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How We Are Selecting Our TOP 7 Policies

We’ve been receiving a lot of policy ideas from our membership already; thanks for sending them through. We are developing a method for members to have an ongoing input into policy making, which we will announce in the New Year. 

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Our policy work is advancing rapidly, and we already have a good idea of our TOP 7 policy priorities. Before we announce those TOP 7, we wanted to let you know what we took into consideration as we came up with them.

Here is our beginners guide to policy making TOP style.

Step 1: Identify the problem

Many government policies are a solution looking for a problem. If the media or public get worked up about something, Establishment parties tend to have a kneejerk reaction and roll out what appears to be a coherent response. Too often unintended consequences then take over.

Before anyone goes marching into action, we need to stop and think really hard. Is there a problem here? How material is that problem? What is the real problem here? Are we dealing with the real long term problem or just a short term symptom?

Without clear answers to these questions, governments can often end up barking up the wrong tree. Their action may be popular in the short term, but if they aren’t dealing with the real problem then inevitably the problem returns.

Given the pace of modern life, such a considered approach is often missing. We saw this with the current Government’s attempt to make it up as they were going along on their ‘comprehensive housing plan’. Similarly dragging the chain on emissions reductions is now coming back to haunt them. But this Government is not alone on this front; we saw the same problems under the previous Labour Government with the foreshore and seabed debacle. This short term patch up job approach to government is what you get when you govern according to the polls.

Step 2: What can we do about the problem?

Once we have a clear idea of the problem, we can look at opportunities to resolve it. What does the theory suggest? What does the evidence suggest? What have we tried in the past, and how did that work? What have they tried overseas, and how well did that work?

 

Of course there is evidence and there is evidence. Some evidence is high quality, and priority should always be given to that. Establishment governments here and overseas often don’t want to monitor and evaluate policy because they don’t want to know if it hasn’t worked. Sometimes an idea is new or novel, and hasn’t been tried elsewhere. As a result, sometimes there isn’t much evidence around on a particular topic. However, lack of high quality evidence shouldn’t always be a barrier to action. Overall, we have to make a judgement based on the best available evidence at the time, which is where values come into play

Establishment parties often twist the question of evidence to their political advantage. Look at the issue of obesity, where the Government has announced a ‘22 point plan’ to deal with the problem. They say there is no evidence that junk food taxes work, yet there is more evidence for the use of junk food taxes and restrictions on advertising to children than there is for any of the policies in their ’22 point plan’.

Step 3: What is the downside?

Thanks to the inability of Establishment parties to make tough decisions, we think there are several policies that should be considered ‘low hanging fruit’ in New Zealand. These are the ones that will get priority to make up our TOP 7.

What constitutes a low hanging fruit? It should have high impact on solving the problem, with little or no downside. So what do we mean by downside?

Many policies have unintended consequences, and can compromise other goals. We’ve seen this in the past; perhaps the most well known example was when the government introduced a bounty for possums. Locals in Northland and Coromandel were upset not to have possums nearby so they set some free; actually increasing the spread of possums. Another example has been the Government’s plan to increase our agricultural exports, which in some regions has come at the price of deteriorating water quality.

On the other hand, the ideal policy is a win/win; i.e. it kills two or more birds (problems) with one stone (policy). It certainly shouldn’t compromise other goals.

The most obvious downside to any policy is the cost. Expensive new policy ideas need to be paid for somehow, and we need to acknowledge the impact of that. Most tax is collected via income tax, which already places a heavy burden on the average New Zealander. Income taxes also reduce the incentive for people to work, innovate and create wealth and jobs.

All our TOP 7 policies will either be fiscally neutral, or will have a plan for how to pay for them.

Remember if you think you can do better than our TOP 7, members will have the opportunity to contribute to policy in the New Year. It is our intention that the political rebellion that is The Opportunities Party will bring an altogether higher level of direct participation in our democracy than has hitherto be seen via the practices of the Establishment parties. Exciting.''

 

Image is work from Khalid Albaih adapted by TOP. 

