosphere for thousands of years: burying their remains underground.</p><p>Kodama Systems, a forest management company based in the Sierra Nevada foothills town of Sonora, has been operating in stealth mode since it was founded last summer. But MIT Technology Review can now report the company has raised around $6.6 million from Bill Gates’s climate fund Breakthrough Energy Ventures, as well as Congruent Ventures and other investors.</p><p>In addition, the payments company Stripe will reveal on Thursday that it’s provided a $250,000 research grant to the company and its research partner, the Yale Carbon Containment Lab, as part of a broader carbon removal announcement. That grant will support a pilot effort to bury waste biomass harvested from California forests in the Nevada desert and study how well it prevents the release of greenhouse gases that drive climate change. </p><p>It also agreed to purchase about 415 tons of carbon dioxide eventually sequestered by the company for another $250,000, if that proof-of-concept project achieves certain benchmarks.</p></blockquote><p></p><p>Whenever I've suggested "Why don't we consider just letting people bury trees," NZ climate people look at me like I'm crazy. </p><p>Meanwhile:</p><p></p><blockquote><p>A handful of research groups and startups have begun exploring the potential to lock up the carbon in wood, by burying or otherwise storing tree remains in ways that slow down decomposition.</p><p>Trees are naturally efficient at sucking down vast amounts of carbon dioxide from the air, but they release the carbon again when they die and rot on the ground. Sequestering trees underground could prevent this. If biomass burial works as well as hoped, it may provide a relatively cheap and easy way to pull down some share of the billions of tons of greenhouse gas that studies find may need to be removed to keep global temperatures in check in the coming decades. </p></blockquote><p>One of the usual objections from the kind of climate people who love to grope for excuses to ignore things that might help the climate (because those things don't force Radical Structural Change and Deep Decarbonisation) is that forests are risky because a forest that offsets emissions from a tonne of coal means a transfer of carbon from the geosphere to the biosphere, and the biosphere is risky. </p><p>Well, carbon stored in trees can be stuck back into the geosphere. </p><p>Look at all these approaches being tried. </p><p><span face="NeueHaas, "input mono", sans-serif" style="background-color: white; font-size: 1.375rem;"></span></p><blockquote><p><span face="NeueHaas, "input mono", sans-serif" style="background-color: white; font-size: 1.375rem;">Burial costs</span></p><p style="background: rgb(255, 255, 255); border: 0px; box-sizing: border-box; font-family: Independent, serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-size: 18px; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.55; margin: 0px 0px 1.875rem; outline: 0px; padding: 0px; vertical-align: baseline;">Other startups and research efforts are taking different approaches to the problem. </p><p style="background: rgb(255, 255, 255); border: 0px; box-sizing: border-box; font-family: Independent, serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-size: 18px; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.55; margin: 0px 0px 1.875rem; outline: 0px; padding: 0px; vertical-align: baseline;">The Australian company InterEarth <a href="https://www.bloomberg.com/news/articles/2022-03-15/carbon-pickling-is-newest-carbon-removal-idea-green-insight#xj4y7vzkg?#xj4y7vzkg=true&sref=E9Urfma4" style="background: transparent; border: 0px; box-sizing: border-box; display: inline; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">believes</a> that allowing trees to soak up salty groundwater before burying them will effectively pickle the wood, preserving it for extended periods.</p><p style="background: rgb(255, 255, 255); border: 0px; box-sizing: border-box; font-family: Independent, serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-size: 18px; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.55; margin: 0px 0px 1.875rem; outline: 0px; padding: 0px; vertical-align: baseline;">The <a href="https://carbonlockdown.net/" style="background: transparent; border: 0px; box-sizing: border-box; display: inline; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Carbon Lockdown Project</a>, a public benefits corporation founded by University of Maryland professor Ning Zeng, has proposed creating pits that are lined with clay or other materials with low permeability.