Dr Eric Crampton: This is why Wellington should be called Lowerer Hutt

Transport historian Dr André Brett has suggested that Wellington be renamed Lowerer Hutt, perhaps to help avoid confusion within the region.

Economists Matthew Maltman and Ryan Greenaway-McGrevy have been looking at Lower Hutt’s housing boom. Their paper, released this week by the Economic Policy Centre at Auckland University, suggests Brett was onto something.

Dr Eric Crampton: Economists agreeing

There was remarkable agreement at the New Zealand Economics Forum last week.

Waikato University’s Forum is now an annual feature of the policy calendar, barring Covid interruptions.

Two very definite themes ran through this year’s sessions.

Eric Crampton: O, Canada.....What have you done to news platforms?

The classic Simpsons “Monorail” episode wasn’t just a cautionary tale about local council megaprojects gone wrong.

Monorail salesman Lyle Lanley told the good people of Springfield that he’d “sold monorails to Brockway, Ogdenville, and North Haverbrook. And by gum, it put them on the map!”

Eric Crampton: The incapacity of development capacity

The way New Zealand’s councils decide whether they have zoned sufficient land for development makes it hard to zone sufficient land for development.

The problem is not any specific analysis. The problem is the method itself. Or, at least, the absence of ongoing sanity checks on the figures.

The National Policy Statement on Urban Development requires larger councils to provide “at least sufficient development capacity to meet expected demand for housing and for business land over the short term, medium term, and long term.”

It sounds excellent in principle. But consider how that requirement is met.

Eric Crampton: Ratcheting up Govt in a crisis goes just one way

It’s funny how times change.

In 2019, Labour announced its first ‘wellbeing’ budget. It was hardly austere.

Over the prior decade, core government spending, as a fraction of overall economic activity, had retrenched considerably. Core Crown expenses peaked at 34.1 percent of GDP in 2011 – the year of the most substantial Christchurch earthquake, as well as continued government response to the Great Financial Crisis.

Eric Crampton: A shift to smoking harm reduction

If Guyon Espiner at Radio New Zealand is right about Associate Health Minister Casey Costello’s plans for tobacco policy, there is reason to celebrate. At least for those who care about harm reduction, proportionality, and civil liberties.

The incoming government’s coalition agreements had already signalled a substantial change in approach to tobacco policy. Rather than rely on punitive measures that make life harder for current smokers, the incoming government would make it easier for smokers to shift to far less harmful ways of getting nicotine.

Eric Crampton: Nipping tobacco prohibition in the bud

On 5 December 1933, ninety years ago this week, America ended alcohol prohibition.

Fourteen years of prohibition had reduced drinking, but at a terrible cost. Organised crime took over what had been a legal and taxed market. Gang warfare over alcohol became common. And adulterated black market alcohol caused a lot of harm.

Eric Crampton: Grant Robertson is to blame for the end of the productivity commission

The New Zealand Productivity Commission was borne of the 2008 coalition agreement between National and Act. And it was ended by the 2023 coalition agreement between the same two parties.

As former Productivity Commission economist Dave Heatley put it, on the New Zealand Economics Association’s Asymmetric Information blog, “How ironic is that?”

The past few years at the Commission, and its ultimate ending, aren’t just about the Commission. The episode raises broader questions about conventions in public sector appointments, about public service neutrality, and about the path the incoming Coalition government might take.

Eric Crampton: Time to restructure Wellington water to to fix the regions creaking pipes

When Wellington Airport installed licence plate readers to streamline parking and passenger pickup and drop-off, it did not have to beg Wellington City Council to find room in the council’s 10-year plan for funding.

Though partially council-owned, the Airport funds its own operations out of its own revenues and makes its own decisions. The structure imposes a commercial discipline and provides better outcomes.

It provides a sharp contrast to the city’s water system.

Eric Crampton: Yes; Minister it's utopia

One of my grad school professors recommended Yes, Minister for better understanding the British public service.

The series was superb. Permanent Secretary Sir Humphrey Appleby wanted the public service left to its own devices, regardless of incoming Minister Jim Hacker’s preferences.

