Issues that matter

Richard Harman blogs at Politik:

“People who are in their homes or any community around New Zealand today are focussed on four issues,” he said.

“Does the family have the jobs they need to support themselves?

“Do they feel safe in their community?

“Are their children getting a decent education?

“Is the health system going to perform for them?

“People worry about the issues that actually matter to them.

And all four are going in the right direction. Record job growth, falling crime, more kids achieving at least NCEA Level 2 and the health system performing way better than seven years ago.

Labour demands stand down due to Minister’s brother!!!

3 News reports:

Prime Minister John Key must stand down a Cabinet minister whose brother has been charged with sexual offending against a child if there’s any chance of a conflict of interest, Labour says.

This is bottom of the barrel stuff, attacking Ministers over what a sibling may have done.

You do not stand down a Minister because an adult sibling has been charged with something. At the most, you would make sure they have no involvement in any discussions or decisions on that case (if that even applied).

Would Andrew Little stand down as Leader of the Labour Party, if one of his siblings was charged with a crime? Of course not.

Labour leader Andrew Little says Mr Key must uphold the highest standards of government.

“If there is any chance of a conflict of interest in the portfolio of this Cabinet minister and the charges a family member is reportedly facing, then they should be stood down,” he said.

The use of the words “any chance” is equivalent to asking someone to prove a negative.  The reality is the Police have operational independence, so it doesn’t matter who the accused’s brother is.

Politics should be about what an MP or Minister has done, not about what their sibling has done.

I recall President Obama had an uncle arrested for drunk driving and facing deportation. By Andrew Little’s logic, Obama should have stood down as President while the case was being heard!

Just a desperate attempt at publicity.

Australian deficit projected to hit $45 billion

Adelaide Now reports:

AUSTRALIA is facing deficits “as far as the eye can see’’ and next week’s Federal Budget is likely to be $41 billion in the red, respected economic forecasters have predicted.

The 2015-16 budget is likely to include a $41.3 billion deficit — a $14 billion deterioration since the December update, according to a report by Deloitte Access Economics to be released on Monday. The underlying cash deficit would be $45.3 billion.

And because of the Senate, the Government can’t get through policy changes to reduce the deficit. It may be a very long time until Australia gets back into surplus.

Glorivavale

The Press reports:

“Did you know”, Hopeful Christian whispers, “that some medical vaccines contain the embryos of aborted fetuses? Did you know that? Aborted fetuses. That’s what they put in them. Right? Now, tell me this: why on earth would anyone want to vaccinate their children?”

Can’t you just imagine huge factories of aborted fetuses, turning them into vaccines!

ABC News reports what the case actually is:

A small but growing number of parents who object to vaccinating their children on religious grounds say they do so because many common vaccines are the product of cells that once belonged to aborted fetuses.

There is a grain of truth to this statement. But even religious leaders, including a future pope, have said that shouldn’t deter parents from vaccinating their children.

Some childhood vaccines, including the one against rubella — which is part of the MMR vaccine given to millions of children worldwide for measles, mumps and rubella — is cultured in “WI-38 human diploid lung fibroblasts,” according to the U.S. Food and Drug Administration’s fact sheet on the vaccine’s ingredients.

Merck, the vaccine’s manufacturer, acknowledged that those cells were originally obtained from an electively aborted fetus. They were used to start a cell line, which is a cell multiplied over and over again to produce cells that are of a consistent genetic makeup. The WI-38 cell line is used as a culture to grow live viruses that are used in vaccines.

Vaccines Developed Using Human Cell Strains

“Merck, as well as other vaccine manufacturers, uses two well-established human cell lines to grow the virus for selected vaccines,” Merck said in a statement to ABC News. “The FDA has approved the use of these cell lines for the production of these Merck vaccines.”

Other common vaccines, including those for chicken pox, hepatitis and rabies, are also propagated in cells originating from legally aborted human fetuses, according to the FDA.

“These abortions, which occurred decades ago, were not undertaken with the intent of producing vaccines,” said a spokeswoman for the U.S. Centers Disease Control and Prevention.

The original cells were obtained more than 50 years ago and have been maintained under strict federal guidelines by the American Type Culture Collection, according to Merck.

“These cell lines are now more than three generations removed from their origin, and we have not used any new tissue to produce these vaccines,” the company added in its statement.

