Eaqub on NZ policymaking

Shamubeel Eaqub’s column in yesterday’s Sunday Star-Times got me thinking.

The column is headed Policy flip-flopping on the road to progress although Eaqub seems to lament two quite different things.  The first is what he suggests is a tendency for policy to reverse course depending on which party is in office.

On tax, we have seen little leadership. The Helen Clark-led Labour government raised income taxes for high income earners, because they wanted a progressive tax system.  The John Key-led government then lowered those taxes, as it took its turn at the policy-making helm.

This kind of turn-based policy making which favours ideology is bad. It creates instability and loses sight of the long-term issues governments should be dealing with.  Instead we need a long-term and deliberate approach which can overcome this kind of policy yo-yo.

And the second is something about failures of New Zealand policymaking more generally

Bad policies often hang around like weeds, because we don’t have a good system to review past policies and undo them if necessary.

The demands for action and leadership are justified. But we should not be so hasty to deride collaborative and transparent approaches to policy development.

They are a good counter to the current way that has allowed big social and economic issues to accumulate over decades.

I’m not convinced on the first score.  For decades now, the similarities between our two main parties have been much more apparent than the differences.  Even in the brief periods of radicalism, Labour briefly wrong-footed the National Party in the mid 1980s, then National had its own brief spurt of reforms in much the same general spirit, and then before long both parties had settled back to doing not very much at all.  In many ways, the similarities aren’t so surprising –  there is plenty of political science and economics literature to predict that sort of clustering to the centre.

There are exceptions of course –  such as the maximum marginal tax rate example Eaqub describes.   Another example might have been the 90 day trial periods promised (and implemented) by National in 2008, and being partially unwound now.   And the exceptions aren’t necessarily a bad thing.  We do, after all, live in a democracy, where parties compete for your vote.  One likes to think that at least some of that competition might be based around different visions, and differences of the best practical ways to achieve even agreeed outcomes, not just on (say) who has the cutest kids or makes the best pizza.  Reasonable people will, at times, take a quite different view on (a) priorities, and (b) mechanisms (not just what “works” but what is “socially acceptable”).   The hankering for “a long-term and deliberate approach which can overcome this kind of policy yo-yo” has disconcerting similarities to the talk of the alleged superiority of the approach adopted in the People’s Republic of China: one party, and now one leader, indefinitely supposedly facilitates good long-term reform.  None of that pesky competition of ideas, interests, and individuals.  Shame about the outcomes there.

So which party is in office is supposed to make a difference –  and not just to the faces on the covers of the women’s magazines.

But I’m much more sympathetic to Eaqub in his concern about longer-term policymaking and associated advisory capability.   And that probably does spillover into Eaqub’s concerns about some of those short-term initiatives parties promise to win elections

Too many policies are populist, turn-based or just ill-thought out

Eaqub laments the state of the public service.

The civil service has a role here, as the generators and repositories of policy ideas, rather than just the delivery mechanism of ministers’ ideas that it has become.

Beaten into submission over decades, our civil service is more likely to say “more research required” on a problem, like an academic, rather than offer a well-formed recommendation.

In some respects it is hard to disagree.   Observing the quality of the analysis and advice coming out of The Treasury and MBIE instills no confidence whatever.  But while ministers have not often not welcomed, and at times actively discouraged, free and frank advice, the problem isn’t only with politicians.  The Treasury’s continued failure to have a compelling narrative of why our economic performance continues to lag behind isn’t really Bill English’s fault –  it is the failure of the institution itself (more interested, apparently, in well-being studies) and perhaps of those –  the State Services Commission –  that appoints heads of government departments.  Sir Robert Muldoon –  no great fan of The Treasury –  didn’t prevent The Treasury being well-positioned in 1984 with ideas, analysis and energy that helped facilitate the reforms of the following decade.  But that was probably an historical exception, and perhaps it is unrealistic –  even in a small country –  to really expect the public service to lead in ideas-generation around desirable reforms.  Apart from anything else, the incentives are all wrong, and the inevitable constraints militate against it.

