Happy 10th birthday NZ Initiative

April saw the NZ Initiative turn 10. It’s been great to see the huge impact they have had on public policy debates. Thought it was worth quoting from some people about their anniversary.

Bill English:

Ten years ago, I had the privilege of launching The New Zealand Initiative.

I believed then and believe more firmly now that New Zealand needs institutions independent of government and the public purse to broaden and deepen our intellectual life. …

In our small and isolated nation, the unchallenged dominance of the state leads to passive compliance and intellectual sclerosis. …

Another such counterbalance is the robust, privately funded New Zealand Initiative. With its independent viewpoint, it has consistently influenced public debate and created change through its intellectual capacity. …

Education policy is the clearest example of the state’s intellectual stranglehold. The Initiative proved itself to be a serious research organisation by using integrated government data to slay some sacred cows about the dumb decile system and school performance. The Initiative’s work was sufficiently dangerous, no wonder it had to be officially ignored. …

Public institutions and corporates dress themselves up in the language of wellbeing, transformation, equity and the just transition – language made meaningless by overuse and under-delivery. 

The New Zealand Initiative is at its best when it cuts through the fog of good intentions and gets to the nub of what actually happens or could happen. It has done an admirable job of maintaining clear economic principles while it grapples with politicised current issues.

Josie Pagani:

It’s hard to have a reasonable debate today. So, hats off to the Initiative team on your 10th birthday for always being up for a fight.

I have fought with you on TV, radio, Twitter, and in the newspapers. We’ve rumbled over wages, housing, taxes, immigration. And like ‘mouth-ey’ street fighters who refuse to stop even when the crowds have gone, we’ve kept the punches going on email.

Your evidence challenges me. I’ve even changed my mind a few times. Maybe you have, too.

We need the disruption of think tanks like yours. Where else can we have a decent argument these days?

Oliver Hartwich:

Much of our politics would be better if we accepted that even our friends can sometimes be wrong – and that our usual opponents may occasionally have good ideas. Both sides usually want to achieve similar things, just by different means.

And so, over the years, we have tried to reach out as much as we could. To disagree gently with those on our side when they deserved it. To find agreements with those opposite when they were right. And to do both in a good-humoured, friendly, and engaging way. …

And so, after a decade at The New Zealand Initiative, I hope we have been clear without being boring. That we tried to make ourselves understood at least as much as we tried to understand others. That we write and speak in a language that connects thoughts and people.

Our goal is to add ideas, colour, and nuance to New Zealand’s debates in our often-polarised world.

Roger Partridge:

Assessing the work of think tanks is notoriously difficult. Counting outputs is one way. And as our role is research-led, research-based outputs must be the starting point for assessing our success.

On this score, we have produced more than 100 research reports and research notes on the most diverse range of policy reform issues, 40 submissions on parliamentary bills and government discussion documents, more than 1000 columns in the media, close to 1500 columns in our own Insights newsletter, and countless interviews on radio, TV and in the print media. But outputs are only a proxy for a think tank’s achievements. The real measure of success is outcomes. …

Our research on housing affordability focusing on “incentives” is a good illustration.

When Oliver joined us in 2012, New Zealand already had a housing affordability crisis. But Oliver’s research suggested the debate about the housing market’s problems was all wrong.

At the time, discussion focussed on demand-side problems. Too much population growth. Too many foreign buyers. Too many property speculators. And so on.

Oliver pointed to Switzerland, a country with almost the same level of migration-based population growth as New Zealand, which had experienced only a tenth of New Zealand’s house price inflation.

In a series of research reports, Oliver and the team argued that the key feature in countries with stable pricing was that the supply of land for housing development flexed with population growth. And they identified the incentives faced by local councils as the critical factor at play.

In countries like Switzerland, local councils and their ratepayers benefit from inwards migration because the new residents more than pay for the infrastructure needed to support their housing. Yet, in New Zealand, population growth is an unwelcome burden for cash-strapped local councils and their ratepayers. Migrants pay GST and income tax to central government. But none of this cash flows back to councils. Little wonder, our research suggested, that councils like Auckland’s use planning laws to restrict development, pushing up house prices.

In Free to Build: Restoring New Zealand’s Housing Affordability, we proposed a range of public policy solutions to change the incentives faced by local councils to solve the housing affordability problem. The solutions ranged from the unusual to the extreme. Or, at least, that is how they were regarded at the time.

We suggested infrastructure bonds should be used to fund new infrastructure development. The bonds would be paid for with a targeted rate on the new development. That way, councils facing funding pressures would get new ratepayers without having to incur infrastructure funding costs. Their incentive to oppose costly new development would be reversed.

More extremely, we recommended central government return the GST on every new house built to local councils. That way, local councils would profit from new housing and would be incentivised to facilitate it. The first recommendation found favour with (then) opposition housing spokesman Phil Twyford. As incumbent governments so often do, the National-led government subsequently adopted the idea. The responsible minister, Steven Joyce, even recruited our lead researcher while implementing our infrastructure bond reform proposal for a 3,500-home development in Wainui on Auckland’s North Shore. Other developments were planned to follow in quick succession. …

I’m looking forward to what they achieve in the next ten years.