Unlocking expert knowledge

The impact of artificial intelligence on the Australian finance industry

Date: 21/05/2025

Report for the Australian Finance Industry Association

Sapere and King & Wood Mallesons (KWM) were engaged by the Australian Finance Industry Association to research the impact of artificial intelligence (AI) on the Australian Finance Industry.

The purpose of the research was to identify and analyse:

• the current and expected medium term use cases that involve the innovative use of AI in the finance industry
• the economic impact of adoption of GenAI in financial services for the Australian economy
• the regulatory challenges, risks and opportunities
• the potential governance approaches that can be adopted by organisations in relation to implementation or deployment of GenAI use cases.

In this report we distinguish between: Narrow AI (being AI that typically provides a ‘point’ solution for a particular use case, such as decision-making based on predetermined algorithms and rules); and Generative AI (being AI that generates new content based on training data in response to prompts).

As a key input into the research, KWM and Sapere surveyed and interviewed a number of participants in the Australian finance industry on their use and adoption of AI. Participants included banks, non-bank lenders, finance companies, fintechs, providers of vehicle and equipment finance, car rental and fleet providers, as well as service providers that provide technology or AI powered services.

This report uses the answers we received through interviews with participants and review of the current literature and market commentary, to analyse the impact that AI is having, and that we expect AI to have, on the Australian finance industry.

The estimated productivity gains in the finance sector provided the basis for modelling the potential scale of economic impacts to the Australian economy. Under our medium scenario this is estimated to add an additional $48.9 billion to GDP (in NPV terms) over the ten years to 2035.

The Sapere team involved were David Graham and Jeremy Thorpe.

More information can be found on the AFIA website:  AFIA urges government to adopt supportive AI frameworks to unlock billions in economic growth

Victorian Fuel Reforms – Regulatory Impact Statement

Date: 21/05/2025

Sapere was engaged by the Victorian Department of Government Services to prepare a Regulatory Impact Statement for Phase 1 of the Victorian Government’s Fair Fuel Plan.

Under Phase 1 of the Fair Fuel Plan, it will be mandatory for all Victorian fuel retailers to provide real time pricing data to be published through a new fuel finder feature on the Service app.

The fuel finder feature on the Service Victora app is intended to provide up to date and readily accessible information to enable Victorian consumers to compare prices of fuel before purchasing.

The RIS considered the different options that could achieve the Victorian Government’s objectives for Phase 1 of the reforms including non-legislative options and approaches in other jurisdictions. The RIS has been published for public consultation during June 2025.

The report was written by David Graham, Sally Carrick and Richard Tooth.

Natural hazards-related public spending in New Zealand: Tracking costs over time by the nature of spending

Date: 15/05/2025

Insurance Australia Group (NZ) commissioned Sapere to examine central government spending on natural hazards—how well it is captured, where it is focused, and how it has changed over time. We found:

1. Significant central government spending: Between 2010 and 2025, $18.4 billion was identified in government appropriations, plus $14.1 billion in public insurance spending (partly funded by levies and reinsurance).
2. Spending is increasing and recovery-focused: Most spending follows major events and is focused on recovery, with baseline spending also rising.
3. Wider costs are even larger: IAG NZ estimates the annual cost of natural hazards could be as much as 4.3% of GDP when private costs and broader social and economic costs are included. Australian analysis suggests direct costs may understate true economic costs by at least 50%.
4. Other parties bear major costs: Local government, iwi/Māori, insurers, private entities and households also incur significant expenses.

With data limitations, we took a conservative approach building on earlier work by the Office of the Auditor-General that likely underestimates spending. We identified areas of improvement that would help including better reporting, clearer categorisation, and coordination with other government levers. Addressing those areas of improvement would enhance understanding and in time potentially effectiveness.

The report was written by Angus White, Corina Comendant, Douglas Yee, and David Moore.

Thanks to those that engaged with us as part of this work.

Further information about this work can be found on the IAG website: New Zealand’s $64b spend on natural hazards heavily skewed to recovery over resilience

Economic Analysis of the Electricity Authority’s Proposed Level Playing Field Measures

Date: 06/05/2025

Genesis Energy asked Sapere to undertake an economic analysis to critically assess the Electricity Authority’s (the Authority) Level Playing Field measures: Options Paper, released on 27 February 2025.

