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Economics Nobel laureate says AI’s ‘amazing possibilities’ need firm rules

Economics Nobel laureate says AI’s ‘amazing possibilities’ need firm rules

A winner of this year’s Nobel prize in economics warned today that artificial intelligence offers “amazing possibilities” but should be regulated because of its job-destroying potential. The remarks from Canadian Peter Howitt, professor emeritus at Brown University in the United States, came amid growing concerns about how AI will impact society and the labour market. California Governor Gavin Newsom today signed a first-of-its-kind law regulating interactions with AI chatbots, rejecting a push from the White House to leave the technology unchecked. Howitt was one of three economists honoured today by the Royal Swedish Academy of Sciences for work on how technology drives and affects growth. His research with fellow winner Philippe Aghion of France focused on the theory of “creative destruction” in which a new and better product enters the market, and the companies selling the older products lose out. Howitt told a news conference that it remains to be seen who will be the leader in AI, and “we don’t know what the creative destruction effects are going to be”. Brown University Professor Emeritus of Economics Peter Howitt. Photo / Ashley McCabe, AFP “It’s obviously a fantastic technology that has amazing possibilities. “And it also obviously has an amazing potential for destroying other jobs or replacing highly skilled labour. “And all I can say is that this is a conflict. It’s going to have to be regulated,” he said. “Private incentives in an unregulated market are not really going to resolve this conflict in a way that’s best for society, and we don’t know what’s going to come from it.” Howitt, 79, said it was a “big moment in human history” and likened it to past periods of technological innovation, including the telecoms boom of the 1990s, and the dawns of electricity and steam power. He said those innovations all demonstrated how technology can enhance and not just replace labour. “How we’re going to do it this time? I wish I had specific answers, but I don’t,” he added. The third economist to be honoured today, American-Israeli Joel Mokyr, was more sanguine about the impact of AI on the labour market. “Machines don’t replace us. They move us to more interesting, more challenging work,” Mokyr, 79, told a news conference live streamed from Northwestern University in the suburbs of Chicago. “Technological change not only replaces people, it creates new tasks.” American-Israeli scientist Joel Mokyr. Photo / Northwestern University in Illinois, AFP Mokyr won his Nobel for his work on identifying the “prerequisites for sustained growth through technological progress”. He said his main concern about the labour market of the future was not “technological unemployment” but labour scarcity as the population ages and fewer people enter the workforce. Howitt said that when he and Aghion first wrote their seminal 1992 paper on creative destruction it took five years to get it published, but his collaborator knew they were on to something special. “Right from the beginning, from our very first research, I remember back in 1987, Philippe saying we’re going to get a Nobel Prize for this. I said, ‘Sure, sure, sure,’” Howitt recalled. “He said, ‘Our time will come. Our time will come,’ okay, and now it’s come. Amazing.” - Agence France-Presse

Reserve Bank to ease mortgage lending restrictions from December

Reserve Bank to ease mortgage lending restrictions from December

The Reserve Bank is to relax restrictions on lending by banks making it easier for low deposit borrowers. From December, commercial banks will be allowed to do up to 25% of new lending to owner-occupiers with a deposit of less than 20%. That’s up from the current speed limit of 20%. At the same time, banks will be allowed to do up to 10% of lending to investors with deposits or equity of less than 30%, up from the 5% current limit. Reserve Bank acting assistant governor of financial stability Angus McGregor said that over the past year the bank had reviewed its approach to setting loan to value ratio (LVR) restrictions. “We concluded that the introduction of debt-to-income [DTI] restrictions last year means LVR settings can be less restrictive on average. This includes looser default settings that we expect will be in place most of the time, except for when risks are particularly elevated.” DTI restrictions help to underpin borrower resilience by acting as a guardrail for risky lending, helping contain the severity and consequences of housing market corrections. McGregor confirmed DTI settings would remain unchanged as they are set to limit high-risk lending in housing upswings and periods of low interest rates, without the need for adjustment. “Now is an appropriate time to move to the new default settings. House prices are within our range of sustainable estimates. Growth in mortgage lending remains moderate and the share of high-risk lending is low.” The Reserve Bank will consult with banks on changes to their Conditions of Registration over the next two weeks. Government welcomes change Finance Minister Nicola Willis welcomed the news, and said that home ownership is part of the Kiwi dream. “Relaxing the restrictions on the amounts banks can lend will make it easier for Kiwis to get a foot on the property ladder. “Presently, only 20% of the new loans banks are allowed to make to owner-occupiers can go to buyers who have deposits of less than 20% of the value of their properties. The Reserve Bank is proposing to increase that limit of new lending to 25%. That will make more funding available to first-home buyers.” Willis said she looked forward to hearing the outcome of the Reserve Bank’s consultation with the commercial banks. Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.

