Will Taylor

Minimum parking restrictions in the Auckland plan (#binthemins)

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So another hot topic in the debate around the Auckland Unitary Plan is whether there should be minimum parking restrictions for new developments. I.e. when a new dwelling is built, developers will be required to build a certain number of car parks depending on the size of the dwelling. I’m not that familiar with the actual detail (it’s covered well by Auckland Transport Blog here), but the main gripe people seem to have is that most new dwellings with two or more bed rooms in suburban Auckland will be required to have two car parks.  Generation Zero have been doing some great advocacy around the Unitary Plan and have produced this graphic, complete with a trendy twitter hash tag #binthemins

Source: Generation Zero

Source: Generation Zero

On its face, as an economist I am suspicious of any arbitrary restriction. Therefore my first question is “what is the market failure this is seeking to correct?”. Or in more simple terms, “why do we think the market will under-provide car parking?”. Read more

Infometrics

Diversification and picking winners

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Following the concerns about botulism and Fonterra, there have been increasing calls for New Zealand to be “diversified” or even for the NZ government to “pick winners”.  Gareth Kiernan touches on these ideas, and why we should be careful with them here.  A choice quote:

Although economic diversity is useful in terms of limiting the volatility of GDP growth, it needs to be remembered that “picking winners” is generally a costly and futile exercise – politicians will usually be worse than entrepreneurs at where to invest resources, and are worse at letting poor performers go.

Remember, it is folly to look at the failures of markets and entrepreneurs without recognising the failures of institutions and government (as a large institution) as well.  In that context, aiming to help out certain firms looks more like taking risk off businesses and putting it on the taxpayer – a shift that hardly seems fair.

What do you think?

Matt Nolan

Sumner praises Bill English

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Straight from the Money Illusion, Scott Sumner discussing his recent trip to Australia:

I was particularly impressed with the talk given by the representative from the New Zealand government (Bill English) but will admit to knowing little about that place, other than that that their people live in Hobbit-style dwellings.

Whether you agree with the policies of the National party, or the specific things that Bill English has pushed through as Finance Minister, you have to admit that he has done an incredibly good job over the past five years – during an incredibly difficult time.

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Will Taylor

EVENT: Commerce Comission talk on new merger guidelines (Auckland)

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The Commerce Commission recently updated it Mergers & Acquisitions guidelines for the first time in 10 years (read them here). They also updated the Authorisation guidelines, which is the mechanism available to the Commission to approve mergers that lesson competition but have an offsetting public benefit (available here).

In Auckland on 10 September (just under two weeks away) the Law and Economics Association of New Zealand (LEANZ) is putting on a special event with the ComCom’s top competition economist (Lilla Csorgo) and top competition lawyer (David Blacktop) talking about the new guidelines.

Details from the mailout below: Read more

Will Taylor

“Sprawl” and population density: should we care about the average or the distribution?

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I’m quite interested in the debate going on in Auckland at the moment about whether population growth should be accommodated by more “sprawl” or increased density. In particular, people claim Auckland currently has quite a lot of sprawl and the vision set out in the Auckland Plan (and implemented in the unitary plan) is that we will move towards a “compact city” (i.e. increased density). A related discussion is what type of transport investments we should prioritize to accommodate that growth (i.e. roading vs public transport/cycling infrastructure).

I was therefore interested to see the New Zealand Institute attempting to debunk the myth that Auckland has a lot of sprawl by posting the following graph, in their very useful “graph of the week” series

Source: New Zealand Institute

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Matt Nolan

Resource booms and income distribution

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Via Vox Eu comes a piece looking at the distributional consequences of resource booms – using Australian data.  Their conclusion:

We need good time series data from developing countries to see whether the distributional impact is bigger there than what we find for Australia. Until then, the analysis here seems timely and relevant, not just for Australia, but for all resource-rich developing countries as the price volatility experienced by the former since the late 19th century was greater than that for the average commodity-exporting low-income country.

The distributional impact of commodity-price shocks in Australia (Canada and New Zealand) should yield important lessons for primary producers from the developmental south.

True – the idea that taxation should be more progressive the more dispersed income and wealth is is an old and widely accepted idea.  And this gives us another way to conceptualise it, with a relevant shock for the NZ and Australian context.  However, a couple of things to keep in mind when thinking about these issues are: Read more