</p><p style="background: rgb(255, 255, 255); border: 0px; box-sizing: border-box; font-family: Independent, serif; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-size: 18px; font-stretch: inherit; font-variant-alternates: inherit; font-variant-east-asian: inherit; font-variant-numeric: inherit; font-variant-position: inherit; font-variation-settings: inherit; line-height: 1.55; margin: 0px 0px 1.875rem; outline: 0px; padding: 0px; vertical-align: baseline;">In <a href="https://cbmjournal.biomedcentral.com/articles/10.1186/s13021-022-00202-0" style="background: transparent; border: 0px; box-sizing: border-box; display: inline; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">a paper</a> this year, Zeng and a colleague also highlighted a number of other potential approaches, including storing biomass in frozen sites, underwater, or even in <a href="https://www.taucarbon.com/" style="background: transparent; border: 0px; box-sizing: border-box; display: inline; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">above-ground shelters</a>. His earlier work found that harvesting and storing wood could potentially remove <a href="https://link.springer.com/article/10.1007/s10584-012-0624-0" style="background: transparent; border: 0px; box-sizing: border-box; display: inline; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">several billion tons of carbon dioxide</a> a year at a cost of <a href="https://www2.atmos.umd.edu/~zeng/" style="background: transparent; border: 0px; box-sizing: border-box; display: inline; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">well below</a> $100 a ton.</p></blockquote><p>You don't need all of them to work. Or even any of these ones - there's lots of other projects being tried, including mineralisation. </p><p>Run a clean ETS focused on net emissions and run the accounting properly. If <i>any </i>of these techs can scale up at low cost, we hit net zero at a low carbon price and could push for net negative, to undo the damage already done. If <i>none</i> of them do, we still hit net zero - just at a higher carbon cost.</p><p>I was on a panel discussion earlier this week about COP28 hosted by the NZ Institute of International Affairs - remotely, as daughter currently isolating with Covid and I don't want to impose risk on others (she's fine). </p><p></p><blockquote class="twitter-tweet"><p dir="ltr" lang="en"><a href="https://twitter.com/climatemorgan?ref_src=twsrc%5Etfw">@ClimateMorgan</a> had an engaging exchange at Vic Uni last night with NZ experts <a href="https://twitter.com/KaedenWatts?ref_src=twsrc%5Etfw">@KaedenWatts</a> <a href="https://twitter.com/ZEALANDIA?ref_src=twsrc%5Etfw">@ZEALANDIA</a> <a href="https://twitter.com/EricCrampton?ref_src=twsrc%5Etfw">@EricCrampton</a> on how to keep 1.5° in sight @ <a href="https://twitter.com/hashtag/COP28?src=hash&ref_src=twsrc%5Etfw">#COP28</a> 🌏🌡️ Change is urgent & possible if we act quickly & decisively together! Thanks to <a href="https://twitter.com/NZIIA_live?ref_src=twsrc%5Etfw">@NZIIA_live</a> for facilitating this panel <a href="https://t.co/0Hr4UtdrVf">pic.twitter.com/0Hr4UtdrVf</a></p>— Germany in New Zealand (@GermEmbWell) <a href="https://twitter.com/GermEmbWell/status/1722359831707939012?ref_src=twsrc%5Etfw">November 8, 2023</a></blockquote><p>But the whole discussion was so frustrating. </p><p>A friend who'd attended said my presence there was felt, like a fart in Church, despite my being remote. </p><p>I talked about the ETS, changes to help it drive to net zero durably, tech bets NZ should be making, other tech underdevelopment. </p><p>Germany's climate rep wanted to focus on gross emission reduction. But when I asked about Germany turning off its nuclear plants and now having to rely on coal, she said nuclear is bad because of Chernobyl. I have a very difficult time taking these people seriously. Unfortunately, they set the agenda at COP. </p><p>Anyway - burying trees isn't as crazy as it might have seemed. </p> <script async="" charset="utf-8" src="https://platform.twitter.com/widgets.js"></script><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-34608918816893953992023-11-08T15:10:00.006+13:002023-11-08T15:10:37.848+13:00Afternoon roundup<p>A closing of the browser tabs</p><p></p><ul style="text-align: left;"><li><a href="https://www.farmersweekly.co.nz/opinion/methane-myths-come-up-against-textbook-science/">Dave Frame batting back the usual (often older) arguments from those who don't like climate science.