Air New Zealand and Air Chathams team up with new interlining deal to offer single ticketing service

Air New Zealand and Air Chathams team up with new interlining deal to offer single ticketing service

A new deal will soon allow Air New Zealand and Air Chathams customers to book a single ticket for flights on both airlines. Starting with journeys between Whakatāne and Auckland, the interlining arrangement will kick in this December. Air New Zealand said checked baggage would be transferred through to the customer’s final destination, making for a smoother travel experience. An Air New Zealand Q300 (de Havilland Canada Dash) and Air Chathams Saab 340A arrived at the airport this morning to celebrate the agreement. Guests included Whakatāne’s mayor-elect Nándor Tánczos, mana whenua and airline representatives. The flag carrier’s incoming chief executive Nikhil Ravishankar welcomed the partnership. “For example, someone travelling from Whakatāne to Kerikeri can now book a single journey, connecting on to an Air New Zealand service,” Ravishankar said today. “By working together, we’re making it easier for customers in more parts of the country to stay connected.” Air Chathams chief executive Duane Emeny said the partnership would deliver more choice and reach for regional customers and provide a platform to promote Whakatāne. “This partnership is an important first step and we see real potential to build on it with further regional connections in the future and continue to help unlock opportunities for growth, employment and mobility across the country,” Emeny said. “These connections are vital for local economies, by ensuring access to tourism, business, education and healthcare,” Associate Minister of Transport James Meager said. Air New Zealand's next chief executive Nikhil Ravishankar said someone travelling from Whakatāne to Kerikeri could now book a single journey. Some regional airlines have been under pressure lately. Earlier this year, Air Chathams indicated it might have to discontinue its Whakatāne route. Last month, Meager and Regional Development Minister Shane Jones announced concessionary loans of up to $30 million from the Regional Infrastructure Fund for small airlines. And under the new Aviation Action Plan, the Government has been urged to support vulnerable regional routes by using the regional infrastructure fund to enable interlining arrangements between regional airlines, Air New Zealand and others. Whakatāne District Council chief executive Steven Perdia said the council has long advocated for something similar to an interline arrangement. “The partnership is great news for Whakatāne and the wider eastern Bay of Plenty and it’s good to see Air New Zealand and Air Chathams work together in support of regional New Zealand,” Perdia said. Under the agreement, Air New Zealand will initially sell Air Chathams’ Whakatāne-Auckland services as part of connecting journeys. An example of that might be Whakatāne to Auckland to Queenstown, or Dunedin to Auckland to Whakatāne. Air New Zealand said more regional connections will be considered at a later stage. John Weekes is a business journalist covering aviation and courts. He has previously covered consumer affairs, crime, politics and courts.

Madagascar’s cornered leader ignores calls to resign after spiralling unrest

Madagascar’s cornered leader ignores calls to resign after spiralling unrest

Madagascar’s embattled President Andry Rajoelina said today that he was sheltering in a “safe place” following an attempt on his life, ignoring calls to resign after spiralling unrest that has forced him into hiding. The twice-delayed speech marked his first public address since a mutinous Army unit backed anti-government protests and followed reports that the 51-year-old leader had fled the country. “Since September 25, there have been attempts on my life and coup attempts. A group of military personnel and politicians planned to assassinate me,” he said in a live address on Facebook. “I was forced to find a safe place to protect my life,” he said, without revealing his location. The protests, led by mostly young demonstrators, erupted over chronic power and water cuts in the impoverished Indian Ocean country, but developed into a broader anti-government movement calling for Rajoelina to resign. Rajoelina, a former mayor of the capital, Antananarivo, called for the constitution to be respected, ignoring calls to step down. “I am on a mission to find solutions,” he said. Rajoelina first came to power in 2009 following a coup sparked by an uprising that ousted former President Marc Ravalomanana. Radio France Internationale said Rajoelina left Madagascar on a French military plane at the weekend, but French officials did not immediately respond to AFP’s request for confirmation. French President Emmanuel Macron, who expressed “great concern” over the island’s crisis, also refused to confirm this. Rajoelina has not appeared in public since last Thursday NZT and his address, set for state television and radio, was twice delayed as armed forces attempted to seize the state broadcaster. Defying orders Earlier in the day, mutinous soldiers and security forces who pledged support to the demonstrators at the weekend joined jubilant crowds in front of Antananarivo city hall, in a rally that had an air of celebration amid expectations Rajoelina would step down. Among the crowds in the morning rally were soldiers from the army Capsat unit, which played a major role in the 2009 coup. At the weekend, the unit declared it would “refuse orders to shoot” on demonstrations, some of which have been met with harsh security force action. Also present were officers from the gendarmerie paramilitary police force, accused of using heavy-handed tactics during the protests. They admitted in a video statement to “faults and excesses” in their response. The United Nations has said at least 22 people were killed in the first days of the protests, some by security forces and others in violence sparked by criminal gangs and looters. Rajoelina has disputed the toll, saying last week there were “12 confirmed deaths and all of these individuals were looters and vandals”. As pressure mounted on Rajoelina, he pardoned eight individuals in a decree issued yesterday, including French-Malagasy dual national Paul Maillot Rafanoharana, who was sentenced in 2021 to 20 years in prison for an attempted coup in Madagascar. ‘Apologise and resign’ Amid rumours that Rajoelina had fled, his Government said at the weekend that he remained in Madagascar and was managing national affairs. Before his speech, protesters said they expected him to step down. “We hope that he will apologise and genuinely announce his resignation,” law student Finaritra Manitra Andrianamelasoa, 24, told AFP at the city hall gathering, where a large flag of the Gen Z movement that led the protests was on display. “We already expect him to offer his apologies to all Malagasy citizens, as we have had many casualties, relatives, who have been injured during the protests,” said 19-year-old Steven Rasolonjanahary. To try to defuse the protests, the President last month sacked his entire Government. Meeting one of the demands of the protesters, the Senate announced the dismissal of its president, Richard Ravalomanana, a former general of the gendarmerie. Madagascar has had a turbulent political hist...