1 00:00:00,040 --> 00:00:03,040 Speaker 1: The New Zealand Initiative back this morning, looking into this 2 00:00:03,240 --> 00:00:05,680 Speaker 1: much devided supermarket setup of ours. They've got a blueprint 3 00:00:05,680 --> 00:00:08,440 Speaker 1: they climb, fast track plans for rezoning, consenting, investment clearance 4 00:00:08,440 --> 00:00:10,639 Speaker 1: and more neutral stains required for the government. Eric Crampton, 5 00:00:10,720 --> 00:00:12,559 Speaker 1: Chief Economists, Well, this's Eric morning to you. 6 00:00:13,280 --> 00:00:13,840 Speaker 2: Good morning. 7 00:00:14,120 --> 00:00:16,760 Speaker 1: You're talking already to a partially converted government. The government 8 00:00:16,840 --> 00:00:19,960 Speaker 1: seemed to be on your side. Is there something? Why 9 00:00:20,000 --> 00:00:22,520 Speaker 1: haven't they done what you're suggesting of? What you're suggesting 10 00:00:22,600 --> 00:00:23,079 Speaker 1: is workable. 11 00:00:24,079 --> 00:00:27,320 Speaker 2: I think that they're expecting that resource management reform that 12 00:00:27,480 --> 00:00:30,800 Speaker 2: Minister Bishop is progressing will solve the problem, and we 13 00:00:30,880 --> 00:00:32,879 Speaker 2: hope that they're right. But the government is in a 14 00:00:32,880 --> 00:00:37,000 Speaker 2: big hurry to affect faster changes competition in the sector. 15 00:00:37,520 --> 00:00:39,360 Speaker 2: This will give them a pathway to do that on 16 00:00:39,400 --> 00:00:42,320 Speaker 2: the timetable that Minister Willis is looking towards, and it 17 00:00:42,360 --> 00:00:45,400 Speaker 2: would bring forward the kinds of changes that we're expecting 18 00:00:45,479 --> 00:00:47,519 Speaker 2: from the next set of resource management reforms. 19 00:00:47,720 --> 00:00:49,760 Speaker 1: Why haven't they thought of what you've thought of? 20 00:00:51,560 --> 00:00:53,000 Speaker 2: I expect that they would have been told that it 21 00:00:53,040 --> 00:00:55,040 Speaker 2: was too it would take too long to put together 22 00:00:55,040 --> 00:00:57,520 Speaker 2: the kind of package that we've put together. The bureaucracy 23 00:00:57,560 --> 00:00:59,360 Speaker 2: moved a little bit more slowly than we do. We 24 00:00:59,400 --> 00:01:02,400 Speaker 2: think that this be drafted fairly quickly and then introduced 25 00:01:02,400 --> 00:01:03,120 Speaker 2: by the Christmas. 26 00:01:03,480 --> 00:01:05,720 Speaker 1: Why would you block out for a free thinker, why 27 00:01:05,760 --> 00:01:07,800 Speaker 1: would you, in looking to fast track all the people 28 00:01:07,800 --> 00:01:10,200 Speaker 1: who want to come to the country allgiately opened supermarkets, 29 00:01:10,480 --> 00:01:13,200 Speaker 1: block the current players out of that process if they 30 00:01:13,240 --> 00:01:16,000 Speaker 1: wanted to do something with the new rules as well. 31 00:01:16,120 --> 00:01:19,120 Speaker 2: Well, we have a sunset it actually, so the minister 32 00:01:19,360 --> 00:01:22,080 Speaker 2: is really keen on getting new entrants, so she's talking 33 00:01:22,120 --> 00:01:24,800 Speaker 2: about some pretty dramatic moves for doing that. Ones that 34 00:01:25,080 --> 00:01:27,840 Speaker 2: don't respect property rates very well and introduce a lot 35 00:01:27,840 --> 00:01:31,840 Speaker 2: of uncertainty into the sector. We're suggesting suggesting that a 36 00:01:31,920 --> 00:01:34,080 Speaker 2: new entrant should get a head start, give them five 37 00:01:34,160 --> 00:01:37,399 Speaker 2: years with access to this kind of planning framework to 38 00:01:37,600 --> 00:01:41,199 Speaker 2: find out whether all of the planning barriers are really 39 00:01:41,200 --> 00:01:43,360 Speaker 2: what's been holding somebody back, because there have been a 40 00:01:43,400 --> 00:01:47,080 Speaker 2: lot of allegations that supermarkets are earning super profits. Well, 41 00:01:47,120 --> 00:01:49,800 Speaker 2: international grocers they love profits as much as anybody else. 42 00:01:50,080 --> 00:01:51,960 Speaker 2: So if those profits are real and we get rid 43 00:01:52,000 --> 00:01:54,400 Speaker 