School of Government · Te Kura Kāwanatanga: Institute for Governance and Policy Studies: Working and Policy Papers

Permanent URI for this collectionhttps://ir.wgtn.ac.nz/handle/123456789/21219

The Institute for Governance and Policy Studies (IPS) fosters discussion, research and publication of current issues of domestic and foreign policy. We particularly link academic research and public policy by providing opportunities for independent and detached study, and for neutral and informed discussion of important and relevant issues. Our goal is to engage the broadest possible range of informed opinion, particularly in drawing people together from the universities, the public service, the business community and the wider public community. Our three catchwords might be summed up as study, engage, inform.

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Open Access
Dishonest accounting: comments on the Climate Change Commission draft report, 2021
(Te Herenga Waka—Victoria University of Wellington, 2021) Bertram, Geoff
I have serious concerns with parts of the draft report, and welcome this opportunity to lay those out and suggest how they might be addressed in the final report. Those relate to (1) the Commission’s acceptance and use of the gross-net accounting methodology which systematically obscures the true record of New Zealand’s emissions performance and the actual lack of ambition in targets set to date; (2) the Commission’s failure to engage with the operational detail of the very dysfunctional electricity market which stands as a roadblock to climate progress whereas it ought to be a key facilitator; and (3) the Commission’s reluctance to engage with the nuts and bolts of the Emissions Trading Scheme; and its failure even to canvass alternative price-based policy frameworks such as carbon taxes.
Open Access
Money for something: A report on political party funding in Aotearoa New Zealand
(Te Herenga Waka—Victoria University of Wellington, 2022) Rashbrooke, Max; Marriott, Lisa
Democracy relies on equality between citizens. When some people have greater influence on key decisions, or greater access to people who have influence, democracy is undermined. However, in New Zealand, over several decades, political parties’ memberships have waned dramatically, and income and wealth have become more concentrated at the top. Meanwhile the cost of campaigning has risen. All this has made parties ever-more dependent on wealthy donors, leaving the door open for those donors to win favours in return. Our research highlights an accelerating pace of scandals caused by the movement of money between wealthy donors and decision-makers. The core recommendations from this research are: 1. Donors’ identities disclosed when they give over $1,500; 2. An annual cap on donations at $15,000; 3. Donations allowed only from eligible voters, not organisations; 4. Stronger powers for the Electoral Commission to pursue donations fraud; and 5. A system of state subsidies for small donations, democracy vouchers to allow voters to allocate state-provided campaign funds, and lump-sum payments to all parties.
Open Access
Official statistics in the search for solutions for living with COVID-19 and its consequences
(Te Herenga Waka—Victoria University of Wellington, 2020) Cook, Len; Gray, Alistair; Haslett, Steve; Lumley, Thomas; Mackie, Roger; Trewin, Dennis; Cope, Ian; Snively, Suzanne; Rosenberg, Bill; Karacaoglu, Girol; Yeabsley, John; Sutch, Helen; Easton, Brian; Snorrason, Hallgrimur; Ljones, Olaf; Thygesen, Lars; Radermacher, Walter; Wilson, Nick; Holt, Tim; Pullinger, John; St John, Susan; Dunnett, Gary
The prolonged existence of COVID-19 and the consequential actions to manage it both nationally, regionally and internationally will provide national statistical offices with the greatest challenges that they might ever expect. There is much in common across statistical systems in the breadth of the expectations that are coming to be placed on them. Few countries will have the capacity to meet all these needs, or even plan for meeting them as they become recognised. This paper presents some personal views on how official statistics will need to change and foreshadows the range of influences on the context for which official statistical offices and international organisations need to plan for. The paper draws on experiences in New Zealand and focuses on aspects which have general applicability in other countries. All countries have some advantages and disadvantages that are unique to them, and those that have relevance to a study anchored in experiences in New Zealand are made clear. The central thrust of the paper is that national statistical offices need to be thinking now about the huge medium- and long-term influences that will shape what they need to change in their work.