Perhaps we have bigger weaknesses than our public service?    Think-tanks are few –  and our most consistently fertile one (the New Zealand Initiative, and is predecessor the Business Roundtable) tends to be located towards a libertarian end of the spectrum where very few likely voters are.  And in many areas, the contribution to policy-related analysis and debate from university academics is pretty thin, or often almost non-existent.  There are understandable reasons –  the PBRF ranking/funding model prioritises refereed journal articles and academic books, and recruitment policy (no doubt for good short-term economic reasons) often prioritises cycling through young foreign academics with little knowledge of, or interest in, the specifics of New Zealand.   Whatever the reasons –  and some of them may just be the limits of a small country – the policy-related inputs are often pretty thin.

But I wonder if the bigger issue still isn’t the lack of demand for anything different.  After the ructions of the 80s and early 90s there seemed to be both a shared elite consensus that reforms had been done pretty well, and it was only a matter of time until we saw the fruit.  And when the fruit (mostly) didn’t show up to the extent hoped for, there was a shared reluctance at a political level to risk more change –  perhaps particularly on the left (where the Labour Party had split).   For many people, life in New Zealand isn’t too bad at all, so why risk rocking the boat –  memories (and folk memories now) of the 80s and 90s.

And the “policy elite” (whether or a broadly-left or broadly-right persuasion) still mostly tend to hold some views that probably haven’t served New Zealand that well.  For example:

  • the broad-based low rate (BBLR) tax system, which keeps getting praised (including abroad) but typically isn’t imitated.   We tax returns to savings materially more heavily than most countries do, and that is increasingly true of business investment too,
  • the deep-seated belief that high levels of immigration are a “good thing” –  generally, and for New Zealand (even as the proponents are unable to produce evidence of those benefits for New Zealand).  The belief might be rooted in history (settler societies and all that), general economics literature, and the dread fear of being accused –  eg by the NZ Initiative –  of “racism” or “xenophobia, but whatever the reason, it no longer serves us well,
  • the endless deference to the People’s Republic of China, and the narrative that has somehow been allowed to grow up that somehow our fragile prosperity depends on keeping on side with the PRC,
  • the indifference to the fact that New Zealand has had consistently the highest real interest rates in the advanced world (and amomg the slower rates of productivity growth) –  the rhetoric for a long time (again a legacy of past decades) was that such differences can’t persist, unless they are risk-based,
  • a shared belief in the importance of technology and the tech sector, and more of a desire to belief than a willingness to ask hard questions about the likelihood of such industries developing, and remaining, here,
  • the implicit belief that our physical location doesn’t matter much (occasional talk about “costs of distance” notwithstanding) and thus an implicit view that analysis fit for small northern European countries is just fine for a really remote South Pacific one,
  • a largely shared indifference to the persistence of a very high real exchange rate.  Some of this indifference no doubt relates to the memories of controlled exchange rates past, or to journal articles characterising exchange rates as random walks, but again whatever the reason, it holds people back from seriously engaging with this symptom of our problems.

Of course, there are other issues on which the “policy-elites” are on the side of the angels –  there is probably a pretty strong consensus on raising the NZS age and even age-indexing it in future –  but there are high political barriers.

And other issues like house prices – perhaps even family breakdown –  where New Zealand’s policy failures aren’t much different from those in many other parts of the Anglo world.

Probably it is much easier to do reform, and even craft some sort of elite support for it, when the issues look like ones that involve converging towards what everyone else is doing.   That was, more or less, the story we told in the 80s and early 90s.  Even when the details of things done here were sometimes world-leading, the overall narrative was one in which we had failed to open up and reform in a way that other countries had, or were doing.  We just need to catch-up, and in the process could do some innovative stuff.

But what of now?  No country anywhere is doing much to do structurally with house prices –  and for most people in most of the rest of the world, those successful parts of the US without the problem seem to be treated as little more than a curiousity, of which most are barely aware.  No one is fixing the “family breakdown” issues either, and so we drift like the rest.

