CINXE.COM

<!DOCTYPE html> <html lang="en"> <head> <meta charset="UTF-8"> <meta name="viewport" content="width=device-width, initial-scale=1"> <title>croaking cassandra | Economics, public policy, monetary policy, financial regulation, with a New Zealand perspective</title> <link rel="profile" href="http://gmpg.org/xfn/11"> <link rel="pingback" href="https://croakingcassandra.com/xmlrpc.php"> <meta name='robots' content='max-image-preview:large' />  <script id="wpcom_remote_login_js"> var wpcom_remote_login_extra_auth = ''; function wpcom_remote_login_remove_dom_node_id( element_id ) { var dom_node = document.getElementById( element_id ); if ( dom_node ) { dom_node.parentNode.removeChild( dom_node ); } } function wpcom_remote_login_remove_dom_node_classes( class_name ) { var dom_nodes = document.querySelectorAll( '.' + class_name ); for ( var i = 0; i < dom_nodes.length; i++ ) { dom_nodes[ i ].parentNode.removeChild( dom_nodes[ i ] ); } } function wpcom_remote_login_final_cleanup() { wpcom_remote_login_remove_dom_node_classes( "wpcom_remote_login_msg" ); wpcom_remote_login_remove_dom_node_id( "wpcom_remote_login_key" ); wpcom_remote_login_remove_dom_node_id( "wpcom_remote_login_validate" ); wpcom_remote_login_remove_dom_node_id( "wpcom_remote_login_js" ); wpcom_remote_login_remove_dom_node_id( "wpcom_request_access_iframe" ); wpcom_remote_login_remove_dom_node_id( "wpcom_request_access_styles" ); } // Watch for messages back from the remote login window.addEventListener( "message", function( e ) { if ( e.origin === "https://r-login.wordpress.com" ) { var data = {}; try { data = JSON.parse( e.data ); } catch( e ) { wpcom_remote_login_final_cleanup(); return; } if ( data.msg === 'LOGIN' ) { // Clean up the login check iframe wpcom_remote_login_remove_dom_node_id( "wpcom_remote_login_key" ); var id_regex = new RegExp( /^[0-9]+$/ ); var token_regex = new RegExp( /^.*|.*|.*$/ ); if ( token_regex.test( data.token ) && id_regex.test( data.wpcomid ) ) { // We have everything we need to ask for a login var script = document.createElement( "script" ); script.setAttribute( "id", "wpcom_remote_login_validate" ); script.src = '/remote-login.php?wpcom_remote_login=validate' + '&wpcomid=' + data.wpcomid + '&token=' + encodeURIComponent( data.token ) + '&host=' + window.location.protocol + '//' + window.location.hostname + '&postid=72205' + '&is_singular='; document.body.appendChild( script ); } return; } // Safari ITP, not logged in, so redirect if ( data.msg === 'LOGIN-REDIRECT' ) { window.location = 'https://wordpress.com/log-in?redirect_to=' + window.location.href; return; } // Safari ITP, storage access failed, remove the request if ( data.msg === 'LOGIN-REMOVE' ) { var css_zap = 'html { -webkit-transition: margin-top 1s; transition: margin-top 1s; } /* 9001 */ html { margin-top: 0 !important; } * html body { margin-top: 0 !important; } @media screen and ( max-width: 782px ) { html { margin-top: 0 !important; } * html body { margin-top: 0 !important; } }'; var style_zap = document.createElement( 'style' ); style_zap.type = 'text/css'; style_zap.appendChild( document.createTextNode( css_zap ) ); document.body.appendChild( style_zap ); var e = document.getElementById( 'wpcom_request_access_iframe' ); e.parentNode.removeChild( e ); document.cookie = 'wordpress_com_login_access=denied; path=/; max-age=31536000'; return; } // Safari ITP if ( data.msg === 'REQUEST_ACCESS' ) { console.log( 'request access: safari' ); // Check ITP iframe enable/disable knob if ( wpcom_remote_login_extra_auth !== 'safari_itp_iframe' ) { return; } // If we are in a "private window" there is no ITP. var private_window = false; try { var opendb = window.openDatabase( null, null, null, null ); } catch( e ) { private_window = true; } if ( private_window ) { console.log( 'private window' ); return; } var iframe = document.createElement( 'iframe' ); iframe.id = 'wpcom_request_access_iframe'; iframe.setAttribute( 'scrolling', 'no' ); iframe.setAttribute( 'sandbox', 'allow-storage-access-by-user-activation allow-scripts allow-same-origin allow-top-navigation-by-user-activation' ); iframe.src = 'https://r-login.wordpress.com/remote-login.php?wpcom_remote_login=request_access&origin=' + encodeURIComponent( data.origin ) + '&wpcomid=' + encodeURIComponent( data.wpcomid ); var css = 'html { -webkit-transition: margin-top 1s; transition: margin-top 1s; } /* 9001 */ html { margin-top: 46px !important; } * html body { margin-top: 46px !important; } @media screen and ( max-width: 660px ) { html { margin-top: 71px !important; } * html body { margin-top: 71px !important; } #wpcom_request_access_iframe { display: block; height: 71px !important; } } #wpcom_request_access_iframe { border: 0px; height: 46px; position: fixed; top: 0; left: 0; width: 100%; min-width: 100%; z-index: 99999; background: #23282d; } '; var style = document.createElement( 'style' ); style.type = 'text/css'; style.id = 'wpcom_request_access_styles'; style.appendChild( document.createTextNode( css ) ); document.body.appendChild( style ); document.body.appendChild( iframe ); } if ( data.msg === 'DONE' ) { wpcom_remote_login_final_cleanup(); } } }, false ); // Inject the remote login iframe after the page has had a chance to load // more critical resources window.addEventListener( "DOMContentLoaded", function( e ) { var iframe = document.createElement( "iframe" ); iframe.style.display = "none"; iframe.setAttribute( "scrolling", "no" ); iframe.setAttribute( "id", "wpcom_remote_login_key" ); iframe.src = "https://r-login.wordpress.com/remote-login.php" + "?wpcom_remote_login=key" + "&origin=aHR0cHM6Ly9jcm9ha2luZ2Nhc3NhbmRyYS5jb20%3D" + "&wpcomid=85004741" + "&time=1732546257"; document.body.appendChild( iframe ); }, false ); </script> <link rel='dns-prefetch' href='//s1.wp.com' /> <link rel='dns-prefetch' href='//s2.wp.com' /> <link rel='dns-prefetch' href='//s0.wp.com' /> <link rel='dns-prefetch' href='//fonts-api.wp.com' /> <link rel="alternate" type="application/rss+xml" title="croaking cassandra » Feed" href="https://croakingcassandra.com/feed/" /> <link rel="alternate" type="application/rss+xml" title="croaking cassandra » Comments Feed" href="https://croakingcassandra.com/comments/feed/" /> <script type="text/javascript"> /* <![CDATA[ */ function addLoadEvent(func) { var oldonload = window.onload; if (typeof window.onload != 'function') { window.onload = func; } else { window.onload = function () { oldonload(); func(); } } } /* ]]> */ </script> <script type="text/javascript"> /* <![CDATA[ */ window._wpemojiSettings = {"baseUrl":"https:\/\/s0.wp.com\/wp-content\/mu-plugins\/wpcom-smileys\/twemoji\/2\/72x72\/","ext":".png","svgUrl":"https:\/\/s0.wp.com\/wp-content\/mu-plugins\/wpcom-smileys\/twemoji\/2\/svg\/","svgExt":".svg","source":{"concatemoji":"https:\/\/s2.wp.com\/wp-includes\/js\/wp-emoji-release.min.js?m=1719498190i&ver=6.8-alpha-59438"}}; /*! This file is auto-generated */ !function(i,n){var o,s,e;function c(e){try{var t={supportTests:e,timestamp:(new Date).valueOf()};sessionStorage.setItem(o,JSON.stringify(t))}catch(e){}}function p(e,t,n){e.clearRect(0,0,e.canvas.width,e.canvas.height),e.fillText(t,0,0);var t=new Uint32Array(e.getImageData(0,0,e.canvas.width,e.canvas.height).data),r=(e.clearRect(0,0,e.canvas.width,e.canvas.height),e.fillText(n,0,0),new Uint32Array(e.getImageData(0,0,e.canvas.width,e.canvas.height).data));return t.every(function(e,t){return e===r[t]})}function u(e,t,n){switch(t){case"flag":return n(e,"\ud83c\udff3\ufe0f\u200d\u26a7\ufe0f","\ud83c\udff3\ufe0f\u200b\u26a7\ufe0f")?!1:!n(e,"\ud83c\uddfa\ud83c\uddf3","\ud83c\uddfa\u200b\ud83c\uddf3")&&!n(e,"\ud83c\udff4\udb40\udc67\udb40\udc62\udb40\udc65\udb40\udc6e\udb40\udc67\udb40\udc7f","\ud83c\udff4\u200b\udb40\udc67\u200b\udb40\udc62\u200b\udb40\udc65\u200b\udb40\udc6e\u200b\udb40\udc67\u200b\udb40\udc7f");case"emoji":return!n(e,"\ud83d\udc26\u200d\u2b1b","\ud83d\udc26\u200b\u2b1b")}return!1}function f(e,t,n){var r="undefined"!=typeof WorkerGlobalScope&&self instanceof WorkerGlobalScope?new OffscreenCanvas(300,150):i.createElement("canvas"),a=r.getContext("2d",{willReadFrequently:!0}),o=(a.textBaseline="top",a.font="600 32px Arial",{});return e.forEach(function(e){o[e]=t(a,e,n)}),o}function t(e){var t=i.createElement("script");t.src=e,t.defer=!0,i.head.appendChild(t)}"undefined"!=typeof Promise&&(o="wpEmojiSettingsSupports",s=["flag","emoji"],n.supports={everything:!0,everythingExceptFlag:!0},e=new Promise(function(e){i.addEventListener("DOMContentLoaded",e,{once:!0})}),new Promise(function(t){var n=function(){try{var e=JSON.parse(sessionStorage.getItem(o));if("object"==typeof e&&"number"==typeof e.timestamp&&(new Date).valueOf()<e.timestamp+604800&&"object"==typeof e.supportTests)return e.supportTests}catch(e){}return null}();if(!n){if("undefined"!=typeof Worker&&"undefined"!=typeof OffscreenCanvas&&"undefined"!=typeof URL&&URL.createObjectURL&&"undefined"!=typeof Blob)try{var e="postMessage("+f.toString()+"("+[JSON.stringify(s),u.toString(),p.toString()].join(",")+"));",r=new Blob([e],{type:"text/javascript"}),a=new Worker(URL.createObjectURL(r),{name:"wpTestEmojiSupports"});return void(a.onmessage=function(e){c(n=e.data),a.terminate(),t(n)})}catch(e){}c(n=f(s,u,p))}t(n)}).then(function(e){for(var t in e)n.supports[t]=e[t],n.supports.everything=n.supports.everything&&n.supports[t],"flag"!==t&&(n.supports.everythingExceptFlag=n.supports.everythingExceptFlag&&n.supports[t]);n.supports.everythingExceptFlag=n.supports.everythingExceptFlag&&!n.supports.flag,n.DOMReady=!1,n.readyCallback=function(){n.DOMReady=!0}}).then(function(){return e}).then(function(){var e;n.supports.everything||(n.readyCallback(),(e=n.source||{}).concatemoji?t(e.concatemoji):e.wpemoji&&e.twemoji&&(t(e.twemoji),t(e.wpemoji)))}))}((window,document),window._wpemojiSettings); /* ]]> */ </script> <link crossorigin='anonymous' rel='stylesheet' id='all-css-0-1' href='https://s2.wp.com/wp-content/mu-plugins/jetpack-plugin/moon/modules/infinite-scroll/infinity.css?m=1685131895i&cssminify=yes' type='text/css' media='all' /> <style id='wp-emoji-styles-inline-css'> img.wp-smiley, img.emoji { display: inline !important; border: none !important; box-shadow: none !important; height: 1em !important; width: 1em !important; margin: 0 0.07em !important; vertical-align: -0.1em !important; background: none !important; padding: 0 !important; } </style> <link crossorigin='anonymous' rel='stylesheet' id='all-css-2-1' href='https://s0.wp.com/_static/??-eJydzMsOwiAQheEXEibEXtKF8VmATggVgcwMNby91U13LlyenHw/vKryJQtmgZpaiJkhtGM6pHA8hLCbRU96ANdiWsGl4h8qRUeWOrD0hNozX+Bn6KsYNpRqP9z20kQFiuu/CbISc+CT3583M1/NMg6zGbc3O1tP4A==&cssminify=yes' type='text/css' media='all' /> <style id='wp-block-library-inline-css'> .has-text-align-justify { text-align:justify; } .has-text-align-justify{text-align:justify;} </style> <link crossorigin='anonymous' rel='stylesheet' id='all-css-4-1' href='https://s2.wp.com/_static/??-eJzTLy/QzcxLzilNSS3WzyrWz01NyUxMzUnNTc0rQeEU5CRWphbp5qSmJyZX6uVm5uklFxfr6OPTDpRD5sM02efaGpoZmFkYGRuZGmQBAHPvL0Y=&cssminify=yes' type='text/css' media='all' /> <style id='jetpack-sharing-buttons-style-inline-css'> .jetpack-sharing-buttons__services-list{display:flex;flex-direction:row;flex-wrap:wrap;gap:0;list-style-type:none;margin:5px;padding:0}.jetpack-sharing-buttons__services-list.has-small-icon-size{font-size:12px}.jetpack-sharing-buttons__services-list.has-normal-icon-size{font-size:16px}.jetpack-sharing-buttons__services-list.has-large-icon-size{font-size:24px}.jetpack-sharing-buttons__services-list.has-huge-icon-size{font-size:36px}@media print{.jetpack-sharing-buttons__services-list{display:none!important}}.editor-styles-wrapper .wp-block-jetpack-sharing-buttons{gap:0;padding-inline-start:0}ul.jetpack-sharing-buttons__services-list.has-background{padding:1.25em 2.375em} </style> <link crossorigin='anonymous' rel='stylesheet' id='all-css-6-1' href='https://s2.wp.com/wp-content/plugins/coblocks/2.18.1-simple-rev.4/dist/coblocks-style.css?m=1681832297i&cssminify=yes' type='text/css' media='all' /> <style id='classic-theme-styles-inline-css'> /*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} </style> <link crossorigin='anonymous' rel='stylesheet' id='all-css-8-1' href='https://s1.wp.com/_static/??/wp-content/mu-plugins/core-compat/wp-mediaelement.css,/wp-content/mu-plugins/wpcom-bbpress-premium-themes.css?m=1432920480j&cssminify=yes' type='text/css' media='all' /> <style id='global-styles-inline-css'> :root{--wp--preset--aspect-ratio--square: 1;--wp--preset--aspect-ratio--4-3: 4/3;--wp--preset--aspect-ratio--3-4: 3/4;--wp--preset--aspect-ratio--3-2: 3/2;--wp--preset--aspect-ratio--2-3: 2/3;--wp--preset--aspect-ratio--16-9: 16/9;--wp--preset--aspect-ratio--9-16: 9/16;--wp--preset--color--black: #000000;--wp--preset--color--cyan-bluish-gray: #abb8c3;--wp--preset--color--white: #ffffff;--wp--preset--color--pale-pink: #f78da7;--wp--preset--color--vivid-red: #cf2e2e;--wp--preset--color--luminous-vivid-orange: #ff6900;--wp--preset--color--luminous-vivid-amber: #fcb900;--wp--preset--color--light-green-cyan: #7bdcb5;--wp--preset--color--vivid-green-cyan: #00d084;--wp--preset--color--pale-cyan-blue: #8ed1fc;--wp--preset--color--vivid-cyan-blue: #0693e3;--wp--preset--color--vivid-purple: #9b51e0;--wp--preset--gradient--vivid-cyan-blue-to-vivid-purple: linear-gradient(135deg,rgba(6,147,227,1) 0%,rgb(155,81,224) 100%);--wp--preset--gradient--light-green-cyan-to-vivid-green-cyan: linear-gradient(135deg,rgb(122,220,180) 0%,rgb(0,208,130) 100%);--wp--preset--gradient--luminous-vivid-amber-to-luminous-vivid-orange: linear-gradient(135deg,rgba(252,185,0,1) 0%,rgba(255,105,0,1) 100%);--wp--preset--gradient--luminous-vivid-orange-to-vivid-red: linear-gradient(135deg,rgba(255,105,0,1) 0%,rgb(207,46,46) 100%);--wp--preset--gradient--very-light-gray-to-cyan-bluish-gray: linear-gradient(135deg,rgb(238,238,238) 0%,rgb(169,184,195) 100%);--wp--preset--gradient--cool-to-warm-spectrum: linear-gradient(135deg,rgb(74,234,220) 0%,rgb(151,120,209) 20%,rgb(207,42,186) 40%,rgb(238,44,130) 60%,rgb(251,105,98) 80%,rgb(254,248,76) 100%);--wp--preset--gradient--blush-light-purple: linear-gradient(135deg,rgb(255,206,236) 0%,rgb(152,150,240) 100%);--wp--preset--gradient--blush-bordeaux: linear-gradient(135deg,rgb(254,205,165) 0%,rgb(254,45,45) 50%,rgb(107,0,62) 100%);--wp--preset--gradient--luminous-dusk: linear-gradient(135deg,rgb(255,203,112) 0%,rgb(199,81,192) 50%,rgb(65,88,208) 100%);--wp--preset--gradient--pale-ocean: linear-gradient(135deg,rgb(255,245,203) 0%,rgb(182,227,212) 50%,rgb(51,167,181) 100%);--wp--preset--gradient--electric-grass: linear-gradient(135deg,rgb(202,248,128) 0%,rgb(113,206,126) 100%);--wp--preset--gradient--midnight: linear-gradient(135deg,rgb(2,3,129) 0%,rgb(40,116,252) 100%);--wp--preset--font-size--small: 13px;--wp--preset--font-size--medium: 20px;--wp--preset--font-size--large: 36px;--wp--preset--font-size--x-large: 42px;--wp--preset--font-family--albert-sans: 'Albert Sans', sans-serif;--wp--preset--font-family--alegreya: Alegreya, serif;--wp--preset--font-family--arvo: Arvo, serif;--wp--preset--font-family--bodoni-moda: 'Bodoni Moda', serif;--wp--preset--font-family--bricolage-grotesque: 'Bricolage Grotesque', sans-serif;--wp--preset--font-family--cabin: Cabin, sans-serif;--wp--preset--font-family--chivo: Chivo, sans-serif;--wp--preset--font-family--commissioner: Commissioner, sans-serif;--wp--preset--font-family--cormorant: Cormorant, serif;--wp--preset--font-family--courier-prime: 'Courier Prime', monospace;--wp--preset--font-family--crimson-pro: 'Crimson Pro', serif;--wp--preset--font-family--dm-mono: 'DM Mono', monospace;--wp--preset--font-family--dm-sans: 'DM Sans', sans-serif;--wp--preset--font-family--dm-serif-display: 'DM Serif Display', serif;--wp--preset--font-family--domine: Domine, serif;--wp--preset--font-family--eb-garamond: 'EB Garamond', serif;--wp--preset--font-family--epilogue: Epilogue, sans-serif;--wp--preset--font-family--fahkwang: Fahkwang, sans-serif;--wp--preset--font-family--figtree: Figtree, sans-serif;--wp--preset--font-family--fira-sans: 'Fira Sans', sans-serif;--wp--preset--font-family--fjalla-one: 'Fjalla One', sans-serif;--wp--preset--font-family--fraunces: Fraunces, serif;--wp--preset--font-family--gabarito: Gabarito, system-ui;--wp--preset--font-family--ibm-plex-mono: 'IBM Plex Mono', monospace;--wp--preset--font-family--ibm-plex-sans: 'IBM Plex Sans', sans-serif;--wp--preset--font-family--ibarra-real-nova: 'Ibarra Real Nova', serif;--wp--preset--font-family--instrument-serif: 'Instrument Serif', serif;--wp--preset--font-family--inter: Inter, sans-serif;--wp--preset--font-family--josefin-sans: 'Josefin Sans', sans-serif;--wp--preset--font-family--jost: Jost, sans-serif;--wp--preset--font-family--libre-baskerville: 'Libre Baskerville', serif;--wp--preset--font-family--libre-franklin: 'Libre Franklin', sans-serif;--wp--preset--font-family--literata: Literata, serif;--wp--preset--font-family--lora: Lora, serif;--wp--preset--font-family--merriweather: Merriweather, serif;--wp--preset--font-family--montserrat: Montserrat, sans-serif;--wp--preset--font-family--newsreader: Newsreader, serif;--wp--preset--font-family--noto-sans-mono: 'Noto Sans Mono', sans-serif;--wp--preset--font-family--nunito: Nunito, sans-serif;--wp--preset--font-family--open-sans: 'Open Sans', sans-serif;--wp--preset--font-family--overpass: Overpass, sans-serif;--wp--preset--font-family--pt-serif: 'PT Serif', serif;--wp--preset--font-family--petrona: Petrona, serif;--wp--preset--font-family--piazzolla: Piazzolla, serif;--wp--preset--font-family--playfair-display: 'Playfair Display', serif;--wp--preset--font-family--plus-jakarta-sans: 'Plus Jakarta Sans', sans-serif;--wp--preset--font-family--poppins: Poppins, sans-serif;--wp--preset--font-family--raleway: Raleway, sans-serif;--wp--preset--font-family--roboto: Roboto, sans-serif;--wp--preset--font-family--roboto-slab: 'Roboto Slab', serif;--wp--preset--font-family--rubik: Rubik, sans-serif;--wp--preset--font-family--rufina: Rufina, serif;--wp--preset--font-family--sora: Sora, sans-serif;--wp--preset--font-family--source-sans-3: 'Source Sans 3', sans-serif;--wp--preset--font-family--source-serif-4: 'Source Serif 4', serif;--wp--preset--font-family--space-mono: 'Space Mono', monospace;--wp--preset--font-family--syne: Syne, sans-serif;--wp--preset--font-family--texturina: Texturina, serif;--wp--preset--font-family--urbanist: Urbanist, sans-serif;--wp--preset--font-family--work-sans: 'Work Sans', sans-serif;--wp--preset--spacing--20: 0.44rem;--wp--preset--spacing--30: 0.67rem;--wp--preset--spacing--40: 1rem;--wp--preset--spacing--50: 1.5rem;--wp--preset--spacing--60: 2.25rem;--wp--preset--spacing--70: 3.38rem;--wp--preset--spacing--80: 5.06rem;--wp--preset--shadow--natural: 6px 6px 9px rgba(0, 0, 0, 0.2);--wp--preset--shadow--deep: 12px 12px 50px rgba(0, 0, 0, 0.4);--wp--preset--shadow--sharp: 6px 6px 0px rgba(0, 0, 0, 0.2);--wp--preset--shadow--outlined: 6px 6px 0px -3px rgba(255, 255, 255, 1), 6px 6px rgba(0, 0, 0, 1);--wp--preset--shadow--crisp: 6px 6px 0px rgba(0, 0, 0, 1);}:where(.is-layout-flex){gap: 0.5em;}:where(.is-layout-grid){gap: 0.5em;}body .is-layout-flex{display: flex;}.is-layout-flex{flex-wrap: wrap;align-items: center;}.is-layout-flex > :is(*, div){margin: 0;}body .is-layout-grid{display: grid;}.is-layout-grid > :is(*, div){margin: 0;}:where(.wp-block-columns.is-layout-flex){gap: 2em;}:where(.wp-block-columns.is-layout-grid){gap: 2em;}:where(.wp-block-post-template.is-layout-flex){gap: 1.25em;}:where(.wp-block-post-template.is-layout-grid){gap: 1.25em;}.has-black-color{color: var(--wp--preset--color--black) !important;}.has-cyan-bluish-gray-color{color: var(--wp--preset--color--cyan-bluish-gray) !important;}.has-white-color{color: var(--wp--preset--color--white) !important;}.has-pale-pink-color{color: var(--wp--preset--color--pale-pink) !important;}.has-vivid-red-color{color: var(--wp--preset--color--vivid-red) !important;}.has-luminous-vivid-orange-color{color: var(--wp--preset--color--luminous-vivid-orange) !important;}.has-luminous-vivid-amber-color{color: var(--wp--preset--color--luminous-vivid-amber) !important;}.has-light-green-cyan-color{color: var(--wp--preset--color--light-green-cyan) !important;}.has-vivid-green-cyan-color{color: var(--wp--preset--color--vivid-green-cyan) !important;}.has-pale-cyan-blue-color{color: var(--wp--preset--color--pale-cyan-blue) !important;}.has-vivid-cyan-blue-color{color: var(--wp--preset--color--vivid-cyan-blue) !important;}.has-vivid-purple-color{color: var(--wp--preset--color--vivid-purple) !important;}.has-black-background-color{background-color: var(--wp--preset--color--black) !important;}.has-cyan-bluish-gray-background-color{background-color: var(--wp--preset--color--cyan-bluish-gray) !important;}.has-white-background-color{background-color: var(--wp--preset--color--white) !important;}.has-pale-pink-background-color{background-color: var(--wp--preset--color--pale-pink) !important;}.has-vivid-red-background-color{background-color: var(--wp--preset--color--vivid-red) !important;}.has-luminous-vivid-orange-background-color{background-color: var(--wp--preset--color--luminous-vivid-orange) !important;}.has-luminous-vivid-amber-background-color{background-color: var(--wp--preset--color--luminous-vivid-amber) !important;}.has-light-green-cyan-background-color{background-color: var(--wp--preset--color--light-green-cyan) !important;}.has-vivid-green-cyan-background-color{background-color: var(--wp--preset--color--vivid-green-cyan) !important;}.has-pale-cyan-blue-background-color{background-color: var(--wp--preset--color--pale-cyan-blue) !important;}.has-vivid-cyan-blue-background-color{background-color: var(--wp--preset--color--vivid-cyan-blue) !important;}.has-vivid-purple-background-color{background-color: var(--wp--preset--color--vivid-purple) !important;}.has-black-border-color{border-color: var(--wp--preset--color--black) !important;}.has-cyan-bluish-gray-border-color{border-color: var(--wp--preset--color--cyan-bluish-gray) !important;}.has-white-border-color{border-color: var(--wp--preset--color--white) !important;}.has-pale-pink-border-color{border-color: var(--wp--preset--color--pale-pink) !important;}.has-vivid-red-border-color{border-color: var(--wp--preset--color--vivid-red) !important;}.has-luminous-vivid-orange-border-color{border-color: var(--wp--preset--color--luminous-vivid-orange) !important;}.has-luminous-vivid-amber-border-color{border-color: var(--wp--preset--color--luminous-vivid-amber) !important;}.has-light-green-cyan-border-color{border-color: var(--wp--preset--color--light-green-cyan) !important;}.has-vivid-green-cyan-border-color{border-color: var(--wp--preset--color--vivid-green-cyan) !important;}.has-pale-cyan-blue-border-color{border-color: var(--wp--preset--color--pale-cyan-blue) !important;}.has-vivid-cyan-blue-border-color{border-color: var(--wp--preset--color--vivid-cyan-blue) !important;}.has-vivid-purple-border-color{border-color: var(--wp--preset--color--vivid-purple) !important;}.has-vivid-cyan-blue-to-vivid-purple-gradient-background{background: var(--wp--preset--gradient--vivid-cyan-blue-to-vivid-purple) !important;}.has-light-green-cyan-to-vivid-green-cyan-gradient-background{background: var(--wp--preset--gradient--light-green-cyan-to-vivid-green-cyan) !important;}.has-luminous-vivid-amber-to-luminous-vivid-orange-gradient-background{background: var(--wp--preset--gradient--luminous-vivid-amber-to-luminous-vivid-orange) !important;}.has-luminous-vivid-orange-to-vivid-red-gradient-background{background: var(--wp--preset--gradient--luminous-vivid-orange-to-vivid-red) !important;}.has-very-light-gray-to-cyan-bluish-gray-gradient-background{background: var(--wp--preset--gradient--very-light-gray-to-cyan-bluish-gray) !important;}.has-cool-to-warm-spectrum-gradient-background{background: var(--wp--preset--gradient--cool-to-warm-spectrum) !important;}.has-blush-light-purple-gradient-background{background: var(--wp--preset--gradient--blush-light-purple) !important;}.has-blush-bordeaux-gradient-background{background: var(--wp--preset--gradient--blush-bordeaux) !important;}.has-luminous-dusk-gradient-background{background: var(--wp--preset--gradient--luminous-dusk) !important;}.has-pale-ocean-gradient-background{background: var(--wp--preset--gradient--pale-ocean) !important;}.has-electric-grass-gradient-background{background: var(--wp--preset--gradient--electric-grass) !important;}.has-midnight-gradient-background{background: var(--wp--preset--gradient--midnight) !important;}.has-small-font-size{font-size: var(--wp--preset--font-size--small) !important;}.has-medium-font-size{font-size: var(--wp--preset--font-size--medium) !important;}.has-large-font-size{font-size: var(--wp--preset--font-size--large) !important;}.has-x-large-font-size{font-size: var(--wp--preset--font-size--x-large) !important;}.has-albert-sans-font-family{font-family: var(--wp--preset--font-family--albert-sans) !important;}.has-alegreya-font-family{font-family: var(--wp--preset--font-family--alegreya) !important;}.has-arvo-font-family{font-family: var(--wp--preset--font-family--arvo) !important;}.has-bodoni-moda-font-family{font-family: var(--wp--preset--font-family--bodoni-moda) !important;}.has-bricolage-grotesque-font-family{font-family: var(--wp--preset--font-family--bricolage-grotesque) !important;}.has-cabin-font-family{font-family: var(--wp--preset--font-family--cabin) !important;}.has-chivo-font-family{font-family: var(--wp--preset--font-family--chivo) !important;}.has-commissioner-font-family{font-family: var(--wp--preset--font-family--commissioner) !important;}.has-cormorant-font-family{font-family: var(--wp--preset--font-family--cormorant) !important;}.has-courier-prime-font-family{font-family: var(--wp--preset--font-family--courier-prime) !important;}.has-crimson-pro-font-family{font-family: var(--wp--preset--font-family--crimson-pro) !important;}.has-dm-mono-font-family{font-family: var(--wp--preset--font-family--dm-mono) !important;}.has-dm-sans-font-family{font-family: var(--wp--preset--font-family--dm-sans) !important;}.has-dm-serif-display-font-family{font-family: var(--wp--preset--font-family--dm-serif-display) !important;}.has-domine-font-family{font-family: var(--wp--preset--font-family--domine) !important;}.has-eb-garamond-font-family{font-family: var(--wp--preset--font-family--eb-garamond) !important;}.has-epilogue-font-family{font-family: var(--wp--preset--font-family--epilogue) !important;}.has-fahkwang-font-family{font-family: var(--wp--preset--font-family--fahkwang) !important;}.has-figtree-font-family{font-family: var(--wp--preset--font-family--figtree) !important;}.has-fira-sans-font-family{font-family: var(--wp--preset--font-family--fira-sans) !important;}.has-fjalla-one-font-family{font-family: var(--wp--preset--font-family--fjalla-one) !important;}.has-fraunces-font-family{font-family: var(--wp--preset--font-family--fraunces) !important;}.has-gabarito-font-family{font-family: var(--wp--preset--font-family--gabarito) !important;}.has-ibm-plex-mono-font-family{font-family: var(--wp--preset--font-family--ibm-plex-mono) !important;}.has-ibm-plex-sans-font-family{font-family: var(--wp--preset--font-family--ibm-plex-sans) !important;}.has-ibarra-real-nova-font-family{font-family: var(--wp--preset--font-family--ibarra-real-nova) !important;}.has-instrument-serif-font-family{font-family: var(--wp--preset--font-family--instrument-serif) !important;}.has-inter-font-family{font-family: var(--wp--preset--font-family--inter) !important;}.has-josefin-sans-font-family{font-family: var(--wp--preset--font-family--josefin-sans) !important;}.has-jost-font-family{font-family: var(--wp--preset--font-family--jost) !important;}.has-libre-baskerville-font-family{font-family: var(--wp--preset--font-family--libre-baskerville) !important;}.has-libre-franklin-font-family{font-family: var(--wp--preset--font-family--libre-franklin) !important;}.has-literata-font-family{font-family: var(--wp--preset--font-family--literata) !important;}.has-lora-font-family{font-family: var(--wp--preset--font-family--lora) !important;}.has-merriweather-font-family{font-family: var(--wp--preset--font-family--merriweather) !important;}.has-montserrat-font-family{font-family: var(--wp--preset--font-family--montserrat) !important;}.has-newsreader-font-family{font-family: var(--wp--preset--font-family--newsreader) !important;}.has-noto-sans-mono-font-family{font-family: var(--wp--preset--font-family--noto-sans-mono) !important;}.has-nunito-font-family{font-family: var(--wp--preset--font-family--nunito) !important;}.has-open-sans-font-family{font-family: var(--wp--preset--font-family--open-sans) !important;}.has-overpass-font-family{font-family: var(--wp--preset--font-family--overpass) !important;}.has-pt-serif-font-family{font-family: var(--wp--preset--font-family--pt-serif) !important;}.has-petrona-font-family{font-family: var(--wp--preset--font-family--petrona) !important;}.has-piazzolla-font-family{font-family: var(--wp--preset--font-family--piazzolla) !important;}.has-playfair-display-font-family{font-family: var(--wp--preset--font-family--playfair-display) !important;}.has-plus-jakarta-sans-font-family{font-family: var(--wp--preset--font-family--plus-jakarta-sans) !important;}.has-poppins-font-family{font-family: var(--wp--preset--font-family--poppins) !important;}.has-raleway-font-family{font-family: var(--wp--preset--font-family--raleway) !important;}.has-roboto-font-family{font-family: var(--wp--preset--font-family--roboto) !important;}.has-roboto-slab-font-family{font-family: var(--wp--preset--font-family--roboto-slab) !important;}.has-rubik-font-family{font-family: var(--wp--preset--font-family--rubik) !important;}.has-rufina-font-family{font-family: var(--wp--preset--font-family--rufina) !important;}.has-sora-font-family{font-family: var(--wp--preset--font-family--sora) !important;}.has-source-sans-3-font-family{font-family: var(--wp--preset--font-family--source-sans-3) !important;}.has-source-serif-4-font-family{font-family: var(--wp--preset--font-family--source-serif-4) !important;}.has-space-mono-font-family{font-family: var(--wp--preset--font-family--space-mono) !important;}.has-syne-font-family{font-family: var(--wp--preset--font-family--syne) !important;}.has-texturina-font-family{font-family: var(--wp--preset--font-family--texturina) !important;}.has-urbanist-font-family{font-family: var(--wp--preset--font-family--urbanist) !important;}.has-work-sans-font-family{font-family: var(--wp--preset--font-family--work-sans) !important;} :where(.wp-block-columns.is-layout-flex){gap: 2em;}:where(.wp-block-columns.is-layout-grid){gap: 2em;} :root :where(.wp-block-pullquote){font-size: 1.5em;line-height: 1.6;} :where(.wp-block-post-template.is-layout-flex){gap: 1.25em;}:where(.wp-block-post-template.is-layout-grid){gap: 1.25em;} </style> <link crossorigin='anonymous' rel='stylesheet' id='all-css-10-1' href='https://s0.wp.com/wp-content/themes/pub/big-brother/style.css?m=1513292499i&cssminify=yes' type='text/css' media='all' /> <link rel='stylesheet' id='big-brother-gentium-css' href='https://fonts-api.wp.com/css?family=Gentium+Basic%3A400%2C700%2C400italic%2C700italic&subset=latin%2Clatin-ext&ver=6.8-alpha-59438' media='all' /> <link rel='stylesheet' id='big-brother-open-sans-css' href='https://fonts-api.wp.com/css?family=Open+Sans%3A400%2C800&subset=latin%2Clatin-ext&ver=6.8-alpha-59438' media='all' /> <link crossorigin='anonymous' rel='stylesheet' id='all-css-14-1' href='https://s0.wp.com/_static/??