So internet, such beneficial

What’s the internet worth, economically speaking?

I recently finished a project on the economic benefits of Internet use for businesses in New Zealand, as part of a team with some other folks from Sapere.

It was funded by Google and Internet NZ under the Innovation Partnership. You can read the report here from the Innovation Partnership website. Or get a gander at the launch event slides.

There has also been some press, for example, in the Herald.

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Use technology better, New Zealand!

On Monday I had the joy of speaking at an academic Symposium organised by the Productivity Hub, a large group of Crown agencies looking at the challenge of how to boost New Zealand’s productivity.

My basic point was that I think that smart use of the internet by New Zealand businesses can help boost the productivity of our businesses and ultimately lift the prosperity of the nation.

We are big on connectivity and are major users of technology, but we do not use it in the most productive ways in our businesses.

You can read the slides, look at the paper, or even read about it in the newspaper.

Somewhere to live

I own a house in Christchurch with two friends. It is a charming three-bedroom character home in Spreydon with wooden floors, a sunny open-plan kitchen and lounge area, a double garage, and a decent-sized backyard with a fairly extensive garden. Lovely if you are in to that sort of thing.

For my sins (and for the princely fee of two dollars a year), I am responsible for its management. And that meant that I had the task of re-renting on a recent weekend after our previous marvelous tenants bought a house.

Shaky ground

Rental demand is very high in Christchurch at present. I have no idea what is really going on, but it seems that not as many people moved away as might have been expected after the earthquakes, and many people are now arriving to help with the rebuild. Although plenty of houses have been lost, not many have been built yet and the net result of all of that is huge interest in anything habitable and increases in rents.

Looking at the data on rents in Christchurch over time compared with the New Zealand average courtesy of Massey University does not seem to reveal so much. Average rents in Christchurch in February 2011 were 310 a week – the same as the average for the country. Rents from August 2012 were 330 (up 6% in the 18 months) for Christchurch versus 320 overall (up 3%).

More revealing, perhaps, is a more anecdotal report.

We had more than 2,500 views on our online advertisement on trademe in the two weeks before the open home. I took twenty or so phone calls and a handful of texts, as well as fifteen email inquiries. On the weekend there were 25 visits and we had 20 applications, eight of which were acceptable in the sense that I would have been happy to have those people live in our house. And of course in the end just one was successful.

How to win

There were two basic approaches taken by potential tenants, the tragedy and the salesperson.

The tragedarians inspired my sympathy. It would take a harder heart than mine to not be sympathetic to those who were being kicked out of their current digs for earthquake repairs or because the landlord was moving in, those who were squatting in a caravan with relatives or perched in a hostel looking for a place to move into with the family when they arrived in a few weeks, or searching for a place closer to family in the area after medical treatment.

In the event, though, this turned out to be the wrong approach to actually secure the lease. Sifting through the tragic tales to somehow try to determine the situation most worthy of relief would have required both wisdom and emotional strengths greater than those I possess.

At best, the tragedarians were playing a kind of lottery, no different in practice from the guy who filled in the form but never spoke to me, presumably chancing that, if he filled in enough forms in enough places, for some place he would be the preferred candidate.

Sell job

So, hard-hearted though it is to say, the salespeople won out in the end. What I was looking for was a decent long-term tenant who would look after the place, pay the rent, not generate any dramas, and tell me when something was wrong. Bonus points if you were prepared to tend the garden. People who found that out what I wanted early and could demonstrate they fitted the bill had the right strategy.

Successful was the person about whom we knew the most, because he was one of only two applicants who had the smarts to write to me beforehand to ask what we were looking for, reasoning that there was no point in applying for places whose criteria they did not meet.

Horrible was the process of calling the 19 unsuccesful applicants, particularly since for many of them there was no compelling reason why they did not suit other than blind luck, and for the others, well, no one filling in a rental application form actually wants real feedback on how they rate in a prospective landlord’s eyes. And so basically I feared not having anything coherent and not insulting to say if they asked me “why not”. And I did not like at all the power and status that I had by virtue of just having bought a house in Christchurch six years ago.

In the event, as often with fears, I need not have worried. The thing that made the calling most horrible was not that the unsuccessful applicants were upset, but that they were all so kind and understanding. It was as if they were sorry to have put me to the trouble of calling them all rather than confused and angry that I had not recognised their evident virtues. Not one of them asked me for any reasons, which made me meditate more than usual upon the apparent goodness of humanity, and made me suspect that this decision was far bigger for me than it was for them.