</a> </li><li><a href="https://draliceevans.substack.com/p/a-dayouth-is-not-a-real-man?r=zccyx&utm_medium=ios&utm_campaign=post">Alice Evans on the origins of 'Dayooth'</a></li><li><a href="https://www.thepress.co.nz/a/nz-news/350105897/maori-parallel-jewish-experience">Ben Kepes on the Māori parallel to the Jewish experience</a></li><li><a href="https://www.thepress.co.nz/nz-news/350106030/supermarket-merger-might-not-lead-better-prices">Consumer NZ figures that if one of our grocers lowers its back-end costs, there could be zero passing-on of savings to consumers</a>. Even a standard monopoly model would have a reduction in price. It would be a fun microeconomics problem set question: come up with conditions under which Jon Duffy could be right (if any), and provide an answer simple enough for him to understand. Consumer NZ just keeps getting more absurd. </li><li><a href="https://www.linkedin.com/jobs/view/3747502406">I like that NZ's Accident Compensation Commission is hiring a Lead Advisor, Econometrics.</a></li><li><a href="https://pharmac.govt.nz/news-and-resources/consultations-and-decisions/2023-11-07-decision-to-decline-inactive-applications-for-the-funding-of-some-medicines/">Pharmac's posted its final decision about pulling 27 drugs from funding consideration</a>, 24 of which were proposed to be pulled because there was no apparent prospect of Medsafe registration. They've decided to pull 24 drugs, 22 of which are because there's no prospect of Medsafe registration. Tafamidis and Cefuroximine might get onto Medsafe's radar. This system is so stupid. </li><li><a href="https://www.newsroom.co.nz/council-tiptoes-over-stadium-funding">But the new stadium would really put Christchurch on the map</a>, just like Ogdenville and New Haverbrook. </li><li><a href="https://www.carbonnews.co.nz/story.asp?storyID=29167&src=newsletter">Interesting proposal around investment in buying out IP rights to make lower-carbon tech more affordable in developing countries</a>. Loyal readers may remember that I've long argued that NZ could do something similar as moonshot on ag biotech. If AgResearch figures out low-emission pastoral systems, GE or otherwise, with government funding, don't try to earn money on any patent. Release it globally on a royalty-free licence that simply requires that a small fraction of the resulting global emission reduction credits to NZ's account. Lowish chance it pans out, but if it did, it would have high return. </li></ul><p></p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-58836245747265846712023-11-08T14:20:00.003+13:002023-11-08T14:20:34.406+13:00A Rule of Two for new drug approvals<p>Requiring Medsafe to automatically approve any drug that had already been approved by at least two trustworthy overseas regulators would sharply hasten new drug approvals without adding particular risk. </p><p>Giving Medsafe an emergency handbrake for use in exceptional circumstances, subject to ongoing review to make sure they were using it appropriately, would reduce what minimal risk might otherwise result. </p><p>I call it a Rule of Two. </p><p><a href="https://www.newsroom.co.nz/how-a-rule-of-two-could-remove-our-barrier-to-better-drug-access">It's my column in Newsroom this week</a>, and <a href="https://www.nzinitiative.org.nz/reports-and-media/reports/safe-to-follow-faster-access-to-medicines-for-kiwis/document/829">a report we put out on Thursday last week</a>. </p><p>The FDA spends hundreds of millions of dollars more on drug approvals than Pharmac spends buying drugs. It is exceedingly unlikely that Medsafe would ever find anything that the FDA missed. It is even more exceedingly unlikely that they'd catch something that both the FDA and the European Medicines Agency had missed. Or the EMA and Australia. Or the FDA and Canada. Or Canada and the UK. </p><p>Medsafe has about 60 staff. Take this job off them and let them focus on areas where they might add real value. </p><p>It isn't just that Medsafe pulls stunts like taking fifteen months to approve Ozempic <i>after </i>it had already been approved by everybody else and <i>after</i> it had already been