The Dim-Post

March 31, 2011

Foregone conclusions are nice to have

Filed under: economics — danylmc @ 11:49 am

Via Stuff:

The Government has ordered a new body aimed at boosting economic performance to investigate the cost of housing.

The Productivity Commission, set up under National’s governing agreement with ACT, has been asked to report on issues including the cost of building a home, the efficiency of taxes, levies and charges and the impact of Government regulations.

The commission has also been told to inquire into international freight transport services, including transport costs and port charges.

English and Hide also announced the appointment of two new commissioners to work alongside commission chairman Murray Sherwin.

They are former Treasury secretary and past ACT candidate Graham Scott, who is now executive chairman of Southern Cross Advisers Ltd, a company specialising in public sector reform, and Victoria University management school head Sally Davenport.

The commission formally begins its work tomorrow.

I wonder how much we’re paying the commissioners to research and consult widely on this complex issue and then advise the government to deregulate the industry and privatise all its state houses?

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33 Comments »

  1. They could start by looking into the scandalously high price of raw materials in the construction sector in NZ. They could do a comparison with Australia and ask why raw materials are so much cheaper there – including products imported from NZ. We’re being screwed over by some of our biggest private sector companies who profiteer from their lack of competition.

    Instead the Commission will suggest we introduce more competition into the provision of state housing…

    Comment by Me Too — March 31, 2011 @ 11:56 am

  2. One suspects that is a certain level of regulatory capture of local government by the boomer demographic, who seem to oppose urban sprawl/inner city apartment blocks/any form of new housing whatsoever.

    Comment by JD — March 31, 2011 @ 12:11 pm

  3. One suspects that is a certain level of regulatory capture of local government by the boomer demographic, who seem to oppose urban sprawl/inner city apartment blocks/any form of new housing whatsoever.

    There’s only one solution to that, and Rodney Hide knows what it is.

    Comment by George D — March 31, 2011 @ 12:15 pm

  4. Danyl, I think it might be your foregone conclusions at work, not theirs. The Productivity Commission will only survive long-term if it does solid non-partisan work and there are many, many people who want to see such a body succeed, including its commissioners. It’s not the Brash 2025 Taskforce.

    Comment by Dave Guerin — March 31, 2011 @ 12:20 pm

  5. Political deniability for unpopular policy positions is also nice to have.

    Comment by Pascal's bookie — March 31, 2011 @ 12:22 pm

  6. It will be a real pity if the Productivity Commission – an idea which is potentially very useful, and has been successful in Australia – is turned into a “go-to” rubber stamp along the lines of the 2025 Taskforce. The initial decision by the Government to allocate minimal funding, which hampers the ability of the Commission to base its findings on comprehensive research, was disappointing. The new Commissioners appointed are another worrying sign.

    Comment by Jordan — March 31, 2011 @ 12:22 pm

  7. “The Productivity Commission will only survive long-term if it does solid non-partisan work”

    The Retirement Commission does solid non-partisan work. But nothing it says or does will ever make the slightest difference to John Key’s blanket ban on any changes to superannuation.

    Comment by sammy — March 31, 2011 @ 12:33 pm

  8. @Dave – I guess we’ll see when they make their recommendations. I can’t see a commission driven by Graham Scott coming up with any suggestions that meet with bi-partisan support.

    Comment by danylmc — March 31, 2011 @ 12:36 pm

  9. What an irony, getting a past ACT candidate to explain why the private sector model and resultant price gouging is not working. Any report will have sob stories of how Fletch and Carter both wept openly at enquiry meetings blaming the Japanese Empire for wanting to pay so much for our best timber and return it to us in the form paper and cardboard forming part of the 1000 page report which won’t even boost the economic performance of a NZ paper recycler.

    What next? Perhaps get John Key to lead a panel to look into money laundering at Merrill Lynch.

