Bob Edlin: A guaranteed Govt income for artists....

A guaranteed Govt income for artists – some MPs see merit in Ireland’s scheme but Newsroom didn’t ask ACT or NZ First

In Budget 2025, Vote Arts, Culture and Heritage was funded $403 million in 2025/26 – or $1.5 billion over four years.

The spending initiatives included:

Brian Easton: Law and Order - An Economics Perspective

What might the public’s increasing demands for safety and security tell the economist?

Criminology and economics are quite different disciplines. Someone from one discipline trespasses on the other with the greatest of caution, something which, I’m afraid, not all economists have. There is a foolish economics literature about the ‘optimal level of crime’. Before it raises your hackles, it is better framed as the optimal level of criminal enforcement, something which must trouble greatly the Treasury desk officer struggling with the law and order vote. This year it amounts to $6.7b (police $2.6b; corrections $2.1b). It is up $2b (or almost half) in the last six years. It amounts to the average adult paying almost $5 a day in tax.

Brian Easton: Is the New Zealand’s Retirement Strategy Sustainable?

Today’s mañana strategy will lead to a crisis for the oldest elderly.

It is said that the only certainties are death and taxes, but a lack of each causes uncertainties. As longevity increases, the pressures on state spending increase. A reluctance to increase taxation means the pressures on the elderly increase.

Brian Easton: How has the New Zealand economy been doing?

Stagnation and Contraction

In this column I use the less familiar measure of GDP per capita instead of the GDP measure favoured by the commentariat. I became familiar with it when I began doing international comparisons because of the population differences between countries, while I depended upon the measure while working on New Zealand’s economic history because of significant population change. The measure is also better for thinking about distributional issues.

Brian Easton? Should Social Media Help Fund News Providers?

The underlying economics of the Fair Digital News Bargaining Bill rests on intellectual property rights.

I have written elsewhere about the tension between information as a public good which economic efficiency requires to be freely available and yet, because it is costly to produce, may require payment to those who create the information. Any practical resolution of the tension will be imperfect.

Brian Easton: Balancing External Security and the Economy

New Zealand is again having to reconcile conflicting pressures from its military and its trade interests. Should we join Pillar Two of AUKUS and risk compromising our markets in China?

For a century after New Zealand was founded in 1840, its external security arrangements and external economics arrangements were aligned. Britain, then the international hegemon, provided the security and the main export market together with the capital which flowed into this country. New Zealand even twice fought on the other side of the world (three times if you include the South African War) as a part of the deal.

Brian Easton: Flooding Housing Policy

The Minister of Housing’s ambition is to reduce markedly the ratio of house prices to household incomes. If his strategy works it would transform the housing market, dramatically changing the prospects of housing as an investment.

Leaving aside the Minister’s metaphor of ‘flooding the market’ I do not see how the announced strategy is going to quickly resolve New Zealand’s housing problems.

Brian Easton: Learning From Brexit

Whether Britain leaving the European Union was right or wrong, good or bad is for the Brits to decide. But there are lessons about international trade to be learned from Brexit, especially as it is very unusual for an economy to break so completely from its major training partner.

In Econ101 we are taught Ricardo’s theory of comparative advantage. In summary it says that specialisation makes economic sense; that it is a good idea for you (or a country) to do what you do best and trade the surplus for something you want from someone else who (or other country which) does it comparatively better. An economist then spends the rest of her or his life exploring the caveats and subtleties of the theory when it applies to the real world. It’s not logically wrong – it’s just that the real world is more complex.

Brian Easton: Do We Need A Population Census?

'It has been said that figures rule the world. Maybe. I am quite sure that it is figures which show us whether it is being ruled well or badly.’ Goethe

I was struck at a recent conference on equity for the elderly, how many presenters implicitly relied upon Statistics New Zealand. We take SNZ for granted. Had it been drawn to their attention, many users would have been astonished. This is not just true for economists, but as the conference showed, it is true for social issues as well across a wider group of professions and thinkers.

Brian Easton: The Post-Covid Economy

Is the economy in another long stagnation? If so, why?

This is about the time that the Treasury will be locking up its economic forecasts to be published in the 2024 Budget Economic and Fiscal Update (BEFU) on budget day, 30 May. I am not privy to what they will be (I will report on them in due course) but the Treasury are competent economists persuaded by the evidence, so other economists should be able to make reasonable guesses at what is bothering them

Brian Easton: Accelerating The Growth Rate?

