Free Press - ACT’s new regular bulletin
Free Press - ACT’s new regular bulletin
Sharing Economy to be worth $335 Billion
Price Waterhouse Coopers project that the sharing economy, Uber, Air BnB, Chariot and the like, will be worth $335 billion worldwide by 2025. Long term surveys show people are becoming less trusting, while increasingly using sharing apps where trustworthiness is recorded over successive transactions. Technology is complimenting free market activity and reducing the need for government regulation.http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11434321
Markets of Virtue
It is popular to decry market activity as cynical. Here is a simple experiment that shows how markets bring out the best in people. Go to TradeMe and view feedback on some traders’ profiles. People with a visible reputation rush to make good misunderstandings and build goodwill. That’s the market in action. Now go to the comments section of a political blog. That’s politics.
The Case for Economic Growth
The New Zealand Initiative have published an excellent essay entitled “The Case for Economic Growth”See here. Among their many well-made points, people subsisted on an average of 50c per day for 100,000 years until 1820 when capitalism came along. Today New Zealanders are around 200 times wealthier. They also present evidence that wealth makes us better environmental custodians, and even makes us smarter.
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Job opportunities
US trends are often a useful guide to how technology will affect the NZ workplace. CareerCast rates 200 jobs on the basis of the work environment, stress levels and hiring outlook. The top jobs tend to use math and coding skills, have a demographic tail wind from the aging population (audiologists, optometrists), or first world problems (dental hygienist, dieticians). Way down at the bottom, number 199 and 200 were respectively lumberjacks and newspaper reporters. Make sure the kids do their math homework.
It’s not All Bad
The job outlook may not be great for journalists in traditional newspapers, but other US data shows rising demand for the skills of journalists, due to the surge in online sources of written news and commentary, as well as in related industries like public relations. Also, lumberjacks have apparently re-emerged in the hipster world, which covets “lumber-sexuals”. Big beards and plaid shirts!
Equipping our kids with the right skills?
We should take seriously that NZ math and science performance fell sharply in the last 2012 global PISA survey. The most worrying aspect was the decline for Maori. We must equip our kids with the essential skills for the 21st century, so they can find meaningful jobs. That is why we need new education strategies, such as ACT’s Partnership Schools.
Capital Gains Taxes
Last week the Reserve Bank deputy-Governor recommended more capital gains taxes on housing which resulted in a brief flare-up debate. By the end of the week all that was left was a gentle smoulder, more smoke than heat. Free Press is relieved that the CGT is off the table for both major parties.
CGT Winners and Losers
A capital gains tax on housing would increase costs for landlords. The person renting would pay all or most of the new tax. Why? In the longer run, capital will only flow into rental housing if the return is adequate. Costs get passed on.
What about the regions?
The last thing the regions need is another tax for Auckland’s sins. It would be a rerun of the debate over the Reserve Bank’s LVRs, an initiative made necessary by Auckland and paid for by everyone. Free Press wonders if the Wellington-based Reserve Bank has hatched a plot to make Aucklanders more unpopular than they already are.
Once More, With Feeling
It’s the Supply Side. From the Deputy Governor: “Urban planning rules are complex and often restrictive. Planning must take account of the Resource Management Act, Local Government Act and Land Transport Act.” He went on to quote the Productivity Commission estimate that the cost of planning regulatory requirements is between $32,000 and $60,000 per house in a subdivision, and $65,000-$110,000 for an apartment. That’s why regulatory reform matters. Free Press apologises for banging on about this, week after week, we’re getting tired of it, too, but regulatory reform is the only way to cure the disease, not the symptoms of a housing shortage.
The Real Culprits
The real reason for housing shortages is the zealous drive to intensify cities at all costs. Last week the New Zealand Planning Institute hosted its annual conference ‘back to the future,’ with the kind of zeal that would make real clergy blush. Headline speaker Charles Montgomery corrected Q+A’s Heather du Plessis Allen that he doesn’t ‘think’ that living closer together will make you happy, he knows.
The Greatest Challenge since WWII!
Attendees told Free Press that Green MP Julie Anne Genter spoke and compared the need for more compact cities with the challenges faced during World War II. We wonder if she’ll be using that speech on Saturday. When the troops returned they built lots and lots of… suburbs.
Take it easy on landlords
In politics it seems to be “landlords bad, house buyers good”; all very George Orwell. But we need plenty of landlords as well as owner-occupiers. People are mobile these days. The transactions costs in buying and selling houses are huge – agent commission, legal and accounting costs. Housing prices can be flat for many years, maintenance costs are high, people often over-capitalise, and people forget about the opportunity costs from alternate investments. If you wanted a leveraged investment you would have done far better in the share market in recent years than in Auckland property. People who have ended up with a leaky building are very aware of the old adage that housing is often a highly leveraged liability masquerading as an asset.
Freedom is not free
If it were legal, ACT Leader David Seymour would sell blood to fundraise for ACT. All you need is a credit card.
ends