Mole News

Auckland Transport called on to fast track te reo Maori on buses, ferries and trains
Auckland Transport (AT) is being called on to make its buses, ferries and trains bilingual with te reo Maori signs.

Independent Maori Statutory Board (IMSB) chairman David Taipari said AT should fast track its implementation of te reo Maori signage on public transport and to set a date for it to be fully bilingual.

Nicholas Kerr: New Zealand’s reforms and lessons for Washington

This is the text of a speech delivered to the Washington Policy Center monthly breakfast on June 27, 2017.

Many of you may be familiar with New Zealand’s reforms from an economic perspective, so I’m going to spend more of my talk focused on two other areas:

1. How policies before and after the reforms impacted individuals
2. How the key players succeeded in implementing the reforms

As a young New Zealander in the period before 1984 and the following decade of reforms, I’ll be speaking from personal experience about their impact. And I’ll be discussing their implementation as the son of an economist who was a key figure in making them come about.

My father, Roger Kerr, was a director of the New Zealand Treasury when the snap election was called in 1984. He and a team of economists drafted a detailed document called Economic Management. This was presented to the incoming Labour Government, which won the election amidst a currency crisis.  Speculators had correctly bet in the closing weeks of the campaign on the likelihood, given the clear need for one, of a post-election devaluation. Several of the party’s new ministers were already inclined towards some of the Treasury’s policy recommendations. This combined with the crisis meant Economic Management was well-received by some senior ministers, and it is widely regarded as having formed the foundation for the reforms that followed. An indication of how well it was received is that it was subsequently published, something no previous government had done.

Two years after the election, Roger was approached by the chief executives of the country’s major corporations who had formed a group called the New Zealand Business Roundtable. They wanted to appoint an executive director and formalize its operations. He felt it was important that the business community support the reforms and turn their back on their past habits of lobbying for favors and corporate welfare. Under my father, it became a think tank, much like the Washington Policy Center, with a formal mission of advancing policies in the interests of all New Zealanders. It favored free markets and limited government.

Before the reforms

Bryce Wilkinson, one of the authors of Economic Management, described the period before the reforms well:

There was an abundance – of limited choice. Blanket foreign exchange controls, high tariffs, tight import quotas.  No new cars for ordinary people. No weekend shopping. Queues to get mortgage finance. Too few licensed restaurants to matter. Union strikes a matter of course during school holidays. Monopolies everywhere.

Government owned all manner of things, including but not limited to: one of the largest hotel chains in the country; both television channels (New Zealand only had two until 1989) and many radio stations; major banks; a steel mill and a publishing house; the country’s airports and universities; and, the telecommunications, electricity, airline, rail and ferry companies.

To help you imagine how stifling government became in New Zealand, let me provide a few of the more extreme examples:

1. To protect dairy farmers, for a period of time you needed a prescription from your doctor if you wanted margarine
2. To protect the government monopoly on rail, trucks were banned from carrying loads more than 30 miles – that’s from here to Tacoma
3. Bars couldn’t open past 6pm, resulting in a culture of binge drinking
4. College wasn’t just free; the Government paid all students who attended university – as a result it became a lifestyle choice for many
5. During the oil crisis in the 1970s, the government didn’t rely on price controls, it simply banned people from driving their own cars, with a policy known as ‘carless days’

Businesses had become part of the problem

Most businesses in industries the government didn’t own had their headquarters in Wellington, New Zealand’s political capital. Instead of devoting their attention to innovation and productivity, they spent an inordinate amount of time lobbying for favors, protection and the like.

Impact on individuals

When government owns and controls the majority of the productive economy and business is focused on getting handouts, your choices in life become very constrained. Huge numbers of people become dependent on the state. That’s always the case for a country with a significant welfare state, but New Zealand took it much further.

Take Kiwis whose passion in life was engineering. If they pursued a career in telecommunications, the generation or transmission of electricity, television or radio, civil engineering and so on, their only option was government employment.

Moreover, given the state had a monopoly over so many industries, employees had close to zero bargaining power, much like public school teachers here. Young and talented people could only get promotions based on tenure or knowing someone in a position of power – for many, a job well done didn’t improve one’s position. Naturally many of our best and brightest, who had higher aspirations, chose to leave the country.

Those who remained experienced declining relative living standards as a result of overall low productivity growth. Many jobs provided little satisfaction and generated massive amounts of waste. Some industries had rules limiting who was permitted to do what, resulting in chronic overstaffing and job dissatisfaction. Work that could be done by one person was often done by two or more people and there were few incentives to be frugal with resources. New Zealand Rail and the post office best characterized these problems.

