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The New Zealand Initiative

The New Zealand Initiative

In this issue:

Ban the foreigners! | Luke Malpass
Consititutional change for New Zealand | Peter Shirtcliffe
Tough but fair debates | Oliver Hartwich
All things considered ...
On the record

Ban the foreigners!

Luke Malpass | Research Fellow | luke.malpass@nzinitiative.org.nz
Bad ideas have a habit of being spread. The Labour Party’s policy to ban foreigners (except those nice Australians) from buying houses in New Zealand is such an example.

Floated a few weeks ago by Tony Alexander, the idea has taken off within the Labour Party, which has decided that the race card is a vote winner.

In fact, Mr Alexander argued that Asians were not buying as much property as commonly thought, but that the perception of high levels of ownership might create xenophobic sentiment!

To mitigate such sentiment, he argued that foreigners should be banned from buying existing housing stock and be limited to buying newly built dwellings.

In adopting Alexander’s policy proposal, the Labour Party believes that foreigners buying houses is an actual rather than a perception problem.

This policy is another in a series of quack solutions to stem the accelerating house prices. Most politicians do not want to confront the real causes of price inflation: land supply, infrastructure, planning ideology. In short, housing supply has struggled to keep up with demand.

Indeed, in the wake of Labour’s announcement, the party has withdrawn support for more greenfield land supply, and is arguing the Auckland Housing Accord won’t do anything to create ‘affordable housing’.

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Labour seems to be edging away from the widely held view that housing supply is a problem. Instead, it seems to think that not only should the state intervene more actively in building more houses through KiwiBuild, but that it should also manage demand through a capital gains tax and a crackdown on foreign property ownership. This combination is meant to somehow create affordability.

Demand side tinkering is acceptable to some degree but not when such tinkering is imbued with an anti-foreigner bias and a wilful sowing of divisive politics.

And to those who argue that the policy is not xenophobic: what else to call a policy banning foreigners from buying houses based on the scuttlebutt and perception that foreigners are making houses unaffordable for New Zealanders?
Constitutional change for New Zealand

Peter Shirtcliffe | insights@nzinitiative.org.nz
Following the 2011 election, part of the Confidence and Supply agreement between the National Party and the Maori Party was the formation of a Constitutional Advisory Panel (CAP). This panel of the good and the great is tasked with examining New Zealand’s constitutional structure, with an emphasis on the Treaty of Waitangi.

The panel’s role is to consult the public on a number of constitutional issues, and report to Ministers Bill English and Pita Sharples by the end of the year.

Unfortunately, there are some worrying features for people concerned about New Zealand’s long-term governance and protecting private property rights: CAP’s terms of reference, the make-up of the panel, and the consultation process itself.

If you haven’t heard of this before, or only have a hazy recall of its existence, do not worry.
The community-at-large are not generally engaged with the process, and there has been little if any sign that the business community are interested – although it should be a concern. For some of those actively involved in the process, the ideal end-point would be entrenching the Treaty of Waitangi in a written constitution.

In late 2012, I commissioned two professionally run focus groups to gauge the community’s observations on these matters.

The results from this (limited) exercise were clear: there were strong and widely held views that the nation should be going in the other direction – away from Treaty entrenchment.

In governance and property rights issues, there was little if any support for constitutionally enshrined biculturalism, or any initiative that could develop or enhance divisiveness.

In mentioning this, I am simply seeking to alert readers to an important process which, given its political genesis, could develop an unfortunate direction for New Zealand’s governance. Adequate, sensitive, non-political leadership must emerge and become engaged on the issue.

Submissions to the panel closed on 31 July. However, I do encourage readers to take an interest. Constitutional arrangements are important and should not be changed lightly.

If anyone would like a copy of my submission, email me at p.shirtcliffe@xtra.co.nz.

