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Roger Kerr: Do Economists Agree on Anything?

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Roger Kerr: Do Economists Agree on Anything? Do economists agree on anything? Roger Kerr The New Zealand Business Roundtable is an organisation comprising primarily chief executives of major New Zealand businesses. The purpose of the organisation is to contribute to the development of sound public policies that reflect overall New Zealand interests. This book contains commentaries written by Roger Kerr that were published by various newspapers in New Zealand and Australia between 2002 and 2007. First published in April 2008 by New Zealand Business Roundtable PO Box 10-147, Wellington 6143, New Zealand http://www.nzbr.org.nz ISBN 978-1-877394-17-1 (online) c 2008 edition: New Zealand Business Roundtable ii Contents About the author ............................... ix I 2007 1 1 Can the media help promote economic literacy? ........... 2 2 The real downsides of remoteness ................... 4 3 Good institutions and policies account for Australia’s prosperity . 6 4 The priority for tax reforms: a flatter tax scale ........... 8 5 Productivity: New Zealand’s biggest economic problem ...... 10 6 Do economists agree on anything? Yes! ............... 12 7 Scoring our schools: what makes for a good education ....... 15 8 New thinking needed on local government .............. 17 9 Climate change: minefields ahead ................... 19 10 Back to basics on election funding .................. 21 11 Public policy riddles .......................... 23 12 Auckland airport not a political plaything .............. 25 13 Catching up with Australia: policies must match goals ....... 27 14 Kiwis and tigers: lessons in conservation ............... 29 15 Confusion around inflation putting monetary policy framework at risk .................................... 31 16 Reining in the regulatory madness .................. 33 17 Welfare: more a band-aid than a solution to poverty ........ 35 18 Not so fast, Minister .......................... 37 19 Will KiwiSaver boost economic growth? ............... 39 20 Taming the ‘tax, spend and regulate’ beast ............. 41 21 Another Budget of missed opportunities ............... 43 22 How to future-proof New Zealand ................... 45 23 Across the Tasman: Australia rising ................. 47 24 Still plenty of scope to get people into work ............. 49 25 It’s time to cool it ........................... 51 26 The lever of riches ........................... 53 27 It’s getting better all the time ..................... 55 28 Monetary policy, inflation and capital markets ........... 57 29 Tax cuts, inflation and saving: confusion piled high ......... 59 30 Capital market regulation: less is better ............... 61 31 Stern review on climate change is bad economics .......... 63 32 Achieving the dream .......................... 65 iii iv Contents II 2006 67 33 Roger Douglas: visionary leader .................... 68 34 Loss of a freedom fighter ........................ 70 35 Flatter taxes still the international trend ............... 72 36 How big is the problem of monopoly? ................ 75 37 Funding political parties: not ordinary government business .... 77 38 Are good institutions and policies enough? .............. 79 39 Contest of environmental policy ideas welcome ........... 81 40 Tax cuts now on the agenda ...................... 84 41 School choice lifts underachieving students .............. 87 42 Question marks over Telecom regulation ............... 89 43 Local government: new framework needed .............. 91 44 The deadweight costs of taxation ................... 94 45 It’s yesterday’s schools once more ................... 96 46 The weak arguments for subsidies for stadiums and events ..... 98 47 Building a culture of philanthropy ..................100 48 Scanning the far horizon: Treasury’s fiscal outlook .........102 49 Roading: still many roadblocks ....................104 50 SOE policy: dumb and now dumber .................106 51 Some myths and facts about savings .................108 52 Budget 2006: “read it and weep” ...................110 53 Tertiary education: who knows best? .................112 54 Energy efficiency: another central planning failure .........114 55 Productivity growth in New Zealand .................117 56 Business to government: please lower and flatten taxes .......120 57 Unjustified dismissal laws are unjust .................122 58 Labour markets are not special ....................124 59 Is there a case for a payroll tax? ...................126 60 What’s wrong with Keynesian economics? ..............128 61 Budget 2006: more spending and less growth ............130 62 ARC rating claims exposed ......................132 63 Reality breaks through with axing of carbon tax ..........135 III 2005 137 64 Perspectives on productivity ......................138 65 The rise and fall of nations ......................141 66 Inflation debate going off the rails ..................143 67 Does Treasury advice represent value for money? ..........145 68 Full employment: not there yet ....................147 69 Privatisation: a third rail? .......................149 70 Getting better value for money in public spending .........152 Contents v 71 Workplace reform in Australia ....................155 72 Global warming and Kyoto becoming decoupled ...........157 73 Why the Greens’ charm offensive failed ................159 74 MMP means Much More Paralysis ..................161 75 Why the rise of China and India can benefit us all .........163 76 The dynamic effects of tax cuts ....................165 77 New Rights New Zealand: myths, moralities and markets . .167 78 Market-oriented policies are mainstream ...............169 79 Funding tertiary education ......................172 80 New Zealanders are more highly taxed than Australians .. .. .174 81 Sustainability ..............................177 82 Improving regulatory disciplines ....................181 83 Should we fear China? .........................183 84 Election policies should be viewed through a growth lens .. .. .185 85 Is the Kyoto Protocol now a dead letter? ...............187 86 Are tax cuts inflationary? .......................189 87 The energy hobgoblins .........................191 88 Are New Zealanders poor savers – or just rational? .........193 89 Clearing the fog of misinformation about wages ...........195 90 Budget gets a ‘not achieved’ grade ..................197 91 Some taxing issues ...........................199 92 Taxation in New Zealand: myth and reality .............201 93 Regulation of unlisted is unwarranted ................203 94 Hui Taumata: a source of optimism .................205 95 Budget Policy Statement shows need for credible growth strategy . 207 96 Roderick Deane on corporate governance ...............209 97 In economics everything takes time ..................211 98 A deficit of understanding .......................213 IV 2004 215 99 Reducing barriers to investment in infrastructure ..........216 100 Multinational companies don’t rule the world ............219 101 Key issues for Maori are also those of wider society .........221 102 The case for lower taxes ........................223 103 Competition vital for efficiency as savings debate continues . .225 104 Learning a lesson in welfare from the United States .........227 105 Australia endorses reform .......................230 106 The case for a flat tax .........................232 107 The fiscal responsibility act: a stocktake after ten years .. .. .234 108 The record of progress .........................236 109 Is there a problem with New Zealand’s management capability? . 238 vi Contents 110 Serving the public, not just the politicians ..............240 111 The role of business in historical perspective and today . .. ..242 112 Understanding New Zealand’s terms of trade ............245 113 It’s yesterday’s schools once more ...................247 114 Hard-headed spending decisions not cold-hearted ..........249 115 Cullen confuses company tax debate .................251 116 Rate bias against business should go .................253 117 Budget shows why stronger fiscal controls are needed ........255 118 Sizing up the 2004 Budget .......................257 119 Education really does matter .....................259 120 Flirting with Florida’s follies .....................261 121 Good policies depend on getting our priorities right .........263 122 Government failure, not market failure, is today’s big problem . .265 123 Is the labour market special? .....................268 124 A refreshing return to sanity .....................270 125 An outsider’s perspective .......................273 126 Australia-US trade deal spells danger for New Zealand .......275 127 Asian giants on the rise ........................277 128 Memo to Margaret Wilson: please engage ..............279 129 Employment law changes a blast from the past ...........285 130 Growth and innovation: yeah right! ..................287 131 Prejudice against a word ........................289 132 Sage words ...............................291 V 2003 293 133 OECD gives New Zealand a D grade .................294 134 Running out of oil – again .......................296 135 A country is not a company ......................298 136 Clock ticking on objectives ......................300 137 Competition shouldn’t be incarcerated ................302 138 Where everybody knows your name .................304 139 Why is Australia doing so well? ....................306 140 Restoring philanthropy in New Zealand ...............308 141 Globalisation is good for the poor ...................310 142 Economic freedom gains ground – but not in New Zealand
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