Saturday, 13 May 2017

EPA closes ranks

New Zealand's Environmental Protection Authority (EPA) has a statutory duty to function in a way that
contributes to the efficient, effective, and transparent management of New Zealand’s environment and natural and physical resources (emphasis added)

In its 2016 Annual Report (pdf), the EPA described (p.10) its new vision and how it proposed to pursue that vision.

Our new vision – An environment protected, enhancing our way of life and the economy – will guide our strategy over the next four years. Our vision is the high-level purpose behind our work. It underpins why we were established and what New Zealanders want from us. We will achieve this through four key principles, or pillars. They are: working together as One EPA, supported by evidence, science and mātauranga Māori; by taking a customer-centric approach to our work, by partnering and working collaboratively with others for success, and by harnessing the potential of our people. Our new strategy is set out in detail in our Statement of Intent 2016-2020. We have restructured our teams so that we can best deliver on the strategic goals and intentions that you will read about elsewhere in this Annual Report.
Fundamental to this approach, is the appointment of our Chief Scientist, Dr Jacqueline Rowarth, who will work with experts from across the natural resources sector.
I was surprised by this, particularly the last bit. My impression is that Dr Rowarth is far too invested in the status quo to effectively "work with experts from across the natural resources sector". So I lodged an OIA, quoted the above section of the EPA's annual report and made the following request...

I am not alone in regarding Dr Rowarth as being extremely antagonistic towards certain types of “experts from across the natural resources sector”. Many people remember her terribly mistaken claims regarding the quality of the Waikato River water, and have noted that neither she nor the EPA has admitted any error over this. Her most recent public pronouncements on Roundup suggest that she is not up with the science regarding glyphosate and the adjuvants with which it is mixed. I am therefore concerned that the EPA is not receiving balanced scientific advice from Dr Rowarth. Please advise which individuals and/or groups is Dr Rowarth working with to inform herself about the following topics relevant to the agriculture sector in New Zealand:
  1. Biological farming, meaning farming with a focus on stimulating and cultivating beneficial biological organisms in the soil.
  2. Antibiotic resistance through the avoidance of antibiotics, including glyphosate.

In response, right at the end of the response period, I got a letter from Allan Freeth (CEO) declining my request on the grounds that this information.
does not exist and cannot be made available without substantial collation or research
So the chief scientist of the EPA cannot name any individual or group she is working with on biological farming or antibiotic resistance.

And, her boss doesn't care.

Thursday, 11 May 2017

Betting on HILP Events

Organised betting markets can help to predict future outcomes if they are sufficiently popular, because well-informed people will seek to profit from their inside information and that will affect the market prices.

Less commonly, such markets might also be useful in public policy formation. For example, you could imagine that we might get a reasonable prediction of the effect that a particular well-defined change in land-use policy would have on real estate prices in Auckland, because lots of people have a financial interest in that particular market.

Notice that these markets also need time bounds though. That's why prediction/betting markets always offer time-limited contracts. It is also why they'll be useless in predicting events of the high-impact-low-probability (HILP) type such as:

  • volcanic eruptions in Auckland;
  • your house burning down;
  • workers seizing the means of production; or
  • an excursion of GMOs ruining our environment, productive capacity or export value.  

Notice that is the incidence of such events that is of main interest. Depending on your perspective, each is a disaster or an opportunity. The scale of those effects is large, but otherwise unknown. So even if you have a time-bound view on likelihood, you'll struggle to estimate an expected value, which will make it difficult to price the risk.

Betting markets are likely to be hopeless under these conditions, but fortunately there are market-makers willing to take your money if you want to hedge against such risks. Its called insurance.

Tuesday, 9 May 2017

What is a net taxpayer?

Poor old young David Seymour was on the twitter yesterday, complaining about tax


It didn't go well, to be honest. Perhaps not as badly as when his predecessor as leader of ACT endorsed incest, but its fair to say that David did struggle a bit. In the heat of battle, he divided the population into "net taxpayers" and others, but then this happened.



No, it doesn't make sense, and Mr Seymour was deservedly ridiculed. Then a deeper question was asked


This is a good question because Davy-boy is inviting us to consider whether we've paid more than we got back, but cash payments massively understate the value given by community volunteers, and the value received by everyone from public good institutions such as schools, hospitals, firefighting, police and the prison/rehab sector.

So, no-one can actually tell whether they're a "net taxpayer" without attaching a value to their consumption of public goods. Dean is obviously OK with being a "net taxpayer" because he feels that the broader deal is acceptable. Mr Seymour would prefer we only look at the ca$h because.....?


Wednesday, 3 May 2017

StuffME - great outcome

The long wait for the Commerce Commission's decision on whether to clear NZ's big media merger ended today, with what Tim Murphy accurately described as 345 pages of unanimous rejection.

Many journalists and media managers are clearly outraged, in a way we seldom see in this country. The ongoing erosion of social services, corporate welfare and tax fraud doesn't generate this media outrage. Nor do the evasions, dissembling and lies of the politicians on whose watch this occurs. But when an independent Commission charged with administering competition laws declines to clear their own mega-merger, well its all on.

Some of the negative comment has ignored the Commission's statutory role, which was determined by the question asked of it by the applicants. The applicants admitted that the merger would reduce competition and sought authorisation, which required them to show that the public benefits of the merger were greater than the detriments. For a media merger, this scope raises all kinds of legitimate concerns, including about the plurality of views.

The lengthy process has also been disparaged, but again, this was largely the applicants doing. Even after the official process of submissions was complete, the applicants continued to send confidential submissions (legal and economic I believe) to the Commission. One can hardly blame the Commission for taking the necessary time to consider these submissions properly, especially since there was no opportunity for merger opponents to comment on these late submissions (not to mention the ever-present threat of legal challenge).

Despite some comments, no-one is disputing that these business are facing serious commercial challenges. Certainly the Commission understands this, as any reasonable reading of the decision will show. Earlier in the process I wrote about hard news as a public good, and how it might be funded.

Industry insiders have got their thinking caps on too. Just yesterday, the NBR quoted some anonymous soul ($) suggesting collaborative models that don't need mergers, including
  • pooling editorial resources (similar to the NZPA or the AP);
  • pooling technical resources (to achieve economies of scale with technical infrastructure); and
  • the development of an innovation task force focused on evaluating and implementing new business models.


These collaborations would site nicely with another good idea floated today for a return to local ownership.

Innovation won't stop and I bet it'll be stronger as a result of this decision. After all, the applicants really did admit that they don't know how to fix their problems and just need more time and money to figure out the answer!

There is one further reason to applaud this decision. The Commission, relying largely on its own analysis has faced down a very aggressive barrage from two large and influential companies. That is a good sign for the future.