This week, I had a column in the Stuff newspapers on the Initiative’s proposed fast-track for new supermarkets.
I noted that existing district plans block new supermarkets that might compete with existing ones. So, we suggested enabling large-scale entry by a new player, overriding anticompetitive parts of district plans, and handling plan changes and consents for all sites at one go.
A retired RMA hearings commissioner wrote to the Christchurch Press saying that I had succumbed to a commonly believed myth. The RMA already forbids councils from considering ‘trade competition’ and its effects. Plans and decisions not allowed to consider competition couldn’t possibly restrict competition.
Nothing to see here, I suppose.
Or, perhaps more accurately, a whole lot to see – in how RMA hearings commissioners understand the world.
Let’s take a few examples.
Ashburton set a planning rule forbidding a new retail development from taking on new retail tenants. Why? Taking customers away from the downtown shops would hurt downtown amenities. Very anticompetitive in effect. But the planners never considered competition, so all is well. Somehow.
Homebase Mall in Christchurch was initially prohibited from having any supermarkets at all, for fear they’d reduce the amenity provided by The Palms shopping centre down the road. On appeal, Homebase was allowed one supermarket.
Christchurch’s Plan Change 84, for the area around the airport, also prohibited more than a single supermarket. And downtown hoteliers objected to there being too many hotels. But none of that has any effect on competition - apparently.
As far as RMA hearings commissioners are concerned, these sorts of things are fine so long as effects on competition weren’t the intent.
Imagine claiming, during a Commerce Commission cartel inquiry, that you never considered competition when colluding with your competitors to restrict output. It was instead about preserving scarce resources, fighting overconsumption, and helping the environment. If they could avoid laughing too loudly, they would weigh those considerations against effects on competition. And you would face penalties.
The country’s RMA hearings commissioners know or care not about the anticompetitive effects of what they do. Forgiving them for that failure requires someone more charitable than me. They have caused substantial harm.
But it’s always better to change the game rather than blame its players. A fast-track to enable greater supermarket competition would help while more comprehensive reform is in progress.
Dr Eric Crampton is Chief Economist at the New Zealand Initiative. This article was first published HERE
Nothing to see here, I suppose.
Or, perhaps more accurately, a whole lot to see – in how RMA hearings commissioners understand the world.
Let’s take a few examples.
Ashburton set a planning rule forbidding a new retail development from taking on new retail tenants. Why? Taking customers away from the downtown shops would hurt downtown amenities. Very anticompetitive in effect. But the planners never considered competition, so all is well. Somehow.
Homebase Mall in Christchurch was initially prohibited from having any supermarkets at all, for fear they’d reduce the amenity provided by The Palms shopping centre down the road. On appeal, Homebase was allowed one supermarket.
Christchurch’s Plan Change 84, for the area around the airport, also prohibited more than a single supermarket. And downtown hoteliers objected to there being too many hotels. But none of that has any effect on competition - apparently.
As far as RMA hearings commissioners are concerned, these sorts of things are fine so long as effects on competition weren’t the intent.
Imagine claiming, during a Commerce Commission cartel inquiry, that you never considered competition when colluding with your competitors to restrict output. It was instead about preserving scarce resources, fighting overconsumption, and helping the environment. If they could avoid laughing too loudly, they would weigh those considerations against effects on competition. And you would face penalties.
The country’s RMA hearings commissioners know or care not about the anticompetitive effects of what they do. Forgiving them for that failure requires someone more charitable than me. They have caused substantial harm.
But it’s always better to change the game rather than blame its players. A fast-track to enable greater supermarket competition would help while more comprehensive reform is in progress.
Dr Eric Crampton is Chief Economist at the New Zealand Initiative. This article was first published HERE
3 comments:
Hearings commissioners don’t make the rules. But they are bound to adhere to them.
You don’t understand the process.
I have noted that recently "The Initiative members " have been poking their nose into "real people stuff" ie supermarkets and apprenticeships which are obviously quite different from corporate understanding, graphs and report preparation .
Work & Industry training and Local body planning are important facets of the NZ population , quite separate from the tedious meanderings of the Reserve Bank , Infometrics etc . The worldwide issue of productivity is brought into sharp focus when the Initiative inteligensia are quite frankly making a fool of themselves when suggesting that ALL NZ Local Government Councils have the same rules and policy and The Initiative can overrule them.
I dont know anything about the Initiative, but I do notice that 'the left' dont seem to approve of their views regardless of content. Having lived abroad for many years, the main things I noticed on returning were lack of competition, particularly in supermarkets, and how expensive and difficult it is to build houses. Anything that removes unnessecary regulation, and allows competition has to be good for NZ.
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