Friday, 20 October 2017

Looking for ideas?

So we've got a new government, and lots of people have been wishing things on them.

And so am I.

Here's one that's well up my list: roll out the infrastructure we need, and pull finger about it while you're at it.

The outgoing government, for all the good stuff it did in some areas, was desperately slow at getting long overdue infrastructure built: 30 year timeframes before we would even start building airport and North Shore links in Auckland were just absurd. And as I've said before and the OECD has said as well this is a once in a generation opportunity to fill our boots with unusually cheap funding to pay for it.

But you don't have to take just my word for it. Here's the IMF's wording in this month's update to its flagship World Economic Outlook (p28, Chapter 1):
Investment in physical infrastructure: Empirical evidence from advanced economies suggests that, if done right, infrastructure investment brings both short- and long-term benefits: an increase in public investment of 1 percent of GDP can raise the level of output by 1½ percent over the medium term...After three decades of almost continuous decline, public investment in infrastructure and the stock of public capital as a share of output are near historic lows in advanced economies. Many countries could take advantage of the favorable funding environment [see? see?] to improve the quality of the existing infrastructure stock and implement new projects (see Chapter 3 of the October 2014 WEO). Countries with deficits in infrastructure include Australia, Canada, Germany, the United Kingdom, and the United States [and us, as I pointed out for example here]. Priorities vary but, in most cases, include upgrading surface transportation and improving infrastructure technologies (in high-speed rail, ports, telecommunications, broadband), as well as green investments.
Fire up the JCBs.

Tuesday, 17 October 2017

Will the RBNZ hold off till late '19?

The inflation numbers we got this morning - headline annual rate 1.9%, with tradables inflation running at 1.0% and non-tradables at 2.6% - were a tad higher than expected.

The numbers are always hard to interpret. On the tradables side we get inflation dealt to us by developments in the rest of the world and  movements in the exchange rate, neither of which we can do much about. On the non-tradables side - the domestically generated inflation which is all the RBNZ can influence over the longer haul - the numbers are distorted by what's going on in the housing markets, which are currently running hot.

But at least we can strip out the housing element in various ways and see what's happening ex housing. Here's the picture (I've adjusted the data mechanically to take out the GST-related blip in 2010-11). The data starting points are driven by when they start on Stats' Infoshare database.


It doesn't really matter which ex-housing measure of domestic inflation you look at: they've all risen to a little over 2%.

So the question I'm left asking is: will the RBNZ really leave monetary policy unchanged till late 2019, as is currently its stated intention? Domestic inflation (ex housing) is already at the mid-point of the Bank's target, and tradables inflation could also easily be running at 2.0% or more: the IMF's latest World Economic Outlook has inflation in the developed world at 1.7% next year and inflation in emerging/developing economies at 4.4%. If you weight those up to get a world inflation rate, it comes out around 3.3%. Call it  3%: then if the NZ$ stays where it is, and domestic inflation (even after taking out the hot housing bits) stays at say 2.25%, then you get overall inflation running at around 2.5%.

That doesn't sound to me like a great case for leaving monetary policy on an accommodative setting all the way out to late 2019. The financial futures market doesn't think so either: 90 day bank bill futures, for example, are pricing in a 0.25% increase by the end of next year, a full year before the RBNZ says it will increase rates. Some folks think it could be earlier again: the BNZ's latest forecasts, earlier this month, see the RBNZ hiking the official cash by 0.25% in the September 2018 quarter.

Any sane central bank won't react to one quarter's numbers, and everyone - central bankers and private sector forecasters, and that includes me being as wrong as anyone else - have all been repeatedly blindsided by inflation not appearing like it was supposed to. But on the latest data I think I'd be sketching in the prospect of higher interest rates a good deal earlier than the Bank has been signalling.

How many is 'enough'?

The ACCC has been doing a fine bit of reporting on the state of competition in various petrol markets around Australia. Its latest one, out last week, is on Brisbane, where it found that motorists were paying roughly 3.3 Aussie cents a litre over the odds compared to the other large cities in Australia, which adds up to A$50 million extracted from drivers' pockets over a full year.

The reason? Less intense competition in Brisbane. Which looks a bit odd at first, when you compare the industry structure in Brisbane with that in Sydney. They don't look that different - in terms of numbers of petrol stations, both cities have the oil companies (BP and Caltex in Brisbane), supermarket outlets, independent chains, and small independents. We can only salivate in contemplation of the degree of choice both cities have compared to us (and in particular compared to our South Island).