There is a constant theme from the economic commentariat that New Zealand needs to lift its economic growth rate, coupled with policies which they are certain will attain that objective. Their prescriptions are usually characterised by two features. First, they tend to be in their advocate’s self-interest. Second, they are unbacked by any systematic empirical evidence using, instead selective anecdote. Well, yes; there is always an example to confirm one’s prejudice. But rarely will it stand up in a court of science. (The conversation is not helped by those who cannot discriminate between productivity growth is slowing down and productivity is falling.)

My research on economic growth has been driven by curiosity rather than seeking policy conclusions. It goes back to almost the beginning of modern growth economics in 1960 when we began having the data and the theories it generated.

Brian Easton: Does A Fiscal Debt Target Make Sense?

Do we treat the government finances with the common sense that household’s manage theirs?

It is a commonly held view that we should treat the government as if it is a prudent household. We don’t when it comes to its debt. Currently the government says it wants to constrain its net debt to between 20 and 40 percent of annual GDP; that is, between about 67 and 133 percent of its annual revenue. But households borrow up to 450 percent of their annual before-tax income.

Brian Easton: How Did FTX Crash?

What seemed a booming success a couple of years ago has collapsed into fraud convictions.

I looked at the crash of FTX (short for ‘Futures Exchange’) in November 2022 to see whether it would impact on the financial system as a whole. Fortunately there was barely a ripple, probably because it was too small and most investors were not sufficiently integrated into the rest of the financial system to be borrowing from it to speculate on cryptocurrencies,

Brian Easton: Do We Take Regulatory Impact Statements Seriously?

The Sorry Story of Earthquake-Prone Buildings.

The Treasury requires that when new or amended legislation is proposed, a Regulatory Impact Statement (RIS) be provided – ‘a high-level summary of the problem being addressed, the options and their associated costs and benefits, the consultation undertaken, and the proposed arrangements for implementation and review’.

Brian Easton: Puffing Policy

Public policy towards tobacco consumption remains politically sensitive.

In 1983, a young researcher was told by a medium-level Treasury official that Treasury policy was to abandon excise duties on tobacco. The senior Treasury economist that I consulted, famed for his commonsense, snorted ‘we need the money’. He explained that no-excise-duty was the ambition of a couple of very ideological Treasury officials – later we would call them ‘Rogernomes’ or ‘neoliberals’ – who objected to state intervention.

Brian Easton: The Prime Minister’s Biggest Challenge

Luxon has to address the need to maintain and enhance New Zealand’s social cohesion.

Brian Easton: The State Of The Economy - January 2024

The New Zealand economy is struggling; the new government will struggle to implement its economic promises.

There is not a great deal of difference in Treasury’s projected GDP growth patterns between the May 2023 Budget Economic and Fiscal Update (BEFU) and the December 2023 Half Yearly Economic and Fiscal Update (HYEFU). But there are some other important underlying changes which suggest the incoming government has a tougher task than it expected. (I am skipping the September 2023 pre-election update because there is a lot of noise in the series, and the longer perspective gives a clearer account of any changes.)

Brian Easton: A Revolutionary Economist

Robert Solow transformed the way we think about economic growth.

When you are in the trenches, you may not always realise what the war is about. Years later you read an account and see more clearly. Thus it was with me in the 1960s when economic analysis went through a revolution.

My insight came later when reading the budgets in the 1960s of Minister of Finance Harry Lake about whom I had been asked to write. The speeches expressed an ambition to increase economic growth, but the analysis was around capital investment only, which sounds very incomplete to today’s economist. Reflecting, I realised Lake was using the explanation I had been taught in my economics courses.

Brian Easton: What Is The Purpose Of An Economy?

In his Economists in the Cold War, Alan Bollard contrasts Saburo Okita of Japan with Zhou En Lai of China to highlight a critical issue.

Saburo Okita (1914-1993) was in Manchuria (northeast China), in the port city of Darien (Chinese: Dalien) which was occupied by Japan at that time. Because they were politically unsympathetic to the increasingly militaristic occupation regime, his family moved in his teenage years back to Tokyo, where he graduated in electrical engineering and joined the civil service. During the Second World War, and despite reservations about Japan’s war policy, he was involved in managing the supplies of raw material such as coal and iron necessary for the war economy and food.

Brian Easton: Peters as Minister

A previous column looked at Winston Peters biographically. This one takes a closer look at his record as a minister, especially his policy record.