And addressing our economic underperformance looks as though it might require stepping away from some of the OECD rhetoric.   That can be hard to do (perhaps especially for officials), absent some compelling figure with an alternative narrative and the political skills to take people with him/her.

To get back to Eaqub’s article, he began by noting that

When a new government forms, there is usually a flurry of studies, task forces, working groups and advisory panels.

That has been right, at least with recent governments.  But perhaps what is most notable about many of those groups is the typically limited resources and limited time they are given.  He cited the Jobs Summit –  done over a couple of months, culminating in a one-day jamboree –  or the 2025 Taskforce (so under-resourced the one foreign appointee couldn’t really believe it). But he could have mentioned the current Tax Working Group too, which is operating on pretty tight deadlines, with limited specialist expertise.   Some of these groups, even with limited time/resources, have produced some useful material.  But they are often more about political management than about actually getting to the bottom of some serious and knotty problem.

This post has been pretty discursive, probably more useful for clarifying my thinking than for anyone else.  I think my bottom line is something along these lines:

Political flip-flopping is the least of our problems.   And the public service –  while quite degraded in its policy capabilities –  is perhaps not a body one could ever hope for much from on a sustained basis.  Our university and think-tank sectors are weak, when it comes to policy analysis and associated innovation.  But perhaps the biggest obstacle to change –  whether around the issue this blog most often focuses on, productivity underperformance, or most others –  is the absence of any political (or, presumably, public) demand for different outcomes, buttressed by “policy-elites” who seem to share assumptions and presuppositions that might have looked fine 25 years ago, but which –  on my argument – don’t do so now.  Without alternatives –  that might go over well at the OECD, the IMF or the like – it is just easier to hold on to those presuppositions, and the comfortable life most enjoy.       It is a recipe for continued drift, which is of course what we saw under the last two governments and what we seem set for under the current one.   It isn’t obvious what, or who, might credibly lead us to something different.

35 thoughts on “Eaqub on NZ policymaking

  1. I agree with your final paragraph. In terms of the catalyst for reform, I am hopeful that it will be a case of generational change as opposed to a crisis. There are some hints of it in incoming cabinet ministers – Phil Twyford on housing for example. I was also interested the other day to see Grant Robertson pushing back against Eaqub’s call for increased budget deficits. I inferred from this that he was at least aware of the savings-investment imbalance and didn’t want to make it any worse.

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    • When Steven Joyce pointed out that Labour had a $11.7 billion hole in their budget, it was based on Labour’s election promises. This is a correct assessment. Labour and Greens should not have rubbished this number and instead should have said that we are in a crises in all key areas and therefore whatever it takes to sort this crisis out, whether it is in housing, in health, in prisons, in retirement etc. Grant Robertson instead, put hand to heart and committed to fiscal responsibilty and budget surpluses which means he has just become a Bill English lookalike and in National Party modus operandi for the last 9 years.

      In effect it is now Grant Robertson that have hamstrung Phil Twyfords hugely ambitious plans. Jacinda Ardern of course slogans all the pre election bribes as aspirational and not necessarily achievable. The term “White man speaks with forked tongue” would be an appropriate description of Jacinda Ardern’s ability to make quick slogans and communicate that to the general public as positive.

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    • Re Robertson, I’m less optimistic. I suspect he just wants to hang very firm on the position Labour took in the election to minimise risks of new attacks from National (same debt target just a few years later).

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  2. Do you think lengthening the electoral cycle to four years would be a useful step to enable more considered policy development?

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    • Given that Labour spent 9 years in opposition, you would have thought that they would have figured out what needs to be done and how to do it. So 4 years is not going to help. At the moment all I see from labour has been way out of the ball park aspirational goals which has no resemblance to reality. The 10,000 house builds a year is looking rather farcical as 6 months passes with no houses being built under Kiwibuild. Overseas manufactured prefab houses are now being under serious consideration but without the available land another pie in the sky wish list and since its going to be overseas manufactured, a name change is required. I suggest “Not Kiwibuild Chinese Prefab” might be a better name for Phil Twyfords building aspirations.