Open Access
Is the Commerce Act 1986 fit for purpose?: A blueprint for a new Commerce Act
(Te Herenga Waka—Victoria University of Wellington, 2020) Bertram, Geoff
As New Zealand’s experiment with deregulation limps unsteadily into its fourth decade, documented cases of regulatory failure accumulate. A common theme running through these failures is that the weakening of regulatory legal requirements in the 1980s and 1990s, under the rubric “light-handed regulation”, was accompanied by a hollowing-out of the public sector’s regulatory capability. That was never a necessary combination.
Open Access
Economic policy in the public sphere: A perspective from New Zealand
(Te Herenga Waka—Victoria University of Wellington, 2019) Makhlouf, Gabriel; Mukherjee, Udayan
In this essay, our aim is to reflect on the uses of economics in policy in New Zealand, and offer a view on where it may need to develop in coming years. Our intention is to speak primarily to policy practitioners, by which we mean those involved in providing analysis and advice that contributes to debate about the direction of public policy. The motivation for this essay has been our passion for economics, its intellectual underpinnings and their historical development, its tools, techniques and rigour, its analytical insights and the contribution they’ve made to our understanding of the world we live in. Economics matters. It is foundational for public policy and as public policy practitioners we want to promote the discipline, support its development into new applications and strengthen its use across all public policy domains.
Open Access
Life in lockdown: The economic and social effect of lockdown during Alert Level 4 in New Zealand
(Te Herenga Waka—Victoria University of Wellington, 2020) Prickett, Kate C.; Fletcher, Michael; Chapple, Simon; Doan, Nguyen; Smith, Conal
On March 25th 2020 New Zealand completed a 48 hour transition to an Alert Level 4 lockdown, a state which severely restricted people’s movement and their social interactions in an attempt to limit the spread of Covid-19. To examine the effects of lockdown on economic and social wellbeing in New Zealand, the Roy McKenzie Centre for the Study of Families and Children and the Institute for Governance and Policy Studies conducted a survey between Wednesday April 15th and Saturday April 18th. This period was particularly salient for examining wellbeing as it was the third week of lockdown and a time when no official announcement had been made on how long lockdown would continue. Taken together, this report highlights that close to half of all New Zealanders experienced an economic loss during Alert Level 4 lockdown. It confirms that the wellbeing losses among those who experienced job or income loss are also likely to have been substantial. Essential workers reported slightly more stress during this time. Those who remained employed but could not work—a sizeable proportion who were likely being supported by the government wage subsidy programme—reported better wellbeing than other workers during lockdown and much better wellbeing than those who lost their jobs, demonstrating the positive impact of job security despite being unable to work. In terms of family functioning, families as a whole were considerably less stressed by fears that lockdown would strain relationships. Balancing work and family demands under lockdown, however, created time pressure and stress among working parents, in particular working mothers of young children. Overall, these findings can inform policy responses in the labour market that are aimed at both economic and wellbeing recovery, and in the event of potential future lockdowns.
Open Access
Fiscal History
(Te Herenga Waka—Victoria University of Wellington, 2019) Rose, Dennis
This paper is based on a presentation to a Symposium, "Well-being, budget responsibility rules and the Public Finance Act", hosted on 15 April 2019 by the Institute of Governance and Policy Studies at Victoria University of Wellington, and on a follow-up presentation to the Fabian Society at Conolly Hall Wellington on April 23. It falls into two parts: an examination of trends in public revenue and spending in the post-war years and a suggested re-focusing of the Public Finance Act fiscal policy framework, that includes the possible use of fiat money creation in support of macroeconomic objectives, particularly full employment. The historic analysis updates work undertaken earlier this decade, with the primary objective of deriving annual time series data summarizing trends in public revenue and spending, suitable for use in econometric analysis.
Open Access
Can We Keep Flying? Decarbonising New Zealand’s Domestic and International Aviation
(Te Herenga Waka—Victoria University of Wellington, 2019) Rae, Wallace; Callister, Paul
There is a recognition in New Zealand of an urgent need to decarbonise our economy. Two of our largest export industries are dairying and tourism. Together they earn valuable income that supports New Zealand’s relatively high standard of living. But both are significant contributors to greenhouse emissions. Dairy is already receiving significant regulatory attention on this front. What about tourism? If we decarbonise our aviation industry, will we still have one, and can tourism survive without it?