To say that the vaccines contain a significant amount of human fetal tissue, as some objectors to the vaccines claim, is misleading, stressed Dr. Paul Offit, the director of the vaccine education center at the Children’s Hospital of Philadelphia.

“There are perhaps nanograms of DNA fragments still found in the vaccine, perhaps billionths of a gram,” he said. “You would find as much if you analyzed the fruits and vegetables you eat.”

Anyway back to Gloriavale:

“Living out there in the world, you don’t really know how selfish you are,” he tells me, before asking whether I’m married and have children. Not yet, I tell him. Christian turns away, looking visibly aghast. He glances around the room at the faces of other Gloriavale leaders. There is awkward silence. The other men look away too. Eventually, Christian muses: “But why not? You’re over the age of 16, aren’t you?”

Heh, I should visit there!

“Our expectation and aim is that our young people come to marriage as virgins,” explains Fervent Stedfast, a senior Gloriavale leader.

Don’t they have the coolest names?

“I would say you have the greatest collection and concentration of virgin young people here than anywhere in New Zealand

That whooshing sound you hear is Sean Topham on a flight to the West Coast

“Jesus Christ is coming back one day soon,” announces Fervent Stedfast at meal time.

Can he be more specific, because if so I could make some some money on iPredict.

2015 Press Freedom Debate

From Brent Edwards:

The EPMU Press Freedom Debate will be held at the Backbencher Pub on Thursday, May 7. Doors open at 5pm but the fun debate itself will start about 7.15 to 7.30pm.

The debate will raise money for the Media Safety and Solidarity Fund which supports press freedom and journalists’ safety in the Asia-Pacific region. Specifically the fund helps pay the education costs of about 100 children of journalists murdered in the Philippines and about 20 children of journalists murdered in Nepal. We have just agreed to fund a similar project in Pakistan.

The moot is: That only new MPs have anything worthwhile to say.

The affirmative: Chris Bishop, James Shaw, Marama Fox
The negative: Peter Dunne, Metiria Turei, Chris Hipkins
The chair: Carol Hirschfeld

The tickets cost $25 each.

Contact me on [email protected]

I’ve been to a few of these (and even been in one of the teams) and they’re usually pretty funny (and rude) affairs.

 

Lole-Taylor moves to Australia

Stuff reports:

A former NZ First MP and her husband have left the country under the cloud of a police investigation.

Asenati Lole-Taylor and her husband Dennis Taylor packed up their belongings and moved to Australia in March, effectively stalling a police investigation into allegations they wrongly accessed the criminal records of a former NZ First Party official.

A coincidence I am sure.

The one-term MP had a colourful record in Parliament raised eyebrows with some of her more outlandish outbursts on twitter and elsewhere.

Parliament was stunned when she asked the police minister if she would feel harassed if she was asked “how much for a blowjob”.  Lole-Taylor later got into a row on Twitter about prostitution and asked users if they were themselves prostitutes before hitting the block button.

She was roundly ridiculed for suggesting the Reserve Bank should be New Zealand owned and on another occasion took it literally when a journalist accused her of shooting the messenger, believing he had accused her of shooting a  parliamentary messenger.

The highlight for me was her continual insistence the Reserve Bank of Australia was foreign owned.

RIP Frana Cardno

Stuff reports:

Hundreds of people giggle as they flap their arms, turn in circles, and clap during a funeral.

This could only be the send off for former Southland District mayor and kindergarten teacher Frana Cardno.

In the picturesque setting of Ivon Wilson Park, Te Anau, mourners were greeted by the scent of beech trees as the sun dried rain from their leaves, and bellbirds sung from their branches.

I met Frana back in the mid 1990s when I was helping organise publicity for the Te Anau Scout Jamboree. Very smart and focused, and I noted each subsequent local body elections saw her re-elected as District Mayor for Southland.

She was Mayor of Southland District from 1992 to 2013.  I doubt there was anyone who lived down there who did not know her.

Condolences to her family and friends.

English on spending

Bill English said last week:

Without slashing and burning, we have managed to rein in the runaway government expenditure that was a feature of the Labour Government in the early 2000s, when spending increased by 50 per cent in five years.

And we’ve done that while significantly improving public services.

The total annual cost of new initiatives in the Government’s last six Budgets is less than $2.9 billion. By comparison, this extra cost in the last six Budgets of the previous Government totalled $20 billion.

That is a massive difference. And it is impossible to imagine that a Labour-led Government could have restrained extra spending like that.