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    • That has absolutely nothing to do with the problem politicians we have now. It wouldn’t change them at all.

      Look at Britain, which has five years. Adam Curtis expounds about this with his beautifully blunt style in his documentaries.

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  3. Personally I wouldn’t vote for that change while we are in a system with a single chamber and few effective checks and balances on a government.

    Also there seems to be quite a malaise around policymaking in Anglo democracies even where they have longer terms than we have.

    For good or ill, Roger Douglas showed that a great deal could be done with a three year term – and, actually, Hawke/Keating.

    I’m not opposed in principle to a four year term, I just suspect it isn’t a material part of the answer.

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  4. Enjoyed your blog. A couple of supplemental thoughts.

    On the apparent absence of political demand for alternatives or different outcomes — it may in part be an outcome of MMP, an overt goal of which was to make governing coalitions stay close to the centre of public expectations. As Prof Richard Mulgan (a member of the 1986 Royal Commission on the Electoral System) states in a 1998 paper [https://ojs.victoria.ac.nz/jnzs/article/download/366/289]:

    “New Zealanders had no major difficulty with adversarialism and two-party competition so long as parties stayed close to public expectations and competed for the electoral centre. It was the breaching of those conventions in the period 1985 to 1991 and the voters’ determination to re-constrain their governments within previous populist limits that led so many voters to support the new system. MMP seems set to satisfy this aim of reasserting the previous populist conventions”.

    The reform period of the 1980s and early 1990s was viewed by Prof Mulgan and his colleagues as “an elective dictatorship bent on radical change with minimum accountability and consultation” –

    “If anything, electoral change was a reaction against state restructuring, at least against the blitzkrieg methods by which such restructuring was brought about. Though radical in its substance, electoral reform was essentially reactionary in intention, an attempted counter-revolution against the policy-making elites.”

    In short, MMP is intended to make off-centre policies hard to achieve. It fosters conservatism (with a small ‘c’).

    Parties and politicians are of course free to advance policies that may appear less centre-ist and pitch their case to the public in MMP elections, then see if they can pull together a coalition of parliamentary votes. But this calls for politicians of unusual skill to be more than mainly avatars of centrist sentiment.

    Even if we had stronger institutional policy generating capacity that was responding to party political demand, very few politicians have the desire or ability to get traction with a general voter audience on deeper policy ideas that seem difficult or counter-intuitive. Of course to explain something complex in a clear and simple manner requires deep understanding (curiosity, open-mindedness, reflection and humility). So it’s unsurprising that cheerleading a party script close to the popular centre is much more appealing for most MPs.

    Regards
    Tony

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    • Interesting thoughts Tony. I’ve never been quite sure how much to ascribe to MMP (as distinct from how we got to MMP). After all, National +ACT had a clear parliamentary majority in the first term of the last govt, but nonetheless did nothing much (altho of course there were some immediate fires to fight – altho the main earthquakes weren’t until the final year of that term).

      Entirely agree with your last para. I guess here, and every, exceptional policy-oriented people – with the ability to take colleagues and the public with them (perhaps Keating/Hawke?) – are pretty rare beasts.

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      • On the first point – yes, it’s hard to know what weight to give it: whether the political culture for the last 25 years has been a continuing reaction to the policy earthquake that preceded it, or a return to some sort of pre-Muldoon stasis, or a fundamental shift due to MPP (in particular, the prevailing sense for a party in government that its return to power requires adherence to centrist moderation). I suspect the latter has some force (but can’t point to any clear evidence).

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      • The issues are actually quite complex. The new Labour government currently has 45 working groups to determine issues and solutions. They are just getting lost in the complexities trying to do too much with too little resources. It’s a Catch 22 on most of the issues that NZ faces.

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      • This complexity is mainly due to MMP with minority parties having a different agenda and can be conflicting. The National government did give up a lot of historical foundation policy to appease Maori. The ACT party was in self destruct mode and 1 extra vote is not exactly a. clear majority. More like the tail waging the dog. Maori Party was included by John Key to secure longevity which successfully kept the National Party in government for 9 years. Of course Labour kept self destructing on the CGT issue.