Eric Crampton: Drilling down into limitless clean energy

The same supervolcano that provides one of the country’s bigger sources of catastrophic risk could well prove part of the answer to one of the country’s bigger problems on the path to 2050. It also helps to illustrate one of the problems in New Zealand’s approach to planning for net zero.

New Zealand will likely need an awful lot more electricity as carbon prices rise. Last week, GNS Science released work showing the potential for supercritical geothermal energy, tapping the much hotter temperatures found deeper. From 2037, it could start generating electricity equivalent to over a quarter of total current electricity generation, cost-effectively.

Eric Crampton: A "Rule Of Two" for faster access to safe medicines

If New Zealand required local crash testing for every new car model, dealerships would be late to stock a small number of mass-market vehicles at higher cost. It would be stupid.

Fortunately, New Zealand regulators instead decide which foreign standards are up to scratch and require that new cars meet at least one of them.

Access to the latest pharmaceuticals is at least as important as access to the latest car model. But consider the effects of Medsafe requirements.

Eric Crampton: How a ‘rule of two’ could remove our barrier to better drug access

When a new pharmaceutical is so successful that it blows out the national income accounts, it’s probably safe to call it a wonderdrug.

Semaglutide, marketed as Ozempic when treating Type II diabetes and as Wegovy for weight loss, turned a half-year 0.3% decline in Danish GDP into a 1.7% year-on-year increase.

But the real wonder for New Zealand is how Medsafe stands as barrier to new pharmaceuticals like Ozempic.

Eric Crampton: Safe to follow - faster access to medicines for Kiwis

Requiring Medsafe approval for pharmaceuticals already approved by at least two trustworthy overseas regulators makes little sense.

Foreign pharmaceutical approval agencies are well-resourced. They also tend to be cautious about approving drugs.

Under the Initiative’s proposed Rule of Two, drugs would automatically be approved in New Zealand if they had been approved by at least two trustworthy overseas approval agencies, unless Medsafe had extraordinary concerns about a particular medicine. But drugs so-approved would be reviewed if withdrawn from foreign markets.

Eric Crampton: The approach to heritage preservation needs a fundamental overhaul

“There is no alternative” is a powerful framing if you want your alternative to prevail – even more so when regulations make it too easy for other options to be far too hard. Wellington’s Council got a dose of it over the past week. But similar stories play out across the country as deadlines for earthquake strengthening on listed buildings come due.

Creating some alternatives may be a good idea.

Eric Crampton: Why NZ needs an independent parliamentary budget office

The true state of public finances is not meant to surprise any incoming government.

The Public Finance Act 1989 aimed to prevent any outgoing government from handing an incoming government the kind of horrors David Lange and Roger Douglas found in the books in 1984.

Eric Crampton: We get the council decisions we deserve

Democracy is the theory that the common people know what they want and deserve to get it good and hard.

At least according to the Sage of Baltimore, journalist and essayist H.L. Mencken.

Wellington has repeatedly chosen councils that have ignored the basic core services for which Council is responsible.

And so Wellingtonians will be getting it good and hard this summer if the taps run dry, and for years to come in paying for prior neglect.

Eric Crampton: Missing markets

If punters at Australia’s Betfair are right, there’s an eighty-nine percent chance any government formed after Saturday’s election will have a National Party Prime Minister.

But the things Betfair can’t tell us makes me miss our missing election stock market.

From 2008 through 2015, Victoria University hosted the world’s best election stock market, iPredict.

Eric Crampton: Housing and the nimby problem

Pro-housing policy generally tries to find ways of outflanking NIMBYs – the Not In My BackYard objectors to new development.

It’s an approach well-supported in academic research and reflected in New Zealand policy.

Eric Crampton: Praise Canada

As a proud Canadian, I am occasionally compelled to draw Kiwis’ attention to the wonderful service that my homeland provides to the world.

The election here has been tedious. But if it has made you despair, just look North.

They’re setting up a regulatory regime for podcasters. I’m not kidding.