The Treasury now expects nominal GDP over the next four years through to 2019 to be around 1.5 per cent lower than forecast in Budget 2014 – mainly because of lower inflation.

That is about $15 billion less and, to put that in context that is more than half of the impact of the global financial crisis.

So these conditions are presenting some real challenges for the Government’s books because it’s the nominal economy that drives PAYE, company tax and GST receipts.

In addition, although we’re seeing more bank deposits which would ordinarily lead to us collect more tax, these are being more than offset by lower interest rates.

Consequently, the Government is collecting less tax.

In which case we should spend less, to match.

In total, Treasury now expects the Government will collect $4.5 billion less tax revenue over the next four years than it expected at the last Budget.

The lower-than-expected revenue, as well as some quite significant non-cash items in the Government accounts, means getting back to OBEGAL surplus is more challenging.

In the Half-Year Update in December, the Treasury forecast an OBEGAL deficit of around $570 million for the 2014/15 year, which is just 0.2 per cent of GDP.

And it forecast a similar OBEGAL surplus for 2015/16.

The Treasury is still finalising its forecasts for this year’s Budget.

But it’s fair to say that both of those forecasts have deteriorated a little since the Half-Year Update.

So we expect the Budget to forecast a slightly bigger deficit for 2014/15 and to forecast a slightly smaller surplus for 2015/16.

This is not the end of the world, but it does mean the Government has failed to achieve the target it had. And we need the Government to not only achieve surplus, but to have large enough surpluses to pay off debt. This means even more spending restraint.

So despite the downturn in revenue, we will stick with the $1 billion annual operating allowances for Budgets 2015 and 2016.

We have a track record that I think the public understands.

We’ve maintained welfare support, we’ve maintained and improved health and education, and we’re thinking ahead to the requirements of a growing economy and a better community through to 2020.

We won’t change that approach just to turn a small forecast deficit into a small forecast surplus. Other things matter more.

It is worth remembering though that the smaller the state’s portion of the economy is, the faster the economy tends to grow. That’s not an argument for a minimal state which can’t provide any social services. But it is an argument for greater fiscal discipline and the aim shouldn’t just be to get expenditure to under 30% of GDP, but around 25% over time. The more money families and businesses have, the better it is for the economy.

How many Labour MPs have staff on zero hour contracts?

The Telegraph reports:

Another case in point – zero-hours contracts. Ed Miliband has somehow been allowed to get away with turning zero-hours contracts into an issue in this election campaign, even though the government of which he was a part did nothing about them for 13 years. Not only that, but 68 Labour MPs have employed staff on zero-hours contracts in the past two years, including Miliband’s Parliamentary Private Secretary. Could his hypocrisy be any more blatant?

That’s got me thinking. Many political parties and MPs have staff on casual contracts with no set or guaranteed hours. A smart journalist would ask the MPs campaigning against zero hour contracts, how many staff do they have on a zero hour contract?

It’s like the 90 day trial periods. Labour and Green MPs campaigned against all other employers being able to dismiss staff during a 90 day probation period. Yet they have their parliamentary staff on a permanent probation period where they can be dismissed at any time, without cause, if the MP just loses confidence in them. I doubt the hypocrisy on that issue is isolated.

Reduce company tax by 1% a year?

ACT proposes:

ACT Leader David Seymour is proposing a programme of one per cent per year reductions in the company tax rate.

Company tax would drop by a percentage point each year for eight years, to a target of 20%.

“In Budget 2015, the Government should be signalling continuous improvement in our business environment, and this proposal does that,” said Mr Seymour.

ACT’s proposal would reduce revenue by around $170-180 million each year, which could be funded by a share of existing planned net expenditure growth and the phase-out of existing corporate welfare.

The Government has an allowance of $1 million a year for new initiatives. It should not all go on extra spending, but some should go on tax relief, and this is a modest and affordable proposal.

A company tax rate of 20% would attract more investment to NZ, which means more jobs and more income.

Calorie labels for alcohol

The Herald reports:

The fashion for large wine glasses has fueled a rise in the number of “invisible” calories people are inadvertently consuming through alcohol, the chair of the Royal Society for Public Health has warned. …

The European Union is considering whether to remove the exemption for alcohol and was due to report back in December, but has so far not ruled on the issue. A recent survey found that 80 per cent of the 2,117 adults questioned did not know the calorie content of common drinks, and most were completely unaware that alcohol contributed to the total calories that they consumed.