    Comment by Tel — March 31, 2011 @ 12:38 pm

  10. At Graham’s discount rate of “$2K per day GST” his personal, labour productivity must be wicked as.

    Comment by k.jones — March 31, 2011 @ 1:01 pm

  11. Look, what really angers me about housing in New Zealand is that state housing is supposed to be based on income, right? Yet many of those in state houses have annual net family income that would easily enable them to afford to rent a place at market rate, or even to pay off a mortgage. Yet they choose to sponge off other tax payers and smoke heavily and throw big beer parties and barbeques at the weekends.

    Comment by Betty — March 31, 2011 @ 1:20 pm

  12. Betty: If that’s the thing that angers you most about housing in NZ then you’re not doing too bad.

    Comment by James — March 31, 2011 @ 1:38 pm

  13. JD: There are intelligent ways to build cities and there are dumb ways to build cities. I’m currently fascinated by those who moan about the cost of rates. They are probably the same people who insisted densities be low and infrastructure be thinly spread and expensive to build and maintain. Blaming “Boomers” for trynig to correct the mistakes of the past seems unfair….if you aren’t prepared to acknowledge sprawl is one of the most expensive ways to build a city. It’s effectively a tax on everyone, sucking up resources and cash just to keep water and sewerage flowing and street lights on…..that could be put to much better uses.

    Comment by Steve — March 31, 2011 @ 1:50 pm

  14. I think Betty is angry cause the cool kids are having a party and no one invited her.

    Comment by BeShakey — March 31, 2011 @ 1:51 pm

  15. Wellington’s Northern Suburbs are a good case study in what’s wrong with housing construction in New Zealand.

    All of the new developments from Newlands, up through Churton Park and Woodridge as far north as Aotea, have been locked up tight by two or three developers. They’re able to effectively act as monopoly suppliers for new houses. The taskforce needs to look at the zoning process councils use and see if there’s a way to avoid situations like this occuring in the first place.

    Comment by Phil — March 31, 2011 @ 2:27 pm

  16. “They could do a comparison with Australia and ask why raw materials are so much cheaper there – including products imported from NZ. ”
    Well, some Aussie dude reckoned he could fly to NZ and get his fortnightly shopping and fly home again and still have change, including Aussie-made stuff that allegedly sells cheaper here.
    Do you have data for these raw materials prices? have you accounted for the exchange rate?

    Comment by Clunking Fist — March 31, 2011 @ 2:33 pm

  17. Hang on Phil, are you talking about land values? That’s different from the cost of construction.
    Urban sprawl lower land values.
    The pendulum swing in building standards after the leaky homes debarcle are possibly whats increasing the cost of building, and they’ve taken the opportumity to squeeze in a few “green” things, too, like the need for cavity walls, double-glazing and underfloor insulation. If we could have houses built to comply with one of 2 or three DIFFERENT standards, then we could trim some costs. Gold, Silver or Bronze standrds, say.

    Comment by Clunking Fist — March 31, 2011 @ 2:39 pm

  18. I remember some reading some initial (draft) policy documents at the time when the idea of a Productivity Commission was being discussed, post 2008 election. I cannot remember the words exactly, but there were passages like “… investigate how government regulation and taxation is putting a brake on economic growth, and how they can be removed.” Okay, they may not have been the exact words, but that was the general jist – completely unself-conscious. I wonder if the establishment documents of the commission are the same?

    Comment by DT — March 31, 2011 @ 2:52 pm

  19. Prices 100×50 H3 MSG8 (F7 in Australia)

    NZ Placemakers over the counter price $6.90/m
    Australia buybuildingsupplies.com over the counter price $4.75/m (NZD 6.44/m)

    Comment by Tel — March 31, 2011 @ 3:42 pm

  20. WTF? Is this essential or a ‘nice-to-have’ ???

    Comment by Rob Crawford — March 31, 2011 @ 3:59 pm

  21. NZ Placemakers over the counter price $6.90/m
    Australia buybuildingsupplies.com over the counter price $4.75/m (NZD 6.44/m)

    Add in the extra GST and the prices are almost equivalent. It’s in food where you really see the differences in prices, thanks to a 15% tax the New Zealand Government levies on edible items.

