Housing4

Foreign advice on foreign buyers

The International Monetary Fund has concluded its 2018 visit to New Zealand, checking with a broad range of stakeholders on how things are going here. Executive Director Oliver Hartwich and I were happy to share our views with them last week. We argued that the most pressing issue facing New Zealand is housing. In addition to the obvious problems caused by housing shortages, they also fuel xenophobia. Read more

Dr Eric Crampton
Insights Newsletter
20 April, 2018
researchED

A festival of education

As recently as in the 1920s, cyclists in the Tour de France would take ‘smoking breaks’, assisting team-mates to light-up while still cycling. Since then, scientific research and evidence has well and truly debunked the myth that smoking is good for athletic performance.   In some ways, education today is like medicine was before science. It is vulnerable to emotions, ideologies and our individual beliefs: the prisms through which we view the world. Read more

Briar Lipson
Insights Newsletter
20 April, 2018
Dutch highway

On a Dutch desert highway...

The BBC recently reported that Dutch authorities had removed singing road lines one day after their installation. Special strips in the asphalt played the anthem of the Friesland province if motorists drove over them at the correct speed of 60 kph. The move was designed to promote safe driving at correct speeds. However, the noise drove neighbouring villagers to distraction. Some enterprising motorists drove over the strips at high speeds trying to play the music at double speed. Read more

Richard Baker
Insights Newsletter
20 April, 2018
Whistle

Blowing the whistle on the Commerce Commission

Does it matter if businesses do not respect their regulators? According to Finance Minister Grant Robertson, it does.Responding to the Initiative’s report, Who Guards the Guards? Regulatory Governance in New Zealand, Mr Robertson said, “It’s incredibly important that these institutions are respected. It’s like a rugby game. Players have to have respect for the referee – even though it’s highly unlikely they will agree with every decision.”The minister is right. Read more

Roger Partridge
The National Business Review
20 April, 2018
Housing1

The foreign buyer ban is an abomination. Bad in principle, worse in practice

There is not a shred of evidence the prohibition on foreign property buyers will alleviate the housing crisis. It is popu, argues economist Eric Crampton.One of the things that think tank chief economists get to do is have a yarn with travelling delegations from international organisations checking in on how things are going in New Zealand. One that we talked with this past month was puzzled about how New Zealand wound up with such an odd ban on foreign home... Read more

Dr Eric Crampton
The Spinoff
17 April, 2018
NZcoins

Will the Living Standards Framework replace budgetary analysis?

According to Oscar Wilde’s play, Lady Windermere’s Fan (1892), “a cynic is a man who knows the price of everything and the value of nothing.”This quip has since migrated to refer to the economics profession.It tells us much about how economics is perceived. Not just as an overly technical, mathematical and calculating exercise but also as an amoral, or even immoral and downright cynical way of looking at the world.Nothing seems to confirm such prejudices more than the way economists... Read more

Dr Oliver Hartwich
The National Business Review
17 April, 2018
Light

Storm brewing in country’s power markets

The autumn storm that took out parts of Auckland’s power grid last week spared Wellington. The weather in the capital remained relatively calm – or at least no worse than any other wintry day. But storms are not the only threat to the grid. Policy decisions in Wellington can be a threat as well, if pricing models do not keep up with technological change. Read more

Dr Eric Crampton
The Dominion Post
16 April, 2018
Taranaki oil

Drilling further into the Government's hole

When you are in a hole, stop drilling. That must have been the Government’s motivation for stopping oil and gas exploration. To say that the past weeks were not quite ideal from the coalition’s viewpoint would be an understatement. The Radio NZ saga, the farce over Russian spies and dubious events around the Provincial Growth Fund did not make it look like the most competent of administrations. Read more

Dr Oliver Hartwich
Insights Newsletter
13 April, 2018
Roman Guard

Guarding the guards

Next week Parliament will have its first chance to debate Commerce Minister Kris Faafoi’s new Commerce Amendment Bill. If passed, the Bill will grant the Commission’s wish - and allow it to use its powers of compulsion to undertake ‘market studies’ into the state of competition in any market. ‘Market studies’ powers sound innocuous enough, but they are far from it. The state should be cautious before authorising regulators to use powers of compulsion. Read more

Roger Partridge
Insights Newsletter
13 April, 2018
Feet in bed

In bed with [redacted]

Every Friday, regular Insights readers undoubtedly look forward to the Initiative’s take on public policy and current events. This week, however, I want to share something a bit personal. You see, I’ve been in a relationship for about as long as I can remember. But lately I’ve been feeling uncomfortable. And I think it’s time I started talking about it. At first, the warning signs were small. I’d try phoning [redacted] but they weren’t returning my calls. Read more

Jenesa Jeram
Insights Newsletter
13 April, 2018
Regulation

Kafka’s caution for the Commerce Commission

In Franz Kafka’s The Trial the chief cashier of a bank, Josef K, is unexpectedly arrested by two unidentified agents from an unspecified agency for an unspecified crime. At one level, The Trial is a satire of bureaucracy. At another, it is uncannily prescient of the oppressive regimes that would emerge in Europe in the first half of the 20th century. But The Trial also serves as a caution to those responsible for regulatory agencies in the 21st century. Read more

Roger Partridge
The National Business Review
8 April, 2018
Calculator

Transport calculation in a world without prices

The biggest lesson of 20th Century economics is that it is hard to get anything right if prices are wrong. It is high time that lesson were applied to transport.From the 1920s through the 1940s, economists pointed out the difficulties in running centrally planned economies. If prices do not emerge from the interplay of consumers and producers in markets, somebody has to set those prices. And if those prices are wrong, everything else starts going wrong.If you do not know... Read more

Dr Eric Crampton
Insights Newsletter
6 April, 2018
House sale

The taxing matter of outrageously high house prices

Could changes in 1989 to New Zealand’s tax treatment of retirement savings plausibly explain a significant portion of the subsequent sharp rise in New Zealand house prices?Andrew Coleman made the case that it could to a LEANZ audience in Wellington this week. He was careful not to argue that it did.He said other relevant factors were operating. These included higher per capita incomes along with lower inflation and lower real interest rates. Read more

Dr Bryce Wilkinson
Insights Newsletter
6 April, 2018

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