America is sometimes called the laboratory of democracy because it has 50 experiments running all the time. Every state has broad jurisdiction. They can each try different ways of solving problems. Some problems are unique to individual states, but others are faced by everyone. And if one state finds a solution that works, others can copy it.
New Zealand has nothing comparable.
Councils have a fair bit of autonomy when spending the money they collect in rates. But there’s no flexibility for some things that really matter.
The country is now in its second round of comprehensive resource management reform. The status quo system is abysmal. Labour’s replacement looked likely to be worse. National’s proposed alternative sounds like it is going in the right direction.
But imagine if councils had been able to try their own version, had they wanted to. Current national-level reform could be informed by what has worked or failed for different councils. Failures would have been at a much smaller scale – and could revert to central government’s default version.
Think about remote communities that have no reasonable access to general practitioners. Central government has promised more money to help foreign-trained doctors do the required lengthy local supervised training so they can practice here. But imagine if Northland had been allowed to try something different if it wanted to. Like just letting Canadian GPs in good standing with their College of Family Physicians serve patients in Northland without all the rigamarole. If it worked, the whole country could learn from the trial. A decade ago, I co-authored a report at the New Zealand Initiative explaining how these policy trial areas could work. We called them Special Economic Zones. However, our idea was very different from the tax concession zones, common overseas, which do not do much to help communities outside the zone’s boundaries.
The policy-trial version that we proposed was fairly simple.
If a local community thought they had found a better way of doing things, that community could come to Wellington and request a policy trial. It would have to be something that, if it worked, could be extended to other similar communities. So, a “let’s not have any tax in this place” policy would just not work – it isn’t something that could be extended to others.
Officials, ideally from Treasury, would work with the community to make it a proper trial. How would we know if the trial worked? Proper trials have measures of success and failure. Treasury might add a few additional indicators to watch for side-effects.
If the trial succeeded, central government would be likely to benefit. Over the longer term, central government’s costs would decrease, its tax revenue would increase, or both would occur. Get a rough and ready measure of the extra revenue that central government has gotten out of the trial, whether through savings or additional tax, and punt some of it back to the council that gave it a go.
Then, let other places decide if they want to try it too or stick with the status quo. The trial could even be successful enough for central government to adopt a national level policy.
While our report focused on councils, it is easy to imagine versions coming from iwi and hapū instead. Canada provides working examples of rangatiratanga that could be tried here as well.
Last week, Minister Shane Jones suggested a Special Economic Zone around Marsden Point. Details were vague but potentially include business-friendly regulations, infrastructure and facilities, investment support, and customs and trade facilitation.
Jones noted that the model could apply to other “strategically important areas of the country where infrastructure, ease of doing business and investment are critical to the economic interests of New Zealand”.
Shifting to on-shore storage of critical emergency fuel reserves makes sense in uncertain times. But, building fuel storage facilities is perfectly feasible through existing fast-track processes. Is a special zone really required?
If Whangārei Council proposed a bundle of regulatory reforms that its community thought worthwhile, and that could be extended to other councils if they proved successful, central government should listen.
But central government picking which areas should win, and which should not, seems like an experiment not worth trying.