One of my favorite stories of the era was told by Richard Prebble, a government minister involved in privatizing many state owned enterprises. He wrote about some rail workers who were shunting wagons in the port of Wellington and inadvertently pushed one into the harbor. They sent one of their colleagues into the water with a hook and cable. A few minutes later he surfaced and asked them which of the many submerged wagons was the one they’d lost.

Reforms

Key reforms included:

• Requiring state-owned enterprises to operate like private businesses, including the post office, railways, ferries and electricity company.
o   Many were subsequently privatized, including the hotels, banks, telecommunications company, airline, airports and ports.
• The floating of the dollar, removal of foreign exchange controls, the reduction of corporate and individual taxes and the implementation of a broad-based goods and services tax (similar to a VAT).
• The removal of price and interest rate controls, and the elimination or drastic reduction of tariffs.
• The removal of agricultural subsidies.
• The Reserve Bank Act, which made the bank’s primary focus targeting inflation

A second wave of reform by a new government included further privatizations, as well as welfare, health care, education and labor market reform. The latter abolished collective bargaining and made it easier for companies and individuals to negotiate their own employment terms.

The effect of these reforms was remarkable on the lives of ordinary New Zealanders. A new generation of entrepreneurs emerged as monopolies faced competition for the first time. Productive and satisfying jobs were created. Employees now had choices and bargaining power, and could leave bad employers without having to also exit the industry that they worked in. Other choices became abundant too, from restaurants and clothing, to cars and stereos, or from beer and wine, to furniture and appliances.

One somewhat minor but very tangible impact was that student deaths as a result of motorcycle accidents fell because more could afford cheap imported second-hand Japanese cars that arrived on New Zealand’s shores by the thousands. It’s also noteworthy that almost all major companies moved their headquarters from Wellington to Auckland, as they abandoned full-time lobbying and instead shifted their focus to more productive enterprises in the nation’s most populous city and natural business capital.

Lessons

What New Zealand now has working in its favor is that is has tried big government and New Zealanders know the dismal results all too well. Because of that, the major parties, reflecting the will of the people, don’t want to turn back the clock on any of the key reforms from this period. That’s not to say the parties don’t want more government spending, but the areas they want it in are generally ones where there was no reform or where reform wasn’t far reaching – for example, policies advocating more government spending usually focus on areas like education, health care, welfare and housing.

This is the challenge I think Seattle in particular and Washington more generally face – big government on a scale New Zealand experienced has never been tried in our state. People here are more willing to believe that government can solve our problems.

It’s also neither easy nor desirable to fabricate a crisis to create an opportunity for a series of reforms. But there are some lessons that I think we can take from New Zealand’s experience.

1. Broad support matters for long-lasting policies.

In order to build support, debate is necessary. There was much opposition to many of the reforms, including protests by farmers who wanted to keep their subsidies and unions who opposed privatization, labor market reforms and more. But on the other side of the debate were large numbers of politicians, business leaders and interest groups who spoke in support of the reforms. The public saw this, understood the reforms and there was broad acceptance when they were implemented, even if for some it was reluctant at first.

Indeed, the Labor government was handsomely reelected after its first three years of reform and fiscal consolidation. When it lost reform momentum during its second term, it was kicked out of office. The National government came in, and implemented the labor market and other reforms I’ve mentioned. Following this, they also won another term.

As a result, no one wants to roll back any of these policies. Contrast this approach to governing with the way President Obama operated and it’s easy to understand why his legacy is in a shambles.

2. Order matters

The order in which you implement policies is important. For example, it would have been better if labor market deregulation was one of the first reforms. We suffered high unemployment initially as the labor market could not adjust quickly to the shocks of the other reforms. But politics is, of course, about the possible.

3. Good policy can be good politics

Many individuals or families became rich running businesses that were sheltered by soaring tariffs or other protections. In the case of cars, the few local manufacturers and dealers became wealthy selling vehicles to the privileged at the expense of ordinary New Zealanders who were unable to afford new cars. There was little opposition to the removal of the restrictions that protected them.

4. The simpler the policy, the lower the risk of future politics

New Zealand’s GST applies to ALL goods and services with a single flat rate, initially 10% and currently 15%. Australia, on the other hand, picked and chose which goods would be taxed. As a result, it’s a political football with parties running on policies to remove or lower the tax on certain items to appeal to sectional interests.