-eJx9jssKAjEMRX/IGEaq6EL8FGlLrBnbpvTBMH9vB1wUFHf3hJzLxSWBlVgpVgwNkm+OY8GZatL29WEMIhHvHC06ipS5G+V33NtSdjiU1icFKpiaQcMOTJZ+ybh1lbp6giVZCV/asCWT8eJ6dNi/BvwnORLwYnXlvnwEeHjNeVNv4TqdzsfpcFFKzW98j2MF&cssminify=yes' type='text/css' media='all' /> <link crossorigin='anonymous' rel='stylesheet' id='print-css-15-1' href='https://s1.wp.com/wp-content/mu-plugins/global-print/global-print.css?m=1465851035i&cssminify=yes' type='text/css' media='print' /> <style id='jetpack-global-styles-frontend-style-inline-css'> :root { --font-headings: unset; --font-base: unset; --font-headings-default: -apple-system,BlinkMacSystemFont,"Segoe UI",Roboto,Oxygen-Sans,Ubuntu,Cantarell,"Helvetica Neue",sans-serif; --font-base-default: -apple-system,BlinkMacSystemFont,"Segoe UI",Roboto,Oxygen-Sans,Ubuntu,Cantarell,"Helvetica Neue",sans-serif;} </style> <link crossorigin='anonymous' rel='stylesheet' id='all-css-18-1' href='https://s2.wp.com/wp-content/themes/h4/global.css?m=1420737423i&cssminify=yes' type='text/css' media='all' /> <script type="text/javascript" id="wpcom-actionbar-placeholder-js-extra"> /* <![CDATA[ */ var actionbardata = {"siteID":"85004741","postID":"0","siteURL":"https:\/\/croakingcassandra.com","xhrURL":"https:\/\/croakingcassandra.com\/wp-admin\/admin-ajax.php","nonce":"8fada2431b","isLoggedIn":"","statusMessage":"","subsEmailDefault":"instantly","proxyScriptUrl":"https:\/\/s0.wp.com\/wp-content\/js\/wpcom-proxy-request.js?ver=20211021","i18n":{"followedText":"New posts from this site will now appear in your <a href=\"https:\/\/wordpress.com\/read\">Reader<\/a>","foldBar":"Collapse this bar","unfoldBar":"Expand this bar"}}; /* ]]> */ </script> <script type="text/javascript" id="jetpack-mu-wpcom-settings-js-before"> /* <![CDATA[ */ var JETPACK_MU_WPCOM_SETTINGS = {"assetsUrl":"https:\/\/s1.wp.com\/wp-content\/mu-plugins\/jetpack-mu-wpcom-plugin\/moon\/vendor\/automattic\/jetpack-mu-wpcom\/src\/build\/"}; /* ]]> */ </script> <script crossorigin='anonymous' type='text/javascript' src='https://s1.wp.com/wp-content/js/rlt-proxy.js?m=1720530689i'></script> <script type="text/javascript" id="rlt-proxy-js-after"> /* <![CDATA[ */ rltInitialize( {"token":null,"iframeOrigins":["https:\/\/widgets.wp.com"]} ); /* ]]> */ </script> <link rel="EditURI" type="application/rsd+xml" title="RSD" href="https://croakingcassandra.wordpress.com/xmlrpc.php?rsd" /> <meta name="generator" content="WordPress.com" /> <link rel='shortlink' href='https://wp.me/5KFCd' />  <meta property="og:type" content="website" /> <meta property="og:title" content="croaking cassandra" /> <meta property="og:description" content="Economics, public policy, monetary policy, financial regulation, with a New Zealand perspective" /> <meta property="og:url" content="https://croakingcassandra.com/" /> <meta property="og:site_name" content="croaking cassandra" /> <meta property="og:image" content="https://s0.wp.com/i/blank.jpg" /> <meta property="og:image:alt" content="" /> <meta property="og:locale" content="en_US" />  <link rel="shortcut icon" type="image/x-icon" href="https://s1.wp.com/i/favicon.ico" sizes="16x16 24x24 32x32 48x48" /> <link rel="icon" type="image/x-icon" href="https://s1.wp.com/i/favicon.ico" sizes="16x16 24x24 32x32 48x48" /> <link rel="apple-touch-icon" href="https://s2.wp.com/i/webclip.png" /> <link rel='openid.server' href='https://croakingcassandra.com/?openidserver=1' /> <link rel='openid.delegate' href='https://croakingcassandra.com/' /> <link rel="search" type="application/opensearchdescription+xml" href="https://croakingcassandra.com/osd.xml" title="croaking cassandra" /> <link rel="search" type="application/opensearchdescription+xml" href="https://s1.wp.com/opensearch.xml" title="WordPress.com" /> <meta name="theme-color" content="#f5f6f7" /> <style type="text/css"> .recentcomments a { display: inline !important; padding: 0 !important; margin: 0 !important; } table.recentcommentsavatartop img.avatar, table.recentcommentsavatarend img.avatar { border: 0px; margin: 0; } table.recentcommentsavatartop a, table.recentcommentsavatarend a { border: 0px !important; background-color: transparent !important; } td.recentcommentsavatarend, td.recentcommentsavatartop { padding: 0px 0px 1px 0px; margin: 0px; } td.recentcommentstextend { border: none !important; padding: 0px 0px 2px 10px; } .rtl td.recentcommentstextend { padding: 0px 10px 2px 0px; } td.recentcommentstexttop { border: none; padding: 0px 0px 0px 10px; } .rtl td.recentcommentstexttop { padding: 0px 10px 0px 0px; } </style> <meta name="application-name" content="croaking cassandra" /><meta name="msapplication-window" content="width=device-width;height=device-height" /><meta name="msapplication-tooltip" content="Economics, public policy, monetary policy, financial regulation, with a New Zealand perspective" /><meta name="description" content="Economics, public policy, monetary policy, financial regulation, with a New Zealand perspective" /> </head> <body class="home blog customizer-styles-applied jetpack-reblog-enabled custom-colors"> <div id="page" class="hfeed site"> <a class="skip-link screen-reader-text" href="#content">Skip to content</a> <header id="masthead" class="site-header clearfix" role="banner"> <div class="site-branding"> <a href="https://croakingcassandra.com/" class="site-logo-link" rel="home" itemprop="url"></a> <h1 class="site-title"><a href="https://croakingcassandra.com/" rel="home">croaking cassandra</a></h1> <h2 class="site-description">Economics, public policy, monetary policy, financial regulation, with a New Zealand perspective</h2> </div> <nav id="site-navigation" class="main-navigation nav-horizontal" role="navigation"> <button class="menu-toggle" aria-controls="primary-menu" aria-expanded="false">Menu</button> <div id="primary-menu" class="menu"><ul> <li class="current_page_item"><a href="https://croakingcassandra.com/">Home</a></li><li class="page_item page-item-1"><a href="https://croakingcassandra.com/about/">About Michael Reddell’s blog</a></li> <li class="page_item page-item-66509"><a href="https://croakingcassandra.com/book-reviews/">Book reviews</a></li> <li class="page_item page-item-58338"><a href="https://croakingcassandra.com/china-prc/">China (PRC)</a></li> <li class="page_item page-item-71258"><a href="https://croakingcassandra.com/early-mpss-and-economic-projections/">MPSs & Economic Forecasts from early-mid 90s</a></li> <li class="page_item page-item-8395"><a href="https://croakingcassandra.com/papers-and-speeches/">Papers and speeches</a></li> <li class="page_item page-item-70350"><a href="https://croakingcassandra.com/reserve-bank-of-new-zealand-superannuation-scheme/">Reserve Bank of New Zealand Superannuation Scheme</a></li> </ul></div> </nav> </header> <div id="content" class="site-content clearfix"> <div class="primary content-area"> <main id="main" class="site-main" role="main"> <div class="article-wrapper"> <article id="post-72205" class="post-72205 post type-post status-publish format-standard hentry category-rbnz-superannuation-fund category-uncategorized"> <header class="entry-header"> <h1 class="entry-title"><a href="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/" rel="bookmark">What does “reciprocity” mean in New Zealand laws?</a></h1> <div class="entry-meta"> <span class="posted-on"><a href="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/" rel="bookmark"><time class="entry-date published" datetime="2024-11-19T15:25:22+13:00">November 19, 2024</time><time class="updated" datetime="2024-11-20T08:13:55+13:00">November 20, 2024</time></a></span> <span class="byline"><span class="author vcard"><a class="url fn n" href="https://croakingcassandra.com/author/mhreddell/">Michael Reddell</a></span></span> <span class="entry-categories"><a href="https://croakingcassandra.com/category/rbnz-superannuation-fund/" rel="category tag">RBNZ Superannuation Fund</a>, <a href="https://croakingcassandra.com/category/uncategorized/" rel="category tag">Uncategorized</a></span> </div> </header> <div class="entry-content"> <p>Apologies for nothing much recently on New Zealand macroeconomics and related topics. My spare time is pretty much consumed at present with my Bank of Papua New Guinea responsibilities and those associated with the <a href="https://croakingcassandra.com/reserve-bank-of-new-zealand-superannuation-scheme/">troubled</a> (and troubling) Reserve Bank of New Zealand Staff Superannuation and Provident Fund. Yes, it is Orr and Quigley again.</p> <p>In my last post I wrote about the scheme being cooked up to transfer the pension liabilities of the Reserve Bank scheme to the Government Superannuation Fund by means that look highly likely to be ultra vires, and in any case are extremely risky for pensioners over coming decades. The basic goal, transferring the liabilities of a small scheme to a much larger scheme, in exchange for a full and final payment from the small scheme before it itself is wound up, isn’t in question (indeed, I’ve championed the search for such a solution). But pretty illegal foundations are a poor basis for anything, most especially when it involves the Minister of Finance, our prudential regulatory agency (concerned with standards of governance and conduct in its bit of the financial sector) the Reserve Bank, and the government’s key economic adviser, The Treasury. It is all the more extraordinary when there are simple, well-grounded, legislative solutions available, which would remove most of the legal and financial risks in what is planned. Such a solution might take a couple of months, but there is simply no urgency about this resolution (and no one involved seriously claims otherwise).</p> <p>Here is the relevant bit of the Government Superannuation Fund Act, a provision added many decades ago, decades before that scheme was closed to new members.</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/11/image.png"><img data-attachment-id="72211" data-permalink="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/image-283/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image.png" data-orig-size="1277,204" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image.png?w=700" width="1024" height="163" src="https://croakingcassandra.com/wp-content/uploads/2024/11/image.png?w=1024" alt="" class="wp-image-72211" srcset="https://croakingcassandra.com/wp-content/uploads/2024/11/image.png?w=1024 1024w, https://croakingcassandra.com/wp-content/uploads/2024/11/image.png?w=1020 1020w, https://croakingcassandra.com/wp-content/uploads/2024/11/image.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/11/image.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/11/image.png?w=768 768w, https://croakingcassandra.com/wp-content/uploads/2024/11/image.png 1277w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure> <p>That looks like a pretty objective test to me. The Governor-General can’t just make any old regulation (Order in Council), not even as regards to superannuation. The test isn’t even whether in the opinion of the Governor-General (or her ministers) a proposed OIC might be (say) in the best interests of some people. The test is that an OIC under this section can only be made if it is giving effect to an arrangement that is intended to provide “reciprocity in matters relating to superannuation”.</p> <p>In a standard conception in decades past such a (hypothetical) arrangement could have involved government department employers and the Reserve Bank (and their respective pension schemes) agreeing to recognise service with the other employer for purposes of each other’s pension scheme. Spend 35 years at The Treasury and 5 years at the Reserve Bank (or vice versa) and your service at the Reserve Bank will count towards your GSF pension (or vice versa). The way defined benefit pension schemes operate that is valuable for employees and enables a bit more labour mobility among related entities that would otherwise occur. Both sets of pension funds, both sets of employers, continued to function.</p> <p> (To be clear, this is a hypothetical – there was no such historical agreement)</p> <p>The scheme the Minister of Finance got her Cabinet colleagues to agree to (presumably acting on Treasury advice, although Treasury refuses to release that advice) bears no resemblance to that sort of (genuinely) reciprocal arrangement at all.</p> <p>Instead, the Reserve Bank scheme would, in effect, sell its liabilities to the GSF, pay the price GSF names to take on those multi-decade liabilities, and then be wound up. All very efficient (in principle) but there is nothing <strong>reciprocal</strong> about it. And as it happens, since to close the Reserve Bank scheme the trustees have to purchase contracts that replicate the pension etc benefits that would otherwise be payable, and since there are differences between the two schemes, what is actually proposed is not that Reserve Bank pensioners are simply added into GSF (its so-called New General Scheme, a set of clauses in the GSF Act) and paid per the GSF rules. For any aspect where the GSF rules are less generous than the Reserve Bank rules, GSF is agreeing by contract to provide better benefits in those areas than it provides to its own members. Which is fairly weird given that the GSF benefits themselves are explicitly outlined in the GSF Act itself, but somehow this contract (and authorising Order in Council) are going beyond statute for this group of pensioners. Which would work out nicely for us…….except that the legal foundations appear incredibly shaky, and thus highly vulnerable. And the nature of DB pension schemes is that they run for many decades – this isn’t simply an arrangement for a year or two.</p> <p>It simply isn’t providing for reciprocity at all. It is just an outright sale and purchase agreement.</p> <p>It appears that section 98 has never been used before (despite 75 years in the legislation) so there are no judicial rulings on what “reciprocity” means in this context. As far as I can gather there also isn’t any authoritative legal commentary on the use of the term in New Zealand legislation.</p> <p>But I thought it might be worthwhile to check all the references, with a search on the legislation.govt.nz database for how “reciprocal” or “reciprocity” is used.  Absent specific authorities on this particular section one might think a court would look not just to the dictionaries but to actual New Zealand usage, in both primary and secondary legislation.  My exercise here is simply about interpreting from context (what arrangements are being described when the operative words were used by drafters, Parliament (acts), and ministers (regulations).</p> <p>I did two levels of search.  The first was to search by title, and the second by the full text of each instrument. (If you are happy to accept my word about the overwhelming weight of how those words are used, then feel free to skip ahead to the Summing Up section at the end of the post.)</p> <p><strong>Titles of Legislation</strong></p> <p>16 titles contain the word “reciprocal” and 13 “reciprocity”.   </p> <p>Of “reciprocal” 13 examples are regulations made under one piece of primary legislation, the Reciprocal Enforcement of Judgments Act 1934 (which incidentally was thus in place when reciprocal/reciprocity were first introduced to what became the GSF Act). Neither “reciprocal” nor “reciprocity” is defined in the Act, but the purpose is illustrated thus</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/11/image-1.png"><img data-attachment-id="72214" data-permalink="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/image-284/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-1.png" data-orig-size="946,104" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-1.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-1.png?w=700" width="946" height="104" src="https://croakingcassandra.com/wp-content/uploads/2024/11/image-1.png?w=946" alt="" class="wp-image-72214" srcset="https://croakingcassandra.com/wp-content/uploads/2024/11/image-1.png 946w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-1.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-1.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-1.png?w=768 768w" sizes="(max-width: 946px) 100vw, 946px" /></a></figure> <p>The other examples, using “reciprocal” in the title, are regulations around child support (and spousal maintenance) payments, one giving effect to an agreement with Australia and another with Hague Convention countries.  The core of these regulations is that orders in one country are “entitled to recognition and enforcement by operation of law in the territory of the other”.</p> <p>What of the 13 with “reciprocity” in the title? 12 of them are health and social welfare provisions. It is quite clear that what they are describing is the parameters for arrangements under which foreigners can be treated the same as New Zealanders here (mirroring the other side of the agreement re the way NZers are treated abroad –  eg as between NZ and the UK our public health service and their NHS).</p> <p>The 13<sup>th</sup> is the Law Practitioners (Victoria Reciprocity) Order 1937, made pursuant to the Law Practitioners Act. The entire order is as follows</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/11/image-2.png"><img data-attachment-id="72215" data-permalink="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/image-285/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-2.png" data-orig-size="946,213" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-2.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-2.png?w=700" width="946" height="213" src="https://croakingcassandra.com/wp-content/uploads/2024/11/image-2.png?w=946" alt="" class="wp-image-72215" srcset="https://croakingcassandra.com/wp-content/uploads/2024/11/image-2.png 946w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-2.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-2.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-2.png?w=768 768w" sizes="(max-width: 946px) 100vw, 946px" /></a></figure> <p>Mutual recognition and all that.</p> <p><strong>Use in the body of legislation</strong></p> <p>What of uses of “reciprocal” and “reciprocity” in the content of acts and regulations?   There is overlap of course: legislation with one or other word in the title also tends to have it in the body.   There are 79 examples of a use of “reciprocal” in the content of acts or regulation and 45 examples of “reciprocity”.     I haven’t reproduced all these search results (easy enough to do yourself), but I have gone through and checked all examples not already covered by the review of the titles above.</p> <p>Take the “<strong>reciprocal</strong>” list first:</p> <ul class="wp-block-list"> <li>The Trans-Tasman Proceedings Act 2010 seems to cover very similar ground to the Reciprocal Enforcements of Judgements law, replacing some orders (Australasian) under that law with this specific Australia-focused legislation</li> <li>The High Court Rules also show up, but again in reference to the Reciprocal Enforcement of Judgements Act</li> <li>Maritime Transport Act references all relate to reciprocal enforcement of judgements.</li> <li>The Tax Administration Act has a specific provision, along the lines of mutual recognition</li> </ul> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/11/image-3.png"><img data-attachment-id="72217" data-permalink="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/image-286/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-3.png" data-orig-size="946,250" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-3.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-3.png?w=700" loading="lazy" width="946" height="250" src="https://croakingcassandra.com/wp-content/uploads/2024/11/image-3.png?w=946" alt="" class="wp-image-72217" srcset="https://croakingcassandra.com/wp-content/uploads/2024/11/image-3.png 946w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-3.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-3.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-3.png?w=768 768w" sizes="(max-width: 946px) 100vw, 946px" /></a></figure> <ul class="wp-block-list"> <li>The Contracts and Commercial Law Act 2017 seems in a similar vein</li> </ul> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/11/image-4.png"><img data-attachment-id="72218" data-permalink="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/image-287/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-4.png" data-orig-size="946,312" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-4.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-4.png?w=700" loading="lazy" width="946" height="312" src="https://croakingcassandra.com/wp-content/uploads/2024/11/image-4.png?w=946" alt="" class="wp-image-72218" srcset="https://croakingcassandra.com/wp-content/uploads/2024/11/image-4.png 946w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-4.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-4.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-4.png?w=768 768w" sizes="(max-width: 946px) 100vw, 946px" /></a></figure> <ul class="wp-block-list"> <li>Or the US-NZ double tax agreement 2014</li> </ul> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/11/image-5.png"><img data-attachment-id="72220" data-permalink="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/image-288/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-5.png" data-orig-size="946,251" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-5.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-5.png?w=700" loading="lazy" width="946" height="251" src="https://croakingcassandra.com/wp-content/uploads/2024/11/image-5.png?w=946" alt="" class="wp-image-72220" srcset="https://croakingcassandra.com/wp-content/uploads/2024/11/image-5.png 946w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-5.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-5.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-5.png?w=768 768w" sizes="(max-width: 946px) 100vw, 946px" /></a></figure> <ul class="wp-block-list"> <li>Or the Sale and Supply of Alcohol Regulations</li> </ul> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/11/image-6.png"><img data-attachment-id="72221" data-permalink="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/image-289/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-6.png" data-orig-size="946,213" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-6.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-6.png?w=700" loading="lazy" width="946" height="213" src="https://croakingcassandra.com/wp-content/uploads/2024/11/image-6.png?w=946" alt="" class="wp-image-72221" srcset="https://croakingcassandra.com/wp-content/uploads/2024/11/image-6.png 946w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-6.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-6.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-6.png?w=768 768w" sizes="(max-width: 946px) 100vw, 946px" /></a></figure> <p>Those are the examples (all of them) from the first page of search results.  </p> <p>I have gone through all the others and have not been able to find a single of example of a usage that is other than something akin to “like for like” (there is perhaps a partial exception in some Treaty of Waitangi settlement legislation, but there the context seems to have been one of mutual obligations over long periods of time).  Not one of the references has the sense of “one-off full and final payment of dollars for services”.  I’ll include just one more in deference to the “creative” lawyers we seem to be dealing with (whether in/for Treasury, Crown Law, PCO, the Reserve Bank, or the Government Superannuation Fund Authority), from the Lawyers and Conveyancers Act</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/11/image-7.png"><img data-attachment-id="72223" data-permalink="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/image-290/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-7.png" data-orig-size="946,332" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-7.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-7.png?w=700" loading="lazy" width="946" height="332" src="https://croakingcassandra.com/wp-content/uploads/2024/11/image-7.png?w=946" alt="" class="wp-image-72223" srcset="https://croakingcassandra.com/wp-content/uploads/2024/11/image-7.png 946w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-7.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-7.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-7.png?w=768 768w" sizes="(max-width: 946px) 100vw, 946px" /></a></figure> <p>And then I turned to uses of “<strong>reciprocity</strong>” in the body of legislation (acts and regulations), again skipping over laws already covered above.</p> <p>There is the UN Convention on Refugees 1951 (made part of our law as a schedule to the Immigration Act)</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/11/image-8.png"><img data-attachment-id="72225" data-permalink="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/image-291/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-8.png" data-orig-size="946,312" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-8.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-8.png?w=700" loading="lazy" width="946" height="312" src="https://croakingcassandra.com/wp-content/uploads/2024/11/image-8.png?w=946" alt="" class="wp-image-72225" srcset="https://croakingcassandra.com/wp-content/uploads/2024/11/image-8.png 946w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-8.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-8.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-8.png?w=768 768w" sizes="(max-width: 946px) 100vw, 946px" /></a></figure> <p>The District Court rules</p> <p></p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/11/image-9.png"><img data-attachment-id="72226" data-permalink="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/image-292/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-9.png" data-orig-size="946,337" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-9.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-9.png?w=700" loading="lazy" width="946" height="337" src="https://croakingcassandra.com/wp-content/uploads/2024/11/image-9.png?w=946" alt="" class="wp-image-72226" srcset="https://croakingcassandra.com/wp-content/uploads/2024/11/image-9.png 946w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-9.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-9.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-9.png?w=768 768w" sizes="(max-width: 946px) 100vw, 946px" /></a></figure> <p>The Valuers Act 1948</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/11/image-10.png"><img data-attachment-id="72228" data-permalink="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/image-293/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-10.png" data-orig-size="946,407" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-10.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-10.png?w=700" loading="lazy" width="946" height="407" src="https://croakingcassandra.com/wp-content/uploads/2024/11/image-10.png?w=946" alt="" class="wp-image-72228" srcset="https://croakingcassandra.com/wp-content/uploads/2024/11/image-10.png 946w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-10.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-10.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-10.png?w=768 768w" sizes="(max-width: 946px) 100vw, 946px" /></a></figure> <p>And the 1923 international treaty on arbitral awards, a schedule to our Arbitration Act 1996.</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/11/image-11.png"><img data-attachment-id="72230" data-permalink="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/image-294/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-11.png" data-orig-size="1330,620" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-11.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-11.png?w=700" loading="lazy" width="1024" height="477" src="https://croakingcassandra.com/wp-content/uploads/2024/11/image-11.png?w=1024" alt="" class="wp-image-72230" srcset="https://croakingcassandra.com/wp-content/uploads/2024/11/image-11.png?w=1024 1024w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-11.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-11.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-11.png?w=768 768w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-11.png 1330w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure> <p>Again, there is not a hint or a single example of “reciprocity” used in ways that might encompass a one-off payment from one entity to another in exchange for the latter assuming a bunch of obligations from the former (let alone the former entity then winding itself up and disappearing). </p> <p>It is, perhaps, telling that (as far as I can see) in not a single act or regulation are the words “reciprocal” or “reciprocity” defined, suggesting that something akin to dictionary definitions and common usage is envisaged. Here is the definition of reciprocity from my two-volume Shorter Oxford English Dictionary:</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/11/image-12.png"><img data-attachment-id="72232" data-permalink="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/image-295/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-12.png" data-orig-size="917,239" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-12.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/11/image-12.png?w=700" loading="lazy" width="917" height="239" src="https://croakingcassandra.com/wp-content/uploads/2024/11/image-12.png?w=917" alt="" class="wp-image-72232" srcset="https://croakingcassandra.com/wp-content/uploads/2024/11/image-12.png 917w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-12.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-12.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/11/image-12.png?w=768 768w" sizes="(max-width: 917px) 100vw, 917px" /></a></figure> <p><strong>Summing Up</strong></p> <p>The last couple of sections have probably been a somewhat boring trawl through pieces of obscure legislation.  But it becomes necessary when parties –  the Minister of Finance, backed by a Cabinet committee, the Reserve Bank, and The Treasury – are content to rely on a “meaning” for the term “reciprocity” seemingly dreamed up by some lawyer or other from thin air.  There is no dictionary precedent for such a usage and nor is there anything in 100 or so years of New Zealand legislation.   It is very hard indeed to see how section 98 of the GSF Act could possibly encompass the sort of deal the Cabinet – led by the Minister – proposes to authorise their Crown entity (GSFA) to undertake. There is nothing in the dictionary to support it, nothing in a plain common reading, and nothing in the legislative history of this old previously-unused provision.</p> <p>Three last points:</p> <ul> <li>why does any of this matter?</li> <li>is the proposed deal bad in intent? and</li> <li>if not, is there are a better way.</li> </ul> <p>It matters because lawmaking should be done properly. It certainly shouldn’t be done on a basis that happens to suit decisionmakers who themselves having nothing at stake if things later go wrong. </p> <p>And what could go wrong? A court could find that the entire Order in Council was <em>ultra vires. </em>A future set of ministers could decide either that they don’t like one or more Reserve Bank pensioners, or just that the original OIC was bad law and probably ultra vires. Or Parliament can disallow the Order in Council (takes one member of the Regulations Review Committee and no other objection), perhaps recognising that it was bad (secondary) law. In each of which scenarios elderly pensioners could be left in limbo, uncertain as to whether they had any entitlement to a pension, but with the money (currently in the Reserve Bank pension scheme) now gone, and at best facing expensive legal action to attempt to assert any claim against someone/anyone (RB, GSFA, former trustees…..).</p> <p>As I noted at the start of this post, the idea of a transfer (with full and final payment) of Reserve Bank scheme pension liabilities to the GSF isn’t a bad one (and I was, and remain, a champion of it in principle). There are genuine administration cost savings to be had (a gain to the Reserve Bank, which is thus keen on the scheme, facing no risks itself), and for anyone involved in governance of the scheme in the last 10 years also an opportunity for personal escape.