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  5. As for policy “weeds” how to get rid of the FIF regime which seems stupidly complicated and I believe is ignored by many accountants as it goes into the ‘too hard’ basket.

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    • Accountants actually thrive on complexity. The dollars roll in from more complexities and any tax changes boosts earnings considerably in the year of change.

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  6. I wonder if less centralist policies are just not explained in a way that the average voter can understand. For example National committed to reducing the national debt, claiming that its policies would reduce it to 20% of GDP by a certain date. Labour said that their policies would also reduce the debt but take three years more. “So what” would have been the standard response.
    However, it is possible that if a politician said that the national debt costs x millions of dollars a year in interest then many voters would take notice, especially if this sum is then compared with the sum that is spent on housing or health or whatever. And if much of this interest goes offshore voters might really take notice.
    Policy not only has to be created it has to be ‘sold’, and sold in terms that the average voter understands, remembering that the average voter has an IQ of 100.

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    • Nick, you need to be fair and have to factor in the impossible to predict events like the $20 billion Christchurch earthquake or the $8 billion Kaikoura Earthquake or even that the RBNZ was intent on engineering a 10% interest rate driven recession. Or the impact of the GFC. Note that the National government navigated these destructive events and still managed to deliver a budget surplus.

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      • Perhaps I wasn’t as clear as I could have been. You see producing a surplus as important and I might agree with you but how important is it to the average voter?
        That’s the point. There has to be an explanation of why a surplus is important in the language that can be easily understood.
        ‘Billions of dollars’ is an incomprehensible number; that’s why I argue that interest payments are more understandable.

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      • Steven Joyce indicated a $11.7 billion deficit in Labour’s election promises. He was laughed out of the room by the Greens and Labour. Surprisingly 7 economists that backed Labour just can’t do maths as well lending support to Labour’s bouts of laughter at parliament time and at election time. The Labour government is not laughing at the moment as election promise after election promise is being stymied with not enough funding and Jacinda wall papering over these election lies as aspirational but may not be achievable.

        Now they want to try and tax homeowners and are using Bernard Hickey to drive the Labour propaganda machinery.

        Accountants have a view that there are 2 budgets, a operational budget and a Capital expenditure budget. The operational budget needs to have the revenue higher than the costs incurred. The capital budget needs to satisfy investing in an asset for future revenue.

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  7. Unlike Tony Baldwin I didn’t enjoy your blog. OK no trouble reading every word and little to actively disagree with but as you put it: ‘pretty discursive’. A list of “views that probably haven’t served New Zealand that well” with no new items. No big ideas to get my head around.

    The only idea to get my neurons active was the issue of family breakdown. Maybe not an issue that naturally fits with blog that discusses RBNZ, inflation and productivity. However reading this article “”The Tech Industry’s War on Kids – How psychology is being used as a weapon against children”” left me scared. https://medium.com/s/story/the-tech-industrys-psychological-war-on-kids-c452870464ce
    Reminded me of the Mexicans meeting the first European ship (population of Mexico declined from 22 to 2 million).
    How can we tell if the NZ 12% under-employed are simply displaced by cheaper immigrants or addicted youngsters unwilling/unable to drag themselves away from carefully crafted computer apps? Does the government have a think-tank that actually dislikes tertiary education and recommends transferring our investment in it to pre-school and primary?

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    • Bob

      Sorry to have disappointed. This post was more about “process” – institututions, incentives etc – than the substance of specific policy areas (so my list was deliberately mostly examples readers will have been a bit famiiar with.

      Re “family breakdown”, it is a concern of mine, altho the specific prompt today was an email from another reader a few days ago.

