New Zealand, for reasons cultural as much as political, has become fertile ground for them. We are a small, highly educated country that prizes good intentions. Yet too often, the people who congratulate themselves for their ideals are not the ones who bear their consequences.
Henderson coined the term in his memoir, Troubled, which traces his journey from foster care to Yale. He observed that many ideas cherished by the educated elite operate like designer goods: they flatter the holder’s identity while costing them little or nothing. The costs, he found, are almost always borne by those with far fewer resources.
The offshore oil and gas exploration ban exemplifies the phenomenon. Announced with lofty rhetoric about climate leadership, the ban was a triumph of symbolism over substance. The Government’s own advisers warned at the time that cutting off future gas supply could raise global emissions, not lower them. The message to investors was clear: New Zealand’s fossil fuel sector had no long-term future. When gas supply tightened, generators confronted a simple reality. If you cannot burn gas, you burn coal.
By 2021, New Zealand was running Huntly harder, fuelled by shiploads of Indonesian coal to keep the power on. Electricity and gas prices rose. For households already struggling with winter power bills, the ban landed not as a virtuous gesture but as an added cost of living. For workers in Taranaki, it meant fewer jobs. The moral satisfaction was concentrated; the burdens fell squarely on those least able to absorb them.
Auckland’s stadium debate offers a variation on the same theme. Every few years, the idea of a world-class waterfront stadium reappears. Its backers speak in the language of civic ambition: a global city should have global infrastructure. The renderings are always spectacular. They are also always detached from fiscal reality. Council reports have repeatedly warned that these projects are technically feasible only if “someone else” pays for them.
With any public project, the central question is not whether it would be nice to have, but what we forgo to build it. Auckland already allocates $146 million per annum just to maintain – not improve – its existing stadium network. Difficult trade-offs are not abstractions. They are real.
Film subsidies present yet another case. New Zealand’s creative sector is rightly admired. But we should be honest about what our generosity to foreign studios represents. Budget 2025 committed $1.09 billion to the International Screen Production Rebate over a four year period, with additional funding for domestic productions. The argument is seductive: high-value jobs, international exposure, and the glamour of Hollywood on the Waitematā. Yet the returns are notoriously difficult to pin down. The benefits flow to a small cluster of firms and individuals. The costs are spread broadly across taxpayers who derive little direct value from the largesse.
The belief that subsidies are warranted survives because it flatters us. We like thinking of ourselves as a global creative hub. But the subsidy regime persists largely because the people who argue most passionately for it are not the ones paying for it. Even when both major parties back the spending, the question of transparent cost-benefit analysis remains uncomfortably unresolved.
Nowhere is the luxury-belief dynamic more visible than in the defence of “heritage character” in housing. Protecting historic streetscapes is admirable. In practice, heritage rules have become a tool for limiting development in some of the country’s most desirable suburbs. Homeowners enjoy the amenity value and rising equity that come from scarcity. Young families and renters bear the brunt of the cost. Auckland’s median house costs around seven times the median income. When restrictions on height and density are framed as preserving a city’s soul, the question of who gets to live in that city is quietly sidelined.
Luxury beliefs extend beyond economics. They also appear in the criminal justice system. The belief that prison is inherently cruel and that accountability is “punitive” carries a social reward among the well-intentioned. But crime does not occur evenly across the population. Victimisation is highest among poorer, younger and Māori households. Lighter sentencing is a cost borne by communities that do not attend policy panels or write opinion columns. For those living in safer suburbs, it is an abstraction. For others, it is a typical Tuesday night.
What these examples share is not ideology but insulation. Luxury beliefs flourish when the people who hold them are protected from their downsides. Because the costs often come with a lag or at a distance, the disconnect can persist for years. But eventually, reality reasserts itself – just not for those insulated from its consequences. Coal trains still arrive at Huntly. Housing lists still grow. Infrastructure still decays. Crime still concentrates in the same postcodes.
We should not abandon ambition. Nor should we sneer at idealism. But we should be honest about trade-offs. Public money is finite. Every decision to spend it on something that makes us feel good is a decision not to spend it where it might do the most good. New Zealand’s challenges are too serious for this. We cannot afford nice-sounding ideas that work only to make the comfortable feel virtuous.
