Sunday , August 1 2021
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Articles by Eric Crampton

Give them residence

3 days ago

Apologise, then make it right.Oliver Hartwich makes the case for granting residence to those non-residents who have been in New Zealand through last March’s lockdown and who have stuck with us since then. A few days ago, the Otaki Medical Centre posted about one of their doctors on Facebook: “We’re disappointed to have lost Dr Richards back to the UK after being unable to secure him and his family residency due to a Government freeze in place with COVID-19,” the GP practice wrote.“Here is an amazing doctor, who cares about our community and wanted to make NZ home. Sadly – after months of fighting – we have had to close the practice to new patients.”Dr Richards is one of many migrants affected by the government’s restrictive and inflexible residence policies. According to a Newshub report,

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Supermarkets and land use planning

4 days ago

If you’re going to read the Commerce Commission’s market study on supermarkets in New Zealand, I’d suggest starting with the first half of Chapter 6. There, they go through the effective difficulties in entering the New Zealand market. As far as I’m concerned, evidence on margins and such really don’t mean much unless there are substantial restrictions against new entry. High profits should motivate entry, if they’re real. If they’re not motivating entry, what’s stopping entry?ComCom’s presentation of the issues in Chapter 6 reverses the sequencing of how I’d think about it, but gets to the same spot. I’ll put it in the way that makes sense to me.They note that opening a new supermarket retail chain requires having a lot of sites near potential customers.At 6.102, the study starts in with

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The post-vaccination future

4 days ago

This week’s column in the Stuff papers got me angry letters from the anti-vax people. I mostly look out to the US and Canada, and what things they’re up to now that vaccination rates are high. There’s a lot of support for vaccine passports in helping people avoid venues that have a lot of riskier people in them. Majorities of Canadians surveyed in late May,
when only 54% of Canadians had had at least a first vaccination dose, and again in July,
supported proof-of-vaccination requirements to board commercial airline
flights; to travel internationally; to attend public events or large gatherings;
to visit public places like restaurants, movie theatres and churches; and, to
attend one’s own place of work.

Quebec will be requiring proof of vaccination for entry into high-risk places like

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Afternoon roundup

10 days ago

If I’m lucky, this will close a third of the browser tabs.A damning indictment of the state of medical research, in the British Med J, from its former editor. "We have now reached a point where those doing systematic reviews must start by assuming that a study is fraudulent until they can have some evidence to the contrary."Jon Brewer is trying to make the MIQ booking system work. It is deeply broken. I hope he gets somewhere. It needs to be fixed. It is difficult to take a hard line on covid testing results being a few minutes past the deadline when they aren’t even bothering to check most folks’ records. Chalk this one up as part of the problem in efficient punishment. Even if it weren’t the case that the probability of being caught matters more than the fine if caught for otherwise

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Not a systems problem?

12 days ago

Were you aware that all the queues outside the old Soviet shops weren’t a systems problem, but a problem of demand just being too high?Here’s the head of MIQ, last week, on the MIQ booking system. The joint head of MIQ has responded to allegations the booking system is broken, saying a current high demand for rooms explains the difficulties travellers have had trying to lock down a spot.Speaking from Parliament on Wednesday, joint head of MIQ Megan Main said high demand had put pressure on the room allocation system for the 31 MIQ facilities across New Zealand – although the Government was looking for a solution.“This isn’t a systems problem so much as a demand versus supply problem. Right now, the demand is high.”Meanwhile, the Ministry of Health finally admitted that its vaccine

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Treating migrants badly

14 days ago

When we moved to New Zealand in 2003, the contrast between the US Immigration system and New Zealand’s was stark. They were near opposite, really. The US system seemed designed to discourage entry. New Zealand’s was far better. I had received the job offer from Canterbury by March 2003. I accepted and put in for a skilled migrant visa. There was no need for an immigration lawyer because everything was simple. The only complication happened when the Canadians took forever to run my police background check. The FBI ran my prints and took about 3 weeks to say I wasn’t known to be a criminal. The Canadians got my prints at the same time and took 4 or 5 months. They took so long that my medical certificates from the US expired while I was waiting. So I had to redo the medical check while on a

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Bomb the city to save it?