Peter Shirtcliffe CMG is a member of The New Zealand Initiative. He has held chair and executive positions at a number of large New Zealand companies.
Tough but fair debates

Dr Oliver Hartwich | Executive Director | oliver.hartwich@nzinitiative.org.nz
Recently, I met a New Zealander who asked me how I, as a relatively newly arrived foreigner, experienced New Zealand. I returned the question straight back to him. Though he was born and raised here, he had spent the last 20-odd years abroad and only recently returned home. So he was almost as new to the country as I was.

Funnily, both our perspectives on New Zealand were overlapping as we stumbled over the same issues. What irritated both of us the most was the strange ways in which political debates are conducted. We thought the degree of polarisation in New Zealand was a lot greater compared to Britain and continental Europe. Political discourse here did not allow for any nuances but resorted to stereotypes, clichés and name-calling.

One such example is the opposition’s plan to introduce a single-buyer model for the electricity market. Neither he nor I was particularly fond of the idea (unsurprisingly, I might add, because we are both economists).

However, we found it hard to get overly agitated by the issue. At least not in the same way in which government politicians denounced the Labour/Greens plan as ‘Stalinist’ or ‘North Korean’. Conversely, we could not see why a more liberalised electricity market had to be described as ‘extreme right-wing’, ‘capitalist’ and ‘an exploitation of consumers’. The single-buyer model may be far from ideal but it could probably be made to work. In any case, we could at least understand why this plan was proposed and what it was meant to achieve.

Certainly one can hold strong and vastly different views on policies without morally denigrating the other side. Neither does it hurt to admit that your opponent may be driven by the same wish as you to positively contribute to society. He may still be wrong, to be sure, but that does not make him a bad or socially repugnant person.

What is desirable, therefore, is a political climate that allows mature conversations on policy. Not every proposal is automatically dubious just because it originates from your political opponents. A more civilised discourse that is tough but fair is what New Zealand lacks.

In this spirit, The New Zealand Initiative is proud to host the Next Generation Debates. Student teams from Auckland, Canterbury, Wellington and Otago universities are battling out the big issues of our time. Join us for the finals:

Auckland semi-final, EY (Britomart), 14 August, 5.30pm
Wellington semi-final, Mac’s Function Centre, 15 August, 5.30pm
Wellington Grand Final, City Gallery, 22 August, 6.00pm

The events are free but registrations are essential. We hope to see you there.

All things considered ...

Graph of the week: Courtesy of the ever-brilliant Statistics New Zealand. What exactly is happening with local council spending? More councils may be living within their means, but why has spending risen by 4.4% when inflation is around 1%?
Business NZ’s Phil O’Reilly is right: the living wage campaign is a bit silly. While consumer pressure is a fine and good thing, the market sets wages, not the number of children you have.
If you want a lesson in how to obfuscate and mangle the English language with bureaucratised jargon, look no further than reinstated Australian Prime Minister, Mr Kevin Rudd.
Speaking of Mr Rudd, Australia has a rather large deficit. It then logically flows that the Prime Minister should create and fund a new National Office for Live Music. This is no joke.
Ah, the United Nations: democratic, in touch and effective. Oh hang on, that’s not the UN. The UN is an organisation that celebrates the writings of fashionable Leftist murderers.
The verdict is in: there is widespread corruption in New South Wales on a scale unimaginable in New Zealand.
The yellow peril is taking our houses! The Labour Party launches the newest chapter of its housing policy disaster novella.
Here is Dr Eric Crampton of the University of Canterbury commenting on xenophobic policy.
Are our kids being swaddled in cotton wool? TVNZ’s Sunday programme investigates. Warning: this story contains the usual infuriating po-faced risk averse-niks.

On the record

Time to go local, Dr Oliver Hartwich, The National Business Review, 2 August 2013
A green solution to make Europe sick, Dr Oliver Hartwich, Business Spectator, 1 July 2013
Council slammed for meddling in trade deals, The National Business Review, 30 July 2013
Aucklanders prefer road tolls to rate hikes - report, The National Business Review, 23 July 2013


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