Of Christmas excess and New Year resolutions

Dr Eric Crampton
The National Business Review
23 December, 2016

Christmas is getting better. Maybe it’s because Kiwis are getting better at keeping New Year's resolutions. The government might then look to the example set by the citizens and set a few resolutions for itself.

The Christmas season used to bring a slew of hand-wringing newspaper columns on Christmas excesses, with stern lectures about the need for restraint. And Brendan O’Neill’s annual column at The Spectator defending Christmas excesses was necessary restorative.

This year’s papers have been less censorious.

Perhaps New Zealand’s temperance movement has gone on holiday early. Or, maybe the statistics on Kiwi drinking – which show flat per capita consumption over the past two decades after a substantial drop from the late 1980s through mid-1990s, and substantial declines in youth hazardous drinking rates since the mid-2000s – have started getting through. Either way, Christmas is looking cheerier.

Moderation in one’s excesses is a virtue and by that standard New Zealand isn’t looking too bad. Kiwis wanting to restrain themselves have ways of doing so.

New Year's resolutions had always seemed a little silly to me: If something is worth doing, why would you need to make a resolution about it? But publicly proclaiming your intentions to do better can constrain you against doing worse. Others can observe your actions and judge your failures.

New Year's resolutions make it a little bit harder to give into temptation. And those wanting even stronger constraints can always choose them: promising a big donation to the charity of choice for anyone catching you breaking your resolutions can do the trick.

These kinds of resolutions work because there are always friends or family who want to help you to help yourself. Finding ways of breaking the spirit of the resolution while keeping to its letter doesn’t work when someone who knows you well is monitoring things.

As much as the government likes to tut-tut individuals’ private choices about whether to eat, drink and be merry, the government has a harder time than we do in tying its own hands.

Housing affordability
In the lead-up to the 2008 election, John Key talked about declining housing affordability in Auckland and the loss of the Kiwi dream of homeownership; an incoming National government would restore housing affordability through RMA reform making it easier to build.

On that file, it’s been a bit like making a New Year's resolution to lose 10kg and finding yourself only 20kg away from your goal at the end of the year.

If you find that you keep breaking New Year's’s resolutions that you really want to keep, it could be time to look to stronger measures to help you stick to your plan. And that’s true for the government as well.

Although Parliament is sovereign in Westminsterian systems, it does have plenty of mechanisms that it can use to keep itself on the straight and narrow. If push came to shove, a sovereign but spendthrift Parliament could repeal the Public Finance Act’s provisions requiring balanced budgets – but doing so would make it obvious to voters that the government was breaking one of its fundamental, important promises.

That binds the government in the same way that a New Year's resolution binds us: It makes it obvious to ourselves and to others when we are breaking an important promise, and opens us up to censure.

The government needs to make a few New Year's's resolutions.

Most importantly, it should resolve to restore Auckland’s housing affordability. Although this is a matter of zoning decisions and infrastructure provision, Auckland Council operates within rules and incentives created by central government – as Mr Key recognised in 2007.

Resolving that the price of the median house in Auckland would not be more than, say, nine times median household income next year, with a declining ratio from there, would be a start. Setting up the infrastructure and zoning policies that would automatically be triggered if housing affordability were not restored would make the resolution credible.

Two more resolutions
Prime Minister Bill English should commit his government to two further resolutions, both drawing on his experience as minister of finance.

His was only one voice of many in the cabinet. If another minister put forward a proposal with a weak regulatory impact statement or poor cost-benefit assessment, Mr English had to pick his battles.

But as prime minister, he could resolve that the cabinet will no longer consider proposals with inadequate support. Ultimately, ministries’ rigour in preparing documentation in support of policies depends on whether the cabinet has any demand for rigour. Providing that demand should be a New Year's's resolution against ministerial excesses.

Finally, the government should resolve to embed the changes Mr English started as finance minister: testing the effects of welfare policies to see which work and measuring outcomes against long-term fiscal liabilities.

The Treasury recently put up an excellent Outcomes Catalogue Tool showing the government’s initiatives, the outcomes those initiatives target and how those outcomes are measured. Resolving to make that an annual release, along with the figures showing whether things are on track, would be an excellent way of making these changes last.

We all face temptations. Individuals have lots of ways of overcoming these, even if the government is often a bit too dismissive of our ability to do so. It’s time the government took its own self-control issues seriously and made a few resolutions for a better 2017.


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