Strange what you can learn on the weekend.

Cut and run

The good people at San Francisco airport have a millimeter wave scanner, which they use, as per normal procedures, to scan departing passengers.

So when I had the joy just recently to fly through America, I was presented with the usual choice.

  • endure the millimeter wave scanner (about which more below), or
  • subject myself to an “enhanced pat-down” (subject of the infamous “don’t touch my junk” video, from a traveller who took objection to it in November 2010).

In the event the choice was made harder for me by the airline schedule and by the enormously long immigration queue I had had to wait through, because if you ask to avoid the scanner, it takes time to make an officer available to do the pat-down. What this meant was that, on one side of the decision scales was a quick scan (there was no one in front of me in the queue) and catching my plane, and on the other side was the scan-free pat-down, missing my plane, staying overnight in San Francisco and doing it all again the next day.

In the end I resignedly surrendered my principles, skipped through the scanner, and rushed to get on my plane which, as if to reassure me, ended up leaving early.

Who cares

It turns out that I need not have been so concerned. It doesn’t seem sensible to subject oneself to more x-rays than you need to, even if the machine they use at some airports gives a trivial dose by comparison with the rays one would absorb during the flight.

But in fact I was subjected to the millimeter wave scanner in San Francisco, which raises far fewer health concerns. The European Union issued a report saying that x-ray backscatter machines should not be used if millimeter wave devices are available, and banned the use of backscatter devices in their airports.

Still horrible

It remains a horrible thing to have to do. You stand in the machine alone, having been divested of your phone, your valuables, some clothes, and some of your dignity. You stand still, your feet on the little yellow feet marks that show you how to stand, isolated suddenly in the relative quiet of the transparent box. You hold your hands up in front of you, following the directions of the agent a few feet away, and aping the cheerless pictogram attached to the machine at eye level. A gesture of surrender to the might of technology and the bureaucracy that has determined that this is For Your Own Security.

The process is anonymised, clinical, optimised to process the greatest numbers of widgets with the least possible delay. Those doing the scanning been denuded of judgement, weary conveyor-belt workers following the rules, directing the endless stream of travellers through the bottleneck and onward into obscurity.

There is a whirr, the arms of the machine come to life and quickly spin around. Anti-climax. And you are done. You stroll out into the freedom and relative calm of the secure area, repatriated with your belongings, who have been through a similar process with more dangerous x-rays.

The future

More amazing, the world accepts that this process is just how you get on a plane. As the TSA reportedly told this man, “By buying your ticket you gave up a lot of rights”. To me it seems more like the distopian vision of some early twentieth century serialist than the considered best efforts of a far-sighted twenty-first century government.

Of course, I am sceptical about the value of airport security in general. But still. Since they do not seem to find anything particularly helpful, and the terrorists are in retreat in most of the world, I do wonder how much longer this madness can continue. I see the process has been streamlined for frequent flyers. How long will it take for the rest of us?

 

PS One of my favourite things about airport security is the sign that says, in essence, “All airport security screening is by consent, but if you do not consent, you will not be allowed to fly.” So cynical.

Trouble at the top

I see in the news that CEOs are still getting pay rises bigger than their employees. CEOs pay has grown almost 10% in the past year, they say, compared with a 2.9% rise in average ordinary time earnings (and 1% consumer price inflation).

This is a trend that has been going on for quite a while, and it is much more of an issue in other places like the UK, where the government is requiring listed companies to have a shareholder vote on executive pay that will bind the company, and in the US, where recently the New York Times reported on 25 companies who paid their CEOs more than the companies paid in taxes. Cue dismay and disgust.

It does seem to be an issue all around the world, although these guys say it is mostly a US problem:

American chief executives received roughly four times what their Swedish counterparts in comparably sized companies did and 3.1 times that of a Japanese chief at a comparably sized company.

The average CEO at one of the 500 biggest US companies was paid $10.5 million a year in 2012, roughly split one third salary, one third other benefits, one third shares. Nice work if you can get it, although CEOs a bit longer in the tooth probably remember 2007 as the halcyon days – average US big-company CEO compensation peaked at $17 million each that year. And spare a special tear for poor Mr Dauman at Verizon who took home $84.5 million in 2010 but could only manage $43 million in 2011.

The ratio of CEO pay is obviously high enough to be a cause of significant political controversy, although CEO pay is not as high these days as it was earlier in the 2000s  relative to production worker pay on this data.

