Making the waka go faster

21/11/2012 § 2 Comments

Monday saw the launch of He kai kei aku ringa, the Crown-Maori Economic Growth Partnership. I went along to the launch event. It was a nice affair — lots of people trying to good things for Maori and the whole country, lots of energy and support for the new plan.

Here are some good things about the plan:

  • There is an actual plan (pdf). This isn’t just hand-wringing (ringa-wringing?) about the state of Maori. There are actual things that are planned to be done. Oh, and people who are supposed to do them.
  • There are goals, relatively SMART goals. The Action Plan takes each of the specific goals, explains why they are important, and then provides a way to measure success. Not always, and things will get fudged, etc. But still, goals like ‘Higher completion rate for Maori students studying for tertiary qualifications’ and ‘Higher retention rates for Maori students in tertiary education’ can be measured and success ascertained.
  • The plan has a sensible structure. It has six strategic goals, and then 20-odd specific goals. People can remember six goals (the rule of thumb is 7 plus-or-minus 2). They can get behind six goals — they know the bigger picture. Big laundry lists aren’t suitable for this purpose, not without structure. This way, everybody knows which way the waka is headed.
  • Education is goal #1. The gap between those with tertiary qualifications and those without is growing. We can argue the why and the equity, but it has happened and does continue. Also, getting a tertiary qualification pays for itself and then some. It’s a worthwhile investment. The relatively poor performance of Maori pupils and students has to be turned around if they want economic success.
  • There appears to be actual funding involved. These initiatives cannot happen without money.

So, I’m hopeful. The plan a good first step. Now for the hard work of doing it.

To finish this off, three things:

  1. Declaration of interests: I am not disinterested in Maori development, having a wife and children who are Ngai Tahu/Kai Tahu.
  2. When the working group presented the report to the Minister, they sang a waiata. It was lovely. I have to see how I can get that added to my research contracts.
  3. The report uses the saying, Ka tangi te kākā. And here, spotted in our yard yesterday, is a kaka (the bands are from the local wildlife sanctuary):

Water erodes asset sales

18/07/2012 § 3 Comments

I feel a bit sorry for National. They made asset sales a central issue in the last election, they won, and now they want to go ahead with their plans. It was all clear and above board. See where that got them.

On the other hand, the Maori Party, Winston Peters, and assorted other people and organisations have a point. How can you sell hydropower companies if you haven’t first worked out who owns the water?

At first, the question seems daft. The State Owned Enterprises have reservoirs and dams, these are used to generate power, and the power produces a revenue stream. The Government wants to sell shares in the company, that is, shares in the future potential net revenues. They aren’t selling water; they are selling company shares.

A little more reflection, and the Maori objection to selling the companies because of the water is very clever. The SOEs might own dams and turbines and whatnot, but they are of no value if they can’t use the water. That’s a spanner in the Government’s plan to sell SOE shares.

The Government could tell prospective buyers that existing water practices will be recognised and grandfathered and everything will tick along as before. But that course means that the national discussions over water policies have been superseded by the asset sales: some existing water rights are been assured, while others will be contested. Alternatively, the Government could sell the shares while acknowledging that there’s a bit of uncertainty over water. That puts the future revenue at risk, which means the shares will sell at a discount.

The issue about water rights, by the way, is this. Well-specified water rights include the amount, quality, timing, and location of the water. Now imagine that a farmer has rights to extract a certain amount of water from a river in January. A power company might need to hold that water in its dam until January to meet that obligation. Let’s say water levels are a bit low in December. The company has a choice: let the water turn the turbines in December, or release the water in January for the farmer. Is it going to look after its revenues, or after the farmer’s water rights?

So the various Maori organisations have put National in a bind:

  • it sells the shares, with a pledge to protect the SOEs’ water allocations, undermining the water talks (including with the rural base)
  • it sells the shares, but takes a discount because it doesn’t pledge to protect the allocations; the asset sales generate less revenue than expected, vindicating the opposition
  • it holds off selling the shares until the water issue is sorted, halting one of its second term’s signature intiatives and handing its political opponents a victory.

Of course, the sale doesn’t have to be all or nothing. The Government could have a partial partial asset sale, only selling those shares that aren’t at risk from the water controversy. That’s a halfway measure that won’t appease anyone.