The Authority is seeking feedback on proposals to address perceived competition risks in New Zealand’s electricity market, particularly around the availability of peak hedge contracts. These concerns stem from the concentration of flexible generation among four vertically integrated generator-retailers (gentailers). The Authority argues that vertical integration limits competition, but it offers no clear evidence to support this.

The Authority acknowledges that the evidence it does have points to scarcity of peak hedges being driven more by underlying fuel and capacity constraints—especially in flexible generation—than by anti-competitive conduct. No single gentailer has sufficient market power to foreclose competitors, and flexible generation is already shared across multiple players.

The Authority’s proposed interventions, including mandated hedge offerings on “even-handed” terms and a shift from price-based to quantity-based allocation of scarce capacity, may undermine market efficiency. These changes have the potential to increase regulatory uncertainty, discourage investment, and overlook the benefits of vertical integration i.e. it helps manage risk and incentivises new generation.

Rather than addressing the root cause—physical scarcity—the proposals risk distorting the market and harming consumers. A better approach would support investment in flexible generation and enhance transparency without dismantling established risk management frameworks.

The report was written by Toby Stevenson and Kieran Murray.

More information can be found on the Authority’s website – Level playing field measures.

Independent expert panel report commissioned by Mercury

Date: 01/05/2025

This submission, commissioned by Mercury for the Energy Competition Task Force and interested parties on “level playing field” proposal and underlying issues, was written by an independent expert panel involving Dr Stephen Batstone and David Reeve from Sapere.

The Task Force aims to tackle two concerns in New Zealand’s electricity market: potential market power in flexible hedge contracts and cost inequities between vertically integrated and independent firms. While the first is a legitimate competition issue, the second is less so. The Task Force’s proposed regulatory intervention—administered access to hedge contracts—would be a fundamental shift, involving the regulator in determining fair contract terms. This would increase complexity and alter expectations of the regulator’s role.

The Task Force’s formation was driven by high wholesale electricity prices during winter 2024. Its initial stance appears to assume these prices stemmed from weak competition due to vertical integration. It argues that gentailers give favourable internal contract terms, disadvantaging independents, especially in flexible, shaped hedge products. However, the Task Force has not clearly demonstrated this or provided evidence of market failure. It has reversed the burden of proof, expecting gentailers to prove they aren’t exercising market power.

The structure of wholesale prices doesn’t reward investment in security of supply, and neither do contract markets. The paper argues that high spot and contract prices were not caused by vertical integration or market power but by physical gas constraints and uncertainty. With growing reliance on intermittent renewables, flexible supply is becoming critical. While this may create future market power risks, the issue stems from fuel ownership concentration—not vertical integration. The Task Force’s proposed non-discrimination rules won’t solve this.

Economic analysis by Houston Kemp finds the Task Force’s “equal input regulation” could reduce competition and efficiency, particularly given difficulties in pricing complex risk products. Proposals for a strategic reserve (similar to 2003’s Whirinaki) are discouraged due to their distortionary impacts.

Finally, public data does not support claims of margin squeeze, stalled innovation, or crowding out of new generation. Industrial demand decline appears limited, with only the wood sector showing signs of further reduction.

For more information, the convenor of the expert panel, Tony Baldwin, has posted about this report on LinkedIn.

Mandatory Market Making under high stress conditions

Date: 14/04/2025

The Sapere submission, written by Toby Stevenson, Corina Comendant and Rohan Trill, examines whether to implement a permanent “circuit breaker” mechanism for mandatory market making in New Zealand’s electricity futures market during high volatility periods, following market stress events in 2024. The Electricity Authority consulted on three options:

1. let the urgent code amendment expire and revert to status quo,
2. make the urgent amendment permanent, or
3. modify the amendment. The Authority preferred Option 1 as the default, requiring Option 2 to demonstrate clear superiority.

Sapere proposes an alternative fourth option featuring a traffic light system. When market conditions move from “green” to “amber” (indicating high stress based on levels of price volatility), the Authority would assess whether to provide relief to market makers from their obligations. If relief is granted, the system moves to “red” and activates a volatility control mechanism (VCM) whereby specifications such as bid ask spreads would be relaxed to predetermined levels until the period of stress passed.

The key question addressed is whether long-term consumer benefits from mandatory market making are enhanced or diminished by introducing a circuit breaker with statistical volatility triggers. Sapere argues that a circuit breaker is a superior approach to enforcing business as usual market making specifications during periods of high stress i.e. periods of extreme price volatility.

