The Kiwi Effect

New Zealand has been rated the world's most free economy by The Economist due to reforms initiated by the Labour government. The old Crown departments have been split into their policy, regulatory, service-delivery and commercial functions. The government has also become the first to adopt the same kind of rigorous accounting standards that are demanded of commercial firms - every new policy must be subjected to long range and analysis of its costs and impact. Having seen New Zealand as the world's laboratory for public sector reform, there is much we could learn from the Kiwi effect.

 

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A Fund for Life

The authors of 'A Fund for Life' argue that the UK state pension should be remodelled on Chile's privatized system which replaced its state pension with compulsory personal savings accounts which have become actuarially sound and secure, and offer flexible retirement ages, higher rates of return and stimulate economic growth.

 

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Forests for the People

The public forest estate no longer serves a public purpose. It occupies 10% of the area of Great Britain and over 15% of the rural area of mainland Scotland. All of this is outside local control. Over the last eighty years the national forest policy has been a complete failure and the Forestry Commission is to blame. There has been no return on investment, no commercial value and worst has failed to deliver on any of its objectives. The authors claim that the public forest estate should be freed from government constraints and protection. The woodlands should be returned gratis to the residents of the communities of which they could then become part.

Miles Saltiel is an investment banker with experience of the privatizations of Eastern Europe. Allan Stewart MP is a former Minister of State at the Scottish Office.

 

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A Power of Good

The privatization and liberalization of the UK electricity industry is the most important and influential reform within the worldwide electricity sector to have occurred in the last half century. Competition was introduced to large parts of the industry, the industry was transferred from state ownership into the hands of private investors, and a new system of independent regulation was established, presided over by a new regulator, the Director General of Electricity Supply (DGES), who presides over the Office of Electricity Regulation (OFFER). The basic principles of the reform are:

  • Seperation of functions – into generation, transmission, distribution, and supply.
  • Regulation of monopoly elements (transmission and distribution).
  • Competition in generation and supply.
  • Transitional arrangements (including support for nuclear generation).

This report outlines the results of these changes.

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Too Much to Swallow

Excise Duty and Value Added Tax account for nearly 2/3 of the price of spirits sold in the UK. This excessive tax rate penalises domestic production, encourages consumption of nearly all imported goods, costs jobs in the domestic drinks industry, and encourages bootleg and smuggled alcohol consumption. The UK can solve this problem by cutting excise duties gradually over five years to reach equivalency with EU duties, harmonising UK and EU duties, and signalling the goal of tax neutrality between alcoholic drinks.

 

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Pre-schools For All: A market solution

This report by David Soskin discusses the issues and solutions surrounding nursery education within the UK. He proposed a number of reforms, which he argues will improve the provision of pre-school education, such as a new independent inspectorate, removing local authorities from the provision of pre school education, removing bureaucratic controls and planning regulations, and setting up a targeted voucher system, so parents have more flexibility to chose where to send their children.

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