The golden goose

So why is this happening. Have we we got more companies that need leaders, driving up demand? Or perhaps fewer people coming out of CEO school looking for sandpits, reducing supply? Or maybe the value of what CEOs do has gone up over time somehow.

You can take your pick from a large number of hypotheses out there in the land of the commentariat. A selection of ideas follows.

  • Some, like these folk in the Wall Street Journal, argue CEOs generate their remuneration (which is often linked with share prices) from manipulating short-term results to drive up the value of their options, and don’t worry enough about long-term company health.
  • The Economist says that the increasing divergence between CEO pay and the pay of the unskilled worker is effectively due to globalisation. Referring to the UK, it says that CEOs with relevant skills are increasingly hard to find as companies diversify and internationalise (although presumably the HR department doesn’t lack for people willing to put their hat in the ring for $10 million a year). More soberingly, there is less to distinguish an unskilled worker in the UK from one in India or China these days, pushing down wages at the bottom end of the labour market as jobs move to where labour is cheapest.
  • Warren Buffett, billionaire investor, is on record as saying (see page 16 of his 2005 report to shareholders) “Too often, executive compensation in the U.S. is ridiculously out of line with performance”, and he particularly criticised large CEO exit payments:

Getting fired can produce a particularly bountiful payday for a CEO. Indeed, he can “earn” more in that single day, while cleaning out his desk, than an American worker earns in a lifetime of cleaning toilets.”

(Mr Buffett is not so indiscreet as to reveal how much time he has spent cleaning toilets in his lifetime).

  • The misalignment Mr Buffett talks about could be because compensation of executives in the US is more like a process of executives using their power to influence their own compensation and extract as much as they can rather than pay arrangements that are aimed at maximising shareholder value.
  • Or it might be because no Board wants to admit that they have a below average CEO by setting a below average pay package in this era when everyone knows what CEOs earn (although I think the world would be a better place if information on what people earned was more freely available).
  • Some say CEOs are mates with the people who set their pay and there is an unspoken rule that if they get approved higher salaries, then they will reciprocate when it comes to making the decisions for others. Or that those advising the relevant peeps on what the CEO should be paid are conflicted by other valuable work that they are doing for the CEO. Or that more generally, there just isn’t sufficient connection between company results and what the boss gets paid.
  • Paul Krugman, Nobel Prize winning economist, argues that the upsurge in executive pay was brought about by political and social factors, including an environment where the media and politicians are less likely to criticise inflated pay rates, weaker unions, and a sharp decline in marginal tax rates.
  • These academics argue that it is basically because the value of the companies CEOs run has gone up – similar to the Economist’s argument. So compensation for executives at the largest companies has risen because the market capitalisation of the largest companies has gone up. If you want to be paid more, work for a bigger company. Although reportedly business services, computers and banking are exceptions – they get paid more anyway. Leading some to say that “perhaps chief executives can add more value in more dynamic sectors”.

Or you might not really care why it happens, but just want it to stop.

Input to output ratio

Interestingly, precisely none of these people think high CEO pay has anything much to do with CEO performance itself. Which leads us on to the interesting question of whether CEOs actually matter at all.

And that in turn leads us on to this really interesting Atlantic article. I quote.

In their groundbreaking “Leadership and Organizational Performance: A Study of Large Corporations,” first published in 1972 in American Sociological Review, Stanley Lieberson and James O’Connor … asserted that the CEO’s influence was seldom decisive in a company’s performance…. “Industry effects,” such as the amount of available capital and the stability of the market, accounted for almost 30 percent of the variance in corporate profits. “Company effects,” such as the firm’s historical place in the corporate pecking order, explained about 23 percent. “CEO effects” explained just 14.5 percent. And even this impact should be viewed skeptically: it unavoidably bundles CEO actions that were genuinely smart and skillful with those that were merely lucky.

Which, if true, means that your task as the CEO is to get your company into an area that is growing quickly. Jeffrey Immelt, the CEO of General Electric (the third largest company in the world by some measures), is reported to have said “Not only could anyone have run GE in the 1990s, [a] dog could have run GE. A German shepherd could have run GE.” Previous CEO Jack Welch more or less agreed with this assessment.

Others are even more sceptical about the value of CEO. The article again:

James March, a management professor at Stanford, says that in any well-run company that’s conscientious about grooming its managers, candidates for the top job are so similar in their education, skills, and psychology as to be virtually interchangeable. All that matters is that someone be in charge. “Management may be extremely difficult and important even though managers are indistinguishable,” he writes. “It is hard to tell the difference between two different light bulbs also; but if you take all the light bulbs away, it is difficult to read in the dark.”