Value Stacking: Application of BESS to many typical use cases

Date: 01/04/2025

Battery Energy Storage Solutions (BESS) are a critical enabler of New Zealand’s renewable energy future. By enhancing system resilience and supporting the uptake of variable renewables, BESS is fast becoming a cornerstone technology in energy innovation. As battery costs continue to decline and new chemistries emerge, the opportunities for widespread adoption are increasing.

Ara Ake, in collaboration with Sapere, previously investigated the potential for a BESS pilot. Findings revealed that relying solely on the New Zealand electricity market does not generate sufficient revenue to make BESS economically viable. Even a real-world network deferral example failed to meet the necessary economic threshold.

However, a BESS could become viable if it provides significant additional value beyond market revenue (such as energy arbitrage and instantaneous reserves). For instance, instead of merely deferring network investment, a BESS that eliminates the need for infrastructure upgrades while leveraging other revenue streams could unlock
greater economic benefits. From a national perspective, non-network solutions solving network challenges could deliver substantial value, particularly if they integrate multiple revenue sources.

The paper explores the economic viability of BESS through value stacking where multiple revenue streams such as energy arbitrage, provision of instantaneous reserves, peak demand reduction, frequency response, and network investment deferral are combined to
justify investment. It presents scenario modelling of typical use cases across different sectors to assess how BESS can be commercially deployed and where barriers remain.

This report has been prepared for Ara Ake by Sapere Research Group, specifically by Directors, David Reeve and Toby Stevenson.

More information on the Ara Ake website: Value Stacking: Application of BESS to many typical use cases

AIIB Health Strategy: Sector trends and analysis

Date: 11/02/2025

David Moore, Dr Tom Love and a team of analysts at Sapere were commissioned by the Asian Infrastructure Investment Bank (AIIB) in 2024 to assist it with development of the sector analysis underpinning its first health infrastructure strategy.

The Bank’s mission is Financing Infrastructure for Tomorrow, which combines AIIB’s commitment to sustainability with clearly defined thematic priorities. Infrastructure for health that leads to more cost-effective health systems can contribute to improved financial sustainability, thereby also alleviating public debt. Health infrastructure can also improve economic competitiveness, social sustainability and inclusion, and environmental sustainability.

Further information can be found on the AIIB website: AIIB Launches Its First Health Strategy to Strengthen the Resilience, Inclusivity and Sustainability of Health Systems

Understanding the key priorities for the New Zealand electricity industry

Date: 07/02/2025

David Reeve and Stephen Batstone were asked by Mercury Energy to consider the broader electricity industry and the issues facing it as simply as we could. This was a challenge because the industry is complex. The authors landed on two reports – one a graphical representation of the industry and the issues, and an addendum that adds detail to the graphics.

We put together a list of issues that we think of as the symptoms of market issues, with assistance from Mercury and Christine Southey. From there the authors assessed what the root causes of those symptoms are for a heat map of issues, for example a lot of issues are symptomatic of a wholesale electricity market under stress. Studio Unlimited, a creative design studio, helped us put together a set of graphics that we think captures the industry as simply as possible while highlighting the complexity of the challenges. The addendum expands on the graphics and provides links to a number of papers we suggest people read to explore all the issues further.

We were also asked to distil the issues down to the key ones that really matter. Based on our previous work on security of supply, distributed energy resources, and flexibility, we conclude that security of supply (including the gas market) is the predominant cause of market stress, with the attendant impact on prices, and an urgent area of focus. We also conclude that the efficient coordination and pricing of smart technology, distribution networks and retail markets is essential to avoid wasting billions of dollars on networks and demand side technology. A separate issue, we think, is how we encourage the consumer to participate because consumer participation and trust are critical to the future of the industry.

However, overall, we conclude that there are some hard questions that must be asked and answered. Politics has, undoubtedly, both directly and indirectly affected price formation in the wholesale electricity market. The reality is that this temptation will always be there. Therefore, what design changes do we need to best insulate the market (and particularly security of supply) from political whim. There are also critical design questions about wholesale, retail and network challenges; however, we believe New Zealand could lead the world again in developing solutions to these.

Above all, though, the Government and public need accountability not only for the timely delivery of necessary solutions but also for the quality of the outcomes.