17 days ago

The ongoing difficulties with heritage restrictions in Wellington are a bit of a problem. Can’t build houses where people want to live. Can’t bowl earthquake-prone defunct old buildings. And can’t even get decent ticketing systems at the rail station because somehow the turnstiles would impede the heritage stuff. When you get this level of institutional ossification, well, the bombers may be the only solution.This week’s third column in the Initiative’s newsletter. The third column is meant to be satire. Or despair. Japan’s post Second World War economic growth was astonishing. Despite widespread devastation, Japan produced an economic miracle.Economist Mancur Olson provides the most compelling explanation.I wonder whether his lessons might apply to continued difficulties in

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Another day, another J-curve

18 days ago

From the Mayo clinic:During a median follow-up of 8.9 years, we documented 8652 incident cases of all-cause death, including 1702 cases of cardiovascular disease death, 4960 cases of cancer death, and 1990 cases of other-cause death. After adjustment confounders and amount of alcohol consumed, higher DHS was significantly associated with a lower risk of all-cause mortality, cardiovascular disease mortality, cancer mortality, or other-cause mortality (Ptrend

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For a better price cap

19 days ago

New Zealand’s ETS has a price cap. It needs a better one.When the carbon price hits $50, the government releases more units into the system. Some of those units are ones that are already within the cap. The government reduces the number of units auctioned each year within the cap to account for stockpiled older units it expects to be redeemed that year. If those stockpiled units fail to be redeemed and are instead held, there will be price pressure. So the government then auctions more units. And again – this is still within the cap. If the stockpile isn’t run down this year, there will be more stockpile left next year, and we’d then expect fewer units auctioned by the Crown to account for that. After that runs out, the government can release more units – units that are over the cap.

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Morning roundup

19 days ago

The morning’s browser tabs:Newsroom picks up on BusinessDesk’s prior reporting on MIQ ghost rooms. Much credit goes to Cameron Conradie’s constant reporting on the numbers. BusinessDesk pointed out that the MIQ system is constantly overwriting its own data so that it is impossible to get, from them, the prior track. I wonder what the Archivist would make of this because it sounds like deliberate destruction of Official Information which may have to have been backed up by a Disposal Authority. Anyway we’re losing skilled migrants who rightly view there as being no chance that the government will fix the system, because the government starts by hating migrants and viewing allowing any of their families in as actually being a bad thing. While it is still good to live in NZ as a permanent

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The Grand Deal

19 days ago

Josh Gans explains how getting vaccines developed and delivered is supposed to work, and how Australia (and NZ, though he doesn’t mention us) have failed. I worry that NZ is set to repeat this particular kind of failure. We need to be getting orders in right now for the delta-variant shot that Pfizer’s developing. Pay a pile for it up front. Order twice as much as we need, for rush delivery at the actual front of the queue. Give the doses we don’t need to whichever other country looks like they most need it. It’s still a bargain, and it’s the right thing to do. Here’s Josh:Let me explain the grand deal because I don’t think it is commonly thought about and it is certainly not explicitly written down. But it goes like this. If we were to think purely ethically, we would want every person

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Afternoon roundup

20 days ago

The browser tabs…The Internet Archive will help improve access to a lot of books currently held by the National Library. Naturally, this upsets some people. Mike Joy wins a battle over what "natural levels" of nitrate in aquifers might mean.Places where the local schools are funded by higher levels of government wind up trying to privatize the public schools through zoning. Everything’s tradeoffs though, eh? If schools are funded by the local communities, poor places get really bad schools. It’s instead a good argument against even greater anti-NIMBY vigilance.Potential nudges to improve compliance with scanning-in for Covid tracing. I’d add one more: put the QR codes in lots of places. Make it easy. At the entrance is great, but if your phone isn’t ready and you’d be holding up a