Eek. How much do we pay them again to keep the lights on?

Silver linings

The Atlantic eventually conclude with two interesting points:

  • One, it is important to ask not whether CEOs add any value, but when they add value, i.e., in what circumstances do you want a rockstar CEO and when would rather have someone less dramatic and ultimately less change-oriented.
  • Two, good CEOs can improve things a little bit. Bad CEOs can really stuff things up. I think anyone who has ever had a boss or been a boss knows this. It is much much easier to stop/ruin/doubt/undermine than it is to support/improve/really add something useful.

I note the irony in Atlantic feteing the then CEOs of Research In Motion, Mike Lazaridis and Jim Balsille, whose “newest BlackBerrys are flying off the shelves”. No more. This is Research In Motion’s share price  for the last five years (the article was written June 2009). Mr Balsille is particularly infamous for saying that he wasn’t worried about the iPhone, and didn’t think it would affect sales of Blackberrys. That said, they got the last laugh, to the tune of $12m between them when Research In Motion finally showed them the door.

Progressive conservative

I looked at who pays how much tax (after National’s 2008 tax cuts) before. The 2012 figures from the Treasury are now out, so the latest numbers are below. One thing I always think is interesting about that is how skewed the income tax base is. More than a third of the income tax is paid by the 6% of income tax payers with the highest incomes. The 20% of taxpayers with the lowest incomes pay only 1% of the tax – a combination of their low incomes and low tax rates (most notably the 10.5% rate on incomes under 14k).

Number of people Amount of tax
(000) % (m) %
0-10k 667 20 198 1
<50k 2440 73 6,618 27
>50k 903 28 18,509 72
>100k 197 6 8,806 34

Clearly part of the reason higher income earners pay more tax is because they earn more money. But unfortunately the figures don’t specify what proportion of income was earned by each group, so we can’t line up income against tax and see how skewed incomes are, or how progressive the tax system is. And the figures also do not include anything about the distribution of cash benefits (most importantly tax credits, superannuation and welfare payments) – although there has recently been published some info on this that I come back to below.

I think that in a modern welfare state, if there is a big misalignment between those who pay the tax and those who receive the benefits, it can be very hard to restore a more sensible balance. In the crudest sense, those who receive the benefits vote for their continuation, and those who pay for it could be powerless to change the situation. Or it could be skewed in other ways, with the powerful able to control the political environment to prevent changes that would require them to shoulder a greater fiscal burden, or those who do not fund the government losing interest in the process of government itself . And all of this is even more of a challenge if there isn’t sufficient transparency about who is paying for what, and who is receiving the benefits.

More broadly, I think we can look at the welfare state as a more or less shared set of agreements and understandings about what one has to give, and what one gets in return. Citizenship isn’t really a mercantilist trading arrangement – at least I don’t think it is for most people – but this kind of analysis is interesting because I worry that it can undermine the basic trust that underlies society if some people feel that others are getting too much of a free ride, at either end of the income spectrum.

Around the world

It is interesting to try to get these New Zealand statistics in context. There is some easily available evidence from Australia, Ireland and the United States. For comparison with what follows, for New Zealand in 2012, the 54% of the population earning less than 30k NZ pay 12% of the tax.

We can start with a picture from Australia, from here

 

A little hard to interpret, but if you follow the proportion of taxpayers on the bottom of the chart out to the right, you can see that the lowest income 50% of taxpayers earn around 25% or so of the income and pay about 15% of the tax, although this does not include taxpayers who earn nothing at all (which, for reference, is 8% of taxpayers in New Zealand). So it looks fairly similar to New Zealand.

The Irish situation seems to be much more skewed. From these figures you can see that the 54% of the population earning less than 50k Euros earn 21% of the income in total and pay only 3.1% of the income tax.

 

And, perhaps no surprise given the general story on the skewedness of incomes there, but the United States is even more skewed on these figures, with the 50% of the population earning less than 32k US earning 14% of the income and paying only 2% of the tax.

A summary table.

Country People Threshold Income Tax
New Zealand 50% 30k 12%
Australia 50% 25% 15%
Ireland 54% 50k 21% 3%
United States 50% 32k 14% 2%

Which would cause you to think that the best place to have a low income is the United States, at least as far as income taxes are concerned.