</p> <p>But it needs to be put on more secure legal foundations. Parliament is, of course, sovereign, and so can legislate anything it likes (for good and ill). A simple amendment to the GSF Act (rather than an Order in Council, resting on the tenuous provisions of section 98) would achieve that. Readers of my previous post may recall that the Minister of Finance told Cabinet that this wasn’t an option because it couldn’t be done until 2025. That is now a mere six weeks away (and at this point any transfer isn’t likely to be feasible before the second half of next year). Taking a punt that things will probably turn out okay simply isn’t good government, whether from ministers or officials (and not an approach they’d be likely to take if they themselves had anything at stake).</p> <p>What about the trustees of the Reserve Bank superannuation scheme you might wonder (of whom I have the misfortune to be one)? All this material was presented to them as long ago as January, and they have simply refused to engage. Not only that but they have specifically and consciously chosen not to seek independent legal advice on whether there is a robust legal foundation for the transfer they propose to enter into. In doing so they appear to rely on a view that one does not need to look behind to check the bona fides of a party they are dealing with to see if they are able to enter into the proposed contract. That seems imprudent generally, but even if it were a model which might make some sense in a corporate context, when Party A can’t easily look into the private authorising documents of Party B, and might have to rely on warranties, it makes no sense at all when (a) the GSF Act is a public piece of legislation available for all to read, and b) all these issues have, more than once, been brought to their attention. </p> <p>It is pretty reprehensible, but then it is what one might expect from two of Orr’s deputy chief executives (appointed to the super fund roles by Quigley’s board) and a Licensed Independent Trustee (a statutory position created a decade ago, notionally to help protect members) who has long been (a) keen to get out of the role, and b) in eight years has never displayed evidence of the slightest interest in the best interests of members and who is on record as suggesting, contrary to the statutory duties, that trustees also need to look out for the interests of the Bank. </p> <p>As a bottom line, the law requires that any such OIC under the GSF Act be with a view to providing reciprocity in matters relating to superannuation. The proposed arrangement, which the GSFA cannot enter into without specific legislative authorisation (the Act prohibits new members), does no such thing, and there is thus no power for an OIC to authorise what is proposed. There is, by contrast, a better way.</p> <p>Finally, note that these matters were raised, in a careful and considered manner, in a <a href="https://croakingcassandra.com/wp-content/uploads/2024/10/letter-to-minister-of-finance-re-section-98-of-the-gsf-act.pdf">letter to the Minister of Finance</a> months ago. I find it remarkable that the Minister has not even had the courtesy to respond, even as she and her department have blocked OIA requests on these matters. I have legal duties to our members. I would hope she senses a moral obligation, to them (former public employees) and to the cause of good, and certain, lawmaking itself.<br></p> <p></p> </div> <footer class="entry-meta"> <span class="comments-link"><a href="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/#comments">7 Comments</a></span> </footer> </article> </div> <div class="article-wrapper"> <article id="post-72174" class="post-72174 post type-post status-publish format-standard hentry category-governance category-rbnz-superannuation-fund"> <header class="entry-header"> <h1 class="entry-title"><a href="https://croakingcassandra.com/2024/10/25/pretty-illegal/" rel="bookmark">Pretty (il)legal</a></h1> <div class="entry-meta"> <span class="posted-on"><a href="https://croakingcassandra.com/2024/10/25/pretty-illegal/" rel="bookmark"><time class="entry-date published" datetime="2024-10-25T11:04:34+13:00">October 25, 2024</time><time class="updated" datetime="2024-11-19T16:26:12+13:00">November 19, 2024</time></a></span> <span class="byline"><span class="author vcard"><a class="url fn n" href="https://croakingcassandra.com/author/mhreddell/">Michael Reddell</a></span></span> <span class="entry-categories"><a href="https://croakingcassandra.com/category/governance/" rel="category tag">Governance</a>, <a href="https://croakingcassandra.com/category/rbnz-superannuation-fund/" rel="category tag">RBNZ Superannuation Fund</a></span> </div> </header> <div class="entry-content"> <p>The title of this post was, of course, a reference to the efforts of former Minister of Finance and National campaign manager Steven Joyce to defend the use by National of music inspired by or copied from some overseas band’s work. It was, he claimed, “pretty legal”. <a href="https://www.nzherald.co.nz/nz/eminems-company-loses-supreme-court-bid-in-national-party-copyright-case/RV3PL3FK6OBUDZII5ZK2RZNMYE/">The courts disagreed</a>.</p> <p>Joyce himself developed form in this area, and as Minister of Finance in 2017 appointed an acting Governor of the Reserve Bank for six months, with no legal authority whatever. It was, in many respects, a pragmatic solution (a new permanent Governor could not, under our conventions, be appointed to take office very close to election day), but instead of passing a brief technical amendment to the Reserve Bank Act, to deal with what was perhaps an unforeseen oversight in the initial drafting, he simply went ahead and made the questionably legal appointment. At the time, this blog devoted a lot of time and space to the issue (having flagged the looming issue a couple of years in advance, while officials and ministers did nothing). Eventually, through the good offices of the Ombudsman, Crown Law – CEO, one Una Jagose, who has since developed something of a reputation – released a summary of their legal advice to Treasury on the issue (discussed, with other relevant links, <a href="https://croakingcassandra.com/2017/09/11/spencer-appointment-still-appears-unlawful/">here</a>). Crown Law’s case seemed to boil down to no more than “well, Parliament must have intended to enable the appointment an acting Governor of this specific sort”. Had they intended it, it would have been a simple matter for a suitable clause to have been in the act. None was. (That particular gap has been fixed in the amendments to the Reserve Bank Act in recent years).</p> <p>It mattered for a number of reasons. </p> <p>First, because we are supposed to be governed under the rule of law, not ministerial whim, or the fancy of officials who happen to think a particular outcome would be convenient, but can’t be bothered asking Parliament to legislate. “Pretty legal” is no sort of acceptable standard, the more so when on a plain reading (detail and legislative context), something is actually pretty clearly illegal. </p> <p>There are also real risks when officials and ministers play fast and loose with the law, for their own convenience, betting perhaps that no one will be bothered with the expense and delays in access to civil justice to attempt to challenge it formally. Fortunately, Grant Spencer – who compromised a worthy career by accepting this temporary but dubiously legal appointment – doesn’t seem to have been faced with particularly contentious choices in his few months occupying the office, but the lawyers might have been gathering if there had been a very costly or contentious decision going against one or other groups of interests. In those days, all power at the Reserve Bank rested with the Governor personally. </p> <p>And, frankly, this was our central bank, supposed guardian of financial stability, and prudential regulator, including around ensuring that good standards of governance exist and are upheld in banks and financial institutions. Would this sort of – pretty legal/ evidently illegal but convenient – standard have been even close to acceptable to the Reserve Bank if a supervised institution had offered it up in the context of its own appointments? And while the appointment was made by Steven Joyce, there is not the slightest sign in the documents of any unease from the Bank. Its Board was, then as now, chaired by Neil Quigley. (You may recall that Quigley – in his day job – and Steven Joyce have an economic relationship recently <a href="https://www.rnz.co.nz/news/national/515880/auditor-general-criticises-way-university-of-waikato-contracted-steven-joyce">called out and criticised</a> by the Auditor-General no less. They probably thought that arrangement was pretty much okay. It wasn’t.)</p> <p>All that said, and bad as that episode was, it was all over in six months. A permanent Governor, lawfully appointed, took office and things moved on. Not all such “pretty (il)legal” stuff done by governments is so time-limited.</p> <p>All that in the post so far was really by way of scene-setting for another example of “pretty legal” sort of thinking. It doesn’t affect many people, but does involve the Reserve Bank (Quigley again, Orr, and their very senior appointees), The Treasury, the Minister of Finance and most of her ministerial colleagues on the one hand, and a fairly small group of mostly very elderly pensioners on the other. Officials and ministers are acting as if the law simply doesn’t matter, to achieve what might otherwise in many ways be a sensible outcome, and by refusing to make simple legislative amendments are doing so in a way that leaves those pensioners and their spouses highly exposed to what could, in the wrong circumstances decades hence, be catastrophic financial risk.</p> <p>I will try to keep the explanation short and clear.</p> <p>The Reserve Bank established a pension fund for employees back in 1935. The defined benefit (pension) bit of the scheme was closed to new members in 1991 (and the later defined contribution bit has also been closed for a long time) and all the members of that scheme are now retired. There aren’t many left (50 or so), and as schemes shrink cost burdens tend to increase, investment options diminish, and it gets harder to find member trustees.</p> <p>The scheme’s rules allow for it to be wound up. But in that event, trustees have to be able to purchase replacement pensions. There are no private annuity providers now in the New Zealand market, but decades ago a provision was included allowing for the possibility of transferring pension liabilities to the Government Superannuation Fund (not coincidentally, the provisions of the two schemes are pretty similar).</p> <p>I’m a trustee of the scheme – never quite imagining in 2008 when I filled in as someone’s alternate that I’d still be there 16 years later. A couple of years ago I championed exploring whether a transfer to the GSF was really a feasible option. If it could be done in ways that replicated members’ benefits, it would lead to measurable cost savings for the Bank, and get all the compliance etc rigmarole out of our lives. I suspect that no one who has served as a trustee of this scheme in the last decade has counted it a pleasant or satisfying experience.</p> <p>Anyway, my colleagues agreed and we got the Reserve Bank Board (which has the final decision on a wind-up) to agree to us exploring the issue.</p> <p>There were a couple of immediate questions. If the GSF Authority wasn’t interested, we couldn’t compel them. But even if they were interested did they have the legal powers, under their own legislation, to assume our liabilities (in exchange for payment)?</p> <p>People, with various degrees of creativity, looked through the GSF Act and found two possible straws to cling to. One dropped away very quickly, as everyone accepted it didn’t help.</p> <p>But then there was section 98 of the Government Superannuation Fund Act.</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-22.png"><img data-attachment-id="72182" data-permalink="https://croakingcassandra.com/2024/10/25/pretty-illegal/image-281/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-22.png" data-orig-size="1303,765" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-22.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-22.png?w=700" loading="lazy" width="1024" height="601" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-22.png?w=1024" alt="" class="wp-image-72182" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-22.png?w=1024 1024w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-22.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-22.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-22.png?w=768 768w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-22.png 1303w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure> <p>When it was first suggested as an avenue, I scoffed. And the more I reflected on those provisions, and their legislative context/history, the more implausible it became.</p> <p>The legislation dates back many decades and what evidence there is suggests it was written mainly with university lecturers in mind – many of whom in those days came from the UK. It made sense to enable agreements that recognised service in (say) UK universities for NZ university pension purposes and vice versa. What was envisaged was a reciprocal relationship. </p> <p>You’ll note that the provision isn’t restricted to overseas entities. Reciprocal arrangements can be enabled, by Order in Council, with other New Zealand entities. It would, for example, have been fully in order decades ago for (an Order in Council enabling) the Reserve Bank and the GSF to have entered a reciprocal agreement to mutually recognise service in the other (eg for Treasury staff moving to the Reserve Bank, Reserve Bank staff moving to Treasury). There was never an agreement of that sort (in fact such were the restrictive practices at the Reserve Bank even when I joined in the 1980s that it was all but impossible to join the Bank if you were aged over 26).</p> <p>But the critical words in that statutory provision – which has apparently not been tested by the courts – is “reciprocity” (“providing reciprocity in matters relating to superannuation”).</p> <p>A few months ago a Cabinet committee, attended by 19 ministers (including the PM) and an under-secretary, decided that it was fine and dandy. A bit later Treasury pro-actively released the <a href="https://www.treasury.govt.nz/sites/default/files/2024-06/cabinet-minute-exp-24-min-0013.pdf">relevant Cabinet minute</a>. They also released, with significant redactions, the <a href="https://www.treasury.govt.nz/sites/default/files/2024-06/cabinet-paper-exp-24-sub-0013.pdf">associated Cabinet paper</a>, presumably prepared for the Minister of Finance by Treasury but with input from various other government agencies.</p> <p>It is a shoddy paper from start to finish (starting with the repeated claim that the Reserve Bank scheme is a “government” scheme – it is a fully separate legal entity, on the same footing and regulatory basis as any other legacy superannuation scheme under the Financial Markets Conduct Act, with the Reserve Bank having no powers over it, and the government itself having no powers or liabilities different from those applying to any private scheme). It is perhaps no wonder that both the Minister and Treasury refused my OIA requests for advice received on this GSF option.</p> <p>It is, however, usefully clear and explicit that the main reason for such a transfer, if it can be legally done, is to save money for the Reserve Bank. That is an entirely legitimate objective, provided members’ interests and rights are robustly protected. But there is no sign that the Minister provided any such assessment to her colleagues, who presumably nodded this through. A transfer to GSF could, in appropriate circumstances, be a mutually beneficial and tidy outcome. But it simply isn’t legal on the law as it stands, and precisely because it is proposed to be done using an Order in Council, which can simply be revoked by any future minister/government, or disallowed by Parliament itself under standard secondary legislation provisions, with no recourse for pensioners, it leaves those pensioners in an extremely vulnerable position. The risk of such revocation or disallowance might seem low today, but as even the Cabinet paper notes the liabilities probably have at least 40 years to run, and no sensible person concerned about their own finances is going to approach decades-long contracts saying “oh, never mind, explicit written statutory powers will probably never be used”. You look for protections, and what the Minister of Finance is proposing to do – pretty illegal in the first place – offers none at all.</p> <p>“Reciprocity” simply does not mean what it has to mean for a simple sale and purchase agreement in which the trustees pay cash to GSF to take the liabilities off their hands to count. It doesn’t mean something like that in plain English usage, and it does not do so anywhere else in New Zealand statutes (and yes, I have worked my way through every single reference). When I buy my groceries from the supermarket it is a mutually beneficial exchange, but no one thinks of it as an agreement involving “reciprocity” (which in general and statutory usage, and things like Social Security Agreements involves something much more of a “like for like” nature.) Moreover, as even the Cabinet paper notes this (pretty illegal) wheeze involves trying to use an Order in Council to get round an explicit statutory prohibition of new entrants to the GSF scheme itself. </p> <p>A couple of months ago, having become aware of the Cabinet minute (although not then of the redacted Cabinet paper itself) I wrote to the Minister of Finance outlining in some detail my concerns, and proposing instead a simple and uncontroversial legislative amendment to the GSF Act, which would provide trustees and members legal certainty, and markedly reduce future risks for members (since revocation of an authorising Order in Council or disallowance by Parliament would no longer be options). I have not had a reply from the Minister. When I approached her again, a private secretary suggested that I could expect a response shortly. Nothing has since been heard, suggesting that a conscious decision has been taken to simply ignore my concerns, as someone with legal duties to scheme members.</p> <p>The full text of my letter to the Minister of Finance is here.</p> <p><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/letter-to-minister-of-finance-re-section-98-of-the-gsf-act.pdf">Letter to Minister of Finance re section 98 of the GSF Act</a></p> <p>The Cabinet paper very briefly touches on the legislative option (having provided ministers with no information on the risks and legal doubts about the approach her officials would have them take).</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-23.png"><img data-attachment-id="72187" data-permalink="https://croakingcassandra.com/2024/10/25/pretty-illegal/image-282/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-23.png" data-orig-size="933,324" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-23.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-23.png?w=700" loading="lazy" width="933" height="324" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-23.png?w=933" alt="" class="wp-image-72187" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-23.png 933w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-23.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-23.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-23.png?w=768 768w" sizes="(max-width: 933px) 100vw, 933px" /></a></figure> <p>I guess if there is no formal legal challenge, pretty illegal stuff can be done quickly. But this is a bizarre argument more generally. Nothing in the Cabinet paper suggests any urgency about an arrangement. The scheme functions, bills are paid, pensions are paid, and although pressures will build they have not done so yet. It would be good to tidy things up, but only if it can be done robustly, and not with ministers brushed off with lines about there being nothing to worry about and only minor implications for members). As it happens, it is now late October 2024 and if a transfer happens it certainly won’t be until 2025. Doing things properly, by the book, not indulging in quick “pretty illegal” fixes, unbothered about the future vulnerabilities created, should be the way our ministers and responsible officials operate.</p> <p>But I guess this is New Zealand.</p> <p>You might be wondering about the other trustees of the scheme. Well, three of them are appointed by Orr/Quigley – two are among Orr’s many DCEs – and openly take the view that it is no concern of theirs whether the current law actually allows a transfer of this sort. Of course, in many commercial deals it isn’t possible for one party to look fully behind the scenes and be sure of the other party’s processes and internal authorisations. One often has to rely on warranties etc. But…..the GSF Act is a public statute, has been on the books for decades, and simply does not contemplate or allow for a deal of this sort. Judging by the time spent, some might conclude that trustees have seemed much more concerned about their own future indemnity arrangements than about robustly protecting the best interests of members. </p> <p>There are simple and much more robust fixes. It is beyond comprehension why the Minister and officials are not willing to take such a route. It speaks of indifference to law, and indifference to people. But it looked quick, and perhaps “pretty legal”</p> </div> <footer class="entry-meta"> <span class="comments-link"><a href="https://croakingcassandra.com/2024/10/25/pretty-illegal/#comments">5 Comments</a></span> </footer> </article> </div> <div class="article-wrapper"> <article id="post-72142" class="post-72142 post type-post status-publish format-standard hentry category-adrian-orr category-monetary-policy"> <header class="entry-header"> <h1 class="entry-title"><a href="https://croakingcassandra.com/2024/10/24/fiction-and-spin/" rel="bookmark">Fiction and spin</a></h1> <div class="entry-meta"> <span class="posted-on"><a href="https://croakingcassandra.com/2024/10/24/fiction-and-spin/" rel="bookmark"><time class="entry-date published" datetime="2024-10-24T10:01:38+13:00">October 24, 2024</time><time class="updated" datetime="2024-10-24T11:16:53+13:00">October 24, 2024</time></a></span> <span class="byline"><span class="author vcard"><a class="url fn n" href="https://croakingcassandra.com/author/mhreddell/">Michael Reddell</a></span></span> <span class="entry-categories"><a href="https://croakingcassandra.com/category/adrian-orr/" rel="category tag">Adrian Orr</a>, <a href="https://croakingcassandra.com/category/monetary-policy/" rel="category tag">Monetary policy</a></span> </div> </header> <div class="entry-content"> <p>I had in mind another post for today, but this morning we had something rare: a speech about monetary policy from the Governor of the Reserve Bank, delivered in Washington at a think-tank which appears to have been hosting many speakers this week (in town for the IMF World Bank Annual Meetings). On their <a href="https://www.piie.com/events/2024/macro-week-2024">schedule</a>, the Deputy Governor of the Banque de France was speaking earlier in the afternoon (some very interesting material in her presentation) and the Prime Minister of Liechtenstein a bit later.</p> <p>The Governor’s wife writes fiction (several books published) and teaches creative writing. Entirely laudable and there are often powerful insights in great works of fiction. But when – as her husband does – fiction and sheer spin are dressed up as serious accounts of policy stewardship etc, the only possible insight is into the character of the chancer who tries it on. And perhaps those who enable him (one could think of Neil Quigley and Grant Robertson, but also now (sadly) of Nicola Willis).</p> <p>But first a point to his credit. Climate change, for example, didn’t get mentioned even once in the speech. Or the treaty of Waitangi. It had the appearance of a straight up and down speech about monetary policy stewardship, as advertised (<a href="https://www.rbnz.govt.nz/-/media/project/sites/rbnz/files/events/2024/10/navigating-monetary-policy-through-the-unknown.pdf">“Navigating monetary policy through the unknown”</a>). And, if you recall how he used to tell people (well, <a href="https://croakingcassandra.com/2022/11/04/making-stuff-up-and-misleading-parliament/">Parliament actually</a>) that the Russian invasion of Ukraine was to blame for the worst New Zealand inflation in decades that line has now been quietly minimised too.</p> <p>Consistent with his revealed preference for fictional embellishments, Orr builds his speech around the navigational challenges faced by ancient mariners, in his case primarily Kupe. Orr claims to know that Kupe had a clear goal in mind, and whether he did or not, (I guess he could have used Captain Cook too) but – technology having moved on – he wasn’t reliant on the sea birds etc. It still seemed a rather strange analogy to use, in 2024, in an age of GPS. Then again, I guess it is only a couple of weeks since the HMNZS Manawanui ran onto the reef, so perhaps it isn’t such a bad analogy for New Zealand monetary policy after all. Perhaps the salvage will be done well, at considerable costs (perhaps lingering costs for the people of Samoa) but the ship never should have ended up on the reef in the first place. Those responsible for the loss of a ship face courts of inquiry, perhaps even a Court Martial.</p> <p>But in Orr’s fictional world central bankers – New Zealand central bankers, since his speech does actually concentrate on New Zealand – are heroes, having delivered us to the least-bad possible outcomes through the storms, vicissitudes and other uncertainties of the last few years, where anything bad was no one’s responsibility, and anything good was to the credit of the wise and respected navigators, led by Orr himself. It was pretty breathtaking stuff really – although questionably persuasive even as fiction – as there is no longer even a hint that anything could have been done better, by our courageous central bank navigator, than it was. When the Bank reviewed its own performance a couple of years ago, they then thought it prudent to acknowledge the odd small error, even while claiming that none of it mattered much. But no longer apparently.</p> <p>In his celebratory self-congratulatory mood – he claims to have saved us from two deep recessions – his overseas listeners would have had absolutely no idea that on the IMF forecasts that came out yesterday, New Zealand’s real per capita GDP growth in both 2024 and 2025 is estimated to be among the worst in the world, down there with places like Yemen and Haiti. Or that on those same IMF estimates, New Zealand will have been one of the very worst performers over the entire 2019 to 2025 period.</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-15.png"><img data-attachment-id="72146" data-permalink="https://croakingcassandra.com/2024/10/24/fiction-and-spin/image-274/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-15.png" data-orig-size="1198,842" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-15.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-15.png?w=700" loading="lazy" width="1024" height="719" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-15.png?w=1024" alt="" class="wp-image-72146" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-15.png?w=1024 1024w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-15.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-15.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-15.png?w=768 768w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-15.png 1198w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure> <p>Now, to be fair to the Governor, one can’t blame underlying long-term productivity problems on the Reserve Bank, but equally no one really doubts that those 2024 and 2025 outcomes are mostly on monetary policy: the consequences of the Bank belatedly waking up to its past mistakes, and doing what it took to get inflation back down again. And, frankly (although the Governor won’t tell you this) anyone can get inflation back down: the trick (the reason we delegated the job to supposed experts) was never letting it get away on you (well, on us, the public) in the first place. </p> <p>The spin, and utter avoidance of any responsibility, begins earlier, in fact with the Bank’s covering press release, which presumably captures the key lines Orr would like to see reported here.</p> <p>First, there is this framing</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-16.png"><img data-attachment-id="72149" data-permalink="https://croakingcassandra.com/2024/10/24/fiction-and-spin/image-275/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-16.png" data-orig-size="669,159" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-16.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-16.png?w=669" loading="lazy" width="669" height="159" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-16.png?w=669" alt="" class="wp-image-72149" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-16.png 669w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-16.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-16.png?w=300 300w" sizes="(max-width: 669px) 100vw, 669px" /></a></figure> <p>Followed up in the speech with this extraordinary admission from someone charged with keeping inflation near 2 per cent.</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-17.png"><img data-attachment-id="72151" data-permalink="https://croakingcassandra.com/2024/10/24/fiction-and-spin/image-276/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-17.png" data-orig-size="958,110" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-17.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-17.png?w=700" loading="lazy" width="958" height="110" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-17.png?w=958" alt="" class="wp-image-72151" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-17.png 958w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-17.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-17.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-17.png?w=768 768w" sizes="(max-width: 958px) 100vw, 958px" /></a></figure> <p>Now, I don’t doubt that briefly in early 2020 perhaps the MPC really believed that the alternative to them acting as they did was economic disaster, but it was very quickly evident that that simply wasn’t the case. Economic indicators here rebounded quickly and early. And the MPC did nothing to start to pull back on the excessively loose monetary policy until late 2021 (it wasn’t until into 2022 that the nominal OCR was even lifted back to the immediate pre-Covid level by when inflation and inflation pressures were already running away on them): they now estimate the positive output gap was in excess of 3 per cent by late 2021. If we want to play with nautical analogies, Ulysses steered his way between Scylla and Charybdis. Orr and his team ran us onto the rocks (full blown inflation, fixed only at great cost). And he claims to have been now quite relaxed about those hugely and disruptive inflationary consequences, with all the attendant arbitrary redistributions.</p> <p>And then, still with the press release, there is this</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-18.png"><img data-attachment-id="72153" data-permalink="https://croakingcassandra.com/2024/10/24/fiction-and-spin/image-277/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-18.png" data-orig-size="694,131" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-18.