Addendum to main summary report: Understanding the key priorities for the New Zealand electricity industry – February 2025

Responding to matters set out in Reviewing risk management options for electricity retailers – issues paper

Date: 20/12/2024

The report by Toby Stevenson, Dr Stephen Batstone and Kieran Murray analyses the Electricity Authority’s issues paper Reviewing risk options for electricity retailers, focusing on the thin market for shaped hedge contracts and potential competition concerns.

While scarcity is a key driver, the Authority examines whether market power influenced pricing. It finds OTC baseload and peak hedge prices likely competitive but cannot determine if super-peak hedge prices reflect competition. The lack of investment in peak capacity over a decade is central to pricing issues. The report warns against intervention, suggesting investment in demand flexibility and batteries will improve market liquidity.

Advice on the implications of the new interpretation of the non-casino gaming machine net proceeds regulation

Date: 11/12/2024

Report prepared for One Foundation Limited.

Review of the Electricity Authority’s proposed amendments to Part 6

Date: 01/12/2024

We were asked by a sub-group of Drive Electric (the Charge Point Operators) to consider the key principles that would underpin a robust and successful commercial environment for new connections to distribution networks. While the question was asked by those looking to connect EV charging points the brief was to consider a good regime for all new connections.

Upon developing the key principles, we then were asked to define the criteria that a reviewer of a new connection regime should look at to determine that the connection regime was open, competitive, and efficient. Following the first consultation by the Electricity Authority on proposed changes for new connection access and distribution connection pricing, we were asked to write the following report on our view of the efficacy of the proposed changes.

This work has prompted a flurry of media attention. Specifically in relation to this work, see Felicity Wolfe’s article, Network connection reform lacks ambition, needs rewrite – Sapere, in Energy News, 24 January 2025.

Additionally, on the Drive Electric website, there are two more related reports by this team:

Principles for access – Developing principles for network connection, March 2024

Achieving efficient investment in public EV charging infrastructure, August 2024

Quality and Safeguarding Frameworks

Date: 14/11/2024

This paper for Whaikaha Ministry of Disabled People and Disability Support Services (DSS) in the Ministry of Social Development (MSD), by Rebecca Rippon and David Moore with sections authored by Gabrielle Baker (Baker Consulting), contributes to developing recommendations for an improved quality framework by drawing on multiple sources of information.

It includes insights from a desktop review, targeted interviews, and a stocktake of existing work and reports. It also incorporates findings from literature on holistic, indigenous, and Aotearoa New Zealand-specific approaches to quality, along with a scan of international and cross-sector quality frameworks, regulations, and mechanisms.

The paper is structured in three parts:

Part One – foundations for a quality framework:
This section outlines the pou (pillars) that underpin the work of DSS. We discuss the principles of Te Tiriti o Waitangi and their implications for a quality framework. We set out the Enabling Good Lives (EGL) principles and consider the ways in which a quality framework can support EGL system-change.

Part Two – regulatory frameworks:
This part describes the current legislative and regulatory environment supporting quality and safeguarding in the disability sector. We look at international regulatory models—particularly in Australia—and consider regulatory practices in other sectors to identify opportunities for improvement.

Part Three – quality measurement:
The final section offers commentary from the literature on how quality and outcomes can be measured within a broader quality framework.

Overall, the paper lays a foundation for designing a future-focused, inclusive, and culturally grounded quality framework, informed by both local and international best practice.

For more information please go to the Disability Support Services website.

Potential uses of Battery Energy Storage Systems for industrial consumers

Date: 04/09/2024

This report, commissioned by the Energy Efficiency and Conservation Authority (EECA), and written by David Reeve, Corina Comendant, Rohan Trill and Stephen Batstone, investigates the potential value of Battery Energy Storage Systems (BESS) for industrial process heat users in New Zealand. A use case for an Electric Vehicle depot is also included. The study examines how BESS can support the transition to electrification. The analysis is based on three specific industrial sites, with the aim of generalising findings to typical use cases.

The primary goal of the study is to model and optimise the value streams of BESS in industrial settings, particularly focusing on:

• energy arbitrage
• reduction of electricity network charges
• accommodating electrification loads such as heat pumps or electrode boilers, and
• co-optimised with gas boilers.

The report also explores the integration of BESS with vehicle depots at industrial sites, where the vehicles have been converted to EVs.

Confluence of factors threatening electricity reliability

Date: 03/09/2024

Mercury asked us to examine security of electricity supply in New Zealand, and whether current arrangements are delivering the level of security that consumers, in aggregate, expect.