 

Showing 60 reactions

  • Richard
    followed this page 2016-11-26 00:09:38 +1300
  • Alistair Newbould
    commented 2016-11-25 22:24:11 +1300
    In the fee and dividend discussion I don’t see any reference to a cap on emissions, just the trade side. Without a cap the price of carbon will need to be arteficially set. I read often of a target of a carbon neutral economy by 2050. So on a national (world would be very optomistic) level, set a legal limit which falls from current to zero over 33 years and the price of carbon will set itself. Beyond that we will need to develop a payment for carbon capture to become carbon negative
  • Peter McArthur
    commented 2016-11-25 18:10:18 +1300
    There are some fundamental changes which we should be making to the manner in which our communities function, which in turn will address many economic, transportation, health, education and equality issues. To get a better understanding of what the elephant in the room looks like, please take time to listen to this presentation by Dr Gil Penalosa, Founder and Director 8 80 Cities who spoke recently in Auckland. (Start at 8 minutes). This is a truly exceptional presentation, and for anybody interested in improving livability in our cities, this is essential watching. Perhaps some policies of TOP could reflect what Gil explains. http://conversations.aucklandcouncil.govt.nz/events/8-80-city-creating-vibrant-and-healthy-communities
  • Gordon Ngai
    commented 2016-11-25 17:30:59 +1300
    Mark Blyth, a professor of international political economy at Brown University on Global Trumpism. His talk sums up the issues we face around the world and policies options to deal with them. Here is the link:-

    https://www.youtube.com/watch?v=Kd2d4_LcEig
  • Oliver Krollmann
    commented 2016-11-25 16:53:00 +1300
    In response to Kevin – I too would like to see a fresh and innovative approach to dealing with crime and sentencing criminals, one that focuses on education, taking responsibility for your actions, providing genuine second chances for the willing, and first and foremost making amends for the damage done.
    I feel that community service, home detention and prison have become more like ways of life, rather than effective deterrents or punishments, and it annoys me that more often than not the victims are left behind with little or no compensation for damage done to their property or personal injury or both.
  • Keith Naisbitt
    followed this page 2016-11-25 16:44:10 +1300
  • james mudge
    commented 2016-11-25 16:12:57 +1300
    you need to target the million voters that didn’t vote. Come up with a way to make the political system relevant to them. Winston Peters and the others are establishment politicians they have had many years to make things better for the majority this has not happened as they benefit to much from the benefits and perks they get now. I do have an idea about how do this especially where those less well off are concerned but don’t believe it is a good idea to put it up here as other parties may steal it. IE National and Labor.
  • Greg Fromont
    commented 2016-11-25 15:45:33 +1300
    Like your step concept, my only thoughts are creating policies to fix a problem (No matter have much evidence you have as t what is wrong) is all good if you know exactly what the outcome is you are trying to achieve. Too much of government and local government policy is about identifying a problem (the current situation), and dropping in some actions with no real idea of where it is your heading or what that actualy looks like. Step 2 needs to be what does a great outcome look like (where are we headed). Then Step 3 – what can we do, how do we get effectively from Step1 problem to Step 2 outcome.
  • Jane Green
    followed this page 2016-11-25 13:48:06 +1300
  • Maxamillian Shields
    commented 2016-11-25 13:42:16 +1300
    Hi Geoff

    What is it about the NZ case currently that means government can spend any more than any other time, or more than any other (free-floating currency) country?

    Totally agree that private debt is an issue – but this is completely different from public debt! And as I explained, when the government runs a surplus, ceteris paribus, the domestic private sector must run a bigger deficit, thereby increasing private debt!

    And so from this I would say no I don’t necessarily agree that a fiscally neutral policy is better than a spending policy at all (if by spending policy you mean one where projected revenue is less than the expense).

    Ok so I’m fine with “a plan for how to pay for them”, as long as that plan is “instruct Westpac to transfer required funds from Government’s Westpac account to recipient’s bank account. And inturn ensure sufficient funds are in Westpac account by tranferring funds from Crown Settlement Account via Exchange Settlement Account System (ESAS).”

    My point is, the plan for how to pay for it is to simply pay for it!

    Of course we (by we I mean govt) need to analyse how much and what we’re spending on – too much spending chasing too little goods and services isn’t going to work – again it’s just too much inflation that we have to worry about . But the level of government debt, inandofitself, is irrelevant! And therefore worrying about the budgetary outcome is pointless. Look at all the evidence around the world. No countries (with free-floating non-convertible currencies where the debt is in their own currency) have gone broke. Some have huge (a value-judgement) debt-GDP ratios, but interest rates are low (going against the argument that increased debt would increase interest rates AND crowd out private investment). Incidentally, interest rates are low, because they are effectively set by central banks – not by bond vigilantes!

    So in order to effectively advance public purpose, isn’t it time we dropped these false limits on government spending. All it does is give people like Bill English an excuse to NOT spend on things.