Most respondents were in favour of calorie labelling on alcoholic drinks.

The US Food and Drug Administration has mandated calorie labelling on alcoholic drinks from December 2015 in US restaurant chains with 20 or more outlets.

It seems strange to have calorie labelling on food and non alcoholic drinks, but not on alcoholic drinks.

I’m in favour of treating alcoholic drinks the same as non-alcoholic drinks, and mandating they should have calorie information.

For those interested the calorie counts for some common alcohol is:

  • half bottle of wine – 350 calories
  • Six pack of beer – 900 calories
  • hip flask of vodka – 820 calories
  • 4 RTDs – 920 calories

The value of port land

The Herald reports:

Ports of Auckland is sitting on land with a commercial value of $2.2 billion, far greater than its $76 million value for port use, says an economist.

What’s more, the value of the land will rise to $3 billion in 10 years, says freelance economist Dr Aaron Schiff.

His figures are based on converting half of 61.6ha of port land, excluding wharves, for private use, with the remainder becoming public space. Dr Schiff has challenged Ports of Auckland’s economic information in a paper written for the Committee for Auckland, an independent organisation of business leaders.

I think there is a huge opportunity cost of having prime waterfront land used as storage for logs and cars. The locations of ports made sense in the 1950s,but makes no sense in the 21st century when waterfront land is the most expensive and desirable you can get.

Imagine in Wellington if the port was primarily at Seaview – an industrial area already. The current port land could host apartment blocks for thousands of people, cafes, restaurants, shops and a huge park for walking, running and cycling. We already have a great city, but an extended waterfront which extended all the way to the Hutt Road, around the stadium would be superb.

Hide on Little

Rodney Hide writes in the HoS:

The old hands weren’t so sure. Dumping on your own candidate didn’t seem right. And Labour’s support for Peters embarrassed them.

They also knew that giving Peters an opportunity, any opportunity, would not necessarily develop to Labour’s advantage.

This week’s Herald-Digipoll survey confirmed their worst fears. Little is polling below Labour’s previous leaders, David Cunliffe and David Shearer.

Peters is breathing down his neck. Key remains on 51 per cent as preferred Prime Minister.

Peters has emerged the victor with a soapbox. It’s he who beat National in a safe seat. It’s Peters who is giving Key a contest. It’s he who is news.

Little has crowned Peters Leader of the Opposition. It’s hard now to see what Labour has gained.

Peters took their support, brushed them aside and now eclipses them. Such is his power and ability.

He’s now not pinching National’s votes. He’s pinching Labour votes.

Indeed. In March National was only 15% ahead of Labour in the polls. In April the average has them 20% ahead.

Ministers not responsible for siblings

What a beat up story in the SST. Stuff reports:

A Cabinet minister’s brother is due to appear in court this week on child indecency charges.

The man has been summonsed to appear in the District Court on Tuesday — but the man’s lawyer, high-powered Queen’s Counsel Jonathan Eaton, last night went to the High Court in Christchurch to obtain an injunction stopping theSunday Star-Times naming the man or the minister concerned.

The minister did not respond yesterday to questions about whether he would stand down while the case was before the court. 

Why on earth would he? It’s slimy to even ask the question. Unless the case directly involves the Minister, he has no responsibility for adult siblings.

Prime Minister John Key, who was at the National Party regional conference in Waitangi, also failed to respond to questions about whether he would stand the minister down from Cabinet.

Again, ridiculous to even ask.

Earlier this year, Labour spokeswoman Carmel Sepuloni stepped aside while her mother was before the courts on benefit fraud charges.

She did not stand down as a Minister (as she isn’t one) or even an MP. She temporarily swapped portfolios as Labour thought there was a conflict with the specific portfolio. That is very different to stepping down from all portfolios as a Minister.

I also think there was no need for Sepuloni to have even stood down in the welfare portfolio, and said so at the time. Hold MPs accountable for what they do, not for what adult family members do.

Auditor-General on Auckland Council consents

An interesting report by the Auditor-General into Auckland Council consents:

Although Building Control has various ways of communicating and interacting with its customers, I am concerned that communication is not as good as it should be. Surveys show that customers are not satisfied with how Building Control communicates. The fact that 70% of consent applications lodged go “on hold” pending further information suggests that there is a large gap between what Building Control expects and what customers believe is expected of them. Architectural and building firms told us that Building Control does not always communicate well or in a consistent way. Auckland Council recently commissioned a large audit focused on customers, which found that communication is one of the areas where improvements can be made.