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-18.png?w=694" loading="lazy" width="694" height="131" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-18.png?w=694" alt="" class="wp-image-72153" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-18.png 694w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-18.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-18.png?w=300 300w" sizes="(max-width: 694px) 100vw, 694px" /></a></figure> <p>Inflation simply was not “caused by COVID-19”. With all their comms staff, this is very unlikely to be a slip of the pen, rather it is yet another in the endless series of attempts to avoid actual responsibility for doing the highly-paid job they took on so badly. No one doubts that Covid provided a context where many policymakers had to make difficult calls in conditions of great uncertainty. But it was the Reserve Bank MPC’s calls, faced with all that uncertainty and the decisions of others (since monetary policy moves last, by construction), that delivered the worst inflation in decades and the attendant cost and disruption to getting it down again. But Orr can’t or won’t admit that.</p> <p>As the work fiction continues, there is no mention of the LSAP – just a couple of passing lines about how quantitative easing tools hadn’t been used in New Zealand before – or the $11 billion of losses the MPC’s choices imposed on the New Zealand taxpayer (as someone pointed out a couple of weeks ago, one could build three Dunedin hospitals for that price), and of course none of the way in which the Bank went on provided concessional lending to banks to the very end of 2022. No doubt, if challenged, Orr would bluster and repeat his utterly unsubstantiated claims that the LSAP made a big positive difference to New Zealanders, but on this occasion his fictional treatment just airbrushes it away.</p> <p>I spluttered when I came to this paragraph</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-19.png"><img data-attachment-id="72156" data-permalink="https://croakingcassandra.com/2024/10/24/fiction-and-spin/image-278/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-19.png" data-orig-size="950,151" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-19.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-19.png?w=700" loading="lazy" width="950" height="151" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-19.png?w=950" alt="" class="wp-image-72156" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-19.png 950w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-19.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-19.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-19.png?w=768 768w" sizes="(max-width: 950px) 100vw, 950px" /></a></figure> <p>He chooses not to mention to his overseas audience (or to remind local readers) that his own reappointment was formally opposed by the two Opposition parties in Parliament at the time or that – as in many other countries – public discontent and inflation and the cost of living registered extremely high in opinion polls throughout, arguably playing a role in defeating the government here last year. It is hard to find anyone with any subject expertise who has any confidence in Orr (I’d mention Orr’s board, who seem to, but hardly any of them have any subject expertise).</p> <p>(In case you are wondering quite what he meant, Orr’s idea of “mutiny” appears only to involve troublesome inflation expectations).</p> <p>The creative writing continues as we move towards the end of the speech.</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-20.png"><img data-attachment-id="72159" data-permalink="https://croakingcassandra.com/2024/10/24/fiction-and-spin/image-279/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-20.png" data-orig-size="924,142" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-20.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-20.png?w=700" loading="lazy" width="924" height="142" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-20.png?w=924" alt="" class="wp-image-72159" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-20.png 924w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-20.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-20.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-20.png?w=768 768w" sizes="(max-width: 924px) 100vw, 924px" /></a></figure> <p>Has anyone ever associated Orr and his public communications with the word “humility”? Perhaps we might all take this as less like make-believe if it weren’t so well-documented just how many times Orr has actively misled Parliament’s Finance and Expenditure Committee (charged in part with holding him to account), or if he didn’t send out his <a href="https://croakingcassandra.com/2024/05/25/underwhelming/">chief economist to say</a> “oh no, we didn’t really mean what the numbers say, and anyway it isn’t our fault but that of the tools”. Nothing, you see, is ever the fault of Orr and the MPC…..at least in this fairy tale. </p> <p>It goes on. </p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-21.png"><img data-attachment-id="72161" data-permalink="https://croakingcassandra.com/2024/10/24/fiction-and-spin/image-280/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-21.png" data-orig-size="934,411" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-21.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-21.png?w=700" loading="lazy" width="934" height="411" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-21.png?w=934" alt="" class="wp-image-72161" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-21.png 934w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-21.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-21.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-21.png?w=768 768w" sizes="(max-width: 934px) 100vw, 934px" /></a></figure> <p>I’m wondering how Martien Lubberink, Roger Partridge, Jenny Ruth or Nicola Willis (in her Opposition days) feel about their experiences of Orr as empathetic communicator? Disdainful bullying is probably a fairer characterisation of his style. And as for the rest of the MPC, all these supposedly-expert external members sat on the MPC right through this extreme period, and none of them ever said a word….no speeches, no serious interviews, no scrutiny by Parliament. Nothing.</p> <p>Orr has the gall to then claim that it is really all in the minutes (the “Record of Meeting”) and that is only a shame that so few people, even “economic experts refer to or query” it. Which is, of course, nonsense on stilts, and just more active make believe. People read the Record of Meeting but they just don’t find much there. Despite all the uncertainties that Orr makes much of, there is never a serious sense of that in the Record of Meeting. Oh, they talk a good game, but when there is real uncertainty about important things, really able smart and engaged people will – with all goodwill – reach quite differing conclusions about where to next, and what the latest data probably mean. There is just none of that. The grapevine reports claim that there is in fact vigorous debate in the MPC, but there is not the slightest evidence of it shown to those us press-ganged into enduring the consequences of their bad calls. If the MPC really was unanimous on all but one call in the last five years, that is a very poor reflection indeed on the MPC members (some of whom are simply unfit for office, but from a couple one might have hoped for a bit more) and their chair. If not, the Record of Meeting is just comms spin.</p> <p>I could go on, but will draw this to a close here. Somewhat remarkably – well, perhaps not in the fictional world Orr would prefer to draw for us – there is no mention of accountability. It was always supposed to be the price, the quid pro quo, for delegating a great deal of constrained power to central banks. Accountability was supposed to involve real consequences. And yet, through the biggest and most costly monetary policy misjudgements in decades, Orr would just prefer no one mentioned anything about accountability (or in fact about mistakes at all). I guess it is the New Zealand public sector way (as we seeing again now in the wake of revelations of obstruction and cover-ups in the context of decades of abuse of people in state care).</p> <p>When captains of naval vessels made mistakes and ran their ship onto the rocks it was often considered fitting, and not inappropriate, for the captain to go down with his ship. But barefaced creative fiction, with not even a hint of contrition or regret to add nuance to the manuscript, seems to be Orr way.</p> </div> <footer class="entry-meta"> <span class="comments-link"><a href="https://croakingcassandra.com/2024/10/24/fiction-and-spin/#comments">18 Comments</a></span> </footer> </article> </div> <div class="article-wrapper"> <article id="post-72105" class="post-72105 post type-post status-publish format-standard hentry category-mpc"> <header class="entry-header"> <h1 class="entry-title"><a href="https://croakingcassandra.com/2024/10/10/central-bank-policy-communications/" rel="bookmark">Central bank policy communications</a></h1> <div class="entry-meta"> <span class="posted-on"><a href="https://croakingcassandra.com/2024/10/10/central-bank-policy-communications/" rel="bookmark"><time class="entry-date published" datetime="2024-10-10T11:28:34+13:00">October 10, 2024</time><time class="updated" datetime="2024-10-10T11:40:14+13:00">October 10, 2024</time></a></span> <span class="byline"><span class="author vcard"><a class="url fn n" href="https://croakingcassandra.com/author/mhreddell/">Michael Reddell</a></span></span> <span class="entry-categories"><a href="https://croakingcassandra.com/category/mpc/" rel="category tag">MPC</a></span> </div> </header> <div class="entry-content"> <p>For a long time I’ve been a strong supporter of central bank transparency about stuff a central bank actually knows something about, but a sceptic of the faux transparency of publishing stuff a central bank really knows very little about. In the former category, one might think of the background papers going to the MPC (by aiming deliberately low I once got them out of the Bank for a forecast round 10 years previously, but good luck if you asked now for the papers around the 2020 and 2021 decisionmaking, let alone those from six months ago). In the latter category I primarily had in mind medium-term macroeconomic forecasts, including endogenous forecasts for the OCR. Sure, the numbers are mostly put together fairly honestly, but in truth (and this isn’t a criticism, more a description of the limitations of human knowledge) central banks just don’t know very much about the future, especially a couple of years ahead. In principle, an OCR forecast now for the end of 2026 would be drawing on forecasts for inflation pressures well out into 2028. Forecasting 2024 or 2025 remains a considerable challenge.</p> <p>But my criticisms there have typically been about the hubris or delusion involved in thinking one could add meaningful value re where things might be a couple of years hence. In fact, I was rereading this morning an <a href="https://croakingcassandra.com/wp-content/uploads/2024/10/mhr-comments-for-2008-bis-conference-on-monetary-policy-transparency-and-communication.pdf">old piece</a> I used at a BIS conference years ago on such issues. But I tended to be relatively more relaxed about near-term forecasts, for (say) the next quarter or two, included the associated guidance on likely policy. If one might still be sceptical about just how good central banks might be at nowcasting or near-term forecasting (a) they do have more resource to throw at the issue than any other forecaster, and b) they should at very least know a little more than we otherwise do about their own reaction functions (ie how they might react to any given set of economic/inflation data). That might be so whether one had in mind explicit near-term OCR forecasts (to the second decimal place) as the Reserve Bank does, or just “bias statements” of the sort pretty much all central banks tend to engage in.</p> <p>Here in New Zealand, even with some new and (apparently) improved external membership of the MPC, the last six months don’t score very well even on that count.</p> <p>It was less than five months ago (22 May in fact) when the MPC released a <em>Monetary Policy Statement</em> indicating, in their forecast track, that there was a bit better than even chance that the next warranted move in the OCR would be an increase this year (to be consistent with this track, probably in August).</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-10.png"><img data-attachment-id="72116" data-permalink="https://croakingcassandra.com/2024/10/10/central-bank-policy-communications/image-269/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-10.png" data-orig-size="485,571" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-10.png?w=255" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-10.png?w=485" loading="lazy" width="485" height="571" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-10.png?w=485" alt="" class="wp-image-72116" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-10.png 485w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-10.png?w=127 127w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-10.png?w=255 255w" sizes="(max-width: 485px) 100vw, 485px" /></a></figure> <p>Their associated communications (which I’ve written about previously) was so at-sea that they tried to deny the implications of their own chosen track (the chief economist even tried to blame it on the tools, rather than the MPC of which he was a part).</p> <p>Within six weeks, (without a new full set of forecasts, and in the absence on holiday of the chief economist), the MPC had flipped to a dovish stance. This was how I <a href="https://croakingcassandra.com/2024/07/11/flip-flop-flip-flop/">illustrated it</a> at the time</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-11.png"><img data-attachment-id="72118" data-permalink="https://croakingcassandra.com/2024/10/10/central-bank-policy-communications/image-270/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-11.png" data-orig-size="741,788" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-11.png?w=282" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-11.png?w=700" loading="lazy" width="741" height="788" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-11.png?w=741" alt="" class="wp-image-72118" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-11.png 741w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-11.png?w=141 141w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-11.png?w=282 282w" sizes="(max-width: 741px) 100vw, 741px" /></a></figure> <p>And on this occasion they more or less did follow through. There wasn’t any huge inconsistency between their July and August statements (and the associated 25 basis point cut in the OCR).</p> <p>But this was the forecast track in the August MPS, published only six weeks ago</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-12.png"><img data-attachment-id="72121" data-permalink="https://croakingcassandra.com/2024/10/10/central-bank-policy-communications/image-271/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-12.png" data-orig-size="484,553" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-12.png?w=263" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-12.png?w=484" loading="lazy" width="484" height="553" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-12.png?w=484" alt="" class="wp-image-72121" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-12.png 484w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-12.png?w=131 131w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-12.png?w=263 263w" sizes="(max-width: 484px) 100vw, 484px" /></a></figure> <p>That forecast track was exactly consistent (weight by days) with 25 basis point cuts in October and November, such that it was clearly intended by the MPC as specific forward guidance. It looks as if they envisaged another 25 basis point cut in February such that by then the OCR would have been lowered to 4.5 per cent.</p> <p>And yet yesterday we saw a 50 basis point cut, and a fairly high degree of confidence among market economists that another 50 points will follow next month. One can argue that there wasn’t a clear direct signal of that from the MPC, although when you put a big headline in the “minutes”, and explicit statements that a) inflation is expected to “remain” around the target midpoint, and b) that an OCR of 4.75 per cent is still “restrictive”, it doesn’t take much guessing to see what they had in mind yesterday (especially with the three month MPC summer holiday coming up).</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-13.png"><img data-attachment-id="72123" data-permalink="https://croakingcassandra.com/2024/10/10/central-bank-policy-communications/image-272/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-13.png" data-orig-size="996,527" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-13.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-13.png?w=700" loading="lazy" width="996" height="527" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-13.png?w=996" alt="" class="wp-image-72123" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-13.png 996w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-13.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-13.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-13.png?w=768 768w" sizes="(max-width: 996px) 100vw, 996px" /></a></figure> <p>Now, as it happens, I think yesterday’s OCR cut was most likely to right call in substantive macroeconomic terms (and still think we are probably heading towards 2.5 per cent by the second half of next year). But that isn’t the issue for this post. Rather the point was nicely summed up by a journalist’s tweet yesterday</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-14.png"><img data-attachment-id="72126" data-permalink="https://croakingcassandra.com/2024/10/10/central-bank-policy-communications/image-273/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-14.png" data-orig-size="606,251" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-14.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-14.png?w=606" loading="lazy" width="606" height="251" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-14.png?w=606" alt="" class="wp-image-72126" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-14.png 606w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-14.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-14.png?w=300 300w" sizes="(max-width: 606px) 100vw, 606px" /></a></figure> <p>Which is a pretty damning indictment, of a committee whose claims to exercise such great discretionary power is that they are technically expert and have some reliable/predictable idea of what they are doing. And that simply isn’t obvious at present.</p> <p>No one particularly minds when central banks change their mind when there is some significant exogenous shock, the size or timing of which they could not reasonably have anticipated. But it is far from clear that anything very much has changed about the economic backdrop since May (no really big data surprises on GDP or unemployment, and confidence measures seem to have bounced around a bit without leaving us in a lot different place than in early May, let alone August). Instead, the expert committee, drawing on its staff, seem simply to have gotten things very wrong, and to have seriously misread the extent of the disinflation that was already well in train (or at least so they assume, having anticipated yesterday the CPI numbers out next week). It doesn’t seem so different (though probably less severe) than the mistake they made in 2020/21 and even early 2022.</p> <p>If the MPC really can’t do better than that there are two options. Either they aren’t the men and women for the job (in several cases that seems quite likely) or they should stop just injecting random noise purporting to be expert judgement by publishing forward tracks and indications of what might happen next. And, of course, there is no indication in any of the published sets of minutes from May to now of any robust debate or disagreement among MPC members, which is simply additionally damning: they all went along with each of the flip flops and inconsistencies through time, with no indication that any of them were applying the intellectual energy and analytical grunt to contest and challenge whatever view was coming from staff or management. I’ve long argued for much more personal accountability for MPC members – the risk has always just been that individuals (whether inexpert internals or the externals) would just free-ride, go along for the status, the fee, the addition to the CV, while adding little, and not bearing any consequences when the overall MPC does poorly. Management hates the idea of an open contest of ideas – has ever since reform models started being explored a decade ago – and one of their worries was of a “cacophony” of voices, in which truth would be obscured. It was never a compelling argument – other central banks manage, and it was a clearly an argument that reflected mostly management self-interest – but the experience of the last six months highlights again just how little “truth” or knowledge there is in anything much the MPC says beyond the specific OCR adjustment on a specific day. An open (but respectful) contest of ideas, exploration of alternative models, could hardly be worse than what’s been on offer again this year.</p> </div> <footer class="entry-meta"> <span class="comments-link"><a href="https://croakingcassandra.com/2024/10/10/central-bank-policy-communications/#comments">20 Comments</a></span> </footer> </article> </div> <div class="article-wrapper"> <article id="post-72091" class="post-72091 post type-post status-publish format-standard hentry category-nz-politics"> <header class="entry-header"> <h1 class="entry-title"><a href="https://croakingcassandra.com/2024/10/08/divisiveness-and-democracy/" rel="bookmark">Divisiveness and democracy</a></h1> <div class="entry-meta"> <span class="posted-on"><a href="https://croakingcassandra.com/2024/10/08/divisiveness-and-democracy/" rel="bookmark"><time class="entry-date published" datetime="2024-10-08T12:18:31+13:00">October 8, 2024</time><time class="updated" datetime="2024-10-08T12:27:29+13:00">October 8, 2024</time></a></span> <span class="byline"><span class="author vcard"><a class="url fn n" href="https://croakingcassandra.com/author/mhreddell/">Michael Reddell</a></span></span> <span class="entry-categories"><a href="https://croakingcassandra.com/category/nz-politics/" rel="category tag">NZ politics</a></span> </div> </header> <div class="entry-content"> <p>Not the usual stuff of this blog, but at lunchtime yesterday I went along to this well-attended event (St Andrew’s was full).</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/img_1678.jpeg"><img data-attachment-id="72093" data-permalink="https://croakingcassandra.com/2024/10/08/divisiveness-and-democracy/img_1678/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/img_1678.jpeg" data-orig-size="3024,3648" data-comments-opened="1" data-image-meta="{"aperture":"1.8","credit":"","camera":"iPhone SE (3rd generation)","caption":"","created_timestamp":"1728381041","copyright":"","focal_length":"3.99","iso":"20","shutter_speed":"0.008","title":"","orientation":"1","latitude":"-41.331330555556","longitude":"174.77732777778"}" data-image-title="IMG_1678" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/img_1678.jpeg?w=249" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/img_1678.jpeg?w=700" loading="lazy" width="849" height="1024" src="https://croakingcassandra.com/wp-content/uploads/2024/10/img_1678.jpeg?w=849" alt="" class="wp-image-72093" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/img_1678.jpeg?w=849 849w, https://croakingcassandra.com/wp-content/uploads/2024/10/img_1678.jpeg?w=1698 1698w, https://croakingcassandra.com/wp-content/uploads/2024/10/img_1678.jpeg?w=124 124w, https://croakingcassandra.com/wp-content/uploads/2024/10/img_1678.jpeg?w=249 249w, https://croakingcassandra.com/wp-content/uploads/2024/10/img_1678.jpeg?w=768 768w" sizes="(max-width: 849px) 100vw, 849px" /></a></figure> <p>I had a few reactions and didn’t think I could do them justice in a few quick tweets.</p> <p>Why did I go along? Well, several reasons really. Being semi-retired one has time, in principle the topic sounded interesting and important, I’d never heard Salmond speak before, and I have some time for Boston. I can’t say I necessarily expected to agree with the thrust of the promised “conversation”, but it is always good to hear people you disagree with make their best cases. Boston noted that it was a rare event at which he lowered the average age (and he is a few years older than me).</p> <p>As it happened, Salmond did most of the talking, while Boston acted more as guide and host to the conversation (although he threw in some more comments in the Q&A session, including stating his preference to raise the NZS eligibility age to 70 – I clapped at that point). He sought to structure the discussion under 4 headings: treaty issues, environmental issues, the future of democracy, and “what on earth should we do now”.</p> <p>Of course, I should have anticipated that the “conversation” wasn’t really going to be anything at all disinterested. If you were concerned about the way in which politics and society were going, and were interested in exploring common ground, rebuilding trust, engaging in efforts towards mutual understanding etc, you certainly wouldn’t have taken Salmond’s approach. From Salmond’s side in particular, it was mostly a series of sneers and laments about this government (David Seymour in particular, and Christopher Luxon who seemed to have fallen into the hands of bad people). </p> <p>(As regular readers will know I am not myself a particular fan of this government, have little time for either Seymour or Luxon, and do not support Seymour’s Treaty Principles Bill.)</p> <p>If inflammatory language is one of the problems of our day, Salmond contributed more than her fair share in just one session. Had anyone who strongly disagreed with her own politics been present they’d not have felt as if Salmond had any interest in them, except to sort them out and put them on the straight and narrow, or any recognition that there might be legitimately competing interests, world views, models for how policy should be done or New Zealand governed. Instead – particularly on treaty issues – we got sneers at how David Seymour couldn’t read Maori (which seemed particularly strange from someone of wholly European ancestry re someone of part Maori ancestry), claims that his approach was “impertinent”, that it was all “heartbreaking”, and that “it takes a lot of work to remain as ignorant as many of us have been”. It was, apparently, okay to have a discussion about the Treaty of Waitangi, “but not like this” – more, it seemed, a case of it was okay for the unwashed to ask questions of the experts and be put back on the right path, as if historical research (fascinating as it often is) was the answer, rather than one contribution to dialogue and debate as to how a modern New Zealand should best be governed, and what (if any) ongoing role an 1840 treaty might play in that.</p> <p>The government was then accused – in the calm moderate language that fosters dialogue – of an “ambush of our democracy”, a claim which appeared to apply not just to treaty things but to the environment. This government, we were told, “is going in the opposite direction to our survival as a species”. Strangely – or perhaps not – the fact that the ETS continues in place, which caps emissions across the economy as a whole, was never mentioned. The fast track list seemed very unpopular……and yet of course there was no mention of projects fast-tracked under the previous government. Perhaps one line I might welcome was that there wasn’t much evidence of the coalition agreement commitment to evidence-based policymaking, if only it weren’t that successive governments – of both political stripes – have been so poor on that score.</p> <p>And if the rhetoric hadn’t been amped up enough, we were then told that the government was “tossing whole categories of people on the rubbish heap”, while being invited to evaluate the government on how many New Zealanders were leaving, the suggestion being that it was because of this “ambush of democracy” – as if this hadn’t been a stark and sad feature of New Zealand, across governments except when the borders were closed, for too many decades.</p> <p>I’m sure it was quite entertaining and emotionally satisfying for the much of the audience – and there were audible gasps of approval when she quoted Nobel economics winner Paul Romer to the effect that “we must stop apologising for regulation. It is the only thing that protects us from the abyss” – as if no one had noticed that David Seymour’s own new ministry is actually called the Ministry <strong>FOR </strong>Regulation.</p> <p>I suspect that Boston was pretty sympathetic to a fair amount of Salmond’s commentary but he did inject a moment of realism, noting that the government (and its component parties) are about as popular now as they were in the election last year. If good Christopher Luxon (Salmond had been keen on him at Air NZ) really had fallen among the disreputable, “many of our fellow New Zealanders” seemed to quite like what he was doing.</p> <p>(Now again to be fair, Boston seemed distinctly unimpressed with the Labour Party, and Salmond with the Green Party, so perhaps they might think it was all just the failures of the Opposition).</p> <p>Salmond seemed dead keen on allowing New Zealand policy to be shaped by international “great and good” people: we got repeated references to various reports of Nobel Prize summits. It wasn’t quite clear how this was going to help her treaty concerns, but I guess she had in mind the environment. Quite why we’d want New Zealand policy to be guided by a bunch of people who are very expert in usually quite narrow technical areas, when most political hard choices are about values and distributional tradeoff, wasn’t ever made clear. Salmond seemed very keen on “citizens’ assemblies” and exercises in so-called “deliberative democracies” but presumably only so long as people like her got to guide the material these selected citizens were presented with. More money for journalism, and public broadcasting in particular, seemed to be a policy line both Boston and Salmond were championing, seemingly utterly oblivious to the declining public trust in journalism.</p> <p>Perhaps weirdest of all was the way Salmond ended. Apparently oblivious to Boston’s reminder that the current government isn’t exactly unpopular (at least outside central Wellington) there was an impassioned plea that we should “let leaders lead”. Since I doubt she in mind Seymour, Shane Jones, or even the diminished Luxon, one can only assume it was only the right sort of approved leaders who should be allowed to lead. In a final flourish of no nuance whatever, we were told that we needed leaders who would look to the interests of their children and grandchildren, not to the interests of donors. A particular unconstructive approach to enhancing mutual respect etc to simply assert that everyone who disagrees with you is either ignorant or in the thrall of donors, and has no concern for next generations (even their own) at all. It really was quite breathtaking.</p> <p>Perhaps if one went along to an ACT rally, or even a New Zealand Initiative members’ retreat, it might all be about as bad on the other side: the dismissive sneering and the automatic assumption of a single right pathway, if only the peasants could be cowed or brought to understand. Maybe (I genuinely don’t know). For myself, I’m sceptical of constant calls for “social cohesion” etc, since there are really big and important differences and values and world views and priorities, and there isn’t much point in assuming that one side or the other only needs to be enlightening (or perhaps silenced). But it really was astonishing that someone as able in her own field as Salmond evidently is, had no apparent interest in anyone else’s models or values or frameworks, or even a conception that there could be such things: the people of goodwill and intelligence might genuinely, deeply, and perhaps intractably disagree. </p> <p>But it probably all played well to the elderly base present at the meeting. Just like so many gatherings – so much social media for that matter – do.