Strengthening the Security and Reliability Council

Date: 03/09/2024

Mercury asked us to consider potential deficiencies in the current industry governance arrangements that might lead to an erosion of security of energy supply.

Thought Leadership Series: Utility customer engagement and the uninformed response bias

Date: 19/08/2024

What is customer engagement really telling us?

Over the last two decades, regulators in Australia and the UK have pushed utilities toward greater customer engagement, which has generally been well-received. However, there are concerns about its effectiveness. A key issue is that customers are often asked to engage on topics they know little about, leading to uninformed and biased responses. This can result in utilities misinterpreting data to justify decisions that may not serve customer interests.

Another concern is that reliance on customer engagement may cause important options to be overlooked. While tools like customer challenge panels can help, they have limitations. To improve engagement, it’s essential to assess whether respondents are informed and to clarify the purpose of engagement—whether it’s for information gathering, stakeholder management, or proposal review.

Waikato Medical School cost-benefit analysis

Date: 19/08/2024

We were engaged to provide a cost-benefit analysis (CBA) of a proposed new medical school at Waikato University.

The Ministry of Health and the University of Waikato have signed a memorandum of understanding to develop a programme of work related to a new medical school. The Coalition Agreement between the New Zealand National Party and ACT New Zealand noted that a “full cost-benefit analysis must be presented before any binding agreement is made with respect to the Waikato Medical School”.

As part of the wider business case for a new medical school, we were engaged by the Ministry to do the following:

1. Produce a cost-benefit analysis (CBA) of a new medical school.
2. Produce an economic case within the detailed business case for a new medical school.
3. Contribute to the economic case of the programme business case for a new medical
   school.

This report contains a CBA of the short-list of options to increase general practitioner (GP) coverage in rural New Zealand via additional medical students.

Our report is available from the Ministry of Health website. Please note it has been redacted in part and further work is being done to refine the CBA.

For more information about the report and this issue please read the following articles with comments from ACT Leader David Seymour, the Minister of Health, Shane Reti and Sarah Dalton, executive director of the Association of Salaried Medical Specialists:

‘We need more doctors’ – Support for new Waikato medical school, RNZ, 22 November 2024

ACT leader David Seymour raises doubts about Waikato medical school, RNZ, 21 November 2024

Economic Burden of HPV-related Cancers

Date: 17/07/2024

The Head and Neck Cancer Foundation Aotearoa asked Sapere to quantify the economic burden of HPV-related cancers in Aotearoa New Zealand. Here, economic burden refers to the direct costs associated with HPV-related cancers.

This report provides background information about HPV-related cancer incidence and prevention programmes in New Zealand, evidence on the cost-effectiveness of HPV-vaccination programmes and the findings from our cost-of-illness estimation showing the economic burden of HPV-related cancer to the health system in Aotearoa New Zealand.

Chair of the Head and Neck Cancer Foundation Aotearoa, Dr Swee Tan, said:

“HPV-related cancer is a huge issue for our country, particularly for our young people. We currently have four parallel programmes to tackle this problem: HPV vaccination; cervical screening; detection and treatment of pre-cancers; and harsh treatment of these cancers that comes with huge fiscal and human costs.

This could be reduced to just one: vaccination. But to do this, we need a 90% vaccination rate, and an ambitious timeframe for reaching this goal. This is in line with the World Health Organisation’s strategy to eliminate cervical cancer. Prevention is a far better way.

We’re currently missing a huge opportunity to reduce burden of disease for individuals and their whānau, and the costs to our health system.”

News articles:

How NZ is failing at HPV cancer prevention, RNZ, Gwen Mcclure, 19 September 2024

Charity calls for vaccination boost as cost of HPV cancers revealed, 1News, Nicole Bremner, 15 September 2024

Future of Work Tripartite Forum Research: Insights into emissions-intensive, trade-exposed businesses (stage two)

Date: 01/06/2024

In June, Preston Davies, Dr Jamie O’Hare and Douglas Yee completed Stage two of research into the economic impact and interdependencies of emissions-intensive, trade-exposed (EITE) businesses in New Zealand.

Stage one, completed last year, explored the transition of EITE businesses to a low-emissions economy, identifying challenges, opportunities, and solutions for a just transition. From that research we identified the challenges and opportunities associated with a low-carbon future, including understanding the economic impacts of EITE business shrinkage or closure in New Zealand supply chain resilience and availability of alternative fuels, and New Zealand’s strategic resilience in the global economy.