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  8. Immigration the cheap and nasty way to grow the economy

    “the deep-seated belief that high levels of immigration are a “good thing” – generally, and for New Zealand (even as the proponents are unable to produce evidence of those benefits for New Zealand). The belief might be rooted in history (settler societies and all that), general economics literature, and the dread fear of being accused – by the NZ Initiative – of “racism” or “xenophobia, but whatever the reason, it no longer serves us well”

    Michael: There are a number of valuable gems and nuggets within your article. I realise it is a critique of Eaqub’s treatise – but – In my view the world is asychronous where one begets the other – not synchronous where everything happens simultaneously in its own sealed vacuum – Eaqub is improving

    If you havent already come across himLet me introduce you to Ross Gittins a acerbic but highly regarded long int the tooth columnist at Fairfax Media who says:

    A high proportion of the promoters of high immigration are also promoters of Smaller Government, never acknowledging the two are incompatible.

    You rarely hear pro-immigration economists acknowledging the clearest message economic theory gives us on the topic: more population requires more spending on additional public and private infrastructure if material living conditions aren’t to deteriorate.

    The more we invest in such “capital widening” to stop the ratio of capital to labour declining, the less scope for investment in “capital deepening” to keep the ratio increasing, and so improving the productivity of our labour. When we fail to invest sufficiently in capital widening – which we have – the decline in living conditions is manifest in overcrowding, traffic congestion and long commuting times. Why have we failed to invest sufficiently? Partly because a high proportion of the promoters of high immigration are also promoters of Smaller Government, never acknowledging the two are incompatible. A bigger population requires a bigger government, with more debt, not less. When you persist with high population growth, but put the clamps on government, you end up with overcrowding, congestion and the rest. Another truth the high immigration advocates refuse to acknowledge is that a much bigger population must lead to much bigger cities and higher-density living in those cities.

    https://www.smh.com.au/business/immigration-the-cheap-and-nasty-way-to-grow-the-economy-20180318-h0xmf0.html

    PS: you article is appreciated

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    • I appreciated Eaqub’s article – “got me thinking” is intended as praise, even if I ended up disagreeing with some of the specifics.

      Thanks for the Gittins – I enjoy the occasional column of his I read. Of course, while I largely agree there is an argument that high – and diverse – immigration is a recipe for smaller government in the very long run. This is based on the proposition that welfare states command community support to the extent we share some identification with each other. The more part of society views other parts as “not us” and vice versa the more the willingness to provide mutual support may fade. I’m not sure I’m persuaded by that channel.

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      • If high immigration matches high emigration then the issues about public and private infrastructure do not apply. However it does raise a significant question: why do Kiwis leave? Partly tradition, partly if you are having to move from the family farm then any world city will suffice, partly curiosity, partly opportunity/experience, partly more pay. Many marry and stay abroad and many marry and return with their partner who now registers in our immigration figures. What is needed to get Kiwis to return, GPD per capita is significant and becoming more so as our economy slides but there may be other ideas worth investigating. It is the dearth of such ideas that seems to be your theme.

        The point about places with high numbers of immigrants being less likely to support the welfare state seems valid. But it applies when there is a ‘them’ and an ‘us’ in other words multiculturalism. To date NZ has been fortunate in having immigrants from diverse countries and many are ‘invisible’ immigrants: UK, French, Dutch, SA, Russian, Bulgarians, etc. A politician like Gareth Morgan can persuade us to sacrifice our superannuation to pay for a universal child benefit; the idea of making such a sacrifice brings images of my grandchildren to mind but if I live next to a large suburb of ‘foreign’ Kiwis it is harder to stomach. I have no trouble with Indian, Chinese and Melanesian children being Kiwis (my grandchildren are Melanesian) but I need to be thinking of the many well integrated immigrants who are trying to be proud Kiwis like myself not the ones who insist on barriers and their culture taking precedence. For example I would shut down the ‘arranged marriage’ route to residency. See https://www.immigration.govt.nz/new-zealand-visas/apply-for-a-visa/about-visa/culturally-arranged-marriage-visitor-visa

        PS Your article “got me thinking” and therefore is appreciated but although there were “valuable gems and nuggets” they had been seen before.

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      • I think the defacto relationship option is far more dubious but I am told the more popular and easiest path to residency.