In an ideal world, the Council would have an online process that can verify it has the necessary information, so there is no having to go back for more.

Auckland Council is technically meeting the statutory deadline for processing most building applications, complying with statutory time frames 98.5% of the time in 2013/14. The average time to process applications is 9-10 working days, much less than the statutory time limit of 20 working days. But the statutory time frame allows all territorial authorities to exclude the days that the application is put on hold.

When the total elapsed time from lodging the application to issuing the consent is considered, Auckland Council processes 80% of applications within 40 working days. However, in exceptional circumstances, some applications can take more than 100 days to process. This includes the time it takes customers to provide the additional material requested.

Five months is a very long time to wait for a consent.

Note these are working days. So 40 working days is two months.

The process of approving consent applications is largely paper-based. Relatively straightforward consent applications require a lot of paper. This is inefficient and costly for Auckland Council and applicants. Auckland Council is planning to introduce electronic lodgement of consent applications, and the forecast efficiency gains seem compelling. In my view, the electronic system should be introduced sooner than planned.

Yes.

However, I noted that the average cost of a sample of actual consent fees in Auckland was significantly higher than the fees shown on Auckland Council’s website. This suggests that more time was needed to process the consent applications than was expected. The differences from other local authorities provide an opportunity for Auckland Council, and all local authorities, to discuss how to get costs into line or to make comparisons easier.

I believe we should have competition between consenting authorities. If you think one consenting authority is too slow or expensive, then you should be able to go to another.

It would be a great opportunity for some of the more efficient Councils to provide consenting for other areas of NZ.

Electoral Commission off to Court of Appeal

The Electoral Commission announced:

The Electoral Commission today filed papers with the Court of Appeal seeking to clarify the meaning of “election advertisement” for the purposes of the Electoral Act following two recent decisions of the High Court that appear to take different approaches to the legal interpretation of its meaning.  The Commission is also seeking to clarify the meaning of “election programme” under the Broadcasting Act. …

In the lead-up to the 2014 General Election, two cases were brought before the High Court challenging advisory opinions provided by the Electoral Commission which had advised that certain items were “election advertisements” under section 3A of the Electoral Act.  The Commission has lodged an appeal of the more recent decision to clarify the approach the Commission should be taking to the interpretation of “election advertisement” when issuing advisory opinions and to “election programme” when providing advice on election broadcasting.

The appeal is limited to questions of law.  The Commission is not seeking to challenge the findings in the Watson decision as they applied to the particular facts in that case. 

It’s good that they are not looking to challenge the specific findings in the Planet Key decision. This means the court case is just about getting clarity on the law for future.

Again I think the time has come for broadcasting to be treated the same as other mediums for electoral purposes, so the same law applies to all advertisements.

Hooton on Little

Matthew Hooton writes at NBR:

Mr Little started strongly. His call in Parliament for Mr Key to “cut the crap and just apologise” risked being tut-tutted but it hit home beautifully after the prime minister’s ever more ludicrous denials over his staff’s abuse of SIS information.

As the number of such scandals increased late last year, Labour strategists advised their leader that Mr Key’s government was entering a terminal phase.  Based on the doctrine that “oppositions don’t win elections; governments lose them,” Labour’s backroom recommended Mr Little and his MPs largely drop out of the public eye and let the inevitable unfold.

The strategy reached its zenith with the decision – which I thought made a lot of sense at the time – not to contest the Northland byelection but implicitly back Winston Peters.  It was argued it would do more harm to National, and thus more good for Labour, for Mr Key’s numbers in Parliament to be cut than for Labour to run a serious campaign.  Sure enough, Mr Peters humiliated National in a seat it had held since 1943.

But whatever caused Mr Peters’ landslide – the Sabin cover up, the disgraceful bridges bribe, a weak candidate, Steven Joyce’s ham-fisted campaign, the thrill of voter rebellion without changing the government, the lure of a celebrity as local MP – it has had no wider impact on Mr Key’s poll numbers.  The overwhelming beneficiary has been Mr Peters who is now touching Mr Little in the preferred prime minister stakes. By far the main loser is the Labour leader who now polls worse than Phil Goff, David Shearer or David Cunliffe.