5. Good politics can give you room for reform

The Labour government threw a bone to the left wing of its party – a nuclear-free policy which at the time had little in the way of economic consequences. This enabled it to maintain the support of some on the left wing of the party and continue with its economic reform agenda. (Arguably it hurt in the country in the long run. For example, New Zealand wasn’t part of the Australian free trade agreement with the USA in 2004, something that would have been unthinkable pre-1980.)

6. Play the long game

The Business Roundtable’s first major policy paper made the case for labor market reform. It took two elections and a new government before it received the attention it needed. But it’s proof of Voltaire’s adage that nothing is more powerful than an idea whose time has come. The work that the Washington Policy Center does is important. Even if policies it advocates for are ignored by those in power today, good ideas win out over time.

7. Business leadership matters

This final lesson is also the one I believe is most important and relevant to Seattle and Washington State. Too often here businesses and their leaders sit on the sidelines or are too late to the debate to make any difference. The most shameful example of this in recent times was the representative of the Seattle Chamber of Commerce on the mayor’s $15 minimum wage advisory board abstaining from even voting on it.

Let me offer a quote from an editorial this year following the death of the second chairman of the New Zealand Business Roundtable, Sir Douglas Myers.

The Roundtable’s leadership was so effective that most New Zealanders came to believe business was always solidly behind the economic reforms. Not so. A protected economy is a very comfortable place for companies with an import licence or an established local market closed to foreign suppliers. 

… It is only economists who worry about the cost-plus pricing and wage inflation that protection permits, sending the country and its economy into long-term decline until its creditors will no longer enable it to sustain a high living standard.

The editors are right to acknowledge that the Roundtable was very much alone amongst business organizations in the early days of the reforms. The Manufacturers Federation, along with many other business sector lobbies, were reluctant to face the risks of deregulation and open competition. It was only over time that they along with the major chambers of commerce slowly came around to supporting the reforms and even began collaborating with the Business Roundtable on policy papers advocating further reforms.

Another obstacle the organization faced was the media. There were a few notable exceptions around individual policies, but generally speaking opinion pages up and down the country were opposed to the economic reforms. One major daily paper went so far as to have an editorial policy opposed to them. The Roundtable instead used the news pages of the press to advance the cause. That required speeches by the chairman, deputy chairman and other member chief executives of major corporations. The media could seldom ignore these. Op-eds signed by the same business leaders were also frequently submitted and published. Years of these efforts as well as the education and cultivation of the opinion page editors turned the tide, resulting in more sympathetic editorials.

The Roundtable also had few supporters in academia. Its approach was to debate university professors in the media or on campus. In the long run, the policies that were implemented generated the expected results and these were inevitably contrary to the predictions of academics who opposed them. Some ate humble pie, conceded they were wrong and changed their tunes. Others that were more defiant suffered reputationally and slunk into irrelevancy. Another key communication strategy was to fly out distinguished and supportive academics from overseas, including Australia, the US and UK. They would deliver speeches, as well as meet with ministers, the press and others interested in their areas of expertise. These foreign experts were more than able to dispense with the criticism of local academics and helped level the playing field for the policy debates.

Faceless business groups are insufficient – their members and leaders need to tirelessly advocate policies and make the case for reform. As the editorial I quoted from earlier noted:

Speaking up for further reform was not for the faint-hearted. Myers did so knowing it would not make him popular. He had no personal need to do it… He did it because, as all who knew him can attest, he fiercely loved this country.

New Zealand and New Zealanders are wealthier and freer for his and his fellow business leaders having done so.

Washington’s trajectory, if not corrected, has it on a slow but steady course towards less freedom and ever bigger government. The inevitable consequence is the sort of country New Zealand became after decades of similar policies. In 1900, New Zealand had the highest GDP per capita in the world. It now ranks around 32nd, even after years of improvement following its economic reforms. The unending growth in government and the increasing restrictions on individual liberty here have predictable consequences. New Zealand’s experience suggests ways we can reverse this course.

Nicholas Kerr, who grew up in New Zealand, is a marketing consultant in Seattle, where he lives with his wife and two small children. In his spare time he blogs at The Kerrant.

Frank Newman: Money matters and mediation

Last week was Money Week. I thought every week was money week but apparently we only need to think about money one week of the year and the remainder of the time we can think about the various other causes that have weeks attached to them.

