This is not a market failure

Radio NZ report:

Two years ago the Department of Internal Affairs introduced a registration fee and an annual renewal fee, because despite having 2500 independent celebrants about 25 percent of them don’t do any weddings.

But the director-general of Births, Deaths and Marriages Jeff Montgomery, said market forces had not worked.

Montgomery said when he took over the role seven years ago, one of the first things he did was relax the criteria to be a marriage celebrant.

“There was a requirement that someone applying to be a celebrant demonstrated that there was a public need for their services in the local community, and one of the ways that was assessed was how many other celebrants were there.

“So if there was already a couple of celebrants in a smallish area like, perhaps Levin, then unless that they could prove that there was unmet demand they were unlikely to be approved. So that meant that some of the celebrants had been appointed many years ago and it was very difficult for new people to enter into that space.

“So my approach was, ‘well, let the market decide. When there’s enough celebrants in an area, people will stop applying’. But that hasn’t happened.”

The fact DIA assumed fewer people would not apply is not a market failure. It is just DIA made a wrong assumption.

If there are celebrants who end up with no clients, that is not a market failure. That is the market working.