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Holes in the MIQ bucket

21 days ago

Thomas Coughlin reports that the reason the government cannot expand MIQ capacity is that they can’t source enough nurses and haven’t enough testing capacity. Now documents released to the Herald under the Official Information Act show officials have been considering long-term purpose-built MIQs since July last year.But each time a new idea was floated, it hit a brick wall: the country does not have the health or security staff to sustain more MIQ places and building new purpose-built MIQ spots could create as many problems as it would solve….Ironically, MIQ, which is often held responsible for restricting the flow of labour into the country, was itself a victim of the labour shortage.A "key constraint for increasing capacity for MIQ is the availability of workforce to provide

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Hazeldine on the ETS

22 days ago

I can’t disagree with anything Auckland University’s Professor Tim Hazeldine has to say about climate policy.Also mostly pointless, are the multitude of policy recommendations that pour forth from the report. If the real decision-makers in the economy (i.e. all those listed above) are getting the correct price signal from the ETS, then there is generally no justification for further government intervention. What should be done will be done.The main exception will be in the provision of what economists call "public goods" – in particular research results that can be freely used by everyone, such as how to breed better-mannered cows.But, in any case, with the emissions price signal sorted, all proposed programmes and policies should just go through the Treasury’s standard cost-benefit

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To Arms

22 days ago

The Janssen vaccine is now approved for use in NZ; AstraZeneca should be close behind. As best we can tell, the Pfizer vaccine slowly being rolled out is better than either, but availability of doses seems to be a binding constraint.There’s some evidence now that AZ as a first shot followed by Pfizer may be better than two shots of Pfizer, or at least no worse. If we could get AZ faster, then that could speed up the vaccination roll-out. There are NIH trials currently underway checking what Janssen-based combinations are like. Safety data should soon be available. If Janssen followed by Pfizer is safe, and if NZ could get doses of it, then we could think about rolling out Janssen as first doses. That too could speed up the vaccination roll-out. Adding a second dose of Pfizer later, at the

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Morning roundup

28 days ago

The morning’s closing of the browser tabs:Customs is now seizing 125,000 cigarettes and 155kg loose tobacco per month. Why? "We have the most expensive cigarettes in the world for legal purchase."Wastewater testing says highest meth consumption, per capita, is in Kaitaia, Ōpōtiki, Wairoa, Kawerau, Tokoroa and Huntly. Lowest levels were in Kerikeri, Dunedin – Tahuna, Queenstown, Wellington – Karori, and Greymouth. Robert MacCulloch on the mediocrity-bias in the public service. Robert MacCulloch wonders why NZ didn’t just pay more to get vaccines faster. Asking this on Twitter always generates a pile of replies from Labour-stans, but come on. We’re continually vying with Australia for worst in the developed world. Oh – and if we wanted to get vaccinated faster, first doses of AZ followed by

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Biofuels mandates

July 2, 2021

The government is taking submissions on its proposed biofuels mandate.It’s an interesting one.From the consultation document:Over the first three years, 2023–2025, the Sustainable Biofuels Mandate would reduce emissions by 1,342 kilotonnes. In 2025 annual transport emissions would reduce by over 4%.They then provide a tallying of potential cost:They’re proposing to reduce GDP by $1,245 million over three years for a three-year cumulative emission reduction of 1,342 kilotonnes. There are a thousand kilos in a million. So the policy costs about $927 per tonne of reductions. The current ETS price is $43.You could buy 20 tonnes at the next auction and shred them for less than the cost of a single tonne of reductions through this policy. Why is this even going out for consultation? Isn’t this

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Credit Suisse wealth inequality data

July 2, 2021

Bob Gregory’s latest rant against the evils of neoliberals inspired me to pull together the latest Credit Suisse wealth figures. The social democracies in Europe usually turn up as a lot more unequal in wealth than NZ, and I was curious where the latest numbers might put things. The latest iteration has NZ with the 145th most unequal wealth distribution of the 168 countries in the data set, or the 24th most equal. I’ve highlighted NZ in red and Sweden, Germany, Finland and Denmark in Green (from left to right). NZ is way over on the right, just to the right of France which you can’t really see. NZ has more traditionally been toward the middle of the pack. The 2017 data had us 80th most unequal of 171, and a bit more unequal than France. This time we’re a bit less unequal than

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Supply chains in illicit markets

