Thursday, 19 February 2015

Yachtsmen in the trough, again.

I could write another post on the subject of yachtsmen in the trough, but what would be the point in repeating what has already (I think) been made plain enough about these subsidised sailors with an entitlement complex who are among the wealthiest beneficiaries in the country.

I could repeat from any one of

It’s the same cronyism as the no-collapsed Sky City subsidy: an alleged economic benefit to something called “the economy” used to justify a private organisation’s costs being met by the taxpayer.

I don’t say an Auckland regatta and another tilt at the America’s Cup won’t be good for New Zealand business. I don’t say that it will either. What I do say is that if particular New Zealand businesses think it will be good for them, then they should pony up themselves.

That’s what sponsorships were invented for. (Something Grant Dalton used to know something about before he became a beneficiary.)

And if a crowd of  individual New Zealanders wants to get behind “their” team out of a sense of nationalism, then I say get to it and help fund it voluntarily. (That’s what crowd funding like Kickstarter was developed for, to get supporters funding projects they want to see happen without demanding others pay for their pleasures; something Grant Dalton should start trying to get his head around.)

Simple point: even if there is an economic benefit to be had, then there is simply no case that NZ taxpayers should be made to pay for specific NZ businesses to benefit economically.


  1. I think you are exactly right, PC!

  2. PC - What do you say to the argument that it has a wider economic benefit that can't be internalised, and that whilst the net gains exceed the net cost, it's impossible to attribute the cost and gains to specific businesses - and therefore the gov't should step in, or it wouldn't happen? Not saying I agree with that argument, I just want to hear your response to it - assuming the part about it being a net economic benefit is correct.

  3. @Mark: An exogenous benefit?
    A benefit to the economic system wider than to those within the economic system?
    I have to wonder to whom precisely this "uninternalised" benefit would accrue.

  4. If you can't put it in a spreadsheet, it doesn't exist.

  5. @PC: Not an exogenous benefit, but a benefit that's dispersed so broadly such that it's value can only be measured on a macro level. Making some numbers up to make the point, let's assume that NZ tourism and business in general will benefit to the tune of $120m if Team NZ win and bring the next event back to NZ, and the expenditure of $30m gives them a 50% chance of achieving that. On those odds it looks a good investment, collectively - but if funding relies on all the thousands of small businesses who will benefit making a voluntary contribution that's proptionate to their potential gain, it's unlikely to happen - because each individual contribution on its own is unlikely to make a significant difference, and so the motivation to contribute at the micro level doesn't exist.

  6. @Mark, you posit a benefit that's dispersed so broadly such that it's value is so small as to be insignificant for each alleged beneficiary (and also, it must be noted, for each to whom it is a cost), but is still so large that it can be measured with the naked eye.

    YOu haven't studied homeopathy, have you?

    The simple fact is that there is no such entity as "NZ tourism and business in general." In actual reality, there are only NZ tourist operators and and NZ businesses, many of the latter (maybe) being forced to subsidise some (just some) of the former.

    Put that like, with the costs accruing to one set of folk and the benefits to another, where's the fairness?

    But you say that despite the large benefit you allege they will accrue, precisely none of the former will notice the increase at all -- and none of the stolen-from will notice the pick-pocketing.

    This is beginning to sound less like homeopathy, and more like a story about theft, and unicorns.

    But take your example. Both the $120 milion and $30 million of your example are large numbers -- especially when you remember it costs us all an estimated $2.50 for every $1 taken in tax. So that's around $75 extra cost for every taxpayer -- large enough to be noticed, but small enough to be hoovered up VOLUNTARILY by some sort of crowd-funding kickstartery king if a thing, IFF the widespread support existed at the levels alleged.

    (Does it? Probbaly not, in which case where's the justice in taking it by force?)

    And what about these alleged homeopathic benefits? Well, at last count there were 166,800 already employed in the local tourism field. Spread across the two years of the projected activities, your $120 million of alleged benefits would have added around 3,000 new full- and part-time positions. (Deduct from that of course the jobs taken away from the taxpayers being dunned $75 miilion in the other direction!)