    By the way, it’s possible to run deficits in perpetuity and have debt/GDP plateau if, over the long term, GDP growth is greater than the interest on the government debt.
  • John Irving
    followed this page 2016-11-25 13:22:10 +1300
  • Miles Dugmore
    commented 2016-11-25 13:11:50 +1300
    Kevin Chamberlain: sorry I don’t know how to respond to a specific posting. I was just trying to come up with a basic concept of how a new Party can differentiate itself. And I think “equality of opportunity” says a lot. The next issue is how this is implemented and that is likely to be more detail that we can post here. It starts from early childhood, the first 3 years are critical as damage done at this point is very hard (impossible) to undo. Then up until about the age of 8, is when the brain is being very much hard wired, and after this things become more consciously cogitative. This early childhood has got to be right, and just as much damage can be done by over protection and by letting a child think they can do no wrong, or alternatively a child who faces violence in the home. A question could be, what is the position of Private schools ? as generally, this gives a child an unfair academic advantage whilst at the same time, can be robbing a child of more genuine social interaction. Criminals are not born, they are breed. And just about the same applies to all other anti-social activities. Then we can move onto the difference between the “standard of living” and the “quality of life”, the latter never being referenced. Parent(s) should have the opportunity to have quality time with their children. There is much truth in the saying, “the best thing you can spend on your children is time”. I would give up shopping on a Sunday if it were to make sure other people can have quality family time. So a second mantra for a new Party could be to focus on “quality of life” more than some obsession with “standard of living”, viz how many cars you have, how new they are, how big your house is, and how many toilets it has.
  • Kevin Chamberlain
    commented 2016-11-25 12:59:47 +1300
    Problems and opportunities not well defined result in Govt. policies that focus on solutions too far away from the actual problem or opportunity – address the issues at its source & come up with some imaginative solutions – example lets spend billions of dollars building more prisons – why not spend this money on building the equivalent of 25 “Outboards” across the country under a Foundation, providing skills to at least have the prison population willing to learn and change their habits and lifestyle – along with other measures that help people to live within the law. Their are about 35,000 on Community Service and over 9,000 in Prison what a waste and disgrace – serious offenders deserve to stay in prison but others just made a mistake – what about a second chance?
  • Miles Dugmore
    commented 2016-11-25 12:37:55 +1300
    Before dealing with details, for a new Party to gain traction it must show a differentiation with old Party thinking as well as not alienating potential voters.
    As a generalization there are those that are fed up with unrestrained capitalism, there are those that are fed up with a nanny state (too many rules and too little personal accountability, and there are those that feel people should not be just given a “free ride”.
    Capitalism can co-exist with a social conscious. And those who seek a “free ride” are probably few, but it should be pointed out that there is no shortage of work that needs to be done, just a shortage of paid work – and the latter is a failure in our economic system (a most simple example is how new nurses often cannot get a job).
    This basis for a fairer and more encompassing society, is one where there is equality of opportunity.
    The current system in all Western countries is totally biased towards the fewer and fewer children and young adults who do not have parents to give them a decent start in life – and often through no fault of the parents – it is a cycle that perpetuates itself and becomes more and more biased.
    So the basic premise of a new Party should be “equality of opportunity”.
  • Luis Arevalo
    commented 2016-11-25 12:37:19 +1300
    Personally I am quite excited about the up coming Policy announcements. I like the way the thought process is being laid out for all of us to digest.
    One small (well, rather large wish) is that TOP looks at Circular Economic thinking in regarding any policies that deal with sustainability and the future of work. Here’s hoping
    Cheers and take care
  • Joe Rodrigues
    followed this page 2016-11-25 12:36:42 +1300
  • Robert Boyd-Bell
    followed this page 2016-11-25 11:48:45 +1300
  • Oliver Krollmann
    commented 2016-11-25 09:12:05 +1300
    Great responses, Geoff. I really like how you’re looking at things from all angles in a no- nonsense way, and that you’re not promising the silver bullet. Smart policy will probably have to combine elements from multiple theories and models, pick the best from many worlds, and be robust and flexible enough to adapt when circumstances or public opinion change.
  • Geoff Simmons
    commented 2016-11-25 08:42:08 +1300
    Hi Matt W – as you say you can incorporate incentives for tree planting into a fee and dividend scheme, you can also incorporate fee and dividend approaches into the ETS. So this is really a question of semantics.

    Maxamillian – appreciate the economics 101, we are economists. Agree that the Govt can always spend, particularly in the NZ case currently, but we also recognise that as a country we have significant off-book liabilities in NZ Super and healthcare and that we face considerable risks from our private debt levels. And I didn’t say we would target a fiscally neutral outcome. I said “All our TOP 7 policies will either be fiscally neutral, or will have a plan for how to pay for them.” Do you disagree that ceteris paribus a fiscally neutral policy is preferable to a spending policy?
  • Matt Walkington
    commented 2016-11-24 16:49:33 +1300
    Geoff: I’m pretty sure negative emissions (tree planting) can be incorporated into a fee and dividend scheme. For example, negative emissions can attract a payment from the combined revenue gathered from the positive emissions. ((Also, to help smooth operation of the scheme it would make sense to build up a fund over some initial period by not paying back out quite the full revenue (minus operational costs). And there might also be some fraction of the revenue set aside for research into emissions reductions technology.))