It was a strong start last year, but Little is now having to fight off Peters for the mantle of Opposition Leader. And the last two polls have Labour back in the 20s, not the 30s.

No red bus

It didn’t have to be this way. Mr Little could have hired a big red bus and travelled through Northland with his candidate and the press gallery, visiting some of the poorest parts of the country trying to shock middle New Zealand. Labour would ultimately have lost but Mr Little would have built up his profile, National would be burdened with a weak local MP and Mr Peters would not have re-emerged as either a prop for a National fourth term or a potential candidate for the prime ministership in a Labour-majority regime.

Also Labour may have pushed away their best chance of Government. Peters won Northland by vowing not to change the Government, just to hold them to account. He is now an MP in a very blue seat. If he holds the balance of power in 2017, is he going to put Labour and Greens into power? Less likely now he is MP for Northland.

Labour’s decision in Northland was a classic example of being a good tactical decision, but a bad strategic one.

Dotcom gets what may be his final delay

NBR reports:

A High Court judge has given Kim Dotcom and his co-accused more time to prepare for their extradition hearing.

The US government wants Mr Dotcom and co-accused Finn Batato, Mathias Ortmann and Bram van der Kolk to go to the US to face copyright infringement charges for their alleged roles in file-sharing site Mega Upload.

While District Court judge Nevin Dawson had said the extradition hearing should take place on June 2, Justice Sarah Katz has quashed this decision. The High Court judge has told the District Court to set a date no earlier than September 1 this year.

 

September the 1st is a Tuesday so that day works!

However, the judge did not let Mr Dotcom and his co-accused off without a warning.

In her decision she says she has decided “with some reluctance” that the interests of natural justice require a later date.

“This should not be taken by the plaintiffs, however, as a signal that any ongoing funding or representation difficulties [if they arise] would be likely to justify further adjournments.

I would be willing to wager a lot of money that in a few months they will seek a further adjournment.

“On the contrary, the plaintiffs must take full responsibility for preparing their extradition hearing on whatever new date is allocated, with whatever level of legal support they are able to secure.”

Although Justice Katz tossed out Mr Dotcom and his co-accused’s arguments that they had not been given full and proper notice of the case, she said they were unable to prepare due to representation and funding.

 

The Justice is being generous. Dotcom had so much money he spent over a million dollars on the worst CD of all time. He also spent $4.5 million on possibly the worst political campaign of all time.

Because he spent all his money on music and politics, he couldn’t pay his lawyers, and hence he gets a delay.

Hopefully this is the last delay.

Guest Post: Investing in a better understanding of Auckland’s ‘housing problem’

A guest post by Michael Sloan:

Have we truly thought through policies proposed to resolve the Auckland property price issue?  Property prices in Auckland are not just rising because there is a lack of housing or because of the RMA process.  They are fundamentally rising because people are still moving to Auckland despite the higher, and increasing, costs of living.  People moving fundamentally believe that the benefits of living in Auckland outweigh the higher costs associated with living there.  That shouldn’t come as a surprise, because the agglomeration effects of living in increasingly large cities (the city effect) is extremely powerful and self-reinforcing.

As regional geographers, we know that difficulty arises because people are very willing to make short term sacrifices in exchange for anticipated long term benefits. My own research in New Zealand has shown that individuals also trade-off costs in some areas of their life for positive returns in areas of their life they deem more important.

In the case of Auckland these long term benefits are better employment and career outcomes than are possible outside of Auckland.  This is also generally true of any town or city relative to a smaller settlement.  Another ‘trade’ that individuals are making in exchange for accepting higher living costs is the positive social effect of moving to a larger city. There are benefits associated with being in closer proximity to more people, more social opportunities and services, and also benefits associated with other friends and family moving to Auckland.  The more important employment, careers and social lives are to movers, the more they are willing to sacrifice their satisfaction in other areas of their lives, such as their cost of living.

One reason that wages haven’t increased as fast as housing costs have in Auckland is likely to be because the influx of workers is keeping local wage inflation low.  This is likely exacerbated by the after-effects of the recession.  Neoclassical economists and geographers talk about regional equilibrium, frequently in terms of wages and regional wage differentials.  The increasing gap between wages and housing costs should discourage an increasing proportion of people considering moving to Auckland from doing so, thus acting as a brake on its population growth.