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  9. For good or ill, Roger Douglas showed that a great deal could be done with a three year term

    Personally I was mesmerised by Roger Douglas, not by his book but by his interviews on the nightly evening news wherein he enunciated his views on the state of the NZ economy and how the (farming) elites had got us there and he dished up the medicine without sugar-coating it and then announcing what he was going to do about it. The biggest shock would have too have been felt by the farming community as they lost their magnificent subsidies, but they were “milking” the enormous subsidies. Leading up to that time the “Queen Street” farmers were highly visible and loud. Douglas was right. But he was ruthless. And as you listened to him explaining why he was doing it you couldn’t disagree with what he said

    I have always respected Roger Douglas. Disappointing the naysayers eventually got him

    Thanks for the comment

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  10. “” the biggest obstacle to change …. is the absence of any political (or, presumably, public) demand for different outcomes “” for some reason reminded me of Ernest Rutherford’s “We’ve got no money, so we’ve got to think” and “A theory that you can’t explain to a bartender is probably no damn good”. At least this blog admits there is a problem. Maybe before Botswana overtakes us our public elite will notice it to.

    I understand your concern about well-being ~ it is a wonderfully vague term that politicians can use to mean anything they like and reminiscent of Len Brown’s “Auckland – the world’s most liveable city” [with Auckland families bringing up their children in garages and motels does it might be the world’s most embarrassing motto?]. However lets give ‘well-being” a crystal clear definition: “where Kiwis who have an option, choose to live” or “where Kiwis with children who have a choice, choose to live”. It would be fairly simple for the dept of Stats to measure success by tracking Kiwi families moving abroad or returning to NZ.

    Assuming the definition involving family it would lead to emphasis on high quality pre-schools, schools and colleges, targeting crime, tackling house prices, moving towards a clean and green environment. The change of emphasis would result in a reduction in funding of universities and students and irrigation projects, maybe taxes on the family home and reduced and delayed superannuation. Plenty of negatives for my family but a vision we could be persuaded by.

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  11. The two main parties operate as a political cartel in NZ effectively agreeing on what will be on offer to NZ political “consumers” and constraining the possible. Meet the new boss….same as the old boss.

    They might do all right now, but unless they come up with some ideas that materially improve the living standards of the median household, given a nasty recession, they will be electoral toast. Populist parties can take over. Look at Italy. Case in point. Millennials and Gen Xers are not wedded to traditional bloc votes and can be nicely manipulated by social media. They may well feel they have nothing to lose by raising a middle finger to the establishment.

    The policy elite live in a Merivale world where everything is hunky dorey economically. Well it’s not beyond the NZ version of the”Hamptons”. What I see around me is not “humming along nicely”. As Mark Blyth said wittily – “The Hamptons are an indefensible position” (can be easily marauded by a disgruntled rabble).

    Family breakdown – the number one thing I reckon that could prevent this is more Kiwi men doing their fair share of childcare and housework. They need to embrace the Shower Power bottle (more than once a year), learn how to plait hair and to do necessary chores even when they don’t feel like it. Women are sick of the “extra child” husband and domestic slavery and ditch them even if it means financial distress. Straightforward solution but involves actual behavioural change which as we know is rather less straightforward.

    Some argue the NZ public needs to be persuaded further about the huge evil of public debt? I would argue the NZ public needs to be disabused of the notion that a government is like a household and realise that excessive, ideologically driven, fiscal austerity has consequences in terms of growth, private debt and employment.

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  12. 2.3 Changing policy expectations
    While useful, models do not capture all the effects policymakers expect from immigration.
    When New Zealand moved to increase the numbers and skills of immigrants in the 1980s
    and 1990s, policymakers appear to have considered that these changes had the potential
    to have major beneficial impacts on the New Zealand economy, reinforcing the gains from
    the other liberalising and deregulating economic reforms undertaken during that period.

    At that time, it was considered that skills-focused inward migration could: improve growth
    by bringing in better quality human capital and addressing skills shortages; improve
    international connections and boost trade; help mitigate the effects of population ageing;
    and have beneficial effects on fiscal balance. As well as “replacing” departing
    New Zealanders and providing particular help with staffing public services (for example,
    medical professionals), it was believed that migration flows could be managed so as to
    avoid possible detrimental effects (such as congestion or poorer economic prospects) for
    existing New Zealanders.