Stage two addressed these three points of further research by:

• examining the key interdependencies between EITE businesses and the rest of the economy
• estimating how employment and GDP would be affected by a change in the collective output of EITE businesses; and
• considering how policy could be configured to support economic resilience.

More information can be found on the MBIE website.

Weather forecasting system review – Final report

Date: 17/05/2024

We were pleased to have had the opportunity to be engaged by the Ministry of Business, Innovation and Employment (MBIE) and the Treasury to review the weather forecasting system in New Zealand, focusing on the following objectives:

1. Identify and recommend the optimal arrangements and responsibilities in the weather forecasting system that will best position New Zealand to meet future weather-related challenges and impacts in the context of climate change
2. Consider the structural configuration of MetService and NIWA, based on the optimal system arrangements identified in point one above
3. Identify if changes in access to weather data should be made and what these should be.

Having completed our analysis, we recommended a re-integration of meteorology services with climate science, hydrology, and oceanography. We believe this will best meet New Zealand’s future needs for weather prediction and anticipation of the effects of weather events and address potential challenges to meeting these needs. In particular, the adjacency of weather with hydrology and the integration of the research to operations pipeline (and resulting implementation and outcomes), together with the removal of duplication in data management and back-office functions provided a compelling logic. We also suggested other changes to funding and monitoring, data access, and the integration across systems and uses to support the prioritisation of effort, take a long-term view of investments and needs, and support:

i) the application of insights across different applications, and

ii) improved understanding of impacts.

We are pleased to see that the government has agreed in principle as announced by the Minister. This represents a significant opportunity to best leverage the skills and systems that exist. There will no doubt be effort involved in achieving this and we are supportive of the agencies as they work through making this happen.

The report was written by David Moore, Angus White, Hamish Hann and Matthew Williamson.

Interim Report

See more information on the MBIE website.

News article:

NIWA to take over MetService in forecaster merger, RNZ, 26 September 2024

Regulatory Impact Statement for the Health Services (Health Service Establishments) Regulations 2024

Date: 29/04/2024

In this report, we took a closer look at the proposed changes to Victoria’s Health Service Establishment Regulations, uncovering how they could reshape the landscape of healthcare in the state.

Private hospitals, day procedure centers, and mobile health services—collectively known as health service establishments—play a crucial role in Victoria’s health service delivery. These facilities offer patients the flexibility to choose their own doctors and pay for services directly, often with the support of private health insurance. In 2021-22 alone, Victoria saw 1.08 million patient separations in private hospitals, accounting for a substantial 37% of all hospital separations. (A “separation” marks the conclusion of a patient’s episode of care.)

This Regulatory Impact Statement (RIS) was meticulously compiled by Sally Carrick and Michelle Hall for the Victorian Department of Health, ensuring a thorough analysis of the implications of the proposed regulatory changes.

International approaches to Natural Health: regulatory scan

Date: 01/02/2024

The Ministry of Health commissioned Sapere to write a report that outlines and compares regulatory approaches to natural health products (NHPs) in Australia, Canada, the EU, UK, USA and China.

For the purpose of this report, NHPs are a group of health and wellness products. They include nutritional supplements and products used in traditional healing practices. They are mostly derived from natural ingredients but can also contain synthetic equivalents.

The report, written by David Moore, Emma Doust, Nick Manning and Douglas Yee, also covers regulation of homeopathy in Germany and Ayurveda in India.

More information is on the Ministry of Health’s website.

A review of aged care funding and service models: a strategic assessment of aged residential care and home and community support services

Date: 16/01/2024

We were commissioned by Te Whatu Ora to undertake a strategic assessment of the aged care sector in New Zealand which involved a review of funding and service models for aged care services. The findings from this review set the foundation for the second phase of work, which will focus on redesigning funding and services to balance sustainability, quality and affordability.

The current settings around the supply and commissioning of aged care services raises several areas of concern. Equitable and timely service access has become compromised under a current state of workforce pressures, rural shortages, and funding inadequacies. The ageing population will put significant pressure on healthcare services, and the review highlights the following challenges currently facing older people and service deliverers throughout the sector.

The project involved David Moore, Jeff Loan, Mehrnaz Rohani, Rohan Trill, Nick Manning and Douglas Yee.

