Does the “Best Start” policy make sense?

According to a recent Colmar Brunton poll child poverty and education (which is another policy around the opportunities of the child) are major issues of interest to the public.  Recognition of this had led Labour to announce their Best Start policy a few weeks ago.  But does the policy make much sense?  Gareth Kiernan has his reservations (Infometrics link):

Best Start is a typical case of a policy solution being developed to an inadequately defined problem, mixed up with a dose of admirable sentiments and a sizable helping of realpolitik.  We don’t have a robust definition of poverty, and for children who are not being adequately provided for, it is difficult to arrive at a fair apportionment of responsibility between the family and society.

What are your thoughts?



Bleg on solar loans

I’m not an energy economist, and am currently a bit short on time, so I thought I’d outsource discussing the new Greens policy on solar.  As a matter of principle I see it as saying “consumers are credit constrained, the energy sector has issues of competition, and the installation capacity exists, given that government loans at a market interest rate (which we can quibble over) may help”.  I have no real problem with that, although I’d like to spend time with the details.

A few questions though:

  1. Why does the government think this will reduce competition?  I’m not quite sure what is being said?
  2. Paying it back through rates, when it is a central government scheme, seems inelegant.  Wouldn’t a more direct scheme where the government installs and then charges make sense.
  3. Given that, if solar is actually effective (hopefully it is getting there), why don’t we have someone in the market trying to lease panels – is the installation cost (given the capital) that much of a pain?
  4. The question of feed in tariff prices, and how that actually works with the grid, is a damned hard one.  Remember, people will be generating “excess power” at times of the day with low demand – the real big problem is storage!

In some ways this feels like a policy trying to “tick a lot of boxes” at once – perhaps the best option would be to deal with perceived competition issues directly, if they exist.  Credit constraints are an interesting one on a number of dimensions – I have some sympathy for the idea that lack of access to credit reduces opportunity, however how much of this is due to the fact that the type of lending is risky?

I’ll leave my mind open to be persuaded either way on this, but when Meridian says there are problems with it (when they are one of the key players trying to get solar power working in NZ at the household level), I am uncertain about the scheme itself.

Clint Smith discusses on Twitter.

Some links against a Living Wage

With the Living Wage idea cropping up around the place, I’ve noticed a couple of places where there have been criticisms of the result:

  1. A review by Brian Scott, where he points out that many of the defined “needs” required to get this wage are in fact not things some people in society would put in their defined “minimum” – this raises an interesting question of “what is poverty”, something we will lightly touch on here on Monday 😉
  2. An analysis from Treasury based on their arithmetic microsimulation model (Taxwell).  This essentially says “if the change in the minimum wage caused NO change in behaviour, who are the people who would see their income increase”.  So this DOES NOT rely on any employment effects or the such (although they will occur in New Zealand, given how high this would push the minimum wage relative to the average wage) – and it shows that most of the benefit in this optimistic scenario does not go to the group the Living Wage campaign wants targeted.

Now some may say that this is a suggestion to businesses, not a demand for policy.  That is fine – I remember working at the Warehouse and being paid a bit more for that role as part of their desire to build a “community” among staff.  And it was good.  But if it is just a request for firms to consider, why keep yelling at politicians?

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Politics aside: National, coalition partners, and the environment

I know nothing about politics, and try not to blog about it – in fact, I hope to not post on it again.  So please don’t be too mean to me 🙂

But I also like to write blog posts, and find the entire idea of getting the Conservative Party into parliament as a coalition partner for National to be weird.  Especially after this “Ask Colin Craig” event on NBR.

Now sure, there could be room in parliament for a socially conservative/religious party, that is all well and good.  And given the current make-up of the National party it would likely lean towards National – but with the Conservative Party’s willingness to be economically interventionist, they also have more in common with where Labour and the NZ Greens are going.

With ACT burnt up, the Conservative party, and calls for a new version of ACT seem to be the only ideas flying around about future coalition partners for National.

But why can’t we have an economically centrist Green party?

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