2: of the barriers, they should be jumping in at the 44 00:01:54,520 --> 00:01:57,360 Speaker 2: end of that window. Open it up to everybody so 45 00:01:57,400 --> 00:02:01,120 Speaker 2: that existing grocers could go in real head to head 46 00:02:01,120 --> 00:02:04,320 Speaker 2: competition because right now, town plans often forbid there from 47 00:02:04,360 --> 00:02:07,320 Speaker 2: being more than one supermarket in the place, or limit 48 00:02:07,360 --> 00:02:09,720 Speaker 2: the size of the supermarket so they can't compete with 49 00:02:09,800 --> 00:02:12,920 Speaker 2: each other too much. It's insane. We need to change it. 50 00:02:13,360 --> 00:02:16,320 Speaker 2: This will enable more entry or expansion from an existing 51 00:02:16,560 --> 00:02:17,760 Speaker 2: small New Zealand player. 52 00:02:17,840 --> 00:02:19,680 Speaker 1: But you're ringing the market. And what if you're wrong, 53 00:02:19,760 --> 00:02:21,680 Speaker 1: and what if you kill the supermarkets in the main 54 00:02:21,720 --> 00:02:23,679 Speaker 1: time while they're sitting there whiting for five years for 55 00:02:23,720 --> 00:02:25,120 Speaker 1: a whole cluster to unfold. 56 00:02:25,919 --> 00:02:28,240 Speaker 2: Well, they've already got an awful lot of stores. They 57 00:02:28,240 --> 00:02:31,000 Speaker 2: would continue with those. This would let a new entrant 58 00:02:31,080 --> 00:02:35,720 Speaker 2: come in get themselves established before the existing ones started expanding. 59 00:02:36,000 --> 00:02:39,280 Speaker 1: Jeez. So you're on the same side as the government. 60 00:02:39,400 --> 00:02:42,360 Speaker 1: There is something wrong with the market. Yeah, And simple. 61 00:02:42,160 --> 00:02:45,639 Speaker 2: Terms, what is wrong with the market is that it's 62 00:02:45,680 --> 00:02:49,040 Speaker 2: been basically like you can't say illegal because you wouldn't 63 00:02:49,120 --> 00:02:51,600 Speaker 2: throw somebody in jail for trying to start up a supermarket. 64 00:02:51,639 --> 00:02:54,280 Speaker 2: But the processes that we have layered on top of 65 00:02:54,320 --> 00:02:58,120 Speaker 2: any of this make it effectively illegal. Like maybe a 66 00:02:58,160 --> 00:03:00,320 Speaker 2: costco can come in and set up one big site 67 00:03:00,360 --> 00:03:03,720 Speaker 2: and that's awesome, but it's been pretty much impossible to 68 00:03:03,760 --> 00:03:07,040 Speaker 2: set up a new version of like Woolworth or New 69 00:03:07,080 --> 00:03:08,600 Speaker 2: World or like a Tesco. 70 00:03:08,840 --> 00:03:11,720 Speaker 1: And you are that's what a part. You are confident 71 00:03:11,760 --> 00:03:14,400 Speaker 1: that if you did this, there are people out there 72 00:03:14,520 --> 00:03:17,600 Speaker 1: globally at scale that would go we're in boots and 73 00:03:17,639 --> 00:03:19,880 Speaker 1: north I'm not. 74 00:03:20,160 --> 00:03:22,120 Speaker 2: This is this is a way of discovering it right. 75 00:03:22,400 --> 00:03:24,640 Speaker 2: So the Minister has been going out trying to find 76 00:03:24,680 --> 00:03:28,120 Speaker 2: international entrants. You hear scuttle about around town of various 77 00:03:28,120 --> 00:03:30,560 Speaker 2: players who may have said said no, but that's all 78 00:03:30,600 --> 00:03:34,160 Speaker 2: within the existing planning framework that makes it painful to 79 00:03:34,280 --> 00:03:36,920 Speaker 2: try to enter the new deal in market. This lets 80 00:03:37,000 --> 00:03:40,160 Speaker 2: us discover whether a new entrant would really want to 81 00:03:40,200 --> 00:03:42,840 Speaker 2: come in and whether there really are superprofits here to 82 00:03:42,880 --> 00:03:43,800 Speaker 2: be chasing after all. 83 00:03:43,880 --> 00:03:45,560 Speaker 1: Right, Eric, good to have you on the program, as always, 84 00:03:45,640 --> 00:03:49,080 Speaker 1: Eric Crampton, who's the chief economist at the New Zealand Initiative. 85 00:03:49,520 --> 00:03:52,440 Speaker 2: For more from the Mic Asking Breakfast, listen live to 86 00:03:52,560 --> 00:03:55,640 Speaker 2: news talks. 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