Modelling peak electricity demand to 2050: Final report and model manual

Date: 21/12/2023

Sapere was commissioned by Electricity Networks Aotearoa (ENA) to model peak electricity demand up to 2050. The report, written by David Reeve, Michael Young and Toby Stevenson, modelled electricity demand across network supply points (NSPs) to 2050 under three scenarios:

1. Naïve – no management of demand beyond current practice
2. Energy Optimised – Energy traders shift discretionary load to minimise wholesale market costs or optimise revenue.
3. Network Optimised – Electricity distribution businesses manage discretionary load to reduce peak impacts on network capacity.

Using the Climate Change Commission’s detailed sector-based modelling and Electricity Authority data, we assessed how national forecasts translate to local NSPs.

A key finding is that effective management of EV charging will be essential to shifting demand from peak to off-peak times. Both energy traders and EDBs benefit from reducing peak demand, but renewable variability, especially wind, can shift peak pricing unexpectedly.

Overall, the modelling highlights how different approaches to load control impact network demand, providing valuable insights for managing future electricity distribution challenges.

The ENA have highlighted the report’s findings on their website:

Peak demand in 2050 and avoiding an energy gridlock

The EPA’s role and performance in assessing hazardous substances

Date: 28/11/2023

Sapere was asked by the EPA to conduct a high-level assessment of the EPA’s role and functions under the Hazardous Substances and New Organisms Act 1996 (the HSNO Act). This assessment was supplementary to the EPA’s Briefing to the Incoming Minister, given the change of government in 2023.

The report consists of a benchmarking exercise of the EPA’s hazardous substances assessment processes against overseas comparators, and an articulation of the context and issues that impact on the EPA’s ability to deliver on its functions, powers, and duties under the HSNO Act.

To read the BIM go to the EPA website: The Environmental Protection Authority’s assessment and reassessment functions under the HSNO Act – Supplementary briefing to incoming Minister

2023 APEC Economic Policy Report: structural reform and an enabling environment for inclusive, resilient and sustainable businesses

Date: 01/11/2023

This year’s APEC Economic Policy Report (AEPR) discusses the complex topic of Structural Reform and an Enabling Environment for Inclusive, Resilient and Sustainable Businesses. In particular, it sheds light on the important intersection between private activity and the public interest.

The AEPR highlights the importance of ensuring a conducive business environment, one that reduces transaction costs and facilitates firm entry, operation and closure. Not only is this good for business and competitiveness, but it also gives firms the space to contribute toward inclusion, resilience and sustainability goals. It further highlights the importance of measuring and recognising firms’ contributions toward the public interest, be it in eliminating greenhouse gas emissions or serving underserved communities. In the same vein, it points out that policymakers can, through structural reform policies, do more to enable businesses, especially small and medium enterprises (SMEs), to contribute toward social goals; measure progress regularly and comprehensively; and incentivise private sector investment toward inclusion, resilience and sustainability.

The report was drafted by a team comprising Emmanuel A. San Andres, Glacer Niño A. Vasquez, Tess Perselay, Nathan Frey and a team at Sapere Research Group comprising Veronica Jacobsen, Jamie O’Hare, Kelvin Woock and Rory McLeod. This report has also benefited from peer review and inputs by the members of the EC.

Electricity Authority funding options following Strategic Baseline Review

Date: 01/11/2023

In December 2022 we were engaged by the Ministry of Business, Innovation and Employment (MBIE) to undertake a strategic baseline review of the Electricity Authority. We reported on the Strategic Baseline Review in August 2023 but were not able to provide strongly evidenced funding options given the information available to us at the time. That is, we would have had to make assumptions that would be better informed by the Authority’s intended actions in response to:

• the strategic baseline review recommendations (particularly shifts in ways of working and potential efficiencies) and
• its thoughts on medium-term regulatory strategy and its priorities in light of this strategy.

Instead, our strategic baseline review outlined further work that would be needed to provide clear funding options and the Authority agreed to undertake further work to develop potential funding options.

Following the review, the Authority created a “Business Case: Enabling a Consumer-Focused Transition” which we were asked to evaluate. With the additional details from this Business Case, the team, consisting of David Moore, Angus White and Toby Stevenson, re-examined the outstanding questions relating to options to manage within different funding paths. The results are presented in this report.