Which means it’s probably perfect politics.

Our responsibility for what we know

04/07/2012 Comments Off on Our responsibility for what we know

Statistics New Zealand publishes a handy annual pocket guide to the country’s statistics. It has GDP, numbers of sheep, all the important things.

This year, they have Te Ao Marama, ‘a snapshot of Maori well-being and development’. It is again in the handy pocket-sized format. Oh, yeah, and the graphics (see below) are cool.

What is clear from the data is that the Maori population is different from the NZ European/Pakeha population. Stats NZ shows that Maori population tends to be young, tends to work more in specific occupations, and tends to have higher rates of unemployment. They also tend to express more dissatisfaction with the state of the environment.

Whatever policies we enact have different effects across the population. Policies to reduce unemployment, for example, are more valuable to groups with higher unemployment rates. Policies to support raising children are more valuable to groups with higher percentages of children.

So, what is our responsibility for using this knowledge of the Maori population? If we know a policy is going to trade off, say, higher unemployment against greater funding for individuals over 80 years of age, then we also know that these policies will affect Maori and Pakeha differently.  Maori have more stake in measures to reduce unemployment, because they are more likely to be unemployed. Pakeha have more stake in health care for those over 80, because they are more likely to live that long.

One possible answer is that the ethnic dimension shouldn’t be our focus. Yes, Maori may be more likely to be in certain jobs or age groups, but the main thing is to focus on employment and health and not get wound up in secondary considerations.

But the big difference is the Treaty of Waitangi. My immigrant’s understanding of the modern interpretation of the Treaty is that it established a bi-cultural country. Maori and British are co-equals, and the country should be managed to serve them both. If policies are detrimental to specific groups which co-incidentally happen to have more Maori or more British/NZ European/Pakeha, then what should we  do about it?

Put another way — how much should the dimension of ethnic identification feature in our discussions and decisions across all policies?

Te Ao Marama provides some interesting statistics, but also raises some important questions.

Narratives of minor parties

10/11/2011 Comments Off on Narratives of minor parties

I’ve looked at National and Labour and the stories they tell about how the economy works. What about the minor parties?

Greens: I was struck by how technocratic they are. They take the economy as a given, and then make suggestions for how to push or pull it in the ‘right’ way. It is a partial equilibrium view, admittedly — the feedbacks and general equilibrium effects are missing. They also try to broaden the discussion: we shouldn’t look just at the market outcomes, but at the wider economic effects. To do this, we should measure the ‘right’ things. The focus on measurement signals acceptance. They aren’t trying to say that the market system failed; it isn’t a systemic critique. Instead, they are saying, ‘Look, when we measure and aim for growth, we get it. Now, let’s do the same for the things that really matter: the environment, society, families, etc.’ This is economics as the operating system for humanity.

Act: It is hard to separate Act 2011 from Hide, Brash, and classical liberalism generally. I won’t really try. Brash was on Close Up on Monday, and repeated the Taskforce 2025 prescription that NZ needs world-leading regulation. That brought to mind, ‘That government is best which governs least’. This is the reasoning behind Hide’s Regulatory Standards Bill. The underlying narrative reminds me of Rousseau: man starts in a state of nature, and then is corrupted. The economy starts off in a state of natural function, and then is corrupted by government.

Maori: Much of the party policy focuses, not surprisingly, on the tangata whenua. The party talks about how outcomes are different for Maori. A lot of the discussion is supply-side: producing more young people with education and training, making better use of the resource base, understanding Maori IP. The demand side is less visible: what skills will be demanded, or why demand for Maori-owned resources aren’t as high. The implication is that the economy works, it just doesn’t work well for Maori. They need to get in there and participate.

A different narrative, one that isn’t used, is that the market produces winners and losers. The poor and dispossessed are as integral to the system as the wealthy. Such as system is unjust, and must be replaced. Instead, the Maori party seems to say that the economy generally works, but Maori need better participation.

I may be reading this wrong, but all three of these parties seem to believe that the economy generally works well. It may need some refocusing (Greens) or relaxing of controls (Act), or we may want a bigger piece of it (Maori), but its centrality and functioning are taken as given. These narratives parallel the political fortunes. They can’t change the essential nature of the Government. Instead, they can alter its trajectory a bit towards their own goals.

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