on the market overseas for <i>four freaking years</i>. It's that Novo Nordisk didn't bother to even apply here until December 2021, because what's the point? Medsafe is too much hassle relative to the size of our market. They haven't submitted Wegovy for approval here yet, for obvious reasons. </p><p>The full delay isn't the fifteen months Medsafe spent evaluating. The full delay is the over five years from the drug's second overseas approval until its approval here. </p><p>Government here, and especially during Covid, loved blaming pharmaceutical companies for not getting their paperwork into Medsafe early. </p><p>It would be like requiring Ferrari to send six of their latest and most expensive models to NZ for destructive crash testing, rather than relying on overseas approvals, and then blaming Ferrari for that there are zero Ferraris on the market in New Zealand. In that case it would be the stupid rule that would be the problem, not Ferrari. It's crazy that we seem able to (sensibly) rely on foreign approvals for cars but not for medicines. I'd think relying on just one would be fine, but a Rule of Two would be sufficiently better than what we have that that's fine too. </p><p>Our report draws on the work of a couple of teams of Canterbury econ students who checked whether Medsafe approval ever really actively protects Kiwis. Turns out there's basically no cases where Medsafe long-term declined drugs that would have been approved by a Rule of Two, and Medsafe withdrawals of drugs from the market tends to follow foreign leads anyway. </p><p>So. Set a Rule of Two. </p><p>Policy doesn't have to be stupid. </p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-49771090150083614322023-11-08T14:07:00.000+13:002023-11-08T14:07:13.729+13:00Daycare socialism<p>Maybe it wasn't a good idea to try running a central planning model for daycare?</p><p><a href="https://www.stuff.co.nz/business/money/301001884/a-year-on-waitlist-still-no-place-parents-battle-for-daycare-spots">Susan Edmunds points to some of the really rather serious consequences, and their cause.</a></p><p></p><blockquote><p>Centres in Cromwell, to which she and her partner moved to be able to buy their own house, are full. She was told they would not have space until the end of 2024 or 2025. She was also on waitlists for home-based care.</p><p>...The Early Childhood Council said it was a problem in several parts of the country.</p><p>Its survey showed 50% of centres were 91% to 100% full, 15.56% of all centres had a wait list of more than a year and 15% had a waitlist of seven to 12 months.</p><p>Chief executive Simon Laube said network management rules introduced in February had made it much harder to open new centres.</p><p>“Originally the problem was too many centres springing up in the same place – you might get three centres on opposing corners which is not good for anyone because all three don't do well. That is a problem, but in that problem, the providers lose because they don't hit the occupancy level and the business fails. The solution of stopping centres opening gets rid of that problem but parents and families are losing out.”</p><p>He said the council would write to the new government to ask it to remove that regulation.</p><p>“I don’t know what you could do to tweak it, there was a real problem that led to it, but it’s not the right solution.”</p></blockquote><p>Too many daycares is a problem that sorts itself out, if you let it. Regulations blocking new daycares is not a problem that sorts itself out. And then you get a pile of people who cannot return to work after having a baby. That has serious consequences too. Longer spells out of work will make it harder to return to the workforce for a lot of professions. Skills deteriorate. Experience isn't gained. </p><p>And remember that barriers to exit (from childcare) are barriers to entry into that circumstance. Some people will delay or reduce the number of children they'd be having because government has screwed this up. </p><p></p><blockquote>He said research showed the average amount of time it took to establish a new service was 2.6 years, including planning and consents. <a href="https://www.stuff.co.nz/national/300737191/nz-childcare-affordability-is-the-worst-in-the-world-government-discovers">Regulation meant that operators might sink a lot of time and money</a> into a business only to find they were not allowed to open, he said. He said 200 centres had closed in the last year.