    Comment by George D — March 31, 2011 @ 4:14 pm

  22. If the commission really delves into the “Egyptian Handshake” world of trade supplies I wonder if they have the balls to start asking questions about trans-Tasman intriguant agreements of you don’t piss in our patch and we wont piss in yours. All they’ll find is hearsay and a duck called Larry that only quacks after he’s had a keg.

    Comment by Tel — March 31, 2011 @ 4:46 pm

  23. @ George D

    Both prices are GST inclusive.

    Comment by Tel — March 31, 2011 @ 4:48 pm

  24. I wonder how much we’re paying the commissioners to research and consult widely on this complex issue and then advise the government to deregulate the industry and privatise all its state houses?

    Probably not nearly as much as we’re paying to make people redundant and hire them back as contractors.

    Comment by Dizzy — March 31, 2011 @ 5:14 pm

  25. yep, perfectly valid to compare an internet price (excluding delivery) with an over-the-counter price, pick up.

    Assuming this is the same or similar (I know nowt about wood, matron) 100 X 50 H3.2 WET MG MSG8:

    http://www.kiwitimbersupplies.co.nz/timber.php?id=csv448320047

    $3.93 + gst = $4.5195

    Comment by Clunking Fist — March 31, 2011 @ 5:58 pm

  26. http://www.kiwitimbersupplies.co.nz/timber.php?id=csv1303555229

    100 X 50 H3.2 KD MG MSG8 (does KD = kiln dried, as opposed to “wet”?)

    $4 =gst = $4.60

    Comment by Clunking Fist — March 31, 2011 @ 5:59 pm

  27. oops, sorries:

    Australia buybuildingsupplies.com over the counter price $4.75/m (NZD 6.44/m)

    Comment by Clunking Fist — March 31, 2011 @ 6:00 pm

  28. If sponging off the Government makes you cool, then count me out of that club.
    I just want transparency when it comes to Government expenditure. The Government uses public funds to pay public servants to decide who is eligible for state housing, benefits, certain Government-funded scholarships, etc, yet those who seem to reap rewards in these areas most of the time, are the ones who have put in no or little effort for said reward.

    Labour has tightened up when it comes to its MP’s using public funds for travel expenses, for example. When will the lint of society (and by that I mean those who actively sponge and use their gains from this for frivolous purposes, instead of those genuinely in need and actively searching for work) be required to tighten up?

    Comment by Betty — March 31, 2011 @ 6:18 pm

  29. Yeah, but what about the Jews?

    Comment by Dizzy — March 31, 2011 @ 6:27 pm

  30. Come on Dizzy, we all know that “lint” is a derogatory reference to feckless Irish.

    Comment by Clunking Fist — March 31, 2011 @ 6:55 pm

  31. I’ve seen Father Ted. The Irish have plenty of fecks.

    Comment by Dizzy — March 31, 2011 @ 8:07 pm

  32. “yet those who seem to reap rewards in these areas most of the time, are the ones who have put in no or little effort for said reward.”

    I disagree. These fekking businessmen and/or their accountants put in a lot of work minimising their taxable incomes to qualify their children for student benefits. Lucky bastards. The kids can escape student loans and holiday in Africa with the parents. My kids tell me about them.

    Businessnan rorting the system is a foregone conclusion but not nice to have. Costs me a lot more than paying piss-all for state house tenants’ smokes and lotto tickets; in fact it fecks me off.

    Comment by Alistair — March 31, 2011 @ 9:24 pm

  33. @ Pascal’s bookie:”Political deniability for unpopular policy positions is also nice to have. So true if what you mean is get a committee to report back some grim recommendations that will be sure to upset the voters. But then John Key says, “No.Those are terrible ideas. You see folks? I am a nice chap taking care of you. OK Bill. Get stuck into what we were going to do anyway.”
    Sorry Pascal. You are much more succinct.

    Comment by ianmac — April 1, 2011 @ 10:46 am


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