Open Access
Official statistics in the search for solutions for living with COVID-19 and its consequences
(Te Herenga Waka—Victoria University of Wellington, 2020) Cook, Len; Gray, Alistair; Haslett, Steve; Lumley, Thomas; Mackie, Roger; Trewin, Dennis; Cope, Ian; Snively, Suzanne; Rosenberg, Bill; Karacaoglu, Girol; Yeabsley, John; Sutch, Hellen; Easton, Brian; Snorrason, Hallgrimur; Ljones, Olaf; Thygesen, Lars; Radermacher, Walter; Wilson, Nick; Holt, Tim; Pullinger, John; St John, Susan; Dunnett, Gary
The prolonged existence of COVID-19 and the consequential actions to manage it both nationally, regionally and internationally will provide national statistical offices with the greatest challenges that they might ever expect. There is much in common across statistical systems in the breadth of the expectations that are coming to be placed on them. Few countries will have the capacity to meet all these needs, or even plan for meeting them as they become recognised. This paper presents some personal views on how official statistics will need to change and foreshadows the range of influences on the context for which official statistical offices and international organisations need to plan for. The paper draws on experiences in New Zealand and focuses on aspects which have general applicability in other countries. All countries have some advantages and disadvantages that are unique to them, and those that have relevance to a study anchored in experiences in New Zealand are made clear. The central thrust of the paper is that national statistical offices need to be thinking now about the huge medium- and long-term influences that will shape what they need to change in their work.
Open Access
Does an empirical Heckman curve exist?
(Te Herenga Waka—Victoria University of Wellington, 2018) Rea, David; Burton, David
The Heckman Curve suggests that the rate of return to public investments in human capital declines across the life course. This paper assesses the empirical evidence for the Heckman Curve, using estimates of program benefit cost ratios from the Washington State Institute for Public Policy. We find no support for the claim of an inverse relationship between rates of return and the age of the person who receives the intervention. The paper concludes by discussing the various features of human capital and interventions that might explain why the predictions of the Heckman Curve are not consistent with the empirical evidence.
Open Access
How effective are 2018 policy settings for the worst-off children?
(Te Herenga Waka—Victoria University of Wellington, 2018) St John, Susan; So, Yun
This report analyses the policy settings in mid-2018 for their potential to improve the position of the worst-off children in New Zealand. The Labour-led government, elected at the end of 2017, seeks to place child well-being at the heart of their policies. As a first step, legislation setting out four primary measures and six supplementary measures of child poverty has been introduced. The purpose of this bill is to…encourage a focus on child poverty reduction, facilitate political accountability against published targets, require transparent reporting on child poverty levels, and create a greater commitment by Government to address child well-being. (New Zealand Parliament, 2018) Over ten years ago, the Ministry of Social Development (MSD) identified “pockets of significant hardship” where some families were falling below the “very stringent 40% after housing costs poverty line where there is nothing in reserve”(Ministry of Social Development, 2007). For our purposes here, children in families which fall under the 40% poverty line – that is, 40% of median, equivalised, disposable household income, after housing costs, also known as the 40% AHC line – are taken as ‘the worst-off’ children. In 2016, ten years after the Ministry first voiced concern that any children fell below this line, there were at least 140,000 children in this group. Child advocacy groups have argued that the 40% AHC line needs to become one of the primary measures in the Child Poverty Reduction Bill and that no child should fall below it (Child Poverty Action Group, 2018b). This working paper provides a technical analysis to show how much is needed to address the poverty of these 140,000 children in a significant way. The finding is that current policy settings in the Families Package to be implemented from 1 July 2018 are seriously inadequate for the task. This report was written in mid-2018 as very low income families wait for relief from the Families Package, with a long winter to follow if there are no immediate and significant further policy changes. The figures in this report are indicative only, but suggest that while the Families Package should reduce measured child poverty overall, it will be insufficient to stem the rising tide of very low income family distress. A range of specific measures focused primarily on this group are recommended for immediate implementation.