</p> </div> <footer class="entry-meta"> <span class="comments-link"><a href="https://croakingcassandra.com/2024/10/08/divisiveness-and-democracy/#comments">23 Comments</a></span> </footer> </article> </div> <div class="article-wrapper"> <article id="post-72073" class="post-72073 post type-post status-publish format-standard hentry category-housing"> <header class="entry-header"> <h1 class="entry-title"><a href="https://croakingcassandra.com/2024/10/07/public-policy-just-keeps-on-worsening/" rel="bookmark">Public policy just keeps on worsening</a></h1> <div class="entry-meta"> <span class="posted-on"><a href="https://croakingcassandra.com/2024/10/07/public-policy-just-keeps-on-worsening/" rel="bookmark"><time class="entry-date published" datetime="2024-10-07T10:22:15+13:00">October 7, 2024</time><time class="updated" datetime="2024-10-07T17:33:03+13:00">October 7, 2024</time></a></span> <span class="byline"><span class="author vcard"><a class="url fn n" href="https://croakingcassandra.com/author/mhreddell/">Michael Reddell</a></span></span> <span class="entry-categories"><a href="https://croakingcassandra.com/category/housing/" rel="category tag">Housing</a></span> </div> </header> <div class="entry-content"> <p>On Friday morning I picked up my copy of <em>The Post</em> to find on the front page a story clearly handed to Stuff’s political editor Luke Malpass, about a shiny new intervention that ministers were to announce later that morning to help out residential property developers. It was, we were told, going to offer free downside price/liquidity insurance to large and established property developers. It would be sold as strictly “time-limited” except that there would, in fact, be no time limit specified. </p> <p>My reaction on Twittter was “What…….” and it brought to mind that old jeer about business-friendly (as opposed to pro-market) governments and an enthusiasm among some of their supporters to “capitalise the gains and socialise the losses”. Little did we imagine that this would in fact become declared and intended policy of this National/ACT/NZ First government (not in the midst of a crisis, where sometimes these things happen, but as a whole new policy tool). I’m not generally an ACT fan, but……you have to wonder what the point of an allegedly pro-market anti-intervention libertarian party is if they wave things like this scheme through Cabinet (and not even their backbenchers have issued statements of disapproval, they being rather freer than ministers).</p> <p>Malpass’s report was quickly proved accurate, with the announcement later that morning by Chris Bishop and Chris Penk (ministers of housing and of building and construction respectively) of the <a href="https://www.beehive.govt.nz/release/new-government-support-residential-construction-market-announced">Residential Development Underwrite scheme</a>. </p> <p>The fact that it appeared to replace but considerably extend schemes in place under Labour was not a point in its favour</p> <blockquote> <p>Funding for the RDU will be redirected from unused funding from the Kiwibuild and BuildReady Development Pathway programmes. Both of these programmes are now closed to new applications.</p> </blockquote> <p>This government (rightly) having made much of inheriting a large structural fiscal deficit, and wanting to get government out of business, instead jump in boots and all. And all apparently on the basis that a couple of Cabinet ministers and their MHUD officials know better than the market what should be built when, where, and by whom, and thus who will win the benevolence of the free government underwrite.</p> <p>There was more <a href="https://www.hud.govt.nz/our-work/residential-development-underwrite">information on the MHUD website</a>, but it was no more reassuring. There was no sign of any analytical framework behind any of it (no analysis at all, let alone anything serious or rigorous. of market failures or any sort of cost-benefit analysis or risk assessment). In fact, there was a distinct sense of something that had been rushed out. Some property developers had presumably been bending the ears of ministers. As the <em>Herald </em>put it “the government is riding to the rescue of stressed property developers”, in a distinctly picking-winners approach to the recession. Plenty of people and firms will have undergone huge stress in the last couple of years, as inflation was squeezed back out of the system. It was and is a necessary adjustment. But most apparently didn’t enjoy the favour of ministers.</p> <p>And will no doubt do so again. In <a href="https://www.interest.co.nz/property/130072/coalition-government-plans-revive-kiwibuild-style-scheme-support-housing">one article</a> on Friday, Bishop was quoted thus</p> <blockquote> <p>Bishop said the scheme wouldn’t be in place forever and Cabinet would make decisions about when to “turn it on and off” depending on demand and construction activity.</p> </blockquote> <p>So that would no predictable and rigorous framework, but rather a great deal of trust in ministers’ ability to forecast construction cycles and housing demand, or to respond to pressures of the electoral cycle or developers bending their ears. Good regulation – like a good tax system – is stable and predictable, not turned on or off at the whim of ministers. This is poor policy, done poorly. And isn’t it simply dishonest for a government department to repeat ministerial spin about the intervention being “time-limited” (and MHUD does exactly that upfront) when there is no time limit at all? After all, in the grand scheme of things every policy intervention will eventually be altered/amended.</p> <p>In essence what the scheme involves:</p> <ul class="wp-block-list"> <li>the government will guarantee to purchase at an agreed (in advance) price houses that don’t sell at an (approved) market price within an approved period of time,</li> <li>only large-scale developers will be eligible for this assistance, preferably those building in Auckland, Wellington, Christchurch, Hamilton, and Tauranga [a little surprised Queenstown wasn’t on the favoured list),</li> <li>no fee will be charged for this put option that is being granted to the developers</li> </ul> <p>The rationale appears to be that banks and other potential lenders aren’t sufficiently willing to take risks on this projects, even at high fees/interest margins, but……government knows better/best. Quite why we are supposed to believe this self-delusion (ministers and officials falling for it is perhaps more understandable – if no more excusable – given the nature of their incentives) is never made clear. Minister are, it appears, blessed with some special insight into the state of the economy and the timing/speed of the recovery, and instead of just (say) publishing that analysis, they prefer to give handouts (and that is what free price/liquidity insurance is) to developers. </p> <p>In the MHUD document there is this statement upfront</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-8.png"><img data-attachment-id="72084" data-permalink="https://croakingcassandra.com/2024/10/07/public-policy-just-keeps-on-worsening/image-267/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-8.png" data-orig-size="963,236" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-8.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-8.png?w=700" loading="lazy" width="963" height="236" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-8.png?w=963" alt="" class="wp-image-72084" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-8.png 963w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-8.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-8.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-8.png?w=768 768w" sizes="(max-width: 963px) 100vw, 963px" /></a></figure> <p>The secondary objective never seems to get another mention, but the ‘primary objective” is almost worse, for being functionally meaningless. You minimise the cost and risk to the Crown by simply not offering free insurance, and if you must offer such insurance you should do so with a disciplined and transparent model (to, for example, estimate the economic price of the option). But there is nothing of that sort in any of the MHUD material, just a lot of mention of the (extensive) discretion afforded to officials, of whom we may be left wondering both what their expertise is and what their incentives are. Why would we back them to make better choices than financial market participants? And as for “maximising housing supply”, there seems to be no analytical framework there either, including around incentives on developers (who will, of course, prefer free insurance and can be expected to try to game the rules). Will there be any material impact on supply, will any impact be any more than timing, and how will MHUD rigorously evaluate claims put to them by developers? Oh, and isn’t developers finding themselves with overhangs of houses and land part of the way that much lower house prices actually come about?</p> <p>It is possible the scheme won’t end up being hugely costly. After all, house prices might take off again as interest rates fall. Or officials might err on the very cautious side and very few underwrite grants might be made (or at such deep discounts that the real insurance cost is cheap). But there is just no good or compelling analytical foundation for any sort of intervention of this sort (none provided, none readily conceivable). Even the business cycle argument seems rather flakey. Ministers seem to lament the cyclicality of residential construction (globally, it tends to be one of the most cyclically variable components of GDP), but when they lament the state of the industry, they don’t mention that new residential dwelling consents are still running around twice the level at the trough of the 2008/09 recesssion.</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-9.png"><img data-attachment-id="72086" data-permalink="https://croakingcassandra.com/2024/10/07/public-policy-just-keeps-on-worsening/image-268/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-9.png" data-orig-size="992,751" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-9.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-9.png?w=700" loading="lazy" width="992" height="751" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-9.png?w=992" alt="" class="wp-image-72086" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-9.png 992w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-9.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-9.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-9.png?w=768 768w" sizes="(max-width: 992px) 100vw, 992px" /></a></figure> <p>There is also talk about helping to get the cyclical economic recovery underway. Pretty much all the arguments against using fiscal policy for that purpose – I’ve outlined them here repeatedly – apply at least as much to discretionary sector-specific interventions like the Residential Development Underwrite. And, of course, were the Reserve Bank to regard this scheme as being likely to make a material difference it should, all else equal, make them more reluctant to, with less scope to, cut the OCR a lot further. </p> <p>It is a rather sad reflection of how the quality of New Zealand policymaking has fallen. Perhaps we should be grateful that exchange rate cycles aren’t what they were – and that past governments were less prone to scheme like this – or who knows what sort of free insurance the government would be dreaming up for exporters.</p> <p>Who knows what the relevant government agencies thought of this scheme. I’ve lodged OIA requests and am particularly interested in any analysis and advice from The Treasury and the Ministry for Regulation.</p> </div> <footer class="entry-meta"> <span class="comments-link"><a href="https://croakingcassandra.com/2024/10/07/public-policy-just-keeps-on-worsening/#comments">9 Comments</a></span> </footer> </article> </div> <div class="article-wrapper"> <article id="post-72041" class="post-72041 post type-post status-publish format-standard hentry category-bank-capital-requirements category-banking category-prudential-regulation"> <header class="entry-header"> <h1 class="entry-title"><a href="https://croakingcassandra.com/2024/10/01/inquiring-into-banking/" rel="bookmark">Inquiring into banking</a></h1> <div class="entry-meta"> <span class="posted-on"><a href="https://croakingcassandra.com/2024/10/01/inquiring-into-banking/" rel="bookmark"><time class="entry-date published" datetime="2024-10-01T13:34:01+13:00">October 1, 2024</time><time class="updated" datetime="2024-10-01T18:12:41+13:00">October 1, 2024</time></a></span> <span class="byline"><span class="author vcard"><a class="url fn n" href="https://croakingcassandra.com/author/mhreddell/">Michael Reddell</a></span></span> <span class="entry-categories"><a href="https://croakingcassandra.com/category/bank-capital-requirements/" rel="category tag">bank capital requirements</a>, <a href="https://croakingcassandra.com/category/banking/" rel="category tag">Banking</a>, <a href="https://croakingcassandra.com/category/prudential-regulation/" rel="category tag">Prudential regulation</a></span> </div> </header> <div class="entry-content"> <p>Hard on the heels of the Commerce Commission’s inquiry into some aspects of banking competition, Parliament’s Finance and Expenditure Committee is also holding an inquiry. Submissions weren’t open for very long and have now closed, but the full terms of reference are <a href="https://www.parliament.nz/en/pb/sc/make-a-submission/document/54SCFIN_SCF_FC430602-F4C3-4B04-957D-08DCB036CF74/inquiry-into-banking-competition">here</a>. It is a select committee inquiry, so it is hard to be optimistic anything very useful will come from it. Select committees are poorly resourced, even if they wanted to make a serious contribution, and the incentives seem to be almost entirely partisan political in nature. </p> <p>A few submissions have so far seen the light of day. Those I’ve seen are:</p> <ul> <li><a href="https://www.rbnz.govt.nz/hub/news/2024/09/rbnz-releases-banking-competition-select-committee-submission">One from the Reserve Bank</a>, together with a supporting <a href="https://www.rbnz.govt.nz/hub/publications/bulletin/2024/how-risk-weights-affect-bank-lending"><em>Bulletin</em> article</a> on risk weights and bank lending,</li> <li><a href="https://www.nzinitiative.org.nz/reports-and-media/submissions/submission-inquiry-on-banking-competition/">One (brief) from the New Zealand Initiative</a>, [ and a <a href="https://www.nzinitiative.org.nz/reports-and-media/submissions/submission-inquiry-on-banking-competition/document/859">fuller version</a> I hadn’t stumbled on] and</li> <li><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/submission-from-andrew-body-to-the-fiandrew-body-submission-to-finance-and-expenditure-select-committee-on-its-banking-inquiry-25-sept-2024.pdf">One from Auckland investment banker Andrew Body,</a> a frequent contributor to debates on some of these issues.</li> </ul> <p>None is particularly long, although Body’s piece has several appendices of past contributions in this general area.</p> <p>The Reserve Bank’s contribution is mostly defensive in nature: if there are any issues, responsibility doesn’t rest with us or with our regulatory model. Which is, of course, pretty much what you would expect them to say, as an entrenched and powerful independent existing regulator, who no doubt believe that all the policy judgements they’ve made have been wise, in the best interests of New Zealanders etc. But just because it is them saying it doesn’t automatically mean they are wrong.</p> <p>And in some areas no doubt they are right. As they note, having four big banks isn’t at all unusual. And some scepticism of state-enabled “maverick disruptors”, especially in the form of an unimpressive modest retail bank, is likely to be well-warranted. They also fairly note that patterns of finance have changed over time, something particularly evident in rural lending (where Rabobank is now the second biggest lender) and in corporate lending (where even on the data they have access to – and big corporates can tap international markets directly – overseas banks other than the big 4 apparently now have 30 per cent of the market).</p> <p>And I (have always tended to) share their view that (approved regulatory) relative risk weights, used in calculating capital requirements matter a lot less than is often made out. In principle they should make no systematic difference at all since the aim of relative risk weights is more or less to reflect true differences in the underlying riskiness of different types of credit (eg a residential mortgage, with a 40 per cent LVR, is likely to be much much less risky, individually and as part of a portfolio, than an unsecured loan to a B-rated corporate). In practice, things aren’t that simple, including because the dividing lines between different types of lending and associated risk aren’t always clear or straightforward, and which side of a rather arbitrary line something falls can matter. And since no one – regulator or regulated – knows with any great certainty how (relatively) risky different types of loans are (mercifully, very bad crises don’t come along very often, and so data are scarce and open to contextual interpretation – regulators can get things wrong, and impose risk weights on particular types of lending that are quite at odds with the views of the lenders themselves. And any mapping for particular Reserve Bank imposed risk weights to either the pricing or availability of individual loan products is likely to be fuzzy and indirect at best.</p> <p>Most importantly, relative risk weights simply do not explain why bank balance sheets are chock-full of residential mortgages. Rather, the artificial scarcity of houses and land, imposed over decades by central and local government, has led to hugely expensive houses, which each incoming generation needs to finance. Bank balance sheets would be much smaller if regulatory reform successfully delivered enduring low prices of houses and urban land. </p> <p>All that said, one shouldn’t be too keen to come to the defence of the Reserve Bank as regulator. This is an agency with very limited specialist expertise at the top (see, notably, the Bank’s Board which now wields the policymaking power), has a culture of being aggressively dismissive, produces no serious research or analysis on financial regulation or stability (even though these functions now comprise the largest chunk of the Bank’s staff) and so on. What speeches there are lack any real depth or insight.</p> <p>As I noted at the start, the New Zealand Initiative’s submission is brief. There are, broadly speaking, two aspects to it. The first is about efficiency considerations – a dimension unfortunately now lost from the legislation</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image.png"><img data-attachment-id="72048" data-permalink="https://croakingcassandra.com/2024/10/01/inquiring-into-banking/image-259/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image.png" data-orig-size="1116,516" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image.png?w=700" loading="lazy" width="1024" height="473" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image.png?w=1024" alt="" class="wp-image-72048" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image.png?w=1024 1024w, https://croakingcassandra.com/wp-content/uploads/2024/10/image.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image.png?w=768 768w, https://croakingcassandra.com/wp-content/uploads/2024/10/image.png 1116w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure> <p>Of course, any bureaucracy can produce a cost-benefit analysis of sorts of justify its own choices. I didn’t find the case for the 2019 decisions compelling, but a review now – especially if the reviewers were appointed by the RB or those sympathetic to it – isn’t really the answer (and under current legislation the Minister of Finance can’t direct the Bank in this area). My own view remains that (a) key people matter, and b) key policymaking decisions (as distinct from implementation on individual instruments and institutions) should be moved back to the Minister of Finance, who has both some real accountability (governments get tossed out, and question in Parliament routinely) and better incentives to balance the competing imperatives around any regulatory structure. It is very unusual to delegate major regulatory choices to an unelected agency (the more so, one with little demonstrated depth, expertise, and commanding little respect).</p> <p>The New Zealand Initiative doesn’t go that far. They propose instead </p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-1.png"><img data-attachment-id="72051" data-permalink="https://croakingcassandra.com/2024/10/01/inquiring-into-banking/image-260/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-1.png" data-orig-size="1086,494" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-1.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-1.png?w=700" loading="lazy" width="1024" height="465" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-1.png?w=1024" alt="" class="wp-image-72051" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-1.png?w=1022 1022w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-1.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-1.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-1.png?w=768 768w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-1.png 1086w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure> <p>I’ve written previously in favour of splitting around a NZPRA, which would have advantages for both those functions and for the Reserve Bank’s monetary policy and related functions. As they note, a suitably-qualified FPC might be a halfway house, although I’m not sure that the MPC – as staffed, and (not) scrutinised and held to account for the mistakes of recent years – is a great advert.</p> <p>(I’m less convinced of the merits of taking the Governor off the Board. The FMA is primarily an implementation agency without much of a public face. The Reserve Bank, or major policymaking committees, are a different matter…….and for what it is worth it would be quite anomalous internationally not to have the Governor on the central bank board.)</p> <p>The main prompt for doing this post was Andrew Body’s submission, which he was kind enough to send me. I don’t agree with everything in his submission – we’d disagree I think mainly on the risk weights issue (see above) – but the bulk of the submission captures a number of areas where the current Reserve Bank is ill-equipped for its job, and not doing that job well. His submission is an easy read. Here are a few extracts.</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-2.png"><img data-attachment-id="72054" data-permalink="https://croakingcassandra.com/2024/10/01/inquiring-into-banking/image-261/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-2.png" data-orig-size="936,881" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-2.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-2.png?w=700" loading="lazy" width="936" height="881" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-2.png?w=936" alt="" class="wp-image-72054" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-2.png 936w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-2.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-2.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-2.png?w=768 768w" sizes="(max-width: 936px) 100vw, 936px" /></a></figure> <p>It is often forgotten just how much of an impost was imposed on banks the local incorporation and outsourcing requirements.</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-3.png"><img data-attachment-id="72056" data-permalink="https://croakingcassandra.com/2024/10/01/inquiring-into-banking/image-262/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-3.png" data-orig-size="930,728" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-3.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-3.png?w=700" loading="lazy" width="930" height="728" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-3.png?w=930" alt="" class="wp-image-72056" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-3.png 930w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-3.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-3.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-3.png?w=768 768w" sizes="(max-width: 930px) 100vw, 930px" /></a></figure> <p>What I’m less sure of is how much of this is idiosyncratic to New Zealand, and how much is a general tendency of regulators and the regulated. The stylised wisdom when I was at the Reserve Bank was that banks were typically under orders from Australia to be very reluctant to upset or call out the regulator (there or here). Of course, when your regulator – as Graeme Wheeler did here – takes offence at anodyne critical comments from a bank economist, and calls in the heavy artillery to get the economist silenced, it sends a message. Banks have a lot at stake, and the Reserve Bank has a lot of power, which can be wielded for good or ill.</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-4.png"><img data-attachment-id="72059" data-permalink="https://croakingcassandra.com/2024/10/01/inquiring-into-banking/image-263/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-4.png" data-orig-size="945,725" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-4.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-4.png?w=700" loading="lazy" width="945" height="725" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-4.png?w=945" alt="" class="wp-image-72059" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-4.png 945w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-4.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-4.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-4.png?w=768 768w" sizes="(max-width: 945px) 100vw, 945px" /></a></figure> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-5.png"><img data-attachment-id="72060" data-permalink="https://croakingcassandra.com/2024/10/01/inquiring-into-banking/image-264/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-5.png" data-orig-size="935,344" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-5.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-5.png?w=700" loading="lazy" width="935" height="344" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-5.png?w=935" alt="" class="wp-image-72060" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-5.png 935w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-5.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-5.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-5.png?w=768 768w" sizes="(max-width: 935px) 100vw, 935px" /></a></figure> <p>Before turning to governance</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-6.png"><img data-attachment-id="72062" data-permalink="https://croakingcassandra.com/2024/10/01/inquiring-into-banking/image-265/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-6.png" data-orig-size="970,897" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-6.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-6.png?w=700" loading="lazy" width="970" height="897" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-6.png?w=970" alt="" class="wp-image-72062" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-6.png 970w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-6.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-6.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-6.png?w=768 768w" sizes="(max-width: 970px) 100vw, 970px" /></a></figure> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/10/image-7.png"><img data-attachment-id="72063" data-permalink="https://croakingcassandra.com/2024/10/01/inquiring-into-banking/image-266/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-7.png" data-orig-size="974,539" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-7.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/10/image-7.png?w=700" loading="lazy" width="974" height="539" src="https://croakingcassandra.com/wp-content/uploads/2024/10/image-7.png?w=974" alt="" class="wp-image-72063" srcset="https://croakingcassandra.com/wp-content/uploads/2024/10/image-7.png 974w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-7.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-7.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/10/image-7.png?w=768 768w" sizes="(max-width: 974px) 100vw, 974px" /></a></figure> <p>Much of that makes a lot of sense. But, of course, there is no sign that the Minister of Finance has any interest whatever in a better Reserve Bank, whether in its monetary policy or regulatory functions. She just reappointed the chair, has left Board vacancies unfilled, and included nothing about a reorientation in her Letter of Expectation. Instead, she seems to have been toying with arbitrary new taxes on banks.</p> <p>Standing back from all three submissions, a few things struck me. The first (and most important) is that neither the Reserve Bank in its defence or the critical submitters mentioned the APRA regulatory requirements and how they affect things in New Zealand (neither did the FEC’s terms of reference). That should be really quite surprising as most of the grumbling is about the four big Australian banks, all of which are part of Australian-based consolidated banking groups, regulated as such by APRA (eg capital requirements that apply to group exposures as a whole). There is no doubt that more onerous regulatory requirements can materially affect the New Zealand subsidiaries, but in any area in which the RBNZ’s requirements were less burdensome than APRA’s it might make or little or no difference here, as the group would still be constrained by group-wide regulation. I’ve never been quite sure how it all works out in practice – how banks do their pricing and risk allocation etc having regard to these distinct regulatory regimes – but it is surprising not to see it mentioned once. At an aggregate level, I’m inclined to the view that the Reserve Bank never made a compelling case for the extent of the 2019 increases in New Zealand capital requirements (and that the heavy focus on high capital is somewhat misplaced, relative to the much-harder-to-measure/observe changes in credit standards), but markedly lower requirements might well become non-binding.</p> <p>I’ve long been a bit puzzled as to why more non deposit-taking entities don’t lend directly into the New Zealand market (at least if, as we are often invited to believe, there are excess profits on offer here). I recall being heavily involved in some work almost 20 years ago now on possible alternative approaches to monetary policy implementation, and one thing we focused on a lot then was the possibility of entities lending mortgages (say) directly into New Zealand from abroad. Disintermediation was also in focus when the first LVR restrictions were put in place. But none of it ever seem to have come to much. I was exchanging notes with a banking lawyer recently and asking why, say, Macquarie – an aggressive new entrant to the Australian mortgage market – couldn’t just lending into New Zealand as “Cheap Mortgage Loans Limited” (so wouldn’t need to be a New Zealand bank), but the person I was engaging with noted that people who had considered such options were scared that the Reserve Bank would act to stop them (and apparently there are designation powers in the new deposit-takers legislation). You have to wonder why it would: no New Zealand depositors’ funds would be at risk, and new competition would be injected to the system. I note it mainly because it isn’t entirely compelling that everything sensible has been done by the Reserve Bank to reduce unnecessary barriers to entry. Better “Cheap Mortgage Loans Limited” than a juiced-up Kiwibank, in which taxpayers’ money is directly at stake.