But it's a bit more apparent than real. In Brisbane the ACCC found that the supermarkets and the independents don't always price that sharply ('RULP' in the graph is regular unleaded petrol). Coles by the way looks a bit worse than it really is, as the prices measured are pump prices, before using "shopper dockets" (those discounts you get with your supermarket receipt). I'd guess a big proportion of the drivers who belly up to Coles will be armed with the discount.


In Sydney, though, the independents go for it.


Part of the difference may be down to the pricing strategies the Brisbane companies have happened to follow. But part of it is down to the greater leeway the Brisbane players have to follow less aggressive pricing plans: there's been a degree of consolidation over the past ten years, with two independents merged into one, and 7-Eleven buying Mobil's stations.

This is sobering stuff for us on this side of the Tasman. If two supermarkets, two oil companies, five independent chains and a tail of small outlets aren't enough to constrain petrol prices in Brisbane to what's on offer in the other Aussie cities, what hope have motorists in New Zealand got of getting a really sharp price from the three big players (BP, Caltex, Z) and the regionally limited price discipline that Gull imposes?

The more time has gone by - and in the light of MBIE's petrol study (links to study here, my comments here and here) - the more I'm leaning towards the view that Dr Jill Walker, the dissenter in the Commerce Commission's approval of the Z/Chevron merger - had the right end of the stick. She said (para 40 of her dissent):
An independent Chevron also provides an ‘option value’ for increased competition in the future without the merger. Without the merger, Chevron’s assets would remain independent of Z. Importantly, this involves not simply retail assets, but an entire supply chain. Effective competition in retail fuel markets tends to be driven by retailers who are backed by their own independent supply chain, such as Gull in parts of the North Island...I am not satisfied that in the future without the merger, there is not a real chance that Chevron’s assets could be used to disrupt retail coordination and increase competition. With the merger, any real chance is permanently removed.
What the Brisbane report shows, in my view, is that you need to facilitate every bit of competition you possibly can: you need a lot of parties to get the sort of outcomes Sydney and Melbourne motorists enjoy. And the option value of one extra aggressive competitor is very high indeed when you're starting (as we are) from a highly concentrated starting point.

The other thing the Brisbane report shows - and I'm not apologising for banging on about it yet again - is what a useful thing these "market studies" are. Our Commerce Commission still hasn't got the ability to do what the ACCC has just done, and does anyone really think the ACCC report was a bad idea, or that the Commerce Commission wouldn't have done just as good a job?

Little birdies tell me that the legislation to give the Commission some limited market studies powers is getting closer and that a petrol study could well be first out of the blocks. There's even a chance that the Commission will, in time, be let do studies off its own bat instead of waiting for Ministerial direction.

Good.

Friday, 6 October 2017

They're like buses...

...no sooner did we get a big chunk of reporting on the electricity markets on Tuesday from the Electricity Authority (which I posted about), but on Wednesday we got the latest information disclosure data on the electricity lines businesses from the Commerce Commission. Here's the (brief) media release and here's the entrance point to the data, which cover the period ending March '17.

It's an odd industry sector. Mostly, in a small economy like ours, we risk having heavily concentrated sectors with limited numbers of players, but we've also some sectors where you wonder how we go on supporting the numbers we do, and, you'd suspect, with the accompanying issues of inefficiencies of scale. The electricity lines game is one that looks like it could do with quite a bit of rationalisation: twenty-nine lines companies for 4.8 million people looks over the top, especially as some are very tiny indeed in terms of customer numbers.

Buller Electricity, the smallest, has only 4,579 customer connections: for perspective, the median lines company has some 185,000 connections, and the biggest (Vector) has over 550,000. There's no reason barring historical accident why Buller should be a standalone entity, and why it hasn't been folded into neighbouring Westpower long ago is a mystery to me. It wouldn't be a massive efficiency - Westpower itself has only 13,448 connections - but it would be a start. Similarly for the rest of the minnows - Scanpower in Dannevirke (6,690 connections), Centralines in Waipukurau (8,496), Nelson Electricity (9,203), and Network Waitaki in Oamaru (12,710).

But we are where we are, as they say, and if you want to find out pretty much anything about the current 29, the comprehensive Commerce Commission data is where to go.

There are terrific snapshots of each one on its own if you click on the map of the lines' networks and follow the 'Download doc' link provided for each network. Here for random example is just a small part of the data on the Orion network showing the state of its lines and cables assets, and there's lots more on its operating and financial performance.


