Dr Eric Crampton: What New Zealand can learn from Andy Burnham’s UK plan

Election 2023 brought us a new government committed to localist approaches. National had campaigned on greater localism as an alternative to the prior Labour government’s more centralising tendencies across water services, polytechnics, housing and farming regulation.

In his Waitangi speech in 2024, the Prime Minister said that, “We, like you, believe in localism and devolution, not centralisation and control. No one understands your iwi like your iwi does.”

Dr Eric Crampton: Forcing banks to offer services in small towns was always a non-starter

Sometimes, a consultation process makes me wonder just how the consultation document got out the door in the first place.

Submissions closed last week on the Reserve Bank’s Keeping Cash Local consultation process. It was a strange proposal, with a stranger process.

Let’s start with the underlying problem before getting to the Bank’s strange consultation.

Dr Eric Crampton: Can culture drive innovation? The answer lies in the books

Everyone knows that culture matters, at least in a vague sense. But showing how it matters has been like pinning jelly to a wall.

I don’t know how many opinion pieces I’ve read blaming New Zealand’s ‘tall poppy syndrome’ for weak innovation and productivity growth. But how could you test whether it is true?

Dr Eric Crampton: A Grokwork Orange

It’s only going to get weirder from here, folks.

Trump did not like existing social media platforms, so he launched his own, Truth Social, in 2022.

He posts there a lot. Content really can be anything.

Dr Eric Crampton: The Americans are on the march! Will Wellington welcome them again?

Wellington has its share of urban legends, most of them false.

One of the more popular ones, and a recurring social media trope, claims that America’s Army Corps of Engineers was prepared to build a proper motorway between Wellington and Auckland after the Second World War. And that the New Zealand government turned them down.

A more restrained version claimed that the Americans would have built Transmission Gully to facilitate movement from their base at Paekākāriki through to the port at Wellington.

Dr Eric Crampton: Better urban planning

Oliver asked me to make the case for the government’s resource management legislation. It should be read in conjunction with Nick Clark’s critique below. I share his concerns, and I expect he’d share some of my hopes.

Under a supportive Minister like Hon Bishop or Hon Twyford, the legislation would enable a more liberal approach to housing and development.

Dr Eric Crampton: Supermarket Competition

Is the reason we don’t have enough supermarket competition because councils have banned new ones?

When the Commerce Commission was looking into retail grocery competition, my shop urged the Commission to check on something important.

As best we could tell, it would be effectively impossible for a new large-format supermarket chain to open in New Zealand. Cities had not zoned enough space for full-sized grocery stores. So, anyone wanting to open a set of stores up and down the country would have enormous difficulty finding viable sites with the right zoning.

Dr Eric Crampton: Legalising groceries

The Commerce Commission’s retail grocery competition inquiries always had the wrong focus.

If there are enormous profits to be made in groceries, why is nobody else trying to steal them away? The world has many supermarket chains. Kiwis can also build new ones. If there are $100 notes on the sidewalk, why is nobody picking them up?

Zoning rules seemed to be the underlying problem. We argued that large-scale entry was de facto impossible.

Dr Eric Crampton: You could have it so much better - The quiet victories of the NZ economy

Every July, members of the New Zealand Association of Economists – academics, practitioners, and officials – meet to tell each other what they’ve been working on. Work presented tends to be work-in-progress. We get a chance to see the work while it is still being built and discuss ways of improving it.

This kind of conference never tends to have an organising theme. Sessions run in parallel; people attend the ones that strike their fancy. If I had to draw a theme from the set I attended, I’d start with one of the last talks I saw.

Dr Eric Crampton: A Kiwi solution to a Canadian problem on refugee sponsorship?

Ten years ago, the NZ Initiative brought a Canadian diplomat to Wellington to explain how Canada let ordinary citizens sponsor refugees. Dean Barry told us that when Canadian communities pledged to support one more refugee, Canada admitted one more. Civil society helped decide how many refugees Canada accepted.

Dean Barry visited in the wake of the Syrian refugee crisis. New Zealanders who wanted to help people had to spend their time lobbying the government to increase the quota. Canadians who wanted to help could fundraise and get on with the job of helping people.