One of the major daily newspapers has been running a series of columns with money tips from our political leaders. I am not sure why one would actually ask a politician for money advice when the government consistently spends more than it earns. It would be more logical to ask for money advice from those who are good at managing money - but then they are not chasing votes and most do not seek publicity.

Seton Motley: Silicon Valley’s ‘News’ Services Bad News for Less Government Everywhere

For decades now, all of America’s major institutions – have been broadly, unquestionably Leftist, and rigidly opposed to any deviance from the entrenched doctrine.

Colleges and universities, Hollywood and entertainment, the Sciences and the News Media – all deeply in Leftism’s thrall.

And then there is the Silicon Valley – now the biggest, baddest, broadest institution of them all. Because of their dominance of the Internet – they have their hands in all of the legacy institutions.

NZCPR Weekly: The Water Debate

Dear NZCPR Reader,   

This week, we look at political manipulation in the debate over fresh water, our NZCPR Guest Commentator Michael Coote examines Maori plans to create a perpetual revenue stream of royalties from commercial water levies, and this week’s poll asks whether you support a charge on the commercial use of water.

And with the election fast approaching, please feel free to forward our newsletters on to others that you believe would be interested in our research and commentary. Anyone is welcome to register for our free weekly newsletter.

*To read the newsletter click HERE.
*To register for the NZCPR Weekly mailing list, click HERE.  

GWPF Newsletter: U.S. Shale Flooding World Markets

Shale Forever: A Near Infinite Energy Resource?

In this newsletter:

1) U.S. Shale Flooding World Markets: Henry Hub Emerges as Global Natural Gas Benchmark
The Wall Street Journal, 17 August 2017 
 
2) Shale Forever: A Near Infinite Energy Resource?
David Blackmon, Forbes, 17 August 2017 

Melanie Phillips: How totalitarianism is winning in the west

Credit to the left-leaning Atlantic magazine for running a piece by Peter Beinart, who has actually looked at what is happening in American society and reached an uncomfortable conclusion which would be hard to find elsewhere in the media – and which is all-too pertinent in the wake of Charlottesville.

For Beinart warns that the left is lurching into totalitarianism and violence. “Antifa” purport to be anti-fascist. But they define as fascist anyone they disagree with including mainstream conservatives. Hence their violent suppression of commentators and scholars such as the conservative columnist Ann Coulter, the Breitbart controversialist Milo Yiannopoulos and the political scientist Charles Murray.

Bryan Leyland: Things you know that ain't so - Auckland airport must have rapid transport

Things you know that ain't so - Auckland airport must have rapid transport.

At the moment, the politicians are going all out with promises of rapid transport – Winston Peters favours heavy rail, while Jacinda promises light rail within a few years.

GWPF Newsletter: All Time Record - India Set For Best-Ever Foodgrain Production

Breaking: Drilling Begins At Cuadrilla’s Lancashire Shale Gas Site

In this newsletter:

1) All Time Record: India Set For Best-Ever Foodgrain Production
Times of India, 17 August 2017 
 
2) India’s Foodgrain Output Up 5-Fold In 60 Years
India Spend, August 2017

GWPF Newsletter: Global Ocean Cooling Continues

Pruitt: EPA Will Review 'Politicized' Climate Science Report

In this newsletter:

1) Global Ocean Cooling Continues
Science Matters, 10 August 2017 
 
2) Pruitt: EPA Will Review 'Politicized' Climate Science Report
Politico, 11 August 2017 

GWPF Newsletter: An Inconvenient Split?

Some Of The World's Largest Non-Polar Glaciers Are Expanding, Despite Global Warming

In this newsletter:

1) An Inconvenient Split?
Paul Matthews, Climate Scepticism, 13 August 2017

2) Some Of The World's Largest Non-Polar Glaciers Are Expanding, Despite Global Warming
Michael Bastasch, Daily Caller, 11 August 2017

Matt Ridley: In its energy policy, Britain keeps picking losers

Shortly before parliament broke up this month, there was a debate on a Lords select committee report on electricity policy that was remarkable for its hard-hitting conclusions. The speakers, and signatories of the report, included a former Labour chancellor, Tory energy secretary, Tory Scottish secretary, cabinet secretary, ambassador to the European Union and Treasury permanent secretary, as well as a bishop, an economics professor, a Labour media tycoon and a Lib Dem who was shortlisted for governor of the Bank of England.

Genuine heavyweights, in short. They were in general agreement: energy policy is a mess, decarbonisation has been pursued at the expense of affordability and, in particular, the nuclear plant at Hinkley Point C in Somerset is an expensive disaster. Their report came out before the devastating National Audit Office report on Hinkley, which said the government had “locked consumers into a risky and expensive project [and] did not consider sufficiently the risks and costs to the consumer”.