The data are not, however, the most accessible thing you'll ever use if you want to make comparisons. The summary report on each company does give some ranking information on how it compares with the others (Orion for example ranks 3rd on a lot of metrics), but if you take the view - as I do - that a good deal of the value from information disclosure regimes comes from looking at relative performance, you'll likely want more than the single-company summaries will give you.

The good news is that the information is there, but it's not immediately obvious where*. So just to make the whole thing easier, I've done it for you - here's a 'Handy ELB ranking guide', where I've also done a bit of colouring (price/quality regulated companies in red, information disclosure companies in black) plus fixed the 'return on investment' line so it better displays the return.

The data are a great starting point for analysis, and could answer any number of interesting questions: are there, for example, any systematic differences between the consumer-owned companies (subject only to information disclosure) and the rest of them (subject to price/quality control)? And what about those efficiencies of scale that I've implicitly assumed earlier? Research economists are always on the look-out for that treasure-trove of as-yet-untilled data: here's a prime candidate.

Whether anyone is, in fact, making good analytical use of this information is another question. It would probably help - and I understand the Commission has it in its plans - to put out some version of this data with interpretative commentary for a general audience, as the Telco Commissioner for example does with annual reports on the telco sector (they're here if you haven't seen them). Information disclosure as a regulatory option has its uses, and maybe those most keenly interested in the sector won't need the info spoon-fed for them, but for the bulk of the intelligent public this very useful data could do with a bit more PR assistance.


*If you go to the network map and scroll down, under 'Documents' you'll see there's a link to a spreadsheet, 'Performance summaries for electricity distributors - Year to 31 March 2017'.  Go to the 'One-pager' sheet of the spreadsheet. Top left, just under the 'Clipboard' command, there's an input box with a dropdown arrow: currently it says 'edb-name'.  Click on the down arrow, from the options that pop up pick 'r-rank', and hey presto - up come two sets of rankings of all 29, one showing the absolute values of the measures and the order showing each company's rank from 1 to 29.

Tuesday, 3 October 2017

More, please

The Electricity Authority has just come out with its latest annual report, and I was pleased to see it continues to report on the state of competition in the various electricity markets: competition, along with efficiency and reliability, are the three core things the Authority focuses on.

It's also great to see the Authority having a go at measuring whether electricity markets have actually become more competitive or not. It's good that there are specifics like the success of the What's My Number campaign, but it's better again if you can assemble some hard or hardish data on the state of overall competitive play. You're never going to pin it down exactly but this Annual Report - and previous exercises which I posted about here and here - have given it a good go.

Here are a couple of the more interesting measures the Authority has tracked (they're down the back in Appendix A). The HHI concentration index for the residential retail market is going down - though it's still on the borderline (2500 or so) between "moderately concentrated" and "highly concentrated" as the US competition authorities would describe it - and the market shares of the top 1, 2 3 and 4 suppliers (the CR measures in the right hand panel) have been slowly dropping.


Here's the HHI for the generation market. It's far from a dramatic movement, but every little helps.


Here's something a bit more complex - the percentage of time a large generator has had the field to itself in a particular area: it's the only one around who can supply energy, and it has surplus energy to provide after meeting its own retail or other contractual demand. In the industry jargon it is the "net pivotal supplier", or in plain English it can hold the rest of us to ransom and ramp up prices. Again it's good news: it doesn't happen very often. There's a net pivotal supplier only 2% of the time.


Things like market shares however don't always tell you a lot: you could, for example, have vigorous competitors going at it hammer and tongs, with their marketing efforts cancelling each other out, so market shares don't move, or you could have cosy tacit collusion, and again market shares don't move. So the Authority has chucked in some behavioural data as well. Here's how often residential customers get approached to switch suppliers. Answer: more often.


Overall, the data show some modest to decent improvement in competition across many, though not all, metrics. Good stuff.

But I'll bet there's a question already on your mind. How come we're not seeing this sort of information coming out on other important markets?

Partly, of course, it's because most other sectors don't have a sectoral regulator. But partly it's because the Commerce Commission still remains hamstrung in its abilities to have a look. There is a proposal to let it do "market studies", but (as I said here) it's very tightly circumscribed and in any event is some considerable time away from being implemented, given the glacial pace of changes to our competition law.