One note of caution amongst the many that are probably justified. These figures do not include consumption taxes (i.e., GST), – I assume that this would flatten the distribution somewhat because people on lower incomes save less money and therefore pay proportionally more consumption tax. And they do not include taxes on investment income or property – I assume that this would skew the distribution in the direction of higher income earners, since I assume they are the ones earning the most from their investments, but I don’t know this for sure – maybe low income retired people are also living off their investments to a large degree.

Welfare differences

I just saw recent media coverage that talks about effective tax rates in New Zealand including the impact of tax credits and welfare programmes. The IRD reckons “high net worth individuals” (who have more than $50m bucks) pay around 34% tax on their personal incomes, and around 28% when other income taxed at lower rates was included. As for those on more modest incomes:

The parliamentarians found it was more difficult to calculate an average tax rate for middle income New Zealanders, but an indicative comparator for someone on an average wage was 17.9 per cent, although Working for Families entitlements would reduce the average net tax rate to 8.4 per cent for a single-earner parent with one child, or 2.3 per cent with two children.

That is to say, if you have a modest income and children, you pay almost no tax thanks for the tax rebates available for having children. As the Parliament concluded, when Working for Families rebates are included near half of all households:

effectively pay no net income tax, and roughly 40 to 50 percent of total net income tax is paid by those in the top 10 per cent income bracket.

Interestingly, the Treasury has recently noted that the total tax paid by the highest income earners fell when the top tax rates were put up in 2001, presumably because high income earners could structure their affairs to dodge the higher taxes. It will be interesting to see the numbers redone subsequent to the cut in the top tax rate in 2008.

WIIFM

Given all that, one would expect common cause between those who pay for the welfare state against those who benefit from it. But it is particular interesting that this income group conflict is not how it plays out in politics, which is to say that people do not line up on these issues in accordance with their economic interests. I note, for example, Niall Ferguson’s recent statement in the Reith Lectures that all young Americans would be members of the Tea Party if they knew what was good for them (because they face having to pay in the future for all of the entitlements the baby boomers created effectively for themselves).

In practice we see particularly young people voting against their economic interests all the time. One random example: there were students in the streets of Paris protesting against public sector pension changes that would reduce the contributions that those same students would have to make to future pension costs. This far and no further, they cry. We have come to raise our taxes. Odd.

Free to roam

Spare a thought for the hapless international air traveller. Not only is s/he subject to confusing and illogical security requirements and passenger safety announcements, but s/he must also furnish him/herself with a passport at his/her own expense, and fill in various forms as the price of admission to another nation.

I am essentially hostile to the whole idea of passports. Partly because they are unnecessarily difficult to use,but more fundamentally because I can not see why free people should be required to let governments know where they are going, or why. Passports are obviously useful given that the world is separated into states and governed by governments, but they have become an overly powerful instrument of control, and I think our lives would be better if we radically scaled back their use. This will be tricky, but I have some ideas.

Passepartout

As noted, passports are very useful. I can see two main purposes. One, they let you go from country to country, and two, they enable you to identify yourself to others as definitely being you in a highly-trusted way.

If we weighed up the costs and benefits of passports, then I think we would overall conclude that they make the world a better place and therefore should be retained rather than completely abolished (at least while we still have this old-fashioned world split into states that like to define their own citizens and control their own borders).

But we could cut down the costs of getting and using passports for travelling across borders (purpose one) without losing their essential usefulness as a means of identification (purpose two). This would make the positive contribution of passports to the overall welfare much bigger, and generally make the world a better and more positive place to be.

The point of the identity checks at the border is basically to try to figure out whether an arrival will be of benefit to the country s/he is visiting. It is very difficult to answer precisely that question on an individual basis though. So the bureaucratic response is to divide arrivals up into categories and apply rules to them that, it is hoped, might help separate the wheat that a country wants to admit from the chaff that it wants to exclude.

I find this idea remarkable:

  • First, it seems highly improbable that one could identify anything useful about the benefits a new arrival will bring to a nation from a passport photo, a few answers on a form, and some questions put to you by a usually indifferent border-based bureaucrat.
  • Second, practically everyone is admitted anyway – they are almost all short-term visitors and they almost all go home again as planned, so the passport information and the form responses must be irrelevant in almost all cases to the question of whether to let someone in or not. In practice, the form is used to try to figure out if a visitor is likely to stay longer than permitted – and therefore should be forced to used the more circuitous immigration process. There is no read on the number of false negatives, i.e., people who are turned away or don’t bother to go through the process but who would have had a major positive impact on New Zealand.
  • Third, the evidence is that immigration is essentially a good thing in the long-term. On UK evidence the biggest downsides are to lower-skilled workers in an economic downturn (presumably on the basis that the immigrants themselves are lower-skilled), limited to the first few years and concentrated on migrants themselves, i.e., new migrants compete with earlier migrants rather than with long-established citizens (see also this). Immigration does not seem to drive up welfare payments on this evidence, and it seems hard to believe that we would run all of this complex system to try to detect the people who might come to New Zealand to get free health care.
  • Fourth, not only does getting a passport cost money and involve major hassles (although Armenia seems like a great place to be a citizen based on this survey since they don’t charge for it at all), but the costs of processing all those passengers is high as well. The New Zealand government will spend $183 million in this year on processing all those people, some or all of which is presumably paid by the travellers themselves as the price for their intrepidity in choosing to cross a border.