Dr Eric Crampton: Wegovy, RSV vaccines among drugs on slow track in NZ

Small countries in a big world can choose to be nimble or they can choose to be stupid.

When it comes to medicines, New Zealand has chosen the second path. Rather than recognising authorisations provided by better-resourced overseas drug approval agencies, New Zealand requires local approval for new medicines.

Dr Eric Crampton: A better way to step off the Govt’s deceptive capital charge merry-go-round

From 1 July, the start of the new fiscal year, Health New Zealand will stop paying charges to the Crown for the capital that it uses. The Ministry calls it a technical change, with no effect on patient care, infrastructure, or the money available for services. On the Crown’s books, nothing apparently happens at all, on net.

The charge had been running at around $576 million per year, in the 2024/25 estimates. Drop it and nothing much changes, because Health New Zealand was funded by the Crown to pay it to the Crown in the first place.

Dr Eric Crampton: Guardrails for a Compulsory KiwiSaver

If re-elected, National would make KiwiSaver contributions compulsory from 2028, with employers and employees each contributing 6 percent by 2032.

 
That compulsion requires guardrails, according to a research note published today by The New Zealand Initiative's Chief Economist Dr Eric Crampton.

Dr Eric Crampton: Kalshi’s billion-dollar rise shows what iPredict couldn’t achieve in NZ

When Victoria University of Wellington’s great little prediction market, iPredict, announced that it would be shutting down back in 2015, it had a couple hundred thousand dollars of traders’ deposited funds in the bank. It was a very small, very limited, academic enterprise.

Kalshi is a US-based prediction market. It is regulated by America’s Commodity Futures Trading Commission, the CFTC, which fully authorised it in 2023.

Dr Eric Crampton: Is Govt really putting the online harm funding before the policy? There’s a hint

It’s a pretty minor budget item all things considered.

Thirty million dollars over four years, when the government plans on core government expenditure of over one hundred and fifty billion dollars in the 2026/2027 fiscal year, isn’t a huge sum.

But I still wonder just how they’re going to manage to spend that much on policy and regulatory work in an area where Parliament has not yet even passed enabling legislation.

Dr Eric Crampton: RBNZ’s campaign to boost banking cash services struggles under scrutiny

Government is awash in consultation processes. So much so that “consultation fatigue” is a real term.

But it is a bit odd when an agency consults over a proposal that it may not have the legal authority to implement – when it cannot do the thing that it proposes doing, or at least not without legislative or regulatory changes beyond the agency’s own authority.

Dr Eric Crampton: Open markets are still the best way to a fair economy

The strongest protection tenants can have is plenty of other potential places to rent, from different landlords eager to rent them a home.

When zoning rules make it very difficult to build new housing, existing landlords do not face much potential competition. If every landlord has dozens of tenants racing to submit applications as soon as a property becomes vacant, landlords will have a lot of power over their tenants. And rents will be high.

Dr Eric Crampton: Fingers crossed

If the country sees a few lucky breaks, Budget 2026 shows a return to surplus in 2029.

The period of structural deficits will have lasted almost a decade.

Without those lucky breaks, including at the Strait of Hormuz, deficits will extend for longer. And it beggars belief that a decade of structural deficits is consistent with the fiscal responsibility provisions of the Public Finance Act.

Dr Eric Crampton: Send my regards to NZ’s regulators as they struggle to keep up

Last year, Cabinet papers promised that New Zealand’s agricultural-product regulator would be required to use assessments from trusted overseas regulators. The Bills now before Parliament instead say the regulator must merely “have regard to” them.

A duty to have regard to something is not a duty to use it. It can be satisfied by reading the overseas assessment, noting it, and then doing the local assessment much as before.

Dr Eric Crampton: Amending alcohol

An alcohol licensing regime should have one big job: to ensure that licensed outlets operate responsibly, first by vetting applications and then by monitoring compliance.

Its measures should be proportionate to the risks being addressed, and cost-effective. Licensing should not be the primary tool for reducing every kind of harmful alcohol-related behaviour. It needs other policies targeted at specific harms. Without those, too much of the burden of harm reduction falls on local alcohol policies and licensing conditions.