Open Access
From Complexity to Collaboration: Creating the New Zealand we want for ourselves, and enabling future generations to do the same for themselves
(Te Herenga Waka—Victoria University of Wellington, 2018) Eppel, Elizabeth; Provoost, Donna; Karacaoglu, Girol
The purpose of this paper is to change how we approach public policy and implementation for complex problems such as child poverty. The ultimate objective of public policy is to improve people’s lives and wellbeing, now and into the future. Traditional environmental, social and economic policies are clearly failing to generate the changes needed to address the persistent and increasing disadvantage facing many people and the communities they live in. This is unacceptable in a country as rich in human and natural resources as Aotearoa New Zealand. We propose a principles-based policy framework for complex social problems such child poverty. This approach will do more than embellish existing policy. It will help ensure that the intent of policy is realised, through a shared and explicit understanding and a commitment to achieving significant improvements. The government needs to rethink its various roles and consider how it enables local communities to be more transformative for children, their families, whānau and communities. We arrive at this conclusion through an analysis of how complex problems and uncertainty are best managed, and through considering some promising practices which suggest some common underpinning values and practices we can follow. In essence, we propose that the design and implementation process for public policy should be reconfigured to rest on a new set of principles, built on values of trust between government and other agents of change, and of valuing distributed community knowledge, resources and local solutions. This paper derives the following set of six principles from our understanding of the complexity of issues like child poverty, and from our consideration of previous attempts to work effectively in complex policy domains. The Government’s proposed legislation to set targets for ‘significant and sustained’ child poverty reduction, and the elevated focus of government agencies on effective interventions and on learning from locally-generated change, make the time ripe for advancing our thinking on these issues.
Open Access
The Case for New Climate Change Adaption. Funding Instruments.
(Te Herenga Waka—Victoria University of Wellington, 2017) Boston, Jonathan; Lawrence, Judy
Adapting to climate change during the 21st century and beyond poses unprecedented technical, administrative and political challenges that will test the ability to cope at national and local levels. The impacts of climate change will be progressive (sea level rise) and intense (rainfall), and punctuated by abrupt and extreme events (storms, droughts, floods and landslips). Such changes will be outside the variability ranges that we have responded to in the past or are responding to currently. They will be ongoing for centuries, and occur concurrently in time around New Zealand. The risks will compound within, between and across sectors and domains of interest. The foreseeable impacts will create high damage costs (Bell, Paulik and Wadwha, 2015; Insurance Council of New Zealand, 2014) and raise difficult inter-temporal and intra-generational trade-offs.2 For instance, in New Zealand insured losses due to extreme weather events were as much as $175 million in 2013 and $135 million in 2014 (Insurance Council of New Zealand, 2017). The Treasury estimates that drought cost New Zealand around $1.5 billion in 2013. Over the last ten years the annual cost of repairing land transport networks damaged by weather-related events has increased from $20 million to $90 million. Moreover, these costs can be expected to escalate significantly over coming decades as a result of climate change. Importantly, in this regard, Local Government New Zealand estimates – based on research by Deloittes Access Economics (Australia)(2013) – that $1 spent on hazard risk reduction will reduce losses and disruption from natural disasters worth between $3 and $11. Other international estimates of the likely savings are consistent with these findings (Healy and Malhotra, 2009).
Open Access
Bridges Both Ways. Transforming the Openness of New Zealand Government.
(Te Herenga Waka—Victoria University of Wellington, 2017) Rashbrooke, Max
One of New Zealand’s great strengths is its easy-going, ‘she’ll be right’ attitude; but every strength can become a weakness. That is increasingly the case with the country’s record on public transparency, political participation, and anti-corruption policies. A long-standing record of scoring well on international rankings for integrity and openness has lulled New Zealand into a complacent attitude. While there is much to be proud of, there are also serious problems, as repeatedly highlighted by international surveys. Political donations are badly regulated, official information laws are being circumvented, and opportunities for deep citizen engagement with politics are limited. New Zealand is also passing up the chance to get on board the latest global push for greater openness, which is being impelled both by advances in technology and citizens’ growing expectations of greater transparency in many parts of their lives. New Zealand therefore faces an opportunity – to regain its leadership on openness, and to address some of the weaker parts of its record. With the 2017 general election just months away, now is the perfect time for a discussion on what kind of government New Zealanders want. This report therefore surveys a wide range of pro-openness policies as an aid, and stimulus, to that debate.