</p> <p>I have no expectation that the FEC inquiry will produce anything useful. It isn’t set up to. The submission time was short – who could commission serious or fresh analysis in that time? – and the committee has few resources, no specialist support, and its members don’t appear overly strongly qualified, except to pursue narrow political agendas (some of which might be sensible, but most won’t). And thus how equipped are they going to be to evaluate competing claims in the submissions they receive? It isn’t like a court case in which expert witnesses are grilled by counsel for both sides, and arguments, evidence, and implications tested. A proper workshop, with major submissions presented as papers with discussants and audience questions might have offered the prospect of shedding some serious light. But the political process is all too often interested more in heat than light.</p> <p>UPDATE: Martien Lubberink (VUW) draws my attention to his submission <a href="https://capitalissues.co/2024/09/15/balancing-innovation-stability-and-competition-in-new-zealands-banking-sector-a-policy-oriented-review/">here</a>. A one sentence summary might be that we should be at least somewhat grateful for what we have – a stable, predominantly foreign-owned, system – and wary of the siren calls to any sort of quick fixes to apparent problems. Thus far, it is hard to disagree (although I have a few specific areas in which I might reach different views than he does).</p> </div> <footer class="entry-meta"> <span class="comments-link"><a href="https://croakingcassandra.com/2024/10/01/inquiring-into-banking/#comments">5 Comments</a></span> </footer> </article> </div> <div class="article-wrapper"> <article id="post-72035" class="post-72035 post type-post status-publish format-standard hentry category-uncategorized"> <header class="entry-header"> <h1 class="entry-title"><a href="https://croakingcassandra.com/2024/09/17/human-nature-doesnt-change/" rel="bookmark">Human nature doesn’t change</a></h1> <div class="entry-meta"> <span class="posted-on"><a href="https://croakingcassandra.com/2024/09/17/human-nature-doesnt-change/" rel="bookmark"><time class="entry-date published" datetime="2024-09-17T11:55:11+12:00">September 17, 2024</time></a></span> <span class="byline"><span class="author vcard"><a class="url fn n" href="https://croakingcassandra.com/author/mhreddell/">Michael Reddell</a></span></span> <span class="entry-categories"><a href="https://croakingcassandra.com/category/uncategorized/" rel="category tag">Uncategorized</a></span> </div> </header> <div class="entry-content"> <p>It was a tweet from Olivier Blanchard, emeritus professor of economics at MIT and former chief economist of the IMF, that first drew my attention to the book</p> <figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper"> <div class="embed-twitter"><blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">Please, please, read it. It is worse than you imagined… (and the book is a page turner). <br> Then, worry about the following headline from Axios today: "1 big thing: Crypto dominates corporate election spending." <a href="https://t.co/riryXjtiLI">https://t.co/riryXjtiLI</a></p>— Olivier Blanchard (@ojblanchard1) <a href="https://twitter.com/ojblanchard1/status/1826589444104737269?ref_src=twsrc%5Etfw">August 22, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div> </div></figure> <p>Blanchard’s full blurb reads </p> <blockquote> <p>“A brilliant and fascinating description of crypto. It makes painfully clear that, on the buying side, there is no limit to human credulity, and the faith in magic returns. And, on the selling side, no limit to hubris, deception and scamming. Read the book, and cry.”</p> </blockquote> <p>As I sat reading <a href="https://www.amazon.com.au/Crypto-Confidential-Insiders-Account-Frontlines/dp/1803996188">the book</a> yesterday I kept wondering quite how it had got through the publishers’ lawyers. But it seems to have been written under a pseudonym and various significant names have been changed, including that of the UK-based crypto firm (that briefly became one of the biggest crypto marketing companies around) in which the author was a senior figure, and more than a few of their client firms. Presumably that was seen as enough to reduce the legal risks sufficiently to publish. </p> <p>Readers should be grateful: it is an easy and absorbing read, and if you are anything like me you’ll read it with some mix of astonishment, despair (human nature and all that), and moral outrage. I’m pretty sure the author intends to prompt readers to think more regulation is an obvious and necessary response, but I’m less easily persuaded on that count. Fools and their money…. If there are decent people and firms in the sector, operating consistently ethically, there is pretty strong incentive on them to differentiate themselves from the (apparently) very many rogues and rank opportunists.</p> <p>“Donoghue” (from here on I’ll drop the quote marks) – who seems to be still quite young (says he was still a student in 2016) – had a background in PR, apparently in both finance and politics in the UK, before he jumped aboard a crypto startup being put together by an old university friend and the friend’s cousin. In the early days – Donoghue still holding down a fulltime PR job elsewhere – it seems not to have been much more than three or four of them, chasing the dream of “generational wealth”. The plan was to launch a gambling platform – on the future price of Bitcoin – with an associated crypto token. As Donoghue writes it now – while claiming, perhaps plausibly as he was the PR guy, not to have realised it at the time – it was a “totally implausible business model”. Which, in the crypto sector, didn’t stop lots of weird projects getting off the ground, and a lot of wealth being redistributed (and some apparently made – with an emphasis on the “apparently”; it was close to the sort of stuff J K Galbraith was writing about when he coined the phrase <a href="https://carnegieendowment.org/china-financial-markets/2021/08/why-the-bezzle-matters-to-the-economy?lang=en">“the bezzle”</a>). The shortlived boom Donoghue was in the midst of collapsed in late 2022, most prominently including the fall of Sam Bankman-Fried’s FTX.</p> <p>It is a lively story. Donoghue’s firm started with its own platform/token, but very quickly found that there was more money to be made parleying their experiences and expertise (such as it was) into selling marketing and promotional services around the launch of new crypto firms/products/token to the myriad of other ambitious opportunists wanting to get on the boom quickly. In some cases, firms were almost throwing money at Moonshot (the pseudonym of the advisory firm). There are weird tales of the launch of improbable NFTs (non-fungible tokens) – who, they wondered, was going to want to buy NFTs of pictures of the football players of some US team, whose CFO had got keen on the idea, especially when there was no easy way – for those not already engrossed in the crypto world – to buy the product. But it sold. Or an NFT of a stamp, when one could simply own the stamp itself (as I recall it, that one didn’t get off the ground).</p> <p>There are plenty of accounts of “influencers” being paid in heavily discounted crypto tokens they were to hawk, never disclosing to the influenced their own direct stake in the success of the token/platform. Or of venture capital firms issued with deeply discounted tokens, typically undertaking next to no due diligence, and wanted less for the immediate money they provided, than for the apparent (but highly misleading signal) that if the VCs were on board, it must be okay for the public to buy. And the parties, so many parties, so lavish.</p> <p>In Donoghue’s words:</p> <blockquote> <p>It’s an insider’s view, into the lives and livelihoods of some of the inner circle to which I used to belong. It’s a record of the sheer extravagance, excess and absurdity, which seemed to take place on a daily basis. And what it illustrates is how the people behind one of the most captivating, disruptive and incomprehensible industries the world has ever seen act when the cameras are off, and their guards are down.</p> </blockquote> <p>I strongly recommend the book. And if the recommendation of someone like Blanchard (and blurbs from two Nobel memorial prize in economics winners) isn’t the thing for you, it also comes blurbed by people like Frank Abagnale (subject of Catch Me if You Can), Izabella Kaminska, Frank Partnoy, William Cohan and Dan Davies, authors many of you will recognise. Oh, and by Andy Verity, whose excellent book – published by the same firm – on the scandalous prosecutions that followed the LIBOR issues in 2008/09 I <a href="https://croakingcassandra.com/2023/07/11/flabbergasted/">wrote about here</a> last year.</p> <p>As it happened I had a couple of emails from Donoghue himself a couple of weeks ago offering me a review copy (not sure why, this being a fairly obscure blog, but I guess PR was his expertise. And I’d already ordered a copy). This is how he describes his own book.</p> <blockquote> <p>The book is a narrative non-fiction account of my time spent working in the cryptocurrency industry. It’s a cautionary tale of the scams and fraud endemic to the space, and the often-devastating consequences inflicted on ordinary investors who get caught up in these.<br /><br />For several years, I ran one of the most prominent marketing agencies in the industry, working with some of the largest companies and projects in the space. I was also on the founding team of a number of projects myself, one of which obtained an all-time-high fully diluted market capitalisation of $300 million.<br /><br />My book now seeks to shed light on the corruption and malpractice which I saw unfold on a daily basis.</p> </blockquote> <p>What could usefully be added is the line from the end of the book’s Prologue: “In order to tell that story, I first need to tell my own. It’s the story of a player on the inside who became so blinded by greed that he didn’t even realise he’d lost his way until it was almost too late”. It was a wild ride, and perhaps one he is now ashamed of. His penultimate paragraph is a good place to end.</p> <blockquote> <p>I can only hope that, after the actions of SBF, Do Kwon, and the countless other characters in the rogues’ gallery of crypto we haven’t heard of – who will all hopefully get their day in court sooner rather than later – people will be dissuaded from having a punt in the murky and malevolent markets of crypto.</p> </blockquote> </div> <footer class="entry-meta"> <span class="comments-link"><a href="https://croakingcassandra.com/2024/09/17/human-nature-doesnt-change/#comments">10 Comments</a></span> </footer> </article> </div> <div class="article-wrapper"> <article id="post-72009" class="post-72009 post type-post status-publish format-standard hentry category-reserve-bank category-settlement-account-remuneration"> <header class="entry-header"> <h1 class="entry-title"><a href="https://croakingcassandra.com/2024/09/09/remunerating-exchange-settlement-accounts-what-is-mof-up-to/" rel="bookmark">Remunerating exchange settlement accounts: what is MoF up to?</a></h1> <div class="entry-meta"> <span class="posted-on"><a href="https://croakingcassandra.com/2024/09/09/remunerating-exchange-settlement-accounts-what-is-mof-up-to/" rel="bookmark"><time class="entry-date published" datetime="2024-09-09T19:36:13+12:00">September 9, 2024</time><time class="updated" datetime="2024-09-09T19:51:47+12:00">September 9, 2024</time></a></span> <span class="byline"><span class="author vcard"><a class="url fn n" href="https://croakingcassandra.com/author/mhreddell/">Michael Reddell</a></span></span> <span class="entry-categories"><a href="https://croakingcassandra.com/category/reserve-bank/" rel="category tag">Reserve Bank</a>, <a href="https://croakingcassandra.com/category/settlement-account-remuneration/" rel="category tag">Settlement account remuneration</a></span> </div> </header> <div class="entry-content"> <p>A few weeks ago I wrote a <a href="https://croakingcassandra.com/2024/08/13/still-a-bad-idea/">post</a> about an article the <em>Herald’s </em>Jenee Tibshraeny had written based on an interview she’d done with the Minister of Finance. Willis was reported as toying with a number of fairly questionable ideas around the Reserve Bank (none involving actually replacing the Board chair). One of those involved the interest rate paid on banks’ settlement account balances at the Reserve Bank. Those balances are currently high (something that is entirely determined by the Reserve Bank; banks themselves can influence only the distribution of the aggregate balances among them).</p> <p>I wrote then</p> <figure class="wp-block-image size-large is-resized"><a href="https://croakingcassandra.com/wp-content/uploads/2024/09/image-5.png"><img data-attachment-id="72012" data-permalink="https://croakingcassandra.com/2024/09/09/remunerating-exchange-settlement-accounts-what-is-mof-up-to/image-255/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/09/image-5.png" data-orig-size="1486,316" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/09/image-5.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/09/image-5.png?w=700" loading="lazy" width="1024" height="217" src="https://croakingcassandra.com/wp-content/uploads/2024/09/image-5.png?w=1024" alt="" class="wp-image-72012" style="width:840px;height:auto" srcset="https://croakingcassandra.com/wp-content/uploads/2024/09/image-5.png?w=1024 1024w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-5.png?w=1020 1020w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-5.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-5.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-5.png?w=768 768w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-5.png 1486w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/09/image-6.png"><img data-attachment-id="72015" data-permalink="https://croakingcassandra.com/2024/09/09/remunerating-exchange-settlement-accounts-what-is-mof-up-to/image-256/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/09/image-6.png" data-orig-size="1492,857" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/09/image-6.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/09/image-6.png?w=700" loading="lazy" width="1024" height="588" src="https://croakingcassandra.com/wp-content/uploads/2024/09/image-6.png?w=1024" alt="" class="wp-image-72015" srcset="https://croakingcassandra.com/wp-content/uploads/2024/09/image-6.png?w=1024 1024w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-6.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-6.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-6.png?w=768 768w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-6.png 1492w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure> <p>It would be an arbitrary bank tax, even if Willis amended the Reserve Bank Act to mandate such an approach</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/09/image-7.png"><img data-attachment-id="72017" data-permalink="https://croakingcassandra.com/2024/09/09/remunerating-exchange-settlement-accounts-what-is-mof-up-to/image-257/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/09/image-7.png" data-orig-size="1486,345" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/09/image-7.png?w=300" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/09/image-7.png?w=700" loading="lazy" width="1024" height="237" src="https://croakingcassandra.com/wp-content/uploads/2024/09/image-7.png?w=1024" alt="" class="wp-image-72017" srcset="https://croakingcassandra.com/wp-content/uploads/2024/09/image-7.png?w=1024 1024w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-7.png?w=1021 1021w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-7.png?w=150 150w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-7.png?w=300 300w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-7.png?w=768 768w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-7.png 1486w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure> <p>I ended the post noting that I had lodged an Official Information Act request with the Minister for all the advice etc she had received on the matter. You will note (above) that Grant Robertson had been pretty responsive to OIA requests on this issue a couple of years ago (and appropriately so, given the OIA’s presumption in favour of disclosure.</p> <p>The current Minister of Finance’s response came back this morning (and yes, I just noticed that her office dated it 9 August rather than 9 September)</p> <figure class="wp-block-image size-large"><a href="https://croakingcassandra.com/wp-content/uploads/2024/09/image-8.png"><img data-attachment-id="72019" data-permalink="https://croakingcassandra.com/2024/09/09/remunerating-exchange-settlement-accounts-what-is-mof-up-to/image-258/#main" data-orig-file="https://croakingcassandra.com/wp-content/uploads/2024/09/image-8.png" data-orig-size="951,1169" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="image" data-image-description="" data-image-caption="" data-medium-file="https://croakingcassandra.com/wp-content/uploads/2024/09/image-8.png?w=244" data-large-file="https://croakingcassandra.com/wp-content/uploads/2024/09/image-8.png?w=700" loading="lazy" width="833" height="1023" src="https://croakingcassandra.com/wp-content/uploads/2024/09/image-8.png?w=833" alt="" class="wp-image-72019" srcset="https://croakingcassandra.com/wp-content/uploads/2024/09/image-8.png?w=833 833w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-8.png?w=122 122w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-8.png?w=244 244w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-8.png?w=768 768w, https://croakingcassandra.com/wp-content/uploads/2024/09/image-8.png 951w" sizes="(max-width: 833px) 100vw, 833px" /></a></figure> <p>It is pretty remarkable that she is withholding absolutely everything (down to and including titles of papers etc, or initial briefings from many months ago). Not the approach of a Minister with any sort of interest in or commitment to open and transparent government, let alone either the letter of spirit of the OIA (perhaps this is why the annual pro-active disclosure of official papers relating to the Budget has still not happened, more than three months on).</p> <p>Some weeks ago, after I wrote my post, Jenee Tibshraeny kindly offered me the opportunity to listen to the full interview she’d done with Willis. There were a number of interesting aspects that hadn’t really come out in the article (space constraints and all that), but what really caught my attention was that she mentioned almost in passing that she’d be keen to see the advice on this issue, to which the Minister’s response was that she couldn’t do that as the matter was “under active consideration”.</p> <p>Section 9(2)(f)(iv) – the clause the Minister cited – is generally interpreted as providing some protection when matters are under active consideration (<a href="https://www.ombudsman.parliament.nz/sites/default/files/2022-02/Confidential%20advice%20to%20Government%20-%20A%20guide%20to%20section%209%282%29%28f%29%28iv%29%20of%20the%20OIA.pdf">Ombudsman’s guidance note</a>), in which case we are left to conclude that not only was the matter still being considered when Tibshraeny did the initial interview more than a month ago, but that it is still under active consideration now. She seems to be seriously toying with a law change to allow an arbitrary distortionary and inefficient tax on banks. It is quite extraordinary (or perhaps would be if this were not the Minister of Finance who has already increased taxes on business – removing depreciation provisions on buildings – and whose government last week imposed an arbitrary export tax (on overseas tourism), in what seems to be a pure revenue grab so flagrant that even Steven Joyce – no free market purist – was prompted to attack the move in his <em>Herald </em>column).</p> <p>One can only hope that there is a less-bad interpretation, but the Minister herself has chosen to go public with the comment to Tibshraeny that she could consider legislative intervention, and the Minister herself is now refusing to release any material on the issue. </p> <p>Any such “tax” would be a seriously retrograde step and would be a signal that the government was much more interested in populist bank-bashing (Green Party style, worse than Grant Robertson) than in serious policymaking. It would be a pure revenue grab, that might even garner a few cheers from the cheap seats, but would command not a shred of respect (for her or for New Zealand policymaking more generally) from serious observers, here or abroad. </p> <p>If, for example, the high level of settlement cash balances troubles her – and it should, as a reflection of past mistakes – perhaps she should have done something about (eg) replacing the Board chair and filling the Board vacancies, with people who are serious about holding Orr to account, and getting a more rigorous approach to policymaking at the Bank. There has been quite enough bad policymaking in recent years without Willis and Luxon adding to it.</p> </div> <footer class="entry-meta"> <span class="comments-link"><a href="https://croakingcassandra.com/2024/09/09/remunerating-exchange-settlement-accounts-what-is-mof-up-to/#comments">10 Comments</a></span> </footer> </article> </div> <div class="article-wrapper"> <article id="post-71996" class="post-71996 post type-post status-publish format-standard hentry category-fiscal-policy"> <header class="entry-header"> <h1 class="entry-title"><a href="https://croakingcassandra.com/2024/09/04/should-nz-establish-a-fiscal-council/" rel="bookmark">Should NZ establish a Fiscal Council?</a></h1> <div class="entry-meta"> <span class="posted-on"><a href="https://croakingcassandra.com/2024/09/04/should-nz-establish-a-fiscal-council/" rel="bookmark"><time class="entry-date published" datetime="2024-09-04T12:16:16+12:00">September 4, 2024</time><time class="updated" datetime="2024-09-04T16:19:03+12:00">September 4, 2024</time></a></span> <span class="byline"><span class="author vcard"><a class="url fn n" href="https://croakingcassandra.com/author/mhreddell/">Michael Reddell</a></span></span> <span class="entry-categories"><a href="https://croakingcassandra.com/category/fiscal-policy/" rel="category tag">Fiscal policy</a></span> </div> </header> <div class="entry-content"> <p>The Treasury this morning hosted a guest lecture on the merits (or otherwise) of a Fiscal Council, hosted by the acting Secretary to the Treasury, Struan Little. </p> <p>A Fiscal Council in this context is something quite different from the sort of state-funded policy costings office that many of the New Zealand political parties seem to be gravitating towards thinking would be good idea (more state funding, under the guise of something in the public interest, so why should we be surprised). Over the years I’ve written consistently sceptically about the policy costings unit idea, and was only reinforced in that view by my involvement last year in the contretemps over the costings of National’s proposed foreign buyers tax. </p> <p>The general idea of a Fiscal Council is to have an independent expert-led small agency that provides independent and non-partisan analysis, research and advice on aggregate fiscal policy, aiming to improve the overall quality of debate on fiscal policy issues and, so it is hoped, improve fiscal policy itself. Such bodies have become flavour of the decade over the last 15 years or so. Fiscal councils are particularly common in Europe, where the macroeconomic issues are generally rather different: countries in the euro-area not only give up the option of monetary policy for national cyclical stabilisation (leaving any such national countercyclical activity to fiscal policy), but are also subject, loosely as it may be, to European Union rules.</p> <p>The idea of establishing a New Zealand fiscal council has been championed by the OECD (but there have been other advocates, including a report from a former top IMF fiscal official done for The Treasury a decade or so ago, and the New Zealand Initiative). I also tended to be somewhat sympathetic (but see below).</p> <p>The speaker at this morning’s lecture was Sebastian Barnes, a (British) mid-level manager in the OECD’s Economics Department, and (while working for the OECD) a former long-serving member (and then chair) of the Irish Fiscal Advisory Council (IFAC), that had been set up in 2011 in the wake of the Irish financial and fiscal crises of the previous few years. </p> <p>My impression, from a distance, of the IFAC had been fairly positive over the years, and nothing Barnes said this morning shifted that sense. IFAC is a pretty lean body (apparently costing about EUR1 million per annum), with five part-time council members (a mix of academics and people with more of a policy background), and a <a href="https://www.fiscalcouncil.ie/about-the-council/secretariat/">secretariat</a> of five fulltime economists and one administrator (they apparently share premises, and admin support with the main national economic research institute). If you look at the current council, three of the five members seemed to be non-Irish (two UK-based and one Italian – a retired IMF official who used to be the desk economist for Ireland).</p> <p>Barnes spoke very positively about the Irish IFAC. That wasn’t exactly surprising – he’d spent 10 years on the Council, was present at its creation, and works for the OECD, which has called for New Zealand to set up a Fiscal Council – but his comments and experiences were interesting. For a small entity, they are pretty active and <a href="https://www.fiscalcouncil.ie/regular-analysis/">publish quite a few regular reports each year</a>, as well as <a href="https://www.fiscalcouncil.ie/occasional-research/">more occasional (but not infrequent) research</a>. Barnes noted that the role of IFAC was threefold: monitoring compliance with the fiscal framework, improving fiscal and economic analysis in Ireland, and promoting informed debate on fiscal issues (and not just among technocrats and politicians). </p> <p>He claimed (and I have no reason to doubt him) that IFAC had become a fairly respected and well-regarded entity on the Irish scene, and that (for example) it had established a strong reputation with the media as a credible analytical agency and a clear communicator. Barnes reckoned IFAC’s presence had helped strengthen parliamentary oversight on fiscal policy issues. One thing that he was at pains to stresses is that IFAC focuses on analysis and avoids getting into normative debates. Here he seemed to be primarily referring to choices around raising taxes or reducing spending (as ways to maintain overall fiscal balance and moderate debt), let alone to specific tax policy or (say) pensions spending. There is, it seems, quite enough to do in deepening understanding of the fiscal arrangements and highlighting risks around fiscal policy becoming pro-cyclical, a big issue for Ireland leading up to 2007. It is worth noting that Ireland now has some very distinctive issues, notably an abundance of tax revenue from foreign multi-nationals (and a big budget surplus), of the sort that may (or may not) prove particularly sustainable, and where the associated tax bases are not always hugely well understood.</p> <p>It is difficult to see that the IFAC has done any particular harm. Perhaps it has even done some good for overall economic policy in Ireland. It doesn’t appear to have become politicised, it has maintained a clear sense of an expert-led analytical and advisory body. And it hasn’t cost the Irish taxpayer very much at all.</p> <p>But it is still rather hard to pin down quite what useful difference fiscal councils, there or elsewhere, have made, and thus whether New Zealand really should regard the establishment of one as a medium-term priority. Barnes did note that a very visible effect of establishing fiscal councils had been that more people were now working on fiscal policy issues (he reckoned at least 100 more across Europe) and argued that fiscal policy issues had tended to be under-researched, especially relative to monetary policy. He several times referred to their inspiration as being expert-led research-oriented central banks. More research isn’t necessarily a bad thing, but…</p> <p>I posed a question, noting that across the OECD there had been a proliferation of fiscal councils and yet it wasn’t obvious that overall fiscal management was getting better (he’d opened his talk with a multi-country chart of gross debt as a share of GDP, and if not every country had gotten worse over the decades, the upward trend (dominated by large countries) was pretty clear). Perhaps things were improving relative to a counterfactual (not directly observable) or perhaps fiscal councils might be more in the nature of a nice-to-have, a luxury consumption item – and good for the employment of macroeconomists and public finance people – rather than an effective contributor to better fiscal policies?</p> <p>His (honest) answer was that we “can’t really tell”, but that he thought some had had “some incremental impact”, while going on to note that some of the better-regarded ones were in places (like Netherlands, Denmark, and Sweden) which had long managed themselves fairly well anyway. Perhaps a decent Fiscal Council was then a common output of a wider disciplined approach to good government and effective fiscal management? As for Ireland, I was struck the other day by a <a href="https://www.ft.com/content/bda76023-5cc2-404a-8ad0-c9cba8af4f88">feature article in the FT</a> about Ireland’s fiscal challenges (those big surpluses from the corporate tax revenue), in which numerous Irish commentators were quoted/mentioned, but there was no reference to IFAC or its analysis at all.</p> <p>It was an interesting presentation, but if it was the best case for a Fiscal Council here (and it should have been given his OECD and IFAC background) I didn’t find it very persuasive. It wasn’t helped by the New Zealand experience of the last decade, where (a) the central bank has become anything but expert-led and produces little serious research or analysis of its own (for all its limitations, Treasury is now producing more), and (b) a Productivity Commission was set up, with a vision of being expert-led, and has now disappeared again, amid a sense (well-justified in my view) that the previous government had substantially degraded it (and to be clear this isn’t a partisan critique – active partisan seem to have been appointed by this government to several boards which should be known for being highly non-partisan). How optimistic could one be that a Fiscal Council could avoid being quickly degraded and politicised, in the New Zealand as we now find it? And do we really think that our fiscal challenges – as we drift towards being a normal OECD country in that regard – have to do with lack of sufficient analysis (official or public)?</p> <p>A decade ago I had a somewhat different view. About the time I was leaving the Reserve Bank I wrote a discussion note for my then colleagues, prompted by a recent visit from US academic economist Ross Levine who was championing an arms-length monitoring body for banking regulation, suggesting that perhaps there was a case for a Macro Council, providing arms-length and independent analysis, research and review around fiscal policy, monetary policy, and financial regulation. I put the <a href="https://croakingcassandra.com/wp-content/uploads/2015/05/discussion-note-thoughts-prompted-by-levine-et-als-guardians-of-finance.pdf">discusssion note</a> on this blog back in its early days.