    It would be possible (though not necessarily desirable) to have emissions trading layered on top of a fee and dividend scheme. It could be done as an open market like the ETS (with prices varying with supply and demand) allowing positive emitters to avoid the emission fee by buying offsets from the negative emitters (within NZ). Alternatively, it could be done at the fixed price of emissions and negative emissions set by the fee and dividend scheme. In that case, it would be an idea to have the fee per unit of positive emissions set greater than the payment per unit of negative emissions. Doing so would provide an additional financial incentive for tree planting and other negative emissions (i.e. it would be cheaper to buy the offsets than pay the fee for emissions). ((I won’t discuss the possible weird side affects of fixed price trading, such as “facilitation payments” to resolve shortage of supply relative to demand.))

    A key aspect of a fee and dividend scheme is the ability to signal prices, and increases in prices, a long way in advance with a high degree of certainty. Also, tuning the scheme to achieve a desired rate of emissions decrease is straight forward – just up the fees for unit emissions or negative emissions.

    http://hot-topic.co.nz/why-nzs-emissions-trading-scheme-is-failing-and-how-we-could-fix-it/

    http://csas.ei.columbia.edu/2015/11/11/environment-and-development-challenges-the-imperative-of-a-carbon-fee-and-dividend/
  • Maxamillian Shields
    commented 2016-11-24 12:58:04 +1300
    Hi Geoff, I’m not saying there aren’t any trade-offs, and I’m not pretending there isn’t. In fact, I said in my comment the trade-off is potentially too much inflation! And I’m not talking about “printing money” – the mechanism by which the government spends can remain the same – I’m merely pointing out that the government has no hard limits on what it can spend, because there will ALWAYS be buyers of government debt securities. If the market did otherwise, then there’d be an arbitrage opportunity!

    I’m suggesting that we should be measuring real outcomes in the economy as opposed to being guided by irrelevant measures like OBEGAL. Why target a specific budgetary outcome (e.g. to be fiscally neutral)? And in fact, a government surplus (for example) might not be a desirable thing because it means the private domestic sector MUST be running a deficit (this is because all flows net to zero, and NZ consistently runs current account deficits).

    Let me ask you this question: Does the fact that the government is now running a surplus make ANY difference to it’s ability to spend? We’re all told there’s a surplus to spend, but in actual fact the government is in no greater position to spend up on things than it was, say, just after the GFC.

    Could you please perhaps have a read up on Modern Monetary Theory. Here’s a great site for a start:

    http://neweconomicperspectives.org/modern-monetary-theory-primer.html
  • Oliver Krollmann
    commented 2016-11-24 11:22:27 +1300
    Thanks for the additional info and response to my question, Geoff
  • Geoff Simmons
    commented 2016-11-24 11:08:48 +1300
    Hi all, fees and dividends are a promising idea for getting people accustomed to the idea of a carbon charge, but remember we also want to encourage forestry and other investment that could reduce carbon emissions. Our climate policy will be out in the New Year.

    Oliver – yes input into policy making will be restricted to our members, although anyone can comment on our Facebook threads (see today’s post for example).

    Lisa – good policy should involve the practitioners for sure. That is how we have done all of our projects.

    Maxamillian – there are ALWAYS tradeoffs, even if you print money, and we shouldn’t pretend otherwise.
  • Matt Walkington
    commented 2016-11-23 19:51:40 +1300
    I meant to say that there is a working example of a fee and dividend scheme on fossil fuels in British Columbia. It does the dividend payment via tax relief. Personally, I like the idea of a monthly credit into bank accounts. The weighing between paying businesses and paying individuals would need careful setting. Not paying businesses at all is an option.

    https://en.wikipedia.org/wiki/British_Columbia_carbon_tax

    https://bravenewclimate.com/2009/11/09/fee-and-dividend-better/

    http://www.skepticalscience.com/BCCarbonTax.html
  • Oliver Krollmann
    commented 2016-11-23 19:22:28 +1300
    The Fee and Dividend Scheme – another smart concept I hadn’t heard of before. I’m learning a lot here, just by following the posts and reactions and reading other people’s ideas. Keep’em coming!
    As for the fossil fuels, I sincerely hope that there is room in the future TOP policy framework for a swift transition to an electric vehicle fleet and the required infrastructure, and a target to bring electricity generation from renewable sources to 100% (unless that intruded too much on the Greens’ turf, not sure). NZ is uniquely positioned to achieve both, with a bit of political will and education and motivation of the public, and it would be a success story that we could tell the whole world and show them how it’s done.
  • Matt Walkington
    commented 2016-11-23 19:10:55 +1300
    Solution looking for problems. the Fee and Dividend Scheme