Yet we know that we need to find out more about the sort of competitive choice consumers are getting in other industries beyond electricity (where the Authority is doing a fine job) and telecommunications (where the Telco Commissioner is also on the ball). We know, for example, that consumers face higher prices for petrol in areas where Gull isn't a competitor, but we only know that because MBIE was ordered to look into it as a one-off investigation.

Why aren't we getting the same level of pro-consumer inquiry in other markets?

Friday, 29 September 2017

Can it keep going?

There was good news today about the volume of new housing consents in Auckland: as Stats pointed out in the release, "Monthly building consents for new homes reached a 13-year-high in August 2017, driven by a spike in apartments and retirement village units in Auckland...Some 10,265 new homes were consented in Auckland region in the August 2017 year. This compares with a peak of 12,937 new homes consented in the June 2004 year (the highest number since the series began in 1991)".

Stats included long-term graphs which put the latest numbers in some perspective, but I've gone back a bit further again (as far as the data series go on Stats' Infoshare database). Here's what the story looks like.


The 'actual' numbers in the graph are an excitable series, mainly because of chunky apartment block consents  turning up in some months but not others. They're volatile enough to turn the seasonally adjusted and trend series into best stabs at what's going on behind the noise, rather than definitive sightings of the underlying reality, so you can't be entirely sure they're on the right track. But after some wavering around the start of this year the trend series (also shown in the graph) now looks to be definitely heading in the right direction.

I've been trying to guess - no stronger - whether the numbers tell us anything about whether we can up the pace any further or whether we've hit capacity constraints. 

On the downside, over the past 25 years we've only briefly been able to keep up 1,000+ periods of monthly consenting.  Something or other has always knocked it back again. Either we've hit some sort of capacity constraint, or the business cycle has put the kibosh on it, with the GFC in particular decimating activity. The latest ANZ business survey wasn't much fun in that regard: only one month, the election and all that, but I particularly didn't like the finding that "A net 26% of businesses expect it to be tougher to get credit". That's bad news for housing developers.

On the plus side, the Auckland labour force has grown quite a bit, and there are more people around these days with building trades skills. Here's what the Household Labour Force Survey shows for people employed in construction in Auckland since 2009 (as far back as Infoshare went, and I haven't time to fossick the Census if it's got longer/better figures).


There wasn't a lot of movement till 2014, but since then employment has lifted from around 50,000 to around 80,000. Recent immigration probably plays some part in this (and maybe people shifting back from Canterbury building sites): where we live on Auckland's North Shore, a good deal of the in-fill development is by Asian developers with Asian crews, including the one literally across the road.

The unknown unknown is probably the impact of the planning process. I've no idea whether the number of consent-approvers is keeping pace with consent applications; I can surmise that (certainly over a time-scale of 25 years) the regulatory requirements to get a consent have risen; I would bet that land-use constraints have got a lot tighter. Net net - who knows, but I'd lean towards a view that planning is at a minimum no less a constraint than previously.

Overall, I'm glad to see the recent pick-up in consents to over 1,000 a month, and it might be a bit curmudgeonly to add "at long bleeding last": it's here, and it's something. But I'm not exactly jumping for joy yet. At this pace (12,000 dwelling units a year) we're still a little adrift of the numbers (14,000-ish?) that people think we need to meet new demand, let along eat into the existing shortfall (20,000-ish?). And while I'd be pleased to be proved wrong this time round, our recent track record suggests we can't keep delivering, or are blown off course from delivering, before we get the job fully done.

Monday, 25 September 2017

When agencies clash

There's a quip you sometimes hear in the competition game: why do countries have only one Monopolies Commission?

Now that the tears of merriment have dried on your cheeks and you've got your breath back, you can actually turn to a real-life example of what happens when you do indeed have two competition authorities. And they fall out with each other.

Australia's got the ACCC: if you've got a merger for 'clearance' (no competition issues), you go to them. And it's got the Australian Competition Tribunal: if you've got a merger for 'authorisation' (competition issues, but overall net benefit), they'll handle it. And then along comes the "mega-merger of the nation's two biggest gambling companies", as the Sydney Morning Herald called it here (possibly $): Tabcorp and Tatts Group, both ASX-listed.

You'll find the full history of what happened next if you google, but save yourself the bother and go to Melbourne Law School Professor Julie Clarke and her very useful Australian Competition Law blog, especially this post about the Tabcorp/Tatts deal. It helpfully includes links to media coverage, too.

The gist: Tabcorp/Tatts tried the ACCC first. No deal, the ACCC saw actual or potential competition problems (here's the Statement of Issues). So Tabcorp/Tatts bailed out and went to the Tribunal.