</p> <p>These days I’m pretty deeply ambivalent. While such a body might, perhaps, play a useful role (mostly as luxury consumption item, but if one is wealthy and successful there is nothing wrong with luxury consumption) in enriching debate/analysis in a successful and well-governed New Zealand, if I was a Minister of Finance seriously interested in much better institutions for economic policy etc in New Zealand, it isn’t where I would start. Whatever really able people are available, whatever financial resources can be spared, which be much better used in seeking to overhaul and get to (or in some case back to) real and sustained analytical and policy expertise. If I had in mind particularly the Reserve Bank, it is far from being the only economic institution with diminished capabilities (and perhaps limited demand for something better from successive ministers). And it is difficult to see how an effective Fiscal Council, let alone a Macro one, would be appointed (and able composition maintained). We have very few academics working in the area, no non-partisan research institutes, and while there are partisan people with real expertise attempting to tap them is just a recipe for repeated games of partisanship in appointments. And while I quite like the Irish use of foreign expertise, the realistic pool is limited to Australia (travel distance still matters a lot) and that pool itself doesn’t seem deep). And Ireland doesn’t need to stock a quality MPC.</p> <p>It was an interesting presentation, it was good of Treasury to host it, but count me unconvinced.</p> <p></p> <p> </p> </div> <footer class="entry-meta"> <span class="comments-link"><a href="https://croakingcassandra.com/2024/09/04/should-nz-establish-a-fiscal-council/#comments">3 Comments</a></span> </footer> </article> </div> <nav role="navigation" id="nav-below" class="paging-navigation"> <h1 class="screen-reader-text">Post navigation</h1> <div class="nav-previous"><a href="https://croakingcassandra.com/page/2/" ><span class="meta-nav">←</span> Older posts</a></div> </nav> </main> </div> <div class="secondary widget-area" role="complementary"> <aside id="block-2" class="widget widget_block"> <div class="wp-block-jetpack-subscriptions__supports-newline wp-block-jetpack-subscriptions"> <div class="wp-block-jetpack-subscriptions__container is-not-subscriber"> <form action="https://wordpress.com/email-subscriptions" method="post" accept-charset="utf-8" data-blog="85004741" data-post_access_level="everybody" data-subscriber_email="" id="subscribe-blog" > <div class="wp-block-jetpack-subscriptions__form-elements"> <p id="subscribe-email"> <label id="subscribe-field-label" for="subscribe-field" class="screen-reader-text" > Type your email… </label> <input required="required" type="email" name="email" class="no-border-radius " style="font-size: 16px;padding: 15px 23px 15px 23px;border-radius: 0px;border-width: 1px;" placeholder="Type your email…" value="" id="subscribe-field" title="Please fill in this field." /> </p> <p id="subscribe-submit" > <input type="hidden" name="action" value="subscribe"/> <input type="hidden" name="blog_id" value="85004741"/> <input type="hidden" name="source" value="https://croakingcassandra.com/"/> <input type="hidden" name="sub-type" value="subscribe-block"/> <input type="hidden" name="app_source" value=""/> <input type="hidden" name="redirect_fragment" value="subscribe-blog"/> <input type="hidden" name="lang" value="en"/> <input type="hidden" id="_wpnonce" name="_wpnonce" value="adb989e27b" /><input type="hidden" name="_wp_http_referer" value="/" /> <button type="submit" class="wp-block-button__link no-border-radius" style="font-size: 16px;padding: 15px 23px 15px 23px;margin: 0; margin-left: 10px;border-radius: 0px;border-width: 1px;" name="jetpack_subscriptions_widget" > Follow </button> </p> </div> </form> </div> </div> </aside><aside id="calendar-3" class="widget widget_calendar"><div id="calendar_wrap" class="calendar_wrap"><table id="wp-calendar" class="wp-calendar-table"> <caption>November 2024</caption> <thead> <tr> <th scope="col" title="Sunday">S</th> <th scope="col" title="Monday">M</th> <th scope="col" title="Tuesday">T</th> <th scope="col" title="Wednesday">W</th> <th scope="col" title="Thursday">T</th> <th scope="col" title="Friday">F</th> <th scope="col" title="Saturday">S</th> </tr> </thead> <tbody> <tr> <td colspan="5" class="pad"> </td><td>1</td><td>2</td> </tr> <tr> <td>3</td><td>4</td><td>5</td><td>6</td><td>7</td><td>8</td><td>9</td> </tr> <tr> <td>10</td><td>11</td><td>12</td><td>13</td><td>14</td><td>15</td><td>16</td> </tr> <tr> <td>17</td><td>18</td><td><a href="https://croakingcassandra.com/2024/11/19/" aria-label="Posts published on November 19, 2024">19</a></td><td>20</td><td>21</td><td>22</td><td>23</td> </tr> <tr> <td>24</td><td>25</td><td id="today">26</td><td>27</td><td>28</td><td>29</td><td>30</td> </tr> </tbody> </table><nav aria-label="Previous and next months" class="wp-calendar-nav"> <span class="wp-calendar-nav-prev"><a href="https://croakingcassandra.com/2024/10/">« Oct</a></span> <span class="pad"> </span> <span class="wp-calendar-nav-next"> </span> </nav></div></aside> <aside id="recent-posts-9" class="widget widget_recent_entries"> <h1 class="widget-title">Recent Posts</h1> <ul> <li> <a href="https://croakingcassandra.com/2024/11/19/what-does-reciprocity-mean-in-new-zealand-laws/">What does “reciprocity” mean in New Zealand laws?</a> </li> <li> <a href="https://croakingcassandra.com/2024/10/25/pretty-illegal/">Pretty (il)legal</a> </li> <li> <a href="https://croakingcassandra.com/2024/10/24/fiction-and-spin/">Fiction and spin</a> </li> <li> <a href="https://croakingcassandra.com/2024/10/10/central-bank-policy-communications/">Central bank policy communications</a> </li> <li> <a href="https://croakingcassandra.com/2024/10/08/divisiveness-and-democracy/">Divisiveness and democracy</a> </li> <li> <a href="https://croakingcassandra.com/2024/10/07/public-policy-just-keeps-on-worsening/">Public policy just keeps on worsening</a> </li> <li> <a href="https://croakingcassandra.com/2024/10/01/inquiring-into-banking/">Inquiring into banking</a> </li> <li> <a href="https://croakingcassandra.com/2024/09/17/human-nature-doesnt-change/">Human nature doesn’t change</a> </li> <li> <a href="https://croakingcassandra.com/2024/09/09/remunerating-exchange-settlement-accounts-what-is-mof-up-to/">Remunerating exchange settlement accounts: what is MoF up to?</a> </li> <li> <a href="https://croakingcassandra.com/2024/09/04/should-nz-establish-a-fiscal-council/">Should NZ establish a Fiscal Council?</a> </li> <li> <a href="https://croakingcassandra.com/2024/09/02/an-excellent-working-relationship-with-the-governor/">An excellent working relationship with the Governor</a> </li> <li> <a href="https://croakingcassandra.com/2024/08/28/wholly-inappropriate/">Wholly inappropriate</a> </li> <li> <a href="https://croakingcassandra.com/2024/08/20/bits-and-pieces-3/">Bits and pieces</a> </li> <li> <a href="https://croakingcassandra.com/2024/08/19/fiscal-and-monetary-policy/">Fiscal and monetary policy</a> </li> <li> <a href="https://croakingcassandra.com/2024/08/17/35m-per-annum-and-this-is-the-sort-of-engagement-we-get/">$35m per annum and this is the sort of “engagement” we get?</a> </li> <li> <a href="https://croakingcassandra.com/2024/08/15/heading-for-2-5-or-less-by-this-time-next-year/">Heading for 2.5% (or less) by this time next year?</a> </li> <li> <a href="https://croakingcassandra.com/2024/08/13/still-a-bad-idea/">Still a bad idea</a> </li> <li> <a href="https://croakingcassandra.com/2024/07/27/treasury-says-one-thing-in-a-speech-but-quite-another-in-the-befu/">Treasury says one thing in a speech but quite another in the BEFU</a> </li> <li> <a href="https://croakingcassandra.com/2024/07/26/not-a-good-case-for-a-cbdc/">Not a good case for a CBDC</a> </li> <li> <a href="https://croakingcassandra.com/2024/07/23/treasury-wanting-to-use-fiscal-policy-more/">Treasury wanting to use fiscal policy more</a> </li> <li> <a href="https://croakingcassandra.com/2024/07/13/public-sector-bloat-reserve-bank-edition/">Public sector bloat: Reserve Bank edition</a> </li> <li> <a href="https://croakingcassandra.com/2024/07/11/flip-flop-flip-flop/">Flip flop flip flop</a> </li> <li> <a href="https://croakingcassandra.com/2024/07/09/still-avoiding-responsibility/">Still avoiding responsibility</a> </li> <li> <a href="https://croakingcassandra.com/2024/07/08/not-on-the-brink-of-bankruptcy/">Not on the “brink of bankruptcy”</a> </li> <li> <a href="https://croakingcassandra.com/2024/07/03/reading-reserve-bank-plans-and-budgets/">Reading Reserve Bank plans and budgets</a> </li> <li> <a href="https://croakingcassandra.com/2024/06/27/astonishing-indifference-to-a-failed-institution/">Astonishing indifference to a failed institution</a> </li> </ul> </aside><aside id="archives-7" class="widget widget_archive"><h1 class="widget-title">Archives</h1> <label class="screen-reader-text" for="archives-dropdown-7">Archives</label> <select id="archives-dropdown-7" name="archive-dropdown"> <option value="">Select Month</option> <option value='https://croakingcassandra.com/2024/11/'> November 2024  (1)</option> <option value='https://croakingcassandra.com/2024/10/'> October 2024  (6)</option> <option value='https://croakingcassandra.com/2024/09/'> September 2024  (4)</option> <option value='https://croakingcassandra.com/2024/08/'> August 2024  (6)</option> <option value='https://croakingcassandra.com/2024/07/'> July 2024  (8)</option> <option value='https://croakingcassandra.com/2024/06/'> June 2024  (6)</option> <option value='https://croakingcassandra.com/2024/05/'> May 2024  (9)</option> <option value='https://croakingcassandra.com/2024/04/'> April 2024  (2)</option> <option value='https://croakingcassandra.com/2024/03/'> March 2024  (1)</option> <option value='https://croakingcassandra.com/2024/02/'> February 2024  (3)</option> <option value='https://croakingcassandra.com/2024/01/'> January 2024  (4)</option> <option value='https://croakingcassandra.com/2023/12/'> December 2023  (11)</option> <option value='https://croakingcassandra.com/2023/11/'> November 2023  (10)</option> <option value='https://croakingcassandra.com/2023/10/'> October 2023  (16)</option> <option value='https://croakingcassandra.com/2023/09/'> September 2023  (15)</option> <option value='https://croakingcassandra.com/2023/08/'> August 2023  (24)</option> <option value='https://croakingcassandra.com/2023/07/'> July 2023  (6)</option> <option value='https://croakingcassandra.com/2023/06/'> June 2023  (6)</option> <option value='https://croakingcassandra.com/2023/05/'> May 2023  (8)</option> <option value='https://croakingcassandra.com/2023/04/'> April 2023  (11)</option> <option value='https://croakingcassandra.com/2023/03/'> March 2023  (7)</option> <option value='https://croakingcassandra.com/2023/02/'> February 2023  (5)</option> <option value='https://croakingcassandra.com/2023/01/'> January 2023  (2)</option> <option value='https://croakingcassandra.com/2022/12/'> December 2022  (6)</option> <option value='https://croakingcassandra.com/2022/11/'> November 2022  (10)</option> <option value='https://croakingcassandra.com/2022/10/'> October 2022  (11)</option> <option value='https://croakingcassandra.com/2022/09/'> September 2022  (5)</option> <option value='https://croakingcassandra.com/2022/08/'> August 2022  (8)</option> <option value='https://croakingcassandra.com/2022/07/'> July 2022  (7)</option> <option value='https://croakingcassandra.com/2022/06/'> June 2022  (5)</option> <option value='https://croakingcassandra.com/2022/05/'> May 2022  (5)</option> <option value='https://croakingcassandra.com/2022/04/'> April 2022  (1)</option> <option value='https://croakingcassandra.com/2022/03/'> March 2022  (2)</option> <option value='https://croakingcassandra.com/2022/02/'> February 2022  (9)</option> <option value='https://croakingcassandra.com/2022/01/'> January 2022  (4)</option> <option value='https://croakingcassandra.com/2021/12/'> December 2021  (8)</option> <option value='https://croakingcassandra.com/2021/11/'> November 2021  (13)</option> <option value='https://croakingcassandra.com/2021/10/'> October 2021  (4)</option> <option value='https://croakingcassandra.com/2021/09/'> September 2021  (8)</option> <option value='https://croakingcassandra.com/2021/08/'> August 2021  (9)</option> <option value='https://croakingcassandra.com/2021/07/'> July 2021  (6)</option> <option value='https://croakingcassandra.com/2021/06/'> June 2021  (7)</option> <option value='https://croakingcassandra.com/2021/05/'> May 2021  (11)</option> <option value='https://croakingcassandra.com/2021/04/'> April 2021  (8)</option> <option value='https://croakingcassandra.com/2021/03/'> March 2021  (9)</option> <option value='https://croakingcassandra.com/2021/02/'> February 2021  (4)</option> <option value='https://croakingcassandra.com/2021/01/'> January 2021  (1)</option> <option value='https://croakingcassandra.com/2020/12/'> December 2020  (3)</option> <option value='https://croakingcassandra.com/2020/11/'> November 2020  (3)</option> <option value='https://croakingcassandra.com/2020/10/'> October 2020  (6)</option> <option value='https://croakingcassandra.com/2020/09/'> September 2020  (13)</option> <option value='https://croakingcassandra.com/2020/08/'> August 2020  (8)</option> <option value='https://croakingcassandra.com/2020/07/'> July 2020  (10)</option> <option value='https://croakingcassandra.com/2020/06/'> June 2020  (10)</option> <option value='https://croakingcassandra.com/2020/05/'> May 2020  (26)</option> <option value='https://croakingcassandra.com/2020/04/'> April 2020  (27)</option> <option value='https://croakingcassandra.com/2020/03/'> March 2020  (31)</option> <option value='https://croakingcassandra.com/2020/02/'> February 2020  (20)</option> <option value='https://croakingcassandra.com/2020/01/'> January 2020  (13)</option> <option value='https://croakingcassandra.com/2019/12/'> December 2019  (17)</option> <option value='https://croakingcassandra.com/2019/11/'> November 2019  (23)</option> <option value='https://croakingcassandra.com/2019/10/'> October 2019  (30)</option> <option value='https://croakingcassandra.com/2019/09/'> September 2019  (25)</option> <option value='https://croakingcassandra.com/2019/08/'> August 2019  (17)</option> <option value='https://croakingcassandra.com/2019/07/'> July 2019  (17)</option> <option value='https://croakingcassandra.com/2019/06/'> June 2019  (25)</option> <option value='https://croakingcassandra.com/2019/05/'> May 2019  (27)</option> <option value='https://croakingcassandra.com/2019/04/'> April 2019  (32)</option> <option value='https://croakingcassandra.com/2019/03/'> March 2019  (39)</option> <option value='https://croakingcassandra.com/2019/02/'> February 2019  (28)</option> <option value='https://croakingcassandra.com/2019/01/'> January 2019  (17)</option> <option value='https://croakingcassandra.com/2018/12/'> December 2018  (27)</option> <option value='https://croakingcassandra.com/2018/11/'> November 2018  (40)</option> <option value='https://croakingcassandra.com/2018/10/'> October 2018  (33)</option> <option value='https://croakingcassandra.com/2018/09/'> September 2018  (30)</option> <option value='https://croakingcassandra.com/2018/08/'> August 2018  (35)</option> <option value='https://croakingcassandra.com/2018/07/'> July 2018  (22)</option> <option value='https://croakingcassandra.com/2018/06/'> June 2018  (30)</option> <option value='https://croakingcassandra.com/2018/05/'> May 2018  (35)</option> <option value='https://croakingcassandra.com/2018/04/'> April 2018  (31)</option> <option value='https://croakingcassandra.com/2018/03/'> March 2018  (29)</option> <option value='https://croakingcassandra.com/2018/02/'> February 2018  (21)</option> <option value='https://croakingcassandra.com/2018/01/'> January 2018  (22)</option> <option value='https://croakingcassandra.com/2017/12/'> December 2017  (15)</option> <option value='https://croakingcassandra.com/2017/11/'> November 2017  (32)</option> <option value='https://croakingcassandra.com/2017/10/'> October 2017  (33)</option> <option value='https://croakingcassandra.com/2017/09/'> September 2017  (39)</option> <option value='https://croakingcassandra.com/2017/08/'> August 2017  (30)</option> <option value='https://croakingcassandra.com/2017/07/'> July 2017  (22)</option> <option value='https://croakingcassandra.com/2017/06/'> June 2017  (31)</option> <option value='https://croakingcassandra.com/2017/05/'> May 2017  (31)</option> <option value='https://croakingcassandra.com/2017/04/'> April 2017  (28)</option> <option value='https://croakingcassandra.com/2017/03/'> March 2017  (30)</option> <option value='https://croakingcassandra.com/2017/02/'> February 2017  (21)</option> <option value='https://croakingcassandra.com/2017/01/'> January 2017  (7)</option> <option value='https://croakingcassandra.com/2016/12/'> December 2016  (15)</option> <option value='https://croakingcassandra.com/2016/11/'> November 2016  (13)</option> <option value='https://croakingcassandra.com/2016/10/'> October 2016  (21)</option> <option value='https://croakingcassandra.com/2016/09/'> September 2016  (9)</option> <option value='https://croakingcassandra.com/2016/08/'> August 2016  (25)</option> <option value='https://croakingcassandra.com/2016/07/'> July 2016  (23)</option> <option value='https://croakingcassandra.com/2016/06/'> June 2016  (29)</option> <option value='https://croakingcassandra.com/2016/05/'> May 2016  (29)</option> <option value='https://croakingcassandra.com/2016/04/'> April 2016  (32)</option> <option value='https://croakingcassandra.com/2016/03/'> March 2016  (32)</option> <option value='https://croakingcassandra.com/2016/02/'> February 2016  (32)</option> <option value='https://croakingcassandra.com/2016/01/'> January 2016  (14)</option> <option value='https://croakingcassandra.com/2015/12/'> December 2015  (26)</option> <option value='https://croakingcassandra.com/2015/11/'> November 2015  (29)</option> <option value='https://croakingcassandra.com/2015/10/'> October 2015  (17)</option> <option value='https://croakingcassandra.com/2015/09/'> September 2015  (25)</option> <option value='https://croakingcassandra.com/2015/08/'> August 2015  (47)</option> <option value='https://croakingcassandra.com/2015/07/'> July 2015  (49)</option> <option value='https://croakingcassandra.com/2015/06/'> June 2015  (45)</option> <option value='https://croakingcassandra.com/2015/05/'> May 2015  (44)</option> <option value='https://croakingcassandra.com/2015/04/'> April 2015  (43)</option> <option value='https://croakingcassandra.com/2015/03/'> March 2015  (12)</option> <option value='https://croakingcassandra.com/2015/02/'> February 2015  (3)</option> </select> <script type="text/javascript"> /* <![CDATA[ */ (function() { var dropdown = document.getElementById( "archives-dropdown-7" ); function onSelectChange() { if ( dropdown.options[ dropdown.selectedIndex ].value !== '' ) { document.location.href = this.options[ this.selectedIndex ].value; } } dropdown.onchange = onSelectChange; })(); /* ]]> */ </script> </aside><aside id="search-5" class="widget widget_search"><form role="search" method="get" class="search-form" action="https://croakingcassandra.com/"> <label> <span class="screen-reader-text">Search for:</span> <input type="search" class="search-field" placeholder="Search …" value="" name="s"> </label> <input type="submit" class="search-submit" value="Search"> </form> </aside><aside id="categories-5" class="widget widget_categories"><h1 class="widget-title">Categories</h1><form action="https://croakingcassandra.com" method="get"><label class="screen-reader-text" for="cat">Categories</label><select name='cat' id='cat' class='postform'> <option value='-1'>Select Category</option> <option class="level-0" value="21635095">Adrian Orr  (77)</option> <option class="level-0" value="14572">agriculture  (1)</option> <option class="level-0" value="153909">APRA  (2)</option> <option class="level-0" value="18939">Argentina  (1)</option> <option class="level-0" value="38350">Auckland  (18)</option> <option class="level-0" value="4330">Australia  (56)</option> <option class="level-0" value="292059">Balance of payments  (1)</option> <option class="level-0" value="34348051">bank capital requirements  (47)</option> <option class="level-0" value="26653">Banking  (20)</option> <option class="level-0" value="580413696">BNZ & Wheeler  (7)</option> <option class="level-0" value="56901951">BusinessNZ  (1)</option> <option class="level-0" value="92788">Cash  (2)</option> <option class="level-0" value="130789">Central banks  (6)</option> <option class="level-0" value="1470">China  (133)</option> <option class="level-0" value="16897">Climate change  (2)</option> <option class="level-0" value="3226">Commodities  (1)</option> <option class="level-0" value="40676">conflicts of interest  (1)</option> <option class="level-0" value="18174">Crime and punishment  (1)</option> <option class="level-0" value="123802">Currency  (4)</option> <option class="level-0" value="385984558">Current New Zealand data  (5)</option> <option class="level-0" value="8614">Dairy  (8)</option> <option class="level-0" value="384954">deposit insurance  (8)</option> <option class="level-0" value="5845156">e-cash  (3)</option> <option class="level-0" value="10371">Earthquakes  (3)</option> <option class="level-0" value="21836336">Eastern and central Europe  (2)</option> <option class="level-0" value="897444">economic geography  (4)</option> <option class="level-0" value="40690">Economic history  (8)</option> <option class="level-0" value="1342">Education  (13)</option> <option class="level-0" value="1478456">Emissions reduction  (15)</option> <option class="level-0" value="4275644">Emissions targets  (12)</option> <option class="level-0" value="956274">Euro area  (10)</option> <option class="level-0" value="554062">Exchange rate  (18)</option> <option class="level-0" value="9328045">Exchange rate regimes  (4)</option> <option class="level-0" value="153816">expectations  (2)</option> <option class="level-0" value="36354">Exports  (41)</option> <option class="level-0" value="487861005">Financial literacy/capability  (2)</option> <option class="level-0" value="478705">Financial stability  (56)</option> <option class="level-0" value="14235576">Financial stabilty  (52)</option> <option class="level-0" value="40680">Fiscal policy  (120)</option> <option class="level-0" value="421050">FMA  (2)</option> <option class="level-0" value="21060">Foreign investment  (2)</option> <option class="level-0" value="1345125">FTAs  (6)</option> <option class="level-0" value="16505">Governance  (48)</option> <option class="level-0" value="2756">Greece  (6)</option> <option class="level-0" value="3392">Greens  (5)</option> <option class="level-0" value="63941">Guest  (1)</option> <option class="level-0" value="299">Housing  (154)</option> <option class="level-0" value="32297">IMF  (15)</option> <option class="level-0" value="4363">Immigration  (201)</option> <option class="level-0" value="35003271">indexed bonds  (2)</option> <option class="level-0" value="161717">inflation  (71)</option> <option class="level-0" value="118871">Institutions  (1)</option> <option class="level-0" value="12498">insurance  (3)</option> <option class="level-0" value="37048">Interest rates  (29)</option> <option class="level-0" value="5142">International  (1)</option> <option class="level-0" value="9937">Israel  (2)</option> <option class="level-0" value="2062">Japan  (2)</option> <option class="level-0" value="514849">Kiwibank  (1)</option> <option class="level-0" value="227869">labour market  (18)</option> <option class="level-0" value="1954">labour party  (36)</option> <option class="level-0" value="763119044">Land taxes and land value rating  (1)</option> <option class="level-0" value="5839">Latin America  (1)</option> <option class="level-0" value="51806">local government  (2)</option> <option class="level-0" value="10748672">LSAP  (14)</option> <option class="level-0" value="25014752">MBIE  (3)</option> <option class="level-0" value="1016696">MMT  (3)</option> <option class="level-0" value="57663">Monetary policy  (305)</option> <option class="level-0" value="763458482">Monetary Policy Remit  (1)</option> <option class="level-0" value="692874">Money supply  (3)</option> <option class="level-0" value="152589">MPC  (35)</option> <option class="level-0" value="434521">National Party  (22)</option> <option class="level-0" value="357514217">New Zealand economic history  (51)</option> <option class="level-0" value="363932892">New Zealand economic performance  (280)</option> <option class="level-0" value="174584263">New Zealand Initiative  (26)</option> <option class="level-0" value="11104">Norway  (3)</option> <option class="level-0" value="2041145">NZ First  (8)</option> <option class="level-0" value="804607">NZ history  (3)</option> <option class="level-0" value="11968">NZ politics  (168)</option> <option class="level-0" value="39978909">NZSF  (8)</option> <option class="level-0" value="101584">OCR  (12)</option> <option class="level-0" value="486600629">OCR leak  (15)</option> <option class="level-0" value="160151">OECD  (5)</option> <option class="level-0" value="788723">OIA  (35)</option> <option class="level-0" value="49370">pandemic  (127)</option> <option class="level-0" value="132985">Population  (10)</option> <option class="level-0" value="9379">Poverty  (1)</option> <option class="level-0" value="217321">Privatisation  (2)</option> <option class="level-0" value="2704">Productivity  (134)</option> <option class="level-0" value="13458928">Productivity Commission  (18)</option> <option class="level-0" value="18215394">Prudential regulation  (5)</option> <option class="level-0" value="107562">PSC  (3)</option> <option class="level-0" value="10020874">PTAs  (17)</option> <option class="level-0" value="560265">Public finance  (2)</option> <option class="level-0" value="26024">R&D  (2)</option> <option class="level-0" value="776129899">RBNZ Superannuation Fund  (2)</option> <option class="level-0" value="448379">Regional development  (8)</option> <option class="level-0" value="5566">Regulation  (9)</option> <option class="level-0" value="64182849">Rennie review  (7)</option> <option class="level-0" value="222096">Reserve Bank  (235)</option> <option class="level-0" value="595757147">Reserve Bank Act reforms  (76)</option> <option class="level-0" value="337262525">Reserve Bank Board  (29)</option> <option class="level-0" value="323052881">Rodger Finlay  (6)</option> <option class="level-0" value="24167">Savings  (10)</option> <option class="level-0" value="774271644">Settlement account remuneration  (1)</option> <option class="level-0" value="5849">Statistics  (19)</option> <option class="level-0" value="3201950">Stress tests  (3)</option> <option class="level-0" value="360948">Superannuation  (15)</option> <option class="level-0" value="8120">Switzerland  (3)</option> <option class="level-0" value="52105">Taxation  (28)</option> <option class="level-0" value="79333">TPP  (12)</option> <option class="level-0" value="1595">Trade  (10)</option> <option class="level-0" value="636">Transparency  (11)</option> <option class="level-0" value="76133">Treasury  (69)</option> <option class="level-0" value="8199">UK  (16)</option> <option class="level-0" value="1">Uncategorized  (564)</option> <option class="level-0" value="9986">unemployment  (18)</option> <option class="level-0" value="699">USA  (10)</option> <option class="level-0" value="256088">wages  (15)</option> <option class="level-0" value="12314">Welfare  (2)</option> <option class="level-0" value="70643">Wellington  (23)</option> <option class="level-0" value="27590543">zero lower bound  (30)</option> </select> </form><script type="text/javascript"> /* <![CDATA[ */ (function() { var dropdown = document.getElementById( "cat" ); function onCatChange() { if ( dropdown.options[ dropdown.selectedIndex ].value > 0 ) { dropdown.parentNode.submit(); } } dropdown.onchange = onCatChange; })(); /* ]]> */ </script> </aside><aside id="twitter_timeline-2" class="widget widget_twitter_timeline"><h1 class="widget-title">Follow me on Twitter</h1><a class="twitter-timeline" data-theme="light" data-border-color="#e8e8e8" data-tweet-limit="5" data-lang="EN" data-partner="jetpack" href="https://twitter.com/@MHReddell" href="https://twitter.com/@MHReddell">My Tweets</a></aside> </div> </div> <footer id="colophon" class="site-footer" role="contentinfo"> <div class="site-footer-wrapper"> <div class="site-info"> <a href="https://wordpress.com/?ref=footer_blog" rel="nofollow">Blog at WordPress.com.</a> </div> <div id="social-links"> <div class="social-links"><ul id="menu-contents" class="menu"><li id="menu-item-8396" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-8396"><a href="https://croakingcassandra.com/papers-and-speeches/"><span class="screen-reader-text">Papers and speeches</span></a></li> <li id="menu-item-58340" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-58340"><a href="https://croakingcassandra.com/china-prc/"><span class="screen-reader-text">China (PRC)</span></a></li> <li id="menu-item-66510" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-66510"><a href="https://croakingcassandra.com/book-reviews/"><span class="screen-reader-text">Book reviews</span></a></li> <li id="menu-item-70355" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-70355"><a href="https://croakingcassandra.com/reserve-bank-of-new-zealand-superannuation-scheme/"><span class="screen-reader-text">Reserve Bank of New Zealand Superannuation Scheme</span></a></li> <li id="menu-item-71259" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-71259"><a href="https://croakingcassandra.com/early-mpss-and-economic-projections/"><span class="screen-reader-text">MPSs & Economic Forecasts from early-mid 90s</span></a></li> </ul></div> </div> </div> </footer> </div> <script type="text/javascript"> var infiniteScroll = {"settings":{"id":"main","ajaxurl":"https:\/\/croakingcassandra.com\/?infinity=scrolling","type":"scroll","wrapper":true,"wrapper_class":"infinite-wrap","footer":"page","click_handle":"1","text":"Older posts","totop":"Scroll back to top","currentday":"04.09.24","order":"DESC","scripts":[],"styles":[],"google_analytics":false,"offset":1,"history":{"host":"croakingcassandra.com","path":"\/page\/%d\/","use_trailing_slashes":true,"parameters":""},"query_args":{"error":"","m":"","p":0,"post_parent":"","subpost":"","subpost_id":"","attachment":"","attachment_id":0,"name":"","pagename":"","page_id":0,"second":"","minute":"","hour":"","day":0,"monthnum":0,"year":0,"w":0,"category_name":"","tag":"","cat":"","tag_id":"","author":"","author_name":"","feed":"","tb":"","paged":0,"meta_key":"","meta_value":"","preview":"","s":"","sentence":"","title":"","fields":"","menu_order":"","embed":"","category__in":[],"category__not_in":[],"category__and":[],"post__in":[],"post__not_in":[],"post_name__in":[],"tag__in":[],"tag__not_in":[],"tag__and":[],"tag_slug__in":[],"tag_slug__and":[],"post_parent__in":[],"post_parent__not_in":[],"author__in":[],"author__not_in":[],"search_columns":[],"lazy_load_term_meta":false,"posts_per_page":10,"ignore_sticky_posts":false,"suppress_filters":false,"cache_results":true,"update_post_term_cache":true,"update_menu_item_cache":false,"update_post_meta_cache":true,"post_type":"","nopaging":false,"comments_per_page":"50","no_found_rows":false,"order":"DESC"},"query_before":"2024-11-26 03:50:57","last_post_date":"2024-09-04 12:16:16","body_class":"infinite-scroll neverending","loading_text":"Loading new page","stats":"blog=85004741&v=wpcom&tz=12&user_id=0&subd=croakingcassandra&x_pagetype=infinite"}}; </script>  <script type="text/javascript" src="//0.gravatar.com/js/hovercards/hovercards.min.js?ver=2024484048849247f5660a2d05b85c6fc286379897f30a1061ad46e7f037e059ed7fe7" id="grofiles-cards-js"></script> <script type="text/javascript" id="wpgroho-js-extra"> /* <![CDATA[ */ var WPGroHo = {"my_hash":""}; /* ]]> */ </script> <script crossorigin='anonymous' type='text/javascript' src='https://s2.wp.com/wp-content/mu-plugins/gravatar-hovercards/wpgroho.js?m=1610363240i'></script> <script> // Initialize and attach hovercards to all gravatars ( function() { function init() { if ( typeof Gravatar === 'undefined' ) { return; } if ( typeof Gravatar.init !