How did we get here

In practice in New Zealand we have to run an open immigration policy to compensate for the enormous outflow of people to Australia and other points abroad every year.

But I fear that passport control at borders, while well-motivated, has gradually become an instrument of oppression rather than freedom. Rather than starting from the point of view that governments should have to have a good reason to detain anyone at the border, we start from the point of view that people need permission to cross, implicitly saying that we need to stop everyone. Travellers need to prove themselves qualified to be allowed to cross the border, rather than governments taking responsibility for establishing who should not be able to and not molesting the rest of us.

The police are specifically prevented from detaining citizens unless they have some reasonable reason to think that they are doing something dodgy. The recent furore over Arizona is a demonstration of how strongly-held this principle is, even in the case of suspected illegal immigrants. If the police were set up like the border services, however, they would be empowered to stop everyone, and those detained would need to demonstrate at their own cost why they should be allowed to be free to go. This seems very bizarre.

Of course, we all submit, more or less resignedly, to these controls. As Proudhon had it in the middle of the nineteenth century (quoted by Mr Scott in his brilliant book Seeing Like a State):

To be ruled is to be kept an eye on, inspected, spied on, regulated, indoctrinated, sermonized, listed and checked off, estimated, appraised, censured, ordered about … To be ruled is at every operation, transaction, movement, to be noted, registered, counted, priced, admonished, prevenued, reformed, redressed, corrected.

Partly we may have evolved this system because visitors don’t vote and immigration controls are a way to be seen to protect the nation from the image of ravening hordes washing up on one’s shores from an uncertain world. To me immigration control seems like a bureaucracy that has developed its system in its own interests, rather than in those of the public it is supposed to serve.

What must be done

Fortunately, I think there are many practical things that can be done to strike a blow for freedom, while still retaining passports for the moment:

  • Just let anyone in from particular countries – At the moment, New Zealand lets in anyone from Australia very easily (and vice versa), although travellers still have to fill in the forms. We could extend the same arrangement to everyone from the UK and USA to start with and see how that goes.
  • Target individuals of interest – This is how Customs go about their job of border protection, i.e., they look for people they think might be doing something dodgy, and then focus their enforcement energies on them. All the other people get to pass by unhassled. Airlines check a person’s name and photo at check-in anyway. The New Zealand authorities could review this information while the person is in flight, and then re-inspect only the people who were of interest.
  • Inspect people’s passports randomly – Since almost everyone who shows up at any border is just a visitor planning to go home to their own country, and almost everyone gets in anyway after answering some questions, there seems little value in inspecting everyone’s passport or running the complex immigration process. Instead there could be an approach based on randomly checking the identities of a few persons, and everyone else could just wander in and find their bags, and meander off to do whatever they came to New Zealand for in the first place.
  • Collect information once – There is clearly value in information on people coming and going between countries. In particular, it is the only regular, frequent data the New Zealand government collects on the skills of people joining and leaving the economy. This is why the form includes a question on occupation. Even then, one would have to wonder how reliable the responses are and there are many questions on the form (for example, name, date of birth, nationality, passport number) that are simply repetitive (given that you have to hand over your passport anyway), and other data (for example, flight number, port of embarkation) where the data could easily be got elsewhere without having to hassle passengers for it. In any case, it is not at all clear to me that all the information put on the form is actually used and useful (address information being a primary example, and don’t even talk to me about the fingerprints that the US authorities take on entry).
  • Only collect information from a sample of travellers – Following this train of thought a bit further, why not simply collect the information from passports automatically on checkin (this is name, date of birth, and nationality, and presumably destination and flight number), and then ask every tenth person to fill in the form. The sample size would still be big enough to deliver useful statistical information, but most passengers would be free of the hassle of bothering with the form.

All helpful steps on the way to greater practical freedom for citizens of the world.