Roger Partridge is chairman and a co-founder of The New Zealand Initiative and is a senior member of its research team. He led law firm Bell Gully as executive chairman from 2007 to 2014. This article was sourced HERE
The offshore oil and gas exploration ban exemplifies the phenomenon. Announced with lofty rhetoric about climate leadership, the ban was a triumph of symbolism over substance. The Government’s own advisers warned at the time that cutting off future gas supply could raise global emissions, not lower them. The message to investors was clear: New Zealand’s fossil fuel sector had no long-term future. When gas supply tightened, generators confronted a simple reality. If you cannot burn gas, you burn coal.
By 2021, New Zealand was running Huntly harder, fuelled by shiploads of Indonesian coal to keep the power on. Electricity and gas prices rose. For households already struggling with winter power bills, the ban landed not as a virtuous gesture but as an added cost of living. For workers in Taranaki, it meant fewer jobs. The moral satisfaction was concentrated; the burdens fell squarely on those least able to absorb them.
Auckland’s stadium debate offers a variation on the same theme. Every few years, the idea of a world-class waterfront stadium reappears. Its backers speak in the language of civic ambition: a global city should have global infrastructure. The renderings are always spectacular. They are also always detached from fiscal reality. Council reports have repeatedly warned that these projects are technically feasible only if “someone else” pays for them.
With any public project, the central question is not whether it would be nice to have, but what we forgo to build it. Auckland already allocates $146 million per annum just to maintain – not improve – its existing stadium network. Difficult trade-offs are not abstractions. They are real.
Film subsidies present yet another case. New Zealand’s creative sector is rightly admired. But we should be honest about what our generosity to foreign studios represents. Budget 2025 committed $1.09 billion to the International Screen Production Rebate over a four year period, with additional funding for domestic productions. The argument is seductive: high-value jobs, international exposure, and the glamour of Hollywood on the Waitematā. Yet the returns are notoriously difficult to pin down. The benefits flow to a small cluster of firms and individuals. The costs are spread broadly across taxpayers who derive little direct value from the largesse.
The belief that subsidies are warranted survives because it flatters us. We like thinking of ourselves as a global creative hub. But the subsidy regime persists largely because the people who argue most passionately for it are not the ones paying for it. Even when both major parties back the spending, the question of transparent cost-benefit analysis remains uncomfortably unresolved.
Nowhere is the luxury-belief dynamic more visible than in the defence of “heritage character” in housing. Protecting historic streetscapes is admirable. In practice, heritage rules have become a tool for limiting development in some of the country’s most desirable suburbs. Homeowners enjoy the amenity value and rising equity that come from scarcity. Young families and renters bear the brunt of the cost. Auckland’s median house costs around seven times the median income. When restrictions on height and density are framed as preserving a city’s soul, the question of who gets to live in that city is quietly sidelined.
Luxury beliefs extend beyond economics. They also appear in the criminal justice system. The belief that prison is inherently cruel and that accountability is “punitive” carries a social reward among the well-intentioned. But crime does not occur evenly across the population. Victimisation is highest among poorer, younger and Māori households. Lighter sentencing is a cost borne by communities that do not attend policy panels or write opinion columns. For those living in safer suburbs, it is an abstraction. For others, it is a typical Tuesday night.
What these examples share is not ideology but insulation. Luxury beliefs flourish when the people who hold them are protected from their downsides. Because the costs often come with a lag or at a distance, the disconnect can persist for years. But eventually, reality reasserts itself – just not for those insulated from its consequences. Coal trains still arrive at Huntly. Housing lists still grow. Infrastructure still decays. Crime still concentrates in the same postcodes.
We should not abandon ambition. Nor should we sneer at idealism. But we should be honest about trade-offs. Public money is finite. Every decision to spend it on something that makes us feel good is a decision not to spend it where it might do the most good. New Zealand’s challenges are too serious for this. We cannot afford nice-sounding ideas that work only to make the comfortable feel virtuous.
Roger Partridge is chairman and a co-founder of The New Zealand Initiative and is a senior member of its research team. He led law firm Bell Gully as executive chairman from 2007 to 2014. This article was sourced HERE
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