"Competition problems? What competition problems?" - the Tribunal didn't see them. Au contraire: "The creation of the Merged Entity will lead to greater competition particularly in online wagering" (my emphasis, from para [540] of the judgement). On net benefits, it saw at [539] assorted ups and no downs: "The benefits to the public which the Tribunal has found to exist, and which it has taken into account, are substantial. There are no material detriments weighed in the balance which are of significance or likely to arise that outweigh the benefits". Slam dunk - authorisation approved.

I can only imagine the gasket-blowing within the ACCC. But once the little red dots in front of their eyes had cleared, they took the Tribunal to the Full Federal Court for judicial review, on three grounds. CrownBet, a Tabcorp/Tatts competitor, added a fourth: it was a courageous (in the Sir Humphrey Appleby sense) claim that the Tribunal had lost its mind. Predictably, that claim crashed and burned, some bits burning more fiercely than others (at [80],"We have experienced some difficulty in distilling CrownBet’s submission about this into a readily comprehensible form").

Not so the ACCC's. Two of its claims got knocked back, but one made it, as you can read in paras [4] to [54] of the judgement: the Tribunal missed a detriment (reduced competition between Tabcorp and Tatts in online betting), and you can't be sure of the overall net benefit if you've missed a detriment. So it's back to the Tribunal to fix, and in the meantime the merger is in limbo.

So it's been an interesting exercise. As a general principle, I like the idea of more checks and balances when it comes to the exercise of regulatory (or any other) powers: as one example our High Court 'inputs methodology merits review' of how the Commerce Commission goes about the business of price control was well worth doing. But you wonder when you see two competition authorities slugging it out. That's beginning to look like overkill in a country already liberally equipped with multiple layers of governments and regulators - not that we in New Zealand can point fingers too vigorously, with our 78 territorial authorities for a total population the size of Melbourne.

By the by, we may hear a little more of this case, as it had something useful to say about how regulators should go about the weighing up of benefits and detriments, which is one of the bigger issues in the current NZME/Fairfax merger appeal.

You'll recall that the Commerce Commission took the view that the merger would involve a loss of 'plurality', less variety in the range of opinions on offer in the mainstream media. And while it didn't know what the value of that detriment was, it looked to be significantly larger than the claimed merger benefits.

Can that rough and ready, 'in the round' assessment fly? Or are you prohibited from saying one thing is bigger than another, if you have no real clue how big the first thing is?

Here I'm straying well off the economists' reservation into the lawyers' farmland, but I reckon the Federal Court's judgement is helpful to the 'in the round' approach. Here's what it said (shorn of unnecessary bits):
[7] Having examined the benefits and detriments resulting from, or likely to result from, the proposed acquisition, the Tribunal is then to determine whether the overall benefit is ‘such’ that the acquisition should be permitted. This requires a balancing exercise to determine the public benefit. The Tribunal has referred to this as a balance-sheet approach ... and this is an informative metaphor. It may suggest, however, that the detriments are to be deducted from the benefits leaving only a net benefit. This is informative but may be likely to be a little unrealistic. Many of the benefits and detriments will be incommensurable and possibly unmeasurable as well. To take an example from this case: how does one weigh the improved efficiency of the wagering market against the perils of problem gambling? It seems to us that the benefits and detriments may more usefully be assayed by means of a process of ‘instinctive synthesis’ sometimes referred to in the law surrounding the formulation of criminal sentences where a similar problem is encountered ...This may be referred to as weighing, but to refer to balancing, or a balance-sheet approach, may suggest that the essential qualitative assessment has a greater degree of precision than the statutory subject-matter permits ...
[68] ... much administrative decision making involves the weighing of imponderables or incommensurables. It would be unworkable to require the Tribunal explicitly to give a weight to each benefit and we would strain to avoid such a construction were it necessary. It is not, however, necessary so to strain. Section 95AZH(1) does not require what the ACCC suggests. The assessment of benefits and detriments must be complete and the Tribunal must, no doubt, weigh them. This is not necessarily, however, an arithmetical or accounting process. As we have said above, it may involve an instinctive synthesis of otherwise incommensurable factors.
"An instinctive synthesis of otherwise incommensurable factors": I like it, and so I imagine will the Commerce Commission's lawyers. Though I have to point out that we beat the Aussie Federal Court to the concept: back in 2011 many of us were already "internalising a really complicated situation in my head".

Friday, 22 September 2017

Who pays?