    I’m a huge fan, at least conceptually, of the fee and dividend scheme. There’s a work-in-progress discussion at

    https://en.wikipedia.org/wiki/Fee_and_dividend

    about how a fee and dividend scheme might apply to carbon emissions.

    This measure has the advantage of being intrinsically fiscally neutral: It places a fee on the undesirable behaviour (emitting carbon is usually the example) but then pays back the entire revenue evenly across the population. The fee can then be increased progressively until the behaviour is curbed sufficiently.

    So, for fossil fuels, a carbon charge would be placed on the fuel at the point of sale but then each person would receive a payment of their even share of the total revenue over a convenient period. Fiscally neutral. I envisage the payment could be monthly and the payments could be made automatically directly into each person’s bank account. There would be some admin fee taken out of the revenue to pay for the operational costs.

    The beauty of the idea is that such a scheme is not limited to just carbon emissions from fossil fuels. It can be generalised to be “all gasses all sectors” just as easily an ETS cap and trade scheme can.

    But more brilliantly, we could have a policy measure we called “The New Zealand Fee and Dividend Scheme” (or some such) and it could be used FOR ALL such behaviour modification measures that might be needed. For example, it could be used at the same time for carbon emissions, a sugar tax and a fat tax (with different schedules of fee rates for each of course).

    I suspect such a scheme would have wide appeal (particularly with less well off people) because the fee and dividend scheme has the characteristic that if you can adapt your behavior more than the average you make money out of the scheme. So, if you take the bus or the train rather than drive, for example, you win.

    Apologies to David Parker and all those who have put effort into NZ’s ETS but I think a Fee and Dividend Scheme has a lot more going for it, if we are serious about effectiveness.
  • LIsa Wall
    commented 2016-11-23 18:17:21 +1300
    I am exceptionally pleased to hear that you will be looking to utlilise evidence based material in order to make sound policy. I do however have some concerns around this. As you have already stated, there is evidence and then there is evidence. I have seen so called evidence based policy being introduced that is short sighted and looks to make short term gains. Often this evidence, is chosen simply because it sits within a government term. As a social work professional within the health sector, I have seen first hand the detrimental impact supposedly good policy has made. I would ask that in making policy, that you contact people who work on the ground floor so to speak, for an opinion. Often it is these opinions that show anecdotal evidence that has not been considered.
  • Maxamillian Shields
    commented 2016-11-23 17:51:14 +1300
    I am interested in the TOP, but I’m already worried about one of your TOP 7 rules. You say:

    “All our TOP 7 policies will either be fiscally neutral, or will have a plan for how to pay for them.”

    Why do policies have to be fiscally neutral? The government of any country with a free-floating non-convertible currency is not revenue constrained whatsoever. We don’t need to raise taxes to fund government spending, and the government is not beholden to bond holders; the government can not go broke.

    The ONLY limit on spending is a much softer one and that is when government spending produces too much inflation. Targeting surplus or a balanced budget is pointless. The level of government debt, inandofitself, means nothing. It’s about what the government spends on, and its about the real resources in the economy. If the real resources can’t keep up with the spending, then yes we’re gonna get inflation. But that has nothing to do with balancing the budget or targeting a surplus.

    What stops us from having the things we need in this country is this supposed affordability problem that the government has. But it’s rubbish. The Japanese government has run deficits consistently for over 20 years and interest rates are the lowest they’ve ever been! The sky hasn’t fallen in!

    I would be interested in a political party that actually understood how government finances really work. Are you that party?

    By the way, we aren’t like Greece – Greece can absolutely go broke as they don’t have their own currency.

    Here’s some people who’d back me up on the above approach to government spending:

    Warren Mosler
    Stephanie Kelton (UMKC, USA)
    Bill Mitchell (University of Newcastle, Australia)
  • Oliver Krollmann
    commented 2016-11-23 13:05:54 +1300
    I’m really keen to learn about the TOP 7.
    Will it be a requirement to be a paying TOP member to be able to provide input, or will there be a public input channel as well?
  • Oliver Krollmann
    followed this page 2016-11-23 13:01:50 +1300