As a result, any policy, intervention or action (even private) that decreases housing costs in Auckland will have an impact on the city’s growth, beyond shaping where people chose to reside within the city.  A decrease in the cost of living in Auckland will increase the relative attractiveness of the city and therefore increase the flow of people into its boundaries.

The increased migration may also suppress wage growth, further encouraging businesses into the area, at the expense of employment opportunities in other towns and cities.  Low wage growth would increase the relative cost of housing.  This may slow population growth, but less so if people continue to prioritise longer term career opportunities over higher short-term costs of living. 

As a result, there is a strong probability that even a surge in home building will likely lead to little improvement in long-term house affordability.  Quite clearly, and more importantly, manipulating one facet of policy can have a large effect on other urban systems and processes, often in unexpected ways.

Both doing something and not doing something has a human cost.  It goes without saying that high house prices have a detrimental effect on people.  It is most heavily borne on those who are our least economically equipped.  Regional labour models usually fail to humanise the effect associated with ‘impediments to the free flow of labour between regions’.  That is, that people have attachment to place, and generally experience poorer outcomes when they are forced into moving. 

Further, there are those that suggest that the economic benefits associated with large cities is essential to our economic success, or even survival. That the increased productivity afforded by the city effect is essential to maintaining our standard of living. Others believe that the success of our cities are hollowing out our regions, and in the case of Auckland, hollowing out our smaller towns and cities.

The difficulty we have with talking about the effects of large complex systems is that all too often it is reduced to bite-sized discussions about specific aspects of the system in isolation, largely because it is difficult to talk about the system as a whole in the same detail.  It is an issue this piece also faces in the interests of remaining relatively concise.  A result is that solutions and criticisms are suggested in isolation of their impact on the system as a whole.

I now live outside of New Zealand, but I believe strongly that the regional processes leading to the rapid growth of Auckland and decline of rural areas should be an issue of national interest.  New Zealand absolutely needs to place greater importance on the research of those studying the regional processes that lead to the very real issues associated with what we see as Auckland’s rapid population growth.  By doing so we can have a better understanding of the real costs and benefits of implementing specific policies.  It will require investing more into this critical area of research and building on the very high quality work already being undertaken by those in these fields.  This investment, however, will be more than justified in both economic and social terms if it leads to better decision making.

Michael Sloan, PhD

Review websites help make informed choices

The Herald reports:

Websites offering customers the chance to review their dining experience were “parasites” on the food industry, says an angry Auckland restaurant owner who’s come out swinging at Zomato.

“At the end of the day the only way those guys make money is off our hard work,” said Jonny Rudduck, owner of Ponsonby Rd Italian eatery, il buco.

“Without us they are nothing and in my view, they’re parasites …”

That view point says more about the owner, than it does about review sites.

Review sites allow customers to have a voice. That is a good thing. Owners can respond to the comments.

I’ll never not go somewhere just because of one bad review. But I will look for patterns – multiple bad reviews. I also look for if the bad review seems to be a one off or a systematic issue.

I use Trip Advisor constantly to choose hotels and restaurants when travelling. The average ratings get it right around 95% of the time. Without such review sites, it would be almost random luck where you go.

Yes it can be frustrating to have an unfair bad review. But the answer to bad data, is more (good) data. Not to try and ban data. Encourage all your happy patrons to review you also.

Copyright and the Internet

A very useful paper by Susan Chalmers on the issues around Copyright and the Internet. It covers:

  • temporary copy rights
  • text and data mining
  • APIs
  • Geoblocking
  • User-Generated Content

The Government is due to soon commence a review of the Copyright Act. I hope it will be a first principles review that will look at whether the law should focus on use rather than copying.

Let Greece default

The Herald reports:

Like a spoilt child and an angry parent locked in an experiment of tough love, Greece and its creditors are embroiled once more in a tug-of-war whose stakes are the future of the debt-ridden country and maybe the euro itself.

By May 9, Greece’s hard-left Government has declared, a deal will emerge to unlock €7.2 billion ($10.22 billion) in fresh credit and keep the economy afloat.

Without it, Greece will default and may even exit the eurozone, triggering the greatest challenge to Europe’s single currency in its 13-year history.

It’s near inevitable. Greece seems to think the rest of Europe should pay its bills. Let them have their own currency.

Let a bankrupt Greece be held up for the next few decades of what happens when you elect Governments that just increase spending and debt, and then can’t even pay the interest on its debt.