On Tuesday evening Harshal Chitale, senior economist in Auckland's Chief Economist Unit, spoke at the latest LEANZ seminar on 'Funding Auckland’s greenfield infrastructure: 'Efficiency, incentives, risk and fairness'. Tell you what - the chair for the evening, Richard Meade, didn't have to do much to encourage debate: this was one fired up audience. In a  nice way: our infrastructure deficit, especially in Auckland, is one of the hottest current issues for the economy, and gets at least a best supporting role nomination in the national slow productivity debate. Plus Harshal's talk raised knotty back-pocket and equity issues on who pays for what.

Harshal's paper will go up on the Auckland Council website in the near future* - probably here - and I should add (as he said) that the talk reflected Harshal's views and not necessarily those of the Council.

The key points I took away (and from here it's as much me as Harshal talking) were that there's a massive $20 billion infrastructural bill coming up to service greenfield development, of which the Council's share for the likes of water, waste, local roads and community spaces is some $13 billion (NZTA road funding pays for a lot of the rest). But Auckland Council's own ability to pay for this greenfield infrastructure is severely constrained. Putting the bill on the rates faces a political commitment not to raise rates more than 2.5% a year. Borrowing faces a credit rating limit: debt beyond some 270% of revenue (and it's currently 255%-ish) jeopardises the Council's AA/Aa credit ratings.

The political constraint may reflect electoral reality: my suggestion that rates should be a fixed proportion (0.25% a year?) of the market value of a house, which has the pleasant property that those who've benefited most from the housing shortage will pay most to relieve it, was not met with universal delight. So we're lumbered with inadequate rates revenue: if the Council's costs are mostly wages (I'd guess they are), 2.5% rates increases will struggle to keep capex spending constant in real terms let alone boost it. And we're lumbered with the debt ceiling, too, as the ratings agencies are unlikely to buy the argument (though it's correct) that the spend today will boost the debt servicing tomorrow, plus it's not silly for the Council to stay a highly rated borrower.

So Harshal's talk looked at what other options there might be - the big ones being developer 'contributions', targeted rates, and off-balance-sheet vehicles - and how they stack up on various criteria including efficiency, having the beneficiaries pay their full whack, and incentivising development rather than land banking. Of that lot, targeted rates maybe scrubbed up best, but it's not an easy area. Apportioning the benefits created and costs incurred, for example, is not straightforward. If new Suburb A gets developed alongside existing Suburb B, for example, it may make it feasible for a new bus route to service both A and B. Who is credited with the benefit? Who ought to pay? And who actually pays in the end: will developers simply pass on all 'their' costs to the housebuyer? And are finely calibrated but expensive and complex attributions any better at the end of the day than cheap and cheerful approximations?

Personally I was left with the impression that local resourcing won't cut it, and some central government funding may be required beyond the Housing Infrastructure Fund (announced here, updated here), which while helpful doesn't get past the debt ceiling problem, since it counts against councils' debt. Relatively limited-scope entities like territorial authorities may not be well equipped to handle step-change demands like these. And Auckland's issues are an outcome in substantial part of the country's national immigration policy (a policy which I don't have an issue with, just to be clear).

Here, and everywhere else where we're short of infrastructure, the government ought to use its considerable leeway to borrow internationally on once in a lifetime cheap terms. Take a look at the chart below: at a wild guess, would you say this looks a good time to tank up? And not just on an interest rate basis, either: we could ease the capital repayments, too, by borrowing for a longer maturity. Last week Austria, a country rated similarly to us (AA+/Aa1 with S&P/Moody's, while we're AA/Aaa), issued 100-year debt. We're getting a bit better at getting longer stuff away than we used to be, but our longest current maturity is 23 years (the September 2040 issue).


Which, by the way, is also what the latest (June) OECD report on the New Zealand economy said:
The government is aiming to reduce net core Crown debt as a share of GDP from 24% in 2016-17 to 10-15% by 2025 to help cope with future periodic global shocks and natural disasters. Nevertheless, it should be possible to finance some high-priority tax reductions or expenditure increases without compromising its fiscal strategy.
So full marks to Harshal for a thoughtful presentation, to Richard for organising, and especially to David Walker of PriceWaterhouseCoopers who generously provided the venue and hosted the drinks and nibbles. Keep an eye out for future meetings: if you've got an interest in the intersection of law and economics, there's bound to be something that'll interest you.

*Update - Harshal's paper was indeed published online, on September 27