There have been a wide range of people saying that the changes to the tax treatment of property will lead to a leap in rents. So will it?
I would say that the answer is yes, and no. Here is why.
Sorry, that was just me interpreting a consequence of this article – where a Green MP stated that he wants to outlaw cold damp flats. As he says:
“We know that there are a lot of cold damp rentals out there and that lots of people have to live in them because they don’t have the money to move.”
Exactly, so by reducing the supply of rental properties and driving up their price, this bill will ensure that students who move to the city to get access to university won’t be able to – and so will have their lifetime options cut down. That is exactly what would have happened to me, if I hadn’t have been able to live in dingy dingy properties.
And of course, this ignores the costs of administering the scheme – are we going to have people constantly patrolling flats for quality now? Won’t this lead to “black-market” rentals. If they think there are external benefits to insulation, subsidise the damn thing – don’t run around with poorly thought out policy like this please.
Anyway, I’m off to watch the Phoenix play …
It sounds like the tertiary education minister and universities will come into conflict regarding funding, again. In this specific case, I think both sides are wrong/focusing a bit narrowly.
The tertiary education minister is saying the government should link funding to performance measures – including work placement. The philosophy guy that was asked disagreed, as they will get less funding (which is weird, as he goes on to say how employers value the skills from philosophy – so this is sort of a contradiction right – Dim Post was on this wave length as well).
In my opinion public funding of education should be based on the “external benefit” associated with said education.
When arguing against the governments suggestion I’d say, if someone can get a well paying job but there is no external benefit, why should the government fund these courses at a high level?
In a similar vein we can argue against the philosophy guy by saying there is nothing intrinsically “good” about having people running around doing a certain degree type in of itself. We need to sit down and say “what is the external benefit associated with this”. Once we know this we have the rationale to sort out funding.
I do not believe all courses should be funded equally. But I also don’t believe that courses should be funded on the basis of work placement. These conclusions come from my value judgments that:
Update: Eric Crampton discusses the policy here.
Update 2: Very different take on tertiary policy in the UK. I can see an argument for lowering the subsidy on education for jobs with a high private benefit and low social benefit (ability to pay and externality arguments). But what do they mean by a graduate tax? Do I get an additional tax on me if I head over there just because I’ve been to university?
Well, they are pretty certain they are better at making your life choices than you are.
The list from the Hearld is:
Hey guys, if you think there is a problem with New Zealand’s culture of drinking, why don’t you try to understand why the problem exists and then come up with solutions to those problems – rather than just saying we should turn around and introduce prohibition. I’m tempted to say it’s because these “high powered Kiwis” don’t understand how us common people think and feel – but I better not.
On that note, economics transmission will return next week – once I again have hours in the day to do real posting.
So the OCR went up 25 basis points. Cool, that is nice.
It was almost entirely in line with expectations so there isn’t much to say, except:
I was about to post a comment on Eric’s blog – but then the comment got long, and I realised I needed a blog post. So here it is.
Eric Crampton raises some important points regarding the Reserve Bank’s view on the ETS in New Zealand. Essentially, they are ignoring it – a policy decision that a lot of analysts have disagreed with. However, this is one of those cases where I would tend to side with the Reserve Bank, lets work through the discussion to figure out what value judgments I’ve made to get there 😉
Update: Eric discusses further here.