Risks of introducing new policy instruments

Although protecting the integrity of the financial sector underpins the development of LVRs, the reasoning provided by the Reserve Bank, seems to have morphed into being about protecting new, highly leveraged, entrants into the housing market from the risks of house price declines. I must admit hearing this type of justification for policy intervention fills me with considerable unease. There is no discussion of normal policy considerations like market failures or externalities. Instead it smacks of the glorious and all-knowing Bank protecting us from our own ignorance and excessive greed.

Lies, damn lies, and statistics

The collection and analysis of statistics shapes our understanding about much of the world. It is vital for social sciences such as economics, but it has also been important in pushing advances in physical science fields such as biology, geology, climatology, and medicine. However, despite the great informational power of statistics, bear in mind that sample based statistics are still always measured with error.

The destiny of GST

Rather than devoting increasing resources to protecting the current system, a relatively simple and robust solution to current problems with GST is available: change the design of the GST from one based on the Destination Principle to one designed on the Origin Principle.

At home with tax breaks

If politicians genuinely wish to address the perennialissues in the New Zealand housing market they need to get brave and address thetax status of home ownership.  And I am not talking about capital gains taxhere.  Although a comprehensive and consistent capital gains tax system wouldbe of help to New Zealand’s economic performance, in terms of the housingmarket a more critical issue is the lack of a tax on imputed rent.

The bluff from Bluff

There has been a lot written recently about the interaction between the upcoming public share offer for Mighty River Power and the blackmail tactics of Rio Tinto to use this event as a means of extracting a further subsidy from our national government. I wish to focus here on a couple of the underlying economic issues involved here: the economic purpose of privatisation programmes and the economic impact of a closure of the Tiwai Point Smelter.

Inflammatory statements

It was with concern that I read a recent news article about the dangers of non-steroidal anti-inflammatory drugs (NSAID), in which a medical researcher is quoted as stating ""If you look at it internationally, diclofenac is the single most widely used NSAID,"" and that ""Clearly thousands of people die as a result of using [diclofenac]"".

Don’t mess with Mr In-between

This article represents the end of Infometrics’ association with the weekend business pages of the Dominion Post. We began this collaboration with the Dominion Post back in June 2007 and have prepared around 260 articles on a wide range of topics over this period. So on behalf of the current Infometrics team (Gareth Kiernan, Matt Nolan, Benje Patterson, Nigel Pinkerton, Adolf Stroombergen, and Andrew Whiteford), as well as past contributors (John Carran, Andrew Gawith, Susan Guthrie, Brent Oliver, Geoff Simmons, and Chris Worthington), I would like to thank our colleagues at the Dominion Post for hosting our articles. To readers, thank you for the many positive comments that we have received. We have also enjoyed the debate generated by readers that have challenged us on various issues.

Song of the Kauri

I had the pleasure of viewing an advanced screening of a documentary produced by Mathurin Molgat, ""Song of the Kauri"" that will screen in the upcoming International Film Festival. I am ill equipped to discuss the film craft, except to note that the peacefulness of the film fits very well with the film’s focus on kauri trees and the art of lutherie (the craft of making stringed musical instruments). So this is not a review, but rather a reaction.

Sue Bradford might actually be right, but for the wrong reasons

The government formally announced on 7 May the Budget implications of its welfare reform plans. Strangely, or maybe that should be predictably, media attention has focussed on the relatively peripheral government initiative to offer long-term contraception for beneficiaries and their daughters. A lot of the media attention was spurred by Sue Bradford’s histrionic response that it was "totally unacceptable" for the Government to get involved in women’s reproduction.