Open Access
Review of New Zealand Police’s progress in response to the 2007 Commission of Inquiry into Police Conduct
(Te Herenga Waka—Victoria University of Wellington, 2017) Rowe, Mike; Macaulay, Michael
In 2007 the report of the Commission of Inquiry (CoI) into Police Conduct made 60 recommendations for change; New Zealand Police (NZ Police) had responsibility for 47 of those. In an effort to ensure that the broad package of recommendations were implemented in a meaningful way that would embed reform in a long-term and fundamental manner, CoI recommendation 60 set a 10-year time frame during which the Auditor-General would periodically report to Parliament on Police’s progress against the CoI recommendations. Four such reports have been made. This decade of oversight concludes in 2017 and in anticipation of a final audit by the Office of the Auditor-General (OAG), NZ Police commissioned this review. The central remit of this review is to consider, in broad terms, the extent to which NZ Police has met the 'spirit and intent' of the CoI report and its Police-specific recommendations. This will supplement the work of the Police’s own Commission of Inquiry Executive Oversight Group that has regularly audited progress relating to each individual recommendation.
Open Access
Wealth Disparities in New Zealand: Final Report
(Te Herenga Waka—Victoria University of Wellington, 2017) Rashbrooke, Geoff; Rashbrooke, Max; Molano, Wilma
Over the period 2002 to 2010, Statistics New Zealand carried out a longitudinal survey known as the Survey of Family, Income and Employment (SoFIE). Some eight waves of data were collected. In every second wave (2003/2004, 2005/2006, 2007/2008 and 2009/2010), respondents were asked questions about their wealth holdings. In 2007 Statistics New Zealand published a paper by Jit Cheung, ‘Wealth Disparities in New Zealand’, based on data from wave 2 (2003/2004). This paper provided an overview of net worth disparity, giving information by mean and by median, and other distribution information including the Gini coefficient and other percentile-based information. Results were also analysed by age, by major ethnic group, by family type, and also by gender, personal income decile, and region. In November 2015, we published a paper, ‘Wealth Disparities in New Zealand: Preliminary Report Providing Updated Data from SOFIE’ (IGPS working paper 15/02), which updated the Cheung 2007 paper to include data from waves 4, 6 and 8 of SoFIE. As promised in that paper, we have now extended our research on wealth disparities by using the SoFIE data to investigate two further areas: 1. In Part 1, a longitudinal analysis looking at the extent to which survey respondents in specified wealth sub-divisions moved between such sub-divisions over the course of the survey; and 2. In Part 2, an asset class analysis looking at how wealth holdings across the spectrum are divided among the different classes, for both assets and liabilities. Note that the results presented here for wave 2 differ a little from the original results owing to changes made to SoFIE population weightings after 2007.
Open Access
Permanent Forest Bonds: A pioneering environmental impact bond for Aotearoa New Zealand
(Te Herenga Waka—Victoria University of Wellington, 2017) Hall, David; Lindsay, Sam; Judd, Sam
Section 1: The challenge is to establish permanent forest on vulnerable land throughout New Zealand, especially erosion-prone land and waterway margins (see Boxes 1 & 2). Leaving this land unforested hinders the nation’s long-term prosperity by degrading national environmental assets and increasing future carbon liabilities, which together, undermine New Zealand’s highly valued green reputation. Section 2: The proposed solution is a world-pioneering Permanent Forest Bond which belongs to the wider classes of green and climate-aligned bonds. The innovation is not only to fill a funding gap for budget-constrained government entities, it is to shift the environmental spending paradigm so that the New Zealand Government pays for positive environmental results rather than services. This shifts the risk of a successful intervention from taxpayers to private investors, who are compensated in return for taking the risk. Section 3: The foundations for the Permanent Forest Bond are based upon the idea of an Environmental Impact Bond, built upon pay-for-performance contracts. First conceived by David Nicola in a 2013 report, there have not yet been any bonds issued in New Zealand under this instrument. However, there are examples emerging in the United States, including a Forest Resilience Bond currently under development (see Box 3). Section 4: The Environmental Impact Bond is an extension of a Social Impact Bond, of which there are now over 60 issued worldwide. However, the impact bond model is better suited for environmental impacts than social impacts, particularly because measurement is less controversial and better established (see Box 4). Section 5: Although there is not yet any empirical track record for Environmental Impact Bonds, there is now an emerging empirical and evaluative literature on Social Impact Bonds. This literature is surveyed to anticipate the various advantages and risks of adapting this structure for establishing permanent forest. Section 6: A major advantage of Environmental Impact Bonds over Social Impact Bonds is the preexisting science and economics of monitoring and valuing environmental assets. This section draws upon existing literature on ecosystem services to identify the potential expenses, revenue streams and avoided costs that can be negotiated as part of a Permanent Forest Bond. Sections 7 & 8: A Permanent Forest Bond is an eminently feasible proposition. The impact bond structure is well suited to aligning the long-run costs and benefits of establishing forest (or not) on vulnerable land.