    Since then, New Zealand has had substantial gross and net immigration, which has been
    relatively skill-focused by international standards. However, New Zealand’s economic
    performance has not been transformed. Growth in GDP per capita has been relatively
    lacklustre, with no progress in closing income gaps with the rest of the advanced world,
    and productivity performance has been poor. It may be that initial expectations about the
    potential positive net benefits of immigration were too high.

    Based on a large body of new research evidence and practical experience, the consensus
    among policymakers now is that other factors are more important for per capita growth
    and productivity than migration and population growth. CGE modelling exercises for
    Australia and New Zealand have been influential in reshaping expectations.

    http://www.treasury.govt.nz/publications/research-policy/wp/2014/14-10
    Migration and Macroeconomic
    Performance in New Zealand:
    Theory and Evidence
    Julie Fry
    New Zealand Treasury Working Paper 14/10
    …………………
    However according to Smart Talk at The Auckland Museum (Noelle McCarthy) -“the arguments against immigration are unsustainable”

    Which version do the public get to hear?

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  13. 2.3 Changing policy expectations
    While useful, models do not capture all the effects policymakers expect from immigration.
    When New Zealand moved to increase the numbers and skills of immigrants in the 1980s and 1990s, policymakers appear to have considered that these changes had the potential to have major beneficial impacts on the New Zealand economy, reinforcing the gains from the other liberalising and deregulating economic reforms undertaken during that period.

    At that time, it was considered that skills-focused inward migration could: improve growth by bringing in better quality human capital and addressing skills shortages; improve international connections and boost trade; help mitigate the effects of population ageing; and have beneficial effects on fiscal balance. As well as “replacing” departing New Zealanders and providing particular help with staffing public services (for example,
    medical professionals), it was believed that migration flows could be managed so as to avoid possible detrimental effects (such as congestion or poorer economic prospects) for existing New Zealanders.

    Since then, New Zealand has had substantial gross and net immigration, which has been relatively skill-focused by international standards. However, New Zealand’s economic performance has not been transformed. Growth in GDP per capita has been relatively lacklustre, with no progress in closing income gaps with the rest of the advanced world, and productivity performance has been poor. It may be that initial expectations about the potential positive net benefits of immigration were too high.

    Based on a large body of new research evidence and practical experience, the consensus among policymakers now is that other factors are more important for per capita growth and productivity than migration and population growth. CGE modelling exercises for Australia and New Zealand have been influential in reshaping expectations.

    Like

    • When chefs are at the top of the skilled migrant list last year together with front desk managers then clearly this is driven by the tourist industry rather than any actual government policy.

      Like

      • If your chefs and front desk managers are earning a base salary of over $75,000 then I agree that they are ‘skilled’ otherwise I reckon I could do the job and I’m certainly not skilled.

        Like

      • Hotels go overseas for managerial staff. My friend got a job as a night manager but quit as it also involved cleaning the toilets. Of course that was his choice but I don’t recall the pay being special.

        Like

      • Bob, so you can cook a decent dim sum meal? That’s what the Chinese eat each morning and for lunch. How about that duck roast hanging in the window? I guess for Indian curries you could just open a can of Pathak curries from the supermarket.

        What about language skills? You can advise in the different languages all the essential services?

        Like

  14. Carl Popper
    First of all, proportional representation confers, even if only indirectly, a constitutional status on political parties which they would otherwise not attain. For I can no longer choose a person whom I trust to represent me: I can choose only a party. And the people who may represent the party are chosen only by the party. And while people and their opinions always deserve the greatest respect, the opinions adopted by parties (which are typically instruments of personal advancement and of power, with all the chances for intrigue which this implies) are not to be identified with ordinary human opinions: they are ideologies.

    https://www.economist.com/blogs/democracyinamerica/2016/01/karl-popper-democracy

    Like

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