July 1, 2021

Credibly certifying that a product’s supply chain meets particular standards is not the easiest thing in the world. Every supplier all the way back in the chain needs to be so-certified, and there will always be fun boundary questions in how far back things need to go. For something like a t-shirt there’s the factory that makes them, the factories that makes the thread and the cloth, the places that make the dyes, the sources of the raw materials and the chemical components that go into the dyes, the people who make the machines that extract the raw materials, the company that makes the fuel for the machines and the electricity suppliers. Maybe also the companies that supply morning tea for the workers and back through that chain as well? It gets messy. Anyway – certification is possible,

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Better testing

June 29, 2021

Last week, Pattrick Smellie tried to figure out what evidence backs up the Covid saliva test that the government has hired in for testing a small number of border workers. There doesn’t seem to be much, or at least it isn’t being disclosed. The firm’s saliva test, which the Ministry of Health had wanted in place by mid-April when it first sought bids for a contract it has indicated could be worth $50 million a year, is expected to become available in Christchurch in coming days with a national rollout occurring on a staged basis through July. APHG says it has been conducting its saliva test on a small number of border and managed isolation workers since the start of the year, but has never published any information publicly on the test. On Monday last week, APHG’s relationships manager

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Agriculture and the ETS

June 29, 2021

Interesting idea for getting some agricultural emissions into the covered sector: bring fertiliser into the ETS. No Right Turn points to the proposal:Nitrous Oxide is a potent greenhouse gas, 265 times worse per ton than carbon dioxide. Its also long-lived, with a half-life of 121 years in the atmosphere. New Zealand emitted 8.36 million tons CO2-equivalent of it in 2019, almost 10% of our total emissions. And yet, we’re doing nothing to limit that. Why not? Because its emitted by farmers, of course.1.5 million tons CO2-equivalent of those emissions is caused by farmers’ (over)use of fertiliser. Stuff’s Olivia Wannan points out that we have an easy way to control this: bring it into the ETS:In its new report, the Climate Change Commission noted fertilisers could be charged the same levy

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Subsidy incidence: EV edition

June 28, 2021

It’s pretty standard drill in intermediate micro to work through some tax incidence questions. The general point is to remind students that it doesn’t matter whether the government says some tax has to be paid by the business or by the customer, or whether it has to be paid by the employer or the employee. The burden of the tax depends on relative elasticities of supply and demand; the statutory incidence really doesn’t much matter in determining the economic incidence.The extension to subsidies is obvious – the same drill applies. And I guess that supply of used electric vehicles in Japan is relatively inelastic. NZ’s announced EV subsidy scheme, yet to come into effect, is bidding up prices there. Turners’ subscription fleet was made possible with a grant from the Government’s green

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Reader mailbag: Bus contracting edition

June 28, 2021

A little while back, I’d suggested that the problem with Wellington’s buses wasn’t whether the operator was private or public, but rather the contracts under which they were operating. Shortly after, I received a helpful pointer in the reader mailbag, but have only now had a chance to hoist it up here.Bus services in the main centres used to be run by municipalities – plus Railways Road Services in some areas. The industry was regulated: you couldn’t run in opposition to the licence holders even if you wanted to. When the government deregulated urban bus services, it also forced the municipalities to sell their fleets and to contract for the services they wanted, with the contracts awarded basically on price. The effect of the first contract round was to reduce costs by around 30%, which

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Afternoon roundup

June 28, 2021

A very long overdue closing of the browser tabs brings these worthies:There’s now a big solar plant running in South Taranaki. Remember: this is the ETS and the electricity market working. The electricity market doesn’t care about the source of the power; it pays the going rate. The ETS increases the cost of thermal and especially increases the cost of coal. This plant’s from Todd Energy. If I’m reading this right, we could have a free trade agreement with India if we had more liberal immigration settings. That sounds like win-win, post-Covid. Unfortunately, political pressure in India leans against free trade unless it also helps make migration easier, and the current New Zealand government hates migrants and migration. Alcohol & Drug use, crime, and a proposal for Victoria building on

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Supply and demand denialism on the right