    YOu don't think anyone would expect to notice that? In raw figures, someone adding a new employee has to make nearly $80,000, say, to make that employment profitable. Anyone planning that level of spending is going to notice it. So you're suggesting at least 3,000 someones who your would expect to notice -- (not all of whom would presently realise they may be in that position, but enough must exist who do and won't that the numbers would roughly cancel out.)

    You don't think those someones who see and employ and expect to make use of this windfall would want to organise some sponsorship deals with the boat to help make it happen? Or, since you reckon there's enough to see with the naked eye, to help crowd-fund the boat themselves as individuals?


    But if they wouldn't, why the hell should we?

  7. PC: As you know, I'm not in favour of gov't taking on this role, and I made it clear in my opening post that the position I was positing was not mine - so don't know why you've made references to homeopathy! I was just seeing if you could answer the common justification for this expenditure (that I overheard in my office) better than I could, without denying that there are economic benefits, and also acknowledging that the benefits for say a Viaduct restaurant and their employees during a Cup event in Auckland are wholly tangible - but not something that business can "buy" like they can buy say advertising for their particular restaurant. I'm not sure if you have though. You've said that if the costs accrue to anyone but the beneficiaries that's unfair - which is of course my position too - but there is in all government expenditure, even the legitimate sort, a difficulty in perfectly distributing the costs proportional to each taxpayer according to the individual benefit they gain. There will always be some who pay more than their share, and some who pay less. I still say that running the Cup is not a legitimate role of gov't, but I'm having difficulty reconciling the moral with the practical in this case - and given this is a drop in the ocean when it comes to say welfare costs, and it might produce a net economic gain as many claim, it's low down the scale in terms of things the state does that trouble me.

  8. Mark, to be fair, you've not been up-front about your own understanding at all. All you did in the first place was to refuse to say that this opinion was your own. Now you say it's not your own view but you overhead others in your office with the view.

    Give that it's low down the scale in terms of things the state does that trouble you then what does any of this mater? You'd be seeking advice to martial arguments against an 'argument' (I'm dubious that what you overheard deserves that title) you care little for and only overhead. Why?

    For example, if you said you felt personally conflicted about your economics and ethics that would be worth doing something about. Or, if you said that you'd like the confidence in the workplace to speak up to others who ignorantly expect sailor's welfare to tell them where they could stick it! Then, it would be worth a good talk and arming you with some useful, additional, ideas to take back into the breach. I'd certainly like to chip in with some ideas here if you're looking with sincerity.

  9. Rick - We won't convince the other side, and more importantly can't be strong in our own position by just sticking to our own narrative, and refusing to reconcile it with new facts and specific arguments that are presented to us - or respond to them by becoming defensive and hostile. You see this most commonly on the left, but it's a tendency that infects our side of politics too - and is perhaps evident in the fact that by me positing an argument and asking for a response, it has become about me and now led to my sincerity being questioned (WTF?)

    The new angle I've presented is quite simple I thought - that there may well be a net economic gain, and that in this case it can only be achieved by the government, because there's no way the contribution from say an individual Viaduct restaurant to the Cup campaign will make any difference. Similar arguments can be applied when it comes to stadiums, tourist advertising that promotes NZ as a tourist destination, etc. It's impossible (or it seems to me impossible) for the economic benefit to be realised voluntarily in some cases, because the benefits whilst being tangible, are so dispersed that there's no motivation for all the disparate individuals who benefit to make their separate contribution . If the answer is that we have to forgo this net economic benefit (if there is one) for the sake of a gov't that sticks to it's core responsibilities and not infringe our rights (my current position) then so be it - but I'm also wondering if there is another angle to this - something that can address that argument on a more 'common sense' level, for someone who is not necessarily a libertarian. The moral and the practical should be in harmony.

    It's probably more an economics question. Perhaps forget the Cup and look at a simpler example: advertisements that promote NZ as a tourist destination. Is there a scenario by which this would still happen under a libertarian gov't - without relying on say large corporations (of which NZ has relative few) to bankroll it, and without there being a majority of tourist businesses that are free-loaders. If so how?


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