== 'function' ) { return; } Gravatar.profile_cb = function ( hash, id ) { WPGroHo.syncProfileData( hash, id ); }; Gravatar.my_hash = WPGroHo.my_hash; Gravatar.init( 'body', '#wp-admin-bar-my-account', { i18n: { 'Edit your profile': 'Edit your profile', 'View profile': 'View profile', 'Sorry, we are unable to load this Gravatar profile.': 'Sorry, we are unable to load this Gravatar profile.', 'Profile not found.': 'Profile not found.', 'Too Many Requests.': 'Too Many Requests.', 'Internal Server Error.': 'Internal Server Error.', }, } ); } if ( document.readyState !== 'loading' ) { init(); } else { document.addEventListener( 'DOMContentLoaded', init ); } } )(); </script> <div style="display:none"> </div> <div id="infinite-footer"> <div class="container"> <div class="blog-info"> <a id="infinity-blog-title" href="https://croakingcassandra.com/" rel="home"> croaking cassandra </a> </div> <div class="blog-credits"> <a href="https://wordpress.com/?ref=footer_blog" rel="nofollow">Blog at WordPress.com.</a> </div> </div> </div> <div id="actionbar" style="display: none;" class="actnbr-pub-big-brother actnbr-has-follow"> <ul> <li class="actnbr-btn actnbr-hidden"> <a class="actnbr-action actnbr-actn-follow " href=""> <svg class="gridicon" height="20" width="20" xmlns="http://www.w3.org/2000/svg" viewBox="0 0 20 20"><path clip-rule="evenodd" d="m4 4.5h12v6.5h1.5v-6.5-1.5h-1.5-12-1.5v1.5 10.5c0 1.1046.89543 2 2 2h7v-1.5h-7c-.27614 0-.5-.2239-.5-.5zm10.5 2h-9v1.5h9zm-5 3h-4v1.5h4zm3.5 1.5h-1v1h1zm-1-1.5h-1.5v1.5 1 1.5h1.5 1 1.5v-1.5-1-1.5h-1.5zm-2.5 2.5h-4v1.5h4zm6.5 1.25h1.5v2.25h2.25v1.5h-2.25v2.25h-1.5v-2.25h-2.25v-1.5h2.25z" fill-rule="evenodd"></path></svg> <span>Subscribe</span> </a> <a class="actnbr-action actnbr-actn-following no-display" href=""> <svg class="gridicon" height="20" width="20" xmlns="http://www.w3.org/2000/svg" viewBox="0 0 20 20"><path fill-rule="evenodd" clip-rule="evenodd" d="M16 4.5H4V15C4 15.2761 4.22386 15.5 4.5 15.5H11.5V17H4.5C3.39543 17 2.5 16.1046 2.5 15V4.5V3H4H16H17.5V4.5V12.5H16V4.5ZM5.5 6.5H14.5V8H5.5V6.5ZM5.5 9.5H9.5V11H5.5V9.5ZM12 11H13V12H12V11ZM10.5 9.5H12H13H14.5V11V12V13.5H13H12H10.5V12V11V9.5ZM5.5 12H9.5V13.5H5.5V12Z" fill="#008A20"></path><path class="following-icon-tick" d="M13.5 16L15.5 18L19 14.5" stroke="#008A20" stroke-width="1.5"></path></svg> <span>Subscribed</span> </a> <div class="actnbr-popover tip tip-top-left actnbr-notice" id="follow-bubble"> <div class="tip-arrow"></div> <div class="tip-inner actnbr-follow-bubble"> <ul> <li class="actnbr-sitename"> <a href="https://croakingcassandra.com"> <img loading='lazy' alt='' src='https://s2.wp.com/i/logo/wpcom-gray-white.png' srcset='https://s2.wp.com/i/logo/wpcom-gray-white.png 1x' class='avatar avatar-50' height='50' width='50' /> croaking cassandra </a> </li> <div class="actnbr-message no-display"></div> <form method="post" action="https://subscribe.wordpress.com" accept-charset="utf-8" style="display: none;"> <div class="actnbr-follow-count">Join 1,727 other subscribers</div> <div> <input type="email" name="email" placeholder="Enter your email address" class="actnbr-email-field" aria-label="Enter your email address" /> </div> <input type="hidden" name="action" value="subscribe" /> <input type="hidden" name="blog_id" value="85004741" /> <input type="hidden" name="source" value="https://croakingcassandra.com/" /> <input type="hidden" name="sub-type" value="actionbar-follow" /> <input type="hidden" id="_wpnonce" name="_wpnonce" value="adb989e27b" /> <div class="actnbr-button-wrap"> <button type="submit" value="Sign me up"> Sign me up </button> </div> </form> <li class="actnbr-login-nudge"> <div> Already have a WordPress.com account? <a href="https://wordpress.com/log-in?redirect_to=https%3A%2F%2Fr-login.wordpress.com%2Fremote-login.php%3Faction%3Dlink%26back%3Dhttps%253A%252F%252Fcroakingcassandra.com%252F2024%252F11%252F19%252Fwhat-does-reciprocity-mean-in-new-zealand-laws%252F">Log in now.</a> </div> </li> </ul> </div> </div> </li> <li class="actnbr-ellipsis actnbr-hidden"> <svg class="gridicon gridicons-ellipsis" height="24" width="24" xmlns="http://www.w3.org/2000/svg" viewBox="0 0 24 24"><g><path d="M7 12c0 1.104-.896 2-2 2s-2-.896-2-2 .896-2 2-2 2 .896 2 2zm12-2c-1.104 0-2 .896-2 2s.896 2 2 2 2-.896 2-2-.896-2-2-2zm-7 0c-1.104 0-2 .896-2 2s.896 2 2 2 2-.896 2-2-.896-2-2-2z"/></g></svg> <div class="actnbr-popover tip tip-top-left actnbr-more"> <div class="tip-arrow"></div> <div class="tip-inner"> <ul> <li class="actnbr-sitename"> <a href="https://croakingcassandra.com"> <img loading='lazy' alt='' src='https://s2.wp.com/i/logo/wpcom-gray-white.png' srcset='https://s2.wp.com/i/logo/wpcom-gray-white.png 1x' class='avatar avatar-50' height='50' width='50' /> croaking cassandra </a> </li> <li class="actnbr-folded-customize"> <a href="https://croakingcassandra.wordpress.com/wp-admin/customize.php?url=https%3A%2F%2Fcroakingcassandra.wordpress.com%2F"> <svg class="gridicon gridicons-customize" height="20" width="20" xmlns="http://www.w3.org/2000/svg" viewBox="0 0 24 24"><g><path d="M2 6c0-1.505.78-3.08 2-4 0 .845.69 2 2 2 1.657 0 3 1.343 3 3 0 .386-.08.752-.212 1.09.74.594 1.476 1.19 2.19 1.81L8.9 11.98c-.62-.716-1.214-1.454-1.807-2.192C6.753 9.92 6.387 10 6 10c-2.21 0-4-1.79-4-4zm12.152 6.848l1.34-1.34c.607.304 1.283.492 2.008.492 2.485 0 4.5-2.015 4.5-4.5 0-.725-.188-1.4-.493-2.007L18 9l-2-2 3.507-3.507C18.9 3.188 18.225 3 17.5 3 15.015 3 13 5.015 13 7.5c0 .725.188 1.4.493 2.007L3 20l2 2 6.848-6.848c1.885 1.928 3.874 3.753 5.977 5.45l1.425 1.148 1.5-1.5-1.15-1.425c-1.695-2.103-3.52-4.092-5.448-5.977z"/></g></svg> <span>Customize</span> </a> </li> <li class="actnbr-folded-follow"> <a class="actnbr-action actnbr-actn-follow " href=""> <svg class="gridicon" height="20" width="20" xmlns="http://www.w3.org/2000/svg" viewBox="0 0 20 20"><path clip-rule="evenodd" d="m4 4.5h12v6.5h1.5v-6.5-1.5h-1.5-12-1.5v1.5 10.5c0 1.1046.89543 2 2 2h7v-1.5h-7c-.27614 0-.5-.2239-.5-.5zm10.5 2h-9v1.5h9zm-5 3h-4v1.5h4zm3.5 1.5h-1v1h1zm-1-1.5h-1.5v1.5 1 1.5h1.5 1 1.5v-1.5-1-1.5h-1.5zm-2.5 2.5h-4v1.5h4zm6.5 1.25h1.5v2.25h2.25v1.5h-2.25v2.25h-1.5v-2.25h-2.25v-1.5h2.25z" fill-rule="evenodd"></path></svg> <span>Subscribe</span> </a> <a class="actnbr-action actnbr-actn-following no-display" href=""> <svg class="gridicon" height="20" width="20" xmlns="http://www.w3.org/2000/svg" viewBox="0 0 20 20"><path fill-rule="evenodd" clip-rule="evenodd" d="M16 4.5H4V15C4 15.2761 4.22386 15.5 4.5 15.5H11.5V17H4.5C3.39543 17 2.5 16.1046 2.5 15V4.5V3H4H16H17.5V4.5V12.5H16V4.5ZM5.5 6.5H14.5V8H5.5V6.5ZM5.5 9.5H9.5V11H5.5V9.5ZM12 11H13V12H12V11ZM10.5 9.5H12H13H14.5V11V12V13.5H13H12H10.5V12V11V9.5ZM5.5 12H9.5V13.5H5.5V12Z" fill="#008A20"></path><path class="following-icon-tick" d="M13.5 16L15.5 18L19 14.5" stroke="#008A20" stroke-width="1.5"></path></svg> <span>Subscribed</span> </a> </li> <li class="actnbr-signup"><a href="https://wordpress.com/start/">Sign up</a></li> <li class="actnbr-login"><a href="https://wordpress.com/log-in?redirect_to=https%3A%2F%2Fr-login.wordpress.com%2Fremote-login.php%3Faction%3Dlink%26back%3Dhttps%253A%252F%252Fcroakingcassandra.com%252F2024%252F11%252F19%252Fwhat-does-reciprocity-mean-in-new-zealand-laws%252F">Log in</a></li> <li class="flb-report"> <a href="https://wordpress.com/abuse/?report_url=https://croakingcassandra.com" target="_blank" rel="noopener noreferrer"> Report this content </a> </li> <li class="actnbr-reader"> <a href="https://wordpress.com/read/feeds/34600341"> View site in Reader </a> </li> <li class="actnbr-subs"> <a href="https://subscribe.wordpress.com/">Manage subscriptions</a> </li> <li class="actnbr-fold"><a href="">Collapse this bar</a></li> </ul> </div> </div> </li> </ul> </div> <script> window.addEventListener( "load", function( event ) { var link = document.createElement( "link" ); link.href = "https://s0.wp.com/wp-content/mu-plugins/actionbar/actionbar.css?v=20241015"; link.type = "text/css"; link.rel = "stylesheet"; document.head.appendChild( link ); var script = document.createElement( "script" ); script.src = "https://s0.wp.com/wp-content/mu-plugins/actionbar/actionbar.js?v=20231122"; script.defer = true; document.body.appendChild( script ); } ); </script> <div id="jp-carousel-loading-overlay"> <div id="jp-carousel-loading-wrapper"> <span id="jp-carousel-library-loading"> </span> </div> </div> <div class="jp-carousel-overlay" style="display: none;"> <div class="jp-carousel-container">  <div class="jp-carousel-wrap swiper-container jp-carousel-swiper-container jp-carousel-transitions" itemscope itemtype="https://schema.org/ImageGallery"> <div class="jp-carousel swiper-wrapper"></div> <div class="jp-swiper-button-prev swiper-button-prev"> <svg width="25" height="24" viewBox="0 0 25 24" fill="none" xmlns="http://www.w3.org/2000/svg"> <mask id="maskPrev" mask-type="alpha" maskUnits="userSpaceOnUse" x="8" y="6" width="9" height="12"> <path d="M16.2072 16.59L11.6496 12L16.2072 7.41L14.8041 6L8.8335 12L14.8041 18L16.2072 16.59Z" fill="white"/> </mask> <g mask="url(#maskPrev)"> <rect x="0.579102" width="23.8823" height="24" fill="#FFFFFF"/> </g> </svg> </div> <div class="jp-swiper-button-next swiper-button-next"> <svg width="25" height="24" viewBox="0 0 25 24" fill="none" xmlns="http://www.w3.org/2000/svg"> <mask id="maskNext" mask-type="alpha" maskUnits="userSpaceOnUse" x="8" y="6" width="8" height="12"> <path d="M8.59814 16.59L13.1557 12L8.59814 7.41L10.0012 6L15.9718 12L10.0012 18L8.59814 16.59Z" fill="white"/> </mask> <g mask="url(#maskNext)"> <rect x="0.34375" width="23.8822" height="24" fill="#FFFFFF"/> </g> </svg> </div> </div>  <div class="jp-carousel-close-hint"> <svg width="25" height="24" viewBox="0 0 25 24" fill="none" xmlns="http://www.w3.org/2000/svg"> <mask id="maskClose" mask-type="alpha" maskUnits="userSpaceOnUse" x="5" y="5" width="15" height="14"> <path d="M19.3166 6.41L17.9135 5L12.3509 10.59L6.78834 5L5.38525 6.41L10.9478 12L5.38525 17.59L6.78834 19L12.3509 13.41L17.9135 19L19.3166 17.59L13.754 12L19.3166 6.41Z" fill="white"/> </mask> <g mask="url(#maskClose)"> <rect x="0.409668" width="23.8823" height="24" fill="#FFFFFF"/> </g> </svg> </div>  <div class="jp-carousel-info"> <div class="jp-carousel-info-footer"> <div class="jp-carousel-pagination-container"> <div class="jp-swiper-pagination swiper-pagination"></div> <div class="jp-carousel-pagination"></div> </div> <div class="jp-carousel-photo-title-container"> <h2 class="jp-carousel-photo-caption"></h2> </div> <div class="jp-carousel-photo-icons-container"> <a href="#" class="jp-carousel-icon-btn jp-carousel-icon-info" aria-label="Toggle photo metadata visibility"> <span class="jp-carousel-icon"> <svg width="25" height="24" viewBox="0 0 25 24" fill="none" xmlns="http://www.w3.org/2000/svg"> <mask id="maskInfo" mask-type="alpha" maskUnits="userSpaceOnUse" x="2" y="2" width="21" height="20"> <path fill-rule="evenodd" clip-rule="evenodd" d="M12.7537 2C7.26076 2 2.80273 6.48 2.80273 12C2.80273 17.52 7.26076 22 12.7537 22C18.2466 22 22.7046 17.52 22.7046 12C22.7046 6.48 18.2466 2 12.7537 2ZM11.7586 7V9H13.7488V7H11.7586ZM11.7586 11V17H13.7488V11H11.7586ZM4.79292 12C4.79292 16.41 8.36531 20 12.7537 20C17.142 20 20.7144 16.41 20.7144 12C20.7144 7.59 17.142 4 12.7537 4C8.36531 4 4.79292 7.59 4.79292 12Z" fill="white"/> </mask> <g mask="url(#maskInfo)"> <rect x="0.8125" width="23.8823" height="24" fill="#FFFFFF"/> </g> </svg> </span> </a> <a href="#" class="jp-carousel-icon-btn jp-carousel-icon-comments" aria-label="Toggle photo comments visibility"> <span class="jp-carousel-icon"> <svg width="25" height="24" viewBox="0 0 25 24" fill="none" xmlns="http://www.w3.org/2000/svg"> <mask id="maskComments" mask-type="alpha" maskUnits="userSpaceOnUse" x="2" y="2" width="21" height="20"> <path fill-rule="evenodd" clip-rule="evenodd" d="M4.3271 2H20.2486C21.3432 2 22.2388 2.9 22.2388 4V16C22.2388 17.1 21.3432 18 20.2486 18H6.31729L2.33691 22V4C2.33691 2.9 3.2325 2 4.3271 2ZM6.31729 16H20.2486V4H4.3271V18L6.31729 16Z" fill="white"/> </mask> <g mask="url(#maskComments)"> <rect x="0.34668" width="23.8823" height="24" fill="#FFFFFF"/> </g> </svg> <span class="jp-carousel-has-comments-indicator" aria-label="This image has comments."></span> </span> </a> </div> </div> <div class="jp-carousel-info-extra"> <div class="jp-carousel-info-content-wrapper"> <div class="jp-carousel-photo-title-container"> <h2 class="jp-carousel-photo-title"></h2> </div> <div class="jp-carousel-comments-wrapper"> <div id="jp-carousel-comments-loading"> <span>Loading Comments...</span> </div> <div class="jp-carousel-comments"></div> <div id="jp-carousel-comment-form-container"> <span id="jp-carousel-comment-form-spinner"> </span> <div id="jp-carousel-comment-post-results"></div> <form id="jp-carousel-comment-form"> <label for="jp-carousel-comment-form-comment-field" class="screen-reader-text">Write a Comment...</label> <textarea name="comment" class="jp-carousel-comment-form-field jp-carousel-comment-form-textarea" id="jp-carousel-comment-form-comment-field" placeholder="Write a Comment..." ></textarea> <div id="jp-carousel-comment-form-submit-and-info-wrapper"> <div id="jp-carousel-comment-form-commenting-as"> <fieldset> <label for="jp-carousel-comment-form-email-field">Email (Required)</label> <input type="text" name="email" class="jp-carousel-comment-form-field jp-carousel-comment-form-text-field" id="jp-carousel-comment-form-email-field" /> </fieldset> <fieldset> <label for="jp-carousel-comment-form-author-field">Name (Required)</label> <input type="text" name="author" class="jp-carousel-comment-form-field jp-carousel-comment-form-text-field" id="jp-carousel-comment-form-author-field" /> </fieldset> <fieldset> <label for="jp-carousel-comment-form-url-field">Website</label> <input type="text" name="url" class="jp-carousel-comment-form-field jp-carousel-comment-form-text-field" id="jp-carousel-comment-form-url-field" /> </fieldset> </div> <input type="submit" name="submit" class="jp-carousel-comment-form-button" id="jp-carousel-comment-form-button-submit" value="Post Comment" /> </div> </form> </div> </div> <div class="jp-carousel-image-meta"> <div class="jp-carousel-title-and-caption"> <div class="jp-carousel-photo-info"> <h3 class="jp-carousel-caption" itemprop="caption description"></h3> </div> <div class="jp-carousel-photo-description"></div> </div> <ul class="jp-carousel-image-exif" style="display: none;"></ul> <a class="jp-carousel-image-download" href="#" target="_blank" style="display: none;"> <svg width="25" height="24" viewBox="0 0 25 24" fill="none" xmlns="http://www.w3.org/2000/svg"> <mask id="mask0" mask-type="alpha" maskUnits="userSpaceOnUse" x="3" y="3" width="19" height="18"> <path fill-rule="evenodd" clip-rule="evenodd" d="M5.84615 5V19H19.7775V12H21.7677V19C21.7677 20.1 20.8721 21 19.7775 21H5.84615C4.74159 21 3.85596 20.1 3.85596 19V5C3.85596 3.9 4.74159 3 5.84615 3H12.8118V5H5.84615ZM14.802 5V3H21.7677V10H19.7775V6.41L9.99569 16.24L8.59261 14.83L18.3744 5H14.802Z" fill="white"/> </mask> <g mask="url(#mask0)"> <rect x="0.870605" width="23.8823" height="24" fill="#FFFFFF"/> </g> </svg> <span class="jp-carousel-download-text"></span> </a> <div class="jp-carousel-image-map" style="display: none;"></div> </div> </div> </div> </div> </div> </div> <link crossorigin='anonymous' rel='stylesheet' id='all-css-0-2' href='https://s0.wp.com/_static/??-eJyljEsKgDAMBS9kDUUquhDPom0Qaz/BNHh9KdgTuBl4w2PgIWVzKpgKRFEU5DgTg8dCm72+DTHnCicBGex2Z2EMwM9JeKtdkgvYW+YOftTaqYkaXOOix8noQU+z8S9MR0BZ&cssminify=yes' type='text/css' media='all' /> <style id='jetpack-block-subscriptions-inline-css'> .is-style-compact .is-not-subscriber .wp-block-button__link,.is-style-compact .is-not-subscriber .wp-block-jetpack-subscriptions__button{border-end-start-radius:0!important;border-start-start-radius:0!important;margin-inline-start:0!important}.is-style-compact .is-not-subscriber .components-text-control__input,.is-style-compact .is-not-subscriber p#subscribe-email input[type=email]{border-end-end-radius:0!important;border-start-end-radius:0!important}.is-style-compact:not(.wp-block-jetpack-subscriptions__use-newline) .components-text-control__input{border-inline-end-width:0!important}.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form-container{display:flex;flex-direction:column}.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline:not(.wp-block-jetpack-subscriptions__use-newline) .is-not-subscriber .wp-block-jetpack-subscriptions__form-elements{align-items:flex-start;display:flex}.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline:not(.wp-block-jetpack-subscriptions__use-newline) p#subscribe-submit{display:flex;justify-content:center}.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form .wp-block-jetpack-subscriptions__button,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form .wp-block-jetpack-subscriptions__textfield .components-text-control__input,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form button,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form input[type=email],.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form .wp-block-jetpack-subscriptions__button,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form .wp-block-jetpack-subscriptions__textfield .components-text-control__input,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form button,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form input[type=email]{box-sizing:border-box;cursor:pointer;line-height:1.3;min-width:auto!important;white-space:nowrap!important}.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form .wp-block-jetpack-subscriptions__button[contenteditable=true],.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form .wp-block-jetpack-subscriptions__button[contenteditable=true]{white-space:pre-wrap!important}.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form input[type=email]::placeholder,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form input[type=email]:disabled,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form input[type=email]::placeholder,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form input[type=email]:disabled{color:currentColor;opacity:.5}.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form .wp-block-jetpack-subscriptions__button,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form button,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form .wp-block-jetpack-subscriptions__button,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form button{border-color:#0000;border-style:solid}.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form .wp-block-jetpack-subscriptions__textfield,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form p#subscribe-email,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form .wp-block-jetpack-subscriptions__textfield,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form p#subscribe-email{background:#0000;flex-grow:1}.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form .wp-block-jetpack-subscriptions__textfield .components-base-control__field,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form .wp-block-jetpack-subscriptions__textfield .components-text-control__input,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form .wp-block-jetpack-subscriptions__textfield input[type=email],.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form p#subscribe-email .components-base-control__field,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form p#subscribe-email .components-text-control__input,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form p#subscribe-email input[type=email],.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form .wp-block-jetpack-subscriptions__textfield .components-base-control__field,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form .wp-block-jetpack-subscriptions__textfield .components-text-control__input,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form .wp-block-jetpack-subscriptions__textfield input[type=email],.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form p#subscribe-email .components-base-control__field,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form p#subscribe-email .components-text-control__input,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form p#subscribe-email input[type=email]{height:auto;margin:0;width:100%}.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form p#subscribe-email,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline .wp-block-jetpack-subscriptions__form p#subscribe-submit,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form p#subscribe-email,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline form p#subscribe-submit{line-height:0;margin:0;padding:0}.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline.wp-block-jetpack-subscriptions__show-subs .wp-block-jetpack-subscriptions__subscount{font-size:16px;margin:8px 0;text-align:end}.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline.wp-block-jetpack-subscriptions__use-newline .wp-block-jetpack-subscriptions__form-elements{display:block}.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline.wp-block-jetpack-subscriptions__use-newline .wp-block-jetpack-subscriptions__button,.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline.wp-block-jetpack-subscriptions__use-newline button{display:inline-block;max-width:100%}.wp-block-jetpack-subscriptions.wp-block-jetpack-subscriptions__supports-newline.wp-block-jetpack-subscriptions__use-newline .wp-block-jetpack-subscriptions__subscount{text-align:start}#subscribe-submit.is-link{text-align:center;width:auto!important}#subscribe-submit.is-link a{margin-left:0!important;margin-top:0!important;width:auto!important}@keyframes jetpack-memberships_button__spinner-animation{to{transform:rotate(1turn)}}.jetpack-memberships-spinner{display:none;height:1em;margin:0 0 0 5px;width:1em}.jetpack-memberships-spinner svg{height:100%;margin-bottom:-2px;width:100%}.jetpack-memberships-spinner-rotating{animation:jetpack-memberships_button__spinner-animation .75s linear infinite;transform-origin:center}.is-loading .jetpack-memberships-spinner{display:inline-block}body.jetpack-memberships-modal-open{overflow:hidden}dialog.jetpack-memberships-modal{opacity:1}dialog.jetpack-memberships-modal,dialog.jetpack-memberships-modal iframe{background:#0000;border:0;bottom:0;box-shadow:none;height:100%;left:0;margin:0;padding:0;position:fixed;right:0;top:0;width:100%}dialog.jetpack-memberships-modal::backdrop{background-color:#000;opacity:.7;transition:opacity .2s ease-out}dialog.jetpack-memberships-modal.is-loading,dialog.jetpack-memberships-modal.is-loading::backdrop{opacity:0} </style> <link crossorigin='anonymous' rel='stylesheet' id='all-css-2-2' href='https://s1.wp.com/wp-content/mu-plugins/jetpack-plugin/moon/modules/tiled-gallery/tiled-gallery/tiled-gallery.css?m=1692903566i&cssminify=yes' type='text/css' media='all' /> <script type="text/javascript" id="coblocks-loader-js-extra"> /* <![CDATA[ */ var wpcom_coblocks_js = {"coblocks_masonry_js":"https:\/\/s2.wp.com\/wp-content\/plugins\/coblocks\/2.18.1-simple-rev.4\/dist\/js\/coblocks-masonry.min.js","coblocks_lightbox_js":"https:\/\/s2.wp.com\/wp-content\/plugins\/coblocks\/2.18.1-simple-rev.4\/dist\/js\/coblocks-lightbox.min.js","jquery_core_js":"\/wp-includes\/js\/jquery\/jquery.min.js","jquery_migrate_js":"\/wp-includes\/js\/jquery\/jquery-migrate.min.js","masonry_js":"\/wp-includes\/js\/masonry.min.js","imagesloaded_js":"\/wp-includes\/js\/imagesloaded.min.js"}; var coblocksLigthboxData = {"closeLabel":"Close Gallery","leftLabel":"Previous","rightLabel":"Next"}; /* ]]> */ </script> <script type="text/javascript" id="jetpack-carousel-js-extra"> /* <![CDATA[ */ var jetpackSwiperLibraryPath = {"url":"https:\/\/s2.wp.com\/wp-content\/mu-plugins\/jetpack-plugin\/moon\/_inc\/build\/carousel\/swiper-bundle.min.js"}; var jetpackCarouselStrings = {"widths":[370,700,1000,1200,1400,2000],"is_logged_in":"","lang":"en","ajaxurl":"https:\/\/croakingcassandra.com\/wp-admin\/admin-ajax.php","nonce":"8b03e44936","display_exif":"1","display_comments":"1","single_image_gallery":"1","single_image_gallery_media_file":"","background_color":"black","comment":"Comment","post_comment":"Post Comment","write_comment":"Write a Comment...","loading_comments":"Loading Comments...","image_label":"Open image in full-screen.","download_original":"View full size <span class=\"photo-size\">{0}<span class=\"photo-size-times\">\u00d7<\/span>{1}<\/span>","no_comment_text":"Please be sure to submit some text with your comment.","no_comment_email":"Please provide an email address to comment.","no_comment_author":"Please provide your name to comment.","comment_post_error":"Sorry, but there was an error posting your comment. Please try again later.","comment_approved":"Your comment was approved.","comment_unapproved":"Your comment is in moderation.","camera":"Camera","aperture":"Aperture","shutter_speed":"Shutter Speed","focal_length":"Focal Length","copyright":"Copyright","comment_registration":"0","require_name_email":"1","login_url":"https:\/\/croakingcassandra.wordpress.com\/wp-login.php?redirect_to=https%3A%2F%2Fcroakingcassandra.com%2F2024%2F11%2F19%2Fwhat-does-reciprocity-mean-in-new-zealand-laws%2F","blog_id":"85004741","meta_data":["camera","aperture","shutter_speed","focal_length","copyright"],"stats_query_args":"blog=85004741&v=wpcom&tz=12&user_id=0&subd=croakingcassandra","is_public":"1"}; /* ]]> */ </script> <script type="text/javascript" id="jetpack-blocks-assets-base-url-js-before"> /* <![CDATA[ */ var Jetpack_Block_Assets_Base_Url="https://s0.wp.com/wp-content/mu-plugins/jetpack-plugin/moon/_inc/blocks/"; /* ]]> */ </script> <script crossorigin='anonymous' type='text/javascript' src='https://s0.wp.com/_static/??-eJydkcFOAzEMRH8Ix92CVHpAfApKst7Fu0kcxUkLf98UdRFCXOhxRjNP1hjPGbykSqniohjFcSBoSsXO3QNOk5hFH/BHLjbIoc2cFBeq2fr1pntdEr5x8ugahxF7mxNXAvVFQtj0p4mcflM3pBcXxK+KezM8mwGUY+4nFTqZJxxZv+7cQhDEjlT+4tV3iqSYm0PHM7gi3SnXcrInnm1l+UdHV84QOK0wiW8KE3/cM0s9c61UoHKkTqP7p/W2SH9T+M5txm2L1/gyHB53w353PByXC10utMA='></script> <script type="text/javascript" crossorigin='anonymous' src="https://s0.wp.com/wp-content/plugins/gutenberg-core/v19.6.4/build/dom-ready/index.min.js?m=1731954715i&ver=222ad38e3e5e302c8bbf" id="wp-dom-ready-js"></script> <script type="text/javascript" id="wp-dom-ready-js-after"> /* <![CDATA[ */ wp.galleryBlockV2Enabled = true /* ]]> */ </script> <script crossorigin='anonymous' type='text/javascript' src='https://s1.wp.com/_static/??-eJydjj0OwjAMhS9EagWGsiCOgtrEVG6dOIqTVr19g8TEABLj9/70YEuGouPqUWFW8KQFVoxeMjQrCe9PYu4CxW7W00tzEgvGAqGaxHWi2IpY0uCWN0MQifBoszCyuEVB66guUyokLb0Sbn+NVWIPhRi9mQZmzPs3+vHZDVmqIpstOQkf2Hr3cLP9ubf91drLfAAx3m7N'></script> <script type="text/javascript"> (function () { var wpcom_reblog = { source: 'toolbar', toggle_reblog_box_flair: function (obj_id, post_id) { // Go to site selector. This will redirect to their blog if they only have one. const postEndpoint = `https://wordpress.com/post`; // Ideally we would use the permalink here, but fortunately this will be replaced with the // post permalink in the editor. const originalURL = `${ document.location.href }?page_id=${ post_id }`; const url = postEndpoint + '?url=' + encodeURIComponent( originalURL ) + '&is_post_share=true' + '&v=5'; const redirect = function () { if ( ! window.open( url, '_blank' ) ) { location.href = url; } }; if ( /Firefox/.test( navigator.userAgent ) ) { setTimeout( redirect, 0 ); } else { redirect(); } }, }; window.wpcom_reblog = wpcom_reblog; })(); </script> <script type="text/javascript"> // <![CDATA[ (function() { try{ if ( window.external &&'msIsSiteMode' in window.external) { if (window.external.msIsSiteMode()) { var jl = document.createElement('script'); jl.type='text/javascript'; jl.async=true; jl.src='/wp-content/plugins/ie-sitemode/custom-jumplist.php'; var s = document.getElementsByTagName('script')[0]; s.parentNode.insertBefore(jl, s); } } }catch(e){} })(); // ]]> </script> <script type="text/javascript"> (function() { var extend = function(out) { out = out || {}; for (var i = 1; i < arguments.length; i++) { if (!arguments[i]) continue; for (var key in arguments[i]) { if (arguments[i].hasOwnProperty(key)) out[key] = arguments[i][key]; } } return out; }; extend( window.infiniteScroll.settings.scripts, ["jetpack-mu-wpcom-settings","rlt-proxy","wpcom-actionbar-placeholder","grofiles-cards","wpgroho","mobile-useragent-info","the-neverending-homepage","coblocks-loader","big-brother-navigation","big-brother-skip-link-focus-fix","jetpack-twitter-timeline","jetpack-carousel","jetpack-blocks-assets-base-url","wp-dom-ready","wp-polyfill","jetpack-block-subscriptions","tiled-gallery","carousel-wpcom"] ); extend( window.infiniteScroll.settings.styles, ["the-neverending-homepage","wp-block-library","jetpack-layout-grid","jetpack-ratings","mediaelement","wp-mediaelement","coblocks-frontend","wpcom-core-compat-playlist-styles","wpcom-bbpress2-staff-css","big-brother-style","genericons","big_brother-wpcom","reblogging","geo-location-flair","a8c-global-print","h4-global","wp-emoji-styles","videopress-video-style","jetpack-sharing-buttons-style","classic-theme-styles","global-styles","big-brother-gentium","big-brother-open-sans","jetpack-global-styles-frontend-style","jetpack-carousel-swiper-css","jetpack-carousel","tiled-gallery","jetpack-block-subscriptions","core-block-supports-duotone"] ); })(); </script> <span id="infinite-aria" aria-live="polite"></span> <script src="//stats.wp.com/w.js?67" defer></script> <script type="text/javascript"> _tkq = window._tkq || []; _stq = window._stq || []; _tkq.push(['storeContext', {'blog_id':'85004741','blog_tz':'12','user_lang':'en','blog_lang':'en','user_id':'0'}]); _stq.push(['view', {'blog':'85004741','v':'wpcom','tz':'12','user_id':'0','subd':'croakingcassandra'}]); _stq.push(['extra', {'crypt':'UE40eW5QN0p8M2Y/RE1mNzc2NTVTamdsRWFxcEV3XUtMXVR5aWlmMVNIcUxBaFstUWRrZVpWQ2tORExSfEpUVm05SlpEZzZWOEtlbW5nZHV0dkhDNjhwP35JbkdHLyZqRVk/NTNQOVdPTjYyfFRyYn5PUHNhVWU9T101R3FaM05FM0h3LHpPYlVzLGd0Z1NTan5maWJSLDNQRWpPLDZNY2RmSGwxYlJUR3QlPy92S2U3Uy94WCVEV3xremtCW2NzTTFKYjc3ZVVob1ZoUnlHUzN5SjJmdXkyZG5yTEI9al1lbHl+ZHd0V1VZaWhNPW5odXdYbk81fG9dR3MtNEV4LVZ3aHw3ZFNQUnpjQUhQeFJmSnYwRkIlY2pfS2QsW2xEWVVfbCtFakV+MQ=='}]); _stq.push([ 'clickTrackerInit', '85004741', '0' ]); </script> <noscript><img src="https://pixel.wp.com/b.gif?v=noscript" style="height:1px;width:1px;overflow:hidden;position:absolute;bottom:1px;" alt="" /></noscript> <script> ( function() { function getMobileUserAgentInfo() { if ( typeof wpcom_mobile_user_agent_info === 'object' ) { wpcom_mobile_user_agent_info.init(); var mobileStatsQueryString = ''; if ( wpcom_mobile_user_agent_info.matchedPlatformName !== false ) { mobileStatsQueryString += '&x_' + 'mobile_platforms' + '=' + wpcom_mobile_user_agent_info.matchedPlatformName; } if ( wpcom_mobile_user_agent_info.matchedUserAgentName !== false ) { mobileStatsQueryString += '&x_' + 'mobile_devices' + '=' + wpcom_mobile_user_agent_info.matchedUserAgentName; } if ( wpcom_mobile_user_agent_info.isIPad() ) { mobileStatsQueryString += '&x_' + 'ipad_views' + '=' + 'views'; } if ( mobileStatsQueryString != '' ) { new Image().src = document.location.protocol + '//pixel.wp.com/g.gif?v=wpcom-no-pv' + mobileStatsQueryString + '&baba=' + Math.random(); } } } document.addEventListener( 'DOMContentLoaded', getMobileUserAgentInfo ); } )(); </script> </body> </html>