June 28, 2021

Normally, it’s the left that makes a hash of basic supply-and-demand thinking – at least in New Zealand. That wasn’t the case in last week’s Wellington Council debates on the proposed spatial plan. Councilors broadly of the left voted in favour of reducing or eliminating heritage restrictions on development, and in favour of allowing building to greater heights downtown. Councilors broadly of the right voted against all of those, but did support allowing new subdivisions – unfortunately, without support from the pro-housing councilors on the left.And Iona Pannett … well, she’s on her own anti-housing axis that isn’t quite left-right but that seems to view building housing as neoliberal and consequently bad. But this from Nicola Young was disappointing.“The character suburbs are

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Another case for Cat Bonds

June 27, 2021

This week’s column in the Dom draws on the joint RBNZ-Treasury workshop on post-Covid macroeconomic policy that preceded last week’s Covid-truncated NZ Association of Economists conference. A snippet:Overall, the workshop felt designed to warm the economic policy community to higher public debt levels for a longer period. The risks of the approach were noted: interest rates can rise, and there will be problems if they do.And the approach only makes sense if projects funded by that debt really do pass cost-benefit assessment. That conventional cost-benefit assessment processes ensuring value for money seem out of fashion was not noted as any substantial constraint.Higher levels of government debt bring risk not only in case of interest rate increases, but also in case of natural disaster.

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Contracting for buses

June 17, 2021

The Ministry of Transport is consulting on the Public Transport Operating Model.Sounds boring as all heck, right?You can submit on it via a survey, and boy are there some worrying questions in there. Let’s step back a minute and consider the problem first. Wellington in particular screwed up its bus service. I have not seen the RFP or contracts that Regional Council put out for the bus service, but it’s easy to diagnose the problem from the symptoms.Here are the symptoms:Bus services that are frequently cancelled for want of drivers;Complaints about driver pay;Concerns about there not being enough drivers. Any doctor can tell you the most likely cause of those symptoms. If the contract for service imposes low penalties for missed services or poor standard of service, relative to what the

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Afternoon roundup

June 16, 2021

The afternoon’s closing of the browser tabs brings a few worthies:Vincent Geloso’s case for not getting rid of a ceremonial monarch. Chris Snowdon on the effect of COP9 on vapers. The coming framework conventions on tobacco control meetings risk making things worse for vaping. Pattrick Smellie goes through the proposals around excluding deductibility of mortgage interest as business expense for residential property investors. It’s going to be very messy. And I doubt it does anything to improve affordability. What Patrick Collison, Tyler Cowen and Patrick Hsu learned doing fast grants. This one’s really really good. They got piles of grant money out the door, fast, and helped in research important for the Covid response. And they learned a lot about current messes in granting agencies

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Assorted updates

June 15, 2021

Blogging has been light. These are the bits I’ve missed telling you about.Matt Burgess, Oliver Hartwich, Bryce Wilkinson and I had a short podcast on the government’s proposed feebate scheme. It’s an incoherent mess given that it’s running up against an ETS with a binding cap. I had a chat with RNZ’s The Panel on congestion charging on Friday. I’d had a column in the Dom Post on it a bit earlier. My column at Newsroom last week went through the changes coming for local councils when water utilities get stripped from them and amalgamated into new entities. My column in our Insights newsletter looked at the government’s sclerotic approach to border management. Better, safer, and even cheaper testing options for border workers are available, and they aren’t being used. I had a chat with

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Smokefree 2025

June 14, 2021

The Government’s proposed approach for achieving SmokeFree 2025 is a bit over-the-top. The proposals would restrict tobacco sales to a smaller number of to-be-licenced R18 outlets, which could then be subject to a sinking lid; impose an annual one-year increase in the purchase age for tobacco until full prohibition were achieved; restrict nicotine content in cigarettes to very low levels; prohibit filters in cigarettes; impose minimum cigarette pricing; and further restrict flavourings.In short, the only way to get a proper cigarette would be through the black market. The Ministry’s betting on folks shifting more heavily to vaping or heated tobacco. I’d expect instead that imposing all this stuff would have smokers flip to black-market excise-free cigarettes, and that smokers would be

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