</blockquote><p>Oh and there's also this. The government also screwed up the labour market for early-childhood centres. </p><p></p><blockquote>He said centres were also facing disruption from the pay parity opt-in scheme, designed to address disparity in pay between teachers working in kindergarten and those in education and care centres.</blockquote><p>Is there any part of childcare that government hasn't screwed up? All the regulations might sound well-meaning. And maybe they give some sense of meaning to the otherwise futile lives of the bureaucrats who write the rules. But the rules cause harm. </p><p><a href="https://www.newsroom.co.nz/confusion-and-concern-over-new-building-warrant-of-fitness-forms">And there's this on top of it:</a></p><p></p><p></p><blockquote><p></p><p>Under the Building Act a single missed or unrecorded inspection in the past 12 months, for example, would prevent the issue of the warrant. </p><p></p><p>A building would instead be issued new forms to show there had been non-compliance, and there would be no way to obtain a warrant of fitness until the next year. </p><p>Auckland Council had previously issued a “report in lieu” to building owners if this were the case and a warrant of fitness could still be obtained. </p><p>But last month the council stopped using the lieu reports and began using the new forms, meaning the workaround was no longer available. </p><p>Early childhood council chief executive Simon Laube said a centre’s licence was conditional on operating out of a building that complied with the Building Act, which for a large number of Auckland centres meant having a building warrant of fitness.</p><p>He said there was concern the Ministry of Education would be heavy-handed with following the letter of the law, if centres did not technically have one. </p><p>“The Ministry of Education are taking licenses off providers for a lot less than this, anything in the kind of grey areas they're moving in really heavy-handed, so something that's black and white like this … we just know what the Ministry of Education is like and they don't go lightly.” </p></blockquote><p>The outgoing Labour government has handed a lot of awful hospital passes to the incoming National-led government. An utter mess in ECE is one of them. </p><p></p><p></p><p></p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0tag:blogger.com,1999:blog-2830084253401570472.post-37646740270787337092023-11-07T07:00:00.004+13:002023-11-07T07:00:00.147+13:00Morning roundup<p>A closing of the browser tabs:</p><p></p><ul style="text-align: left;"><li>The Economist's write-up of <a href="https://www.economist.com/culture/2023/11/03/a-new-museum-of-prohibited-art-shows-how-censorship-evolved">Barcelona's new Museum of Prohibited Art.</a> <a href="https://www.museuartprohibit.org/">The museum's website is here</a>. </li><li><a href="https://www.ft.com/content/0fa6edec-267f-4652-8bc5-486d60e4049e">Europe considering pricing agricultural emissions</a>.</li><li><a href="https://www.ft.com/content/77e4dd04-9190-4987-8621-4e724dc579ff">Bill Gates on some of the climate tech in the pipeline</a>.</li><li><a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4614052">Cass Sunstein on goods that people buy but wish did not exist</a>. Fun as a logical exercise - this class of goods could exist in this way. But banning them would just push status-seeking onto other margins. Other margins can be worse. And what if there's an additional class of goods: ones that people loudly claim they wish didn't exist, but secretly enjoy? In that case, could you ever tell which ought to be banned?</li><li><a href="https://conversationswithtyler.com/episodes/stephen-jennings/">Stephen Jennings's Conversation with Tyler</a>. Great stuff on building new cities in Africa, and a gloomy bit about New Zealand. </li><li><a href="https://www.stuff.co.nz/business/money/301001884/a-year-on-waitlist-still-no-place-parents-battle-for-daycare-spots">What happens when central government tries to centrally plan daycare</a>. Maybe Stephen Jennings is right to be pessimistic about the place. </li></ul><p></p><div class="blogger-post-footer"><img src="http://c.statcounter.com/counter.php?sc_project=sm6OffsettingBehaviour&java=0&invisible=1" alt="." border="0" height="1" width="1" //></div>Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.com0