Free Press

ACT’s regular bulletin

Insidious Bullying
Last night TV One revealed just how far the teachers’ unions will go in bullying partnership schools. It is shameful. We are all for raising the status of the teaching profession (a stated goal of the unions) but this kind of bullying behaviour is doing more damage to the profession than anyone else.

What did they do?
Stuff has a good summary of the issue here. Basically they stormed into a state school and forced a stop-work meeting, then wrote a menacing legal letter because the school had the temerity to share its chemistry equipment with a partnership school after hours.

Funding Fabrications
The unions are still claiming that partnership schools are better funded than state schools, by comparing partnership schools during their start-up phase with long-established state schools. All schools appear to get more funding per student in their early years, then level out as their rolls grow. An apples-to-apples comparison of partnership school funding can be found here.

David vs. Jacinda
In this week’s Sunday Star-Times Column, David Seymour argued that Auckland’s land use regulations are costing the whole country thousands per year. Jacinda ‘vehemently’ agrees with him. David has apologised to his supporters and promises not to say anything else Jacinda agrees with any time soon.

1987 All Over Again?
Brian Gaynor writes in the Herald that the culture surrounding property investment today is redolent of mid 1980s euphoria. He recalls customs agents who wouldn’t let him into the country unless he gave them a stock tip.

Is he Right?
Free Press does not know if he is correct. If we had such predictive powers we would use them to make a fortune and donate it to ACT (if you are feeling fluid and think ACT is doing a good job, you can support us here).

He’s Probably Wrong
The New Zealand housing market has a big shock absorber: it is part of the global market. Auckland prices are high but not outrageously so in international dollar terms, and the market is tiny by volume. The U.S. housing market is so large it can take the world down with it whereas New Zealand’s market is smaller than many U.S. cities. If prices did start to fall, foreign demand would cushion it.

But What if He’s Right?
We don’t have a crystal ball, but know a major correction in house prices would be catastrophic. If it’s a correction we’re headed for, all the usual suspects will use it to beat up on free markets, calling for more government regulation.

Really?
Yep, just look at how the 2008 U.S. mortgage crisis played out. The Fed fed the U.S. housing bubble by keeping interest rates artificially low, the U.S. Government required banks to lend to bad debtors based on race (the Community Reinvestment Act), the tax code had special carve outs for mortgage interest, and prices shot up highest in cities with draconian land use planning. The mortgage collapse was caused by government but capitalism got the blame.

The Higher they Are…
Mortgage losses in the U.S. were highest where house prices were highest because they fell farthest. The prices were highest in places with strict land use planning rules (like Auckland’s). Urban Geographer Wendell Cox has shown that the U.S. mortgage collapse, and ultimately the whole GFC were driven by bad land use planning.

Where Does that Leave Us?
New Zealand in general and Auckland in particular has a highly regulated housing market. As Free Press has reported before, Auckland Council’s obsession with making the city denser has made land nine times more expensive at the city fringe. If Gaynor is correct, you read it here first: excessive land use regulation, not the market, will be to blame.

© Scoop Media