Free Press, 26 November 2018 - Unintended Consequences

Tue, 27 Nov, 2018

It’s a truism to say that government action often produces perverse side-effects. But why does this occur? One source of unintended consequences, according to economist Robert K. Merton, is the “imperious immediacy of interest”. That is, politicians are so concerned with achieving the foreseeable and immediate consequences of their actions they fail to consider the other consequences that might flow from them.

Sound familiar?

That is surely an apt description of our current Government. Resigned to the opposition benches for nine long years, the current crop of social engineers have bolted from the gates with such verve that its list of own goals seems to grow by the day.

Smoke and mirrors

From the Bizarre Files, the Government has announced it will regulate vaping as heavily as it does cigarettes. Vaping is a relatively safe innovation that could help the 500,000 New Zealanders or so that smoke quit. By limiting the colours and flavours that firms can market and by restricting the places people can vape, the government is reducing the incentive for people to give up their habit. As with so many other innovations, the politicians have failed to keep up with vaping and it is currently unregulated. But in its haste to fill the regulatory void – and protect its revenue base – the Government will create a new generation of smokers. For an administration that purports to care about disadvantaged New Zealanders, this is a massive own goal.

A shell game

Phil Twyford’s single-minded crusade against “unfair and unnecessary” letting fees will see them disappear in their current from next month. But tenants won’t be any better off. That’s because letting fees have reappeared as ‘tenancy fees’ to be levied by property managers on landlords. And, despite the Prime Minister “hoping” it won’t be the case, banning letting fees will lead to higher rents as landlords pass these additional costs on to renters. ACT predicted it all along: the Government can’t avoid costs; it can only shift them around.

Fees-Free fail

Last week, we learned that, despite a $2.8 billion investment in making the first year of university free, fewer students were taking up tertiary study this year as compared with 2017. As ACT has said all along, Fees-Free is simply subsidising well-off students that would have gone to university anyway and who will earn more over their working lives than non-graduates. The unintended consequence here, of course, is the fact that the Government is now more constrained in its ability to pay teachers more – a much more deserving cause.

Emissions contrition

Free Press has covered the ban on oil and gas exploration extensively, but it would be remiss to leave it out of any account of the Government’s own goals. Despite climate change being billed by the Prime Minister as ‘her generation’s nuclear-free moment’, and the oil and gas ban being ‘necessary’ to fight it, the official analysis indicates that greenhouse gas emissions may in fact rise as a result. This is because the production of oil and gas will shift to countries which produce dirtier oil and gas. We’re also now seeing Genesis Energy importing Indonesian coal in order to keep the lights on.

A regulatory constitution

Governments clearly can’t be trusted not to make stupid laws, so New Zealand needs a regulatory constitution. What would that look like? It would set out the basic principles any proposed bill or regulation would be required to meet, including complying with the rule of law, the protection of individual liberties, and the protection of property rights. Second, Ministers and Chief Executives would be required to certify the bill or regulation complied with the principles, and if not, provide a justification for incompatibility. Finally, citizens would be given the right to challenge poorly-made laws in the courts. The courts could strike down bad laws where they are incompatible with the principles.

Upcoming events

As always, keep an eye on upcoming events on the ACT website. David has events in Auckland, Wellington and Christchurch coming up over the next month.