Open Access
Wealth Disparities in New Zealand: Preliminary Report Providing Updated Data from SOFIE
(Te Herenga Waka—Victoria University of Wellington, 2015) Rashbrooke, Geoff; Rashbrooke, Max; Molano, Wilma
Over the period 2002 to 2010, Statistics New Zealand carried out a longitudinal survey known as the Survey of Family, Income and Employment (SoFIE). Some eight waves of data were collected. Every second wave (2003/2004, 2005/2006, 2007/2008, and 2009/2010), respondents were asked questions about their wealth holdings. In 2007 Statistics New Zealand published a paper by Jit Cheung, Wealth Disparities in New Zealand, based on data from wave 2. That paper provided an overview of net worth disparity, giving information by mean and by median, and other distribution information including the Gini coefficient and other percentile-based information. Results were also analysed by age, by major ethnic group, by family type, and also by gender, personal income decile, and region. This preliminary paper is the initial part of a project to use data from those waves. The project has two principal purposes: 1. To update the Cheung 2007 paper to include data from waves 4, 6 and 8 of SoFIE; and in addition to extend the format of the results reported by Cheung based on wave 2 of SoFIE to include information as to the extent to which survey respondents in specified wealth subdivisions moved between such sub-divisions over the course of the survey. 2. To demonstrate the richness of the information gathered by SoFIE and to encourage further exploration of the survey’s wealth data.
Open Access
The "investment approach" – liabilities or assets?
(Te Herenga Waka—Victoria University of Wellington, 2015) James, Colin
In 2011 the government adopted from the Accident Compensation Corporation via the Welfare Working Group a programme of actuarially estimating the cost of someone staying long-term on a benefit and using that as the basis for defining the return from "investing" in action that deflected that person from a benefit into long-term work. The Ministry of Social Development (MSD) engaged an Australian firm, Taylor Fry, to do the actuarial estimates of long-term benefit costs. It applied programmes incorporating those estimates initially to 16-17-year-olds and sole teen mothers of 16-18 in the welfare system, groups known to have a high risk of long-term benefit-dependency. This actuarial/investment technique is known as the "forward-liability investment approach" or just the "investment approach". Including the "forward-liability" qualifier underlines that in its initial application the technique is essentially insurance against a future liability. Leaving out the "forward liability" qualifier suggests an investment approach might logically be applied to building assets in addition to avoiding liabilities and applied more widely in policy development and government decision-making.
Open Access
The TINZ National Integrity System Assessment 2013 and the Open Government Partnership: From findings to recommendations and on to implementation
(Te Herenga Waka—Victoria University of Wellington, 2014) Petrie, Murray
The 2013 National Integrity System Assessment conducted by Transparency International New Zealand (TINZ) has been attracting increased attention recently with the inclusion by the government of a commitment in NZ’s first Open Government Partnership (OGP) National Action Plan to consider and respond to the recommendations in the NIS assessment. This paper is intended to increase understanding of the TINZ National Integrity System Assessment recommendations and the process by which they were produced, and to discuss their implementation in the context of the OGP. The paper is part of a series of IGPS papers on the National Integrity System Assessment and on the Open Government Partnership. This article begins by discussing the key findings from a system-level analysis of the pillars of the National Integrity System; briefly discusses how the NZ findings compare to NIS assessments in other countries; provides an overview of the recommendations and the process by which they were generated; and discusses implementation of the report’s recommendations, in particular through NZ’s membership of the Open Government Partnership (OGP). The recommendations in the NIS assessment are reproduced in full in Annex 1.

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