Karl du Fresne: Greens pay the price for one woman's hubris

This was going to be a Turei-free column. Honest. But how can anyone ignore what has been arguably the most tumultuous fortnight in politics since 1984?

My colleague Tom Scott had a cartoon in Wednesday’s paper in which a priest asked a boy: “What has Metiria Turei’s admission of benefit fraud and the Green Party’s subsequent meltdown taught us?”

The boy’s answer: “Never admit to making a mistake even 25 years later.”

That’s a legitimate interpretation of what happened, but my take on it is slightly different.

NZCPR Weekly: Super Policy Under Scrutiny

Dear NZCPR Reader,   

This week, we examine retirement policy, our NZCPR Guest Commentator Michael Littlewood outlines the advantages of our present superannuation system and decries the lack of research and evidence underpinning many policy decisions, and this week’s poll asks whether you would support the retirement age being increased from 65 to 67. 

With Parliament sitting for only one more week before rising for the General Election, this is your last chance to contact Members of Parliament – all MP email addresses can be found on our website HERE.

*To read the newsletter click HERE.
*To register for the NZCPR Weekly mailing list, click HERE.  

GWPF Newsletter: New York Times Admits Its Frontpage Climate Story Was Wrong

Lord Lawson Blasts Al Gore For Obsession Over Climate

In this newsletter:

1) New York Times Admits Its Frontpage Climate Story Was Wrong
Michael Bastasch, Daily Caller, 9 August 2017

2) Lamar Smith Slams NYT 'False Allegations', 'Fake News' of 'Leaked' Climate Report
CNS News, 9 August 2017 

GWPF Newsletter: Met Office Accused Of Misleading BBC Audience Over Extreme Weather

BBC Defends Lord Lawson Climate Change Interview

In this newsletter:

1) Met Office Accused Of Misleading BBC Audience Over Extreme Weather Claims
Paul Matthews, Climate Scepticism, 11 August 2017

The BBC asked Peter Stott (Met Office) about extreme events, and specifically storms, but Stott responded by talking about heat waves. What we see here is another example of the self-destructive ‘circling the wagons’ policy. The sceptic has to be attacked, and the warmist defended, even when the IPCC report supports the sceptic.

Frank Newman: Political manias and meltdowns

The election campaign has already brought up its share of extraordinary events: the self-mutilation of the Green Party leadership and the rise of Jacindamania. With those two events the campaign has been transformed as support shifts from NZ First and the Greens to Labour - although based on the latest polling it looks like NZ First will continue to hold the trump card come election night.

In amongst the manias and melt-downs there have been some policy announcements. Prior to the election I will summarise the party policies that particularly affect property investors, but one that is particularly eye-brow raising in a weird way is the announcement by the Opportunities (Gareth Morgan) Party (TOP).

Karl du Fresne: Shakespeare would have loved it

Greens co-leader James Shaw on Q&A yesterday was saying he was shocked at the hatred for the poor that had been exposed since Metiria Turei went public about her benefit fraud. What bullshit. 

Turei is still being characterised by her admirers as courageous and virtuous. That’s bullshit too. 

She made a calculated and cynical political decision and it backfired spectacularly. While she was gazing down the track at a shimmering city of votes floating like a tantalising mirage in the distance, a 100-tonne locomotive was bearing down on her from behind.

Mike Butler: The story behind the Titford story

Northland farmer Allan Titford steeled himself on Thursday for a long time locked up when he found out that his appeal against conviction and sentence was rejected. Now, with the appeal over, the other hidden story may be told.

Titford, who was jailed in 2013 for 24 years on 39 charges including the rape of his wife, burning his house down, and assaulting his children, found out about the failure of his appeal from a friend who saw it in a newspaper.

Ron Manners: Australian Native Title Act - this may surprise you!

I posted the following article about the Native Title Act on my website recently and it's a topic that's been generating quite a bit of discussion in the news. Although I reflect on my interactions with the Act and Aboriginal people in the article, as I've charted the Native Title Act process from 1977, it's also a tale of lost opportunities and political correctness.

Have a read for yourself and let me know your opinions on this legislation. Does it surprise you?

To anyone who assumed that the Native Title Act was designed to ‘assist our Aboriginals’, think again. Like most legislation there was much going on behind the scenes that only became obvious after the economic damage was done.