Review of the New Zealand Product Accelerator: an assessment of its performance, value and optimum role in growing the value and commercial success of New Zealand’s manufacturing sector

Date: 09/10/2023

The New Zealand Product Accelerator (the NZPA) is a publicly funded research network run out of the University of Auckland. The NZPA includes a core team at the University of Auckland that does upfront engagement work with businesses to help define their R&D needs, and expert researchers at eight institutions who receive a small amount of funding to provide on-call research capacity for the NZPA’s clients.

The Ministry for Business, Innovation and Employment (MBIE) commissioned Sapere Research Group and ThinkPlace New Zealand in June 2023 to conduct a review of the NZPA. The review aims to further understand the NZPA’s current role in New Zealand’s advanced manufacturing ecosystem and identify what its optimal role could be in the future.

The team from Sapere were David Moore, Jeff Loan and Lockie Woon, working alongside staff from ThinkPlace: Peter Harrison, Cara Adler, Ben Harris-Finnigan, and Prof. Beth Webster.

The report attached is a public version of a report submitted to MBIE. It withholds the review team’s analysis of future state options and recommendations for expanding the NZPA to protect the confidentiality of advice.

Evaluation of the Building Financial Capacity in Housing Agencies (BFCHA) initiative

Date: 15/09/2023

Growing social housing

The Victorian Treasury offered A$1.1 billion in low-cost, long-term low-interest loans and state guarantees to community housing agencies. Our evaluation of this Building Financial Capacity of Housing Agencies program managed the complexity of complementary social housing funding and financing programs in our analysis.

Fashion clothing consumption and waste flows in the Auckland region: towards understanding textile waste and consumption streams

Date: 01/09/2023

The research contained within this report aims to elucidate and quantify, where possible, consumption and waste streams of fashion textiles in the Auckland region. We are guided by the following objectives, to provide:

• a detailed description of the structure of the clothing sector and clothing flows, including the identification of Auckland’s contribution to New Zealand’s textile footprint
• a quantification of clothing imported into Auckland and New Zealand by weight, fibre type, and general application
• a quantification of the tonnages of clothing discarded before being sold or worn
• an understanding of the proportion of textiles in the New Zealand market attributable to clothing
• a quantification of local clothing manufacture
• an estimate of rates of clothing consumption per person, per annum
• an understanding of reasons for clothing disposal and an estimate of disposed tonnages
• an assessment of the durability of certain types of clothing available on the New Zealand market
• an understanding of practices relating to clothing reuse, recycling, or repair.

This report has been prepared by Sapere Research Group for Auckland City Council as part of its statutory obligations under the Waste Minimisation Act to produce a Waste Assessment and associated Waste Management and Minimisation Plan (WMMP). The research also aligns with the Council’s commitments under Te Tāruke-ā-Tāwhiri: Auckland’s Climate Action Plan to be carbon neutral by 2025.

The report was written by Preston Davies, Professor Raechel Laing, Dr Jamie O’Hare, and Kelvin Woock.

Review of third-party access pricing to SA Water’s water infrastructure services

Date: 02/08/2023

The Essential Services Commission of South Australia engaged Sapere to advise on the pricing approaches that could, in both theory and practice, be adopted for third-party access for water infrastructure services.

Mapping Auckland’s food system: towards a quantification of flows of food, waste, loss, and greenhouse gas emissions

Date: 01/08/2023

This project aims to quantify the flows of food generated in Auckland and consumed by Aucklanders. Our analysis examines, as much as possible, the direct inputs into Auckland’s food system and the food waste generated within the food and beverage system in Auckland Council’s geographical jurisdiction. The primary goals of the research are to:

1. generate baseline data on material flows of Auckland’s food system and associated greenhouse gas (GHG) emissions, and
2. assist in the identification of intervention points to support Auckland’s transition towards a circular and low-carbon food system.

This research is a key component of Auckland Council’s statutory obligations under the Waste Minimisation Act (2008) to produce a Waste Assessment and associated Waste Management and Waste Minimisation Plan (WMMP). In addition, the outputs of this research are relevant to the Council’s commitments under Te Tāruke-ā-Tāwhiri: Auckland’s Climate Plan to be carbon neutral by 2050.

The report was written by Dr Jamie O’Hare, Emily King, Preston Davies, and Corina Comendant.

Lifting Māori enterprise and labour market outcomes

Date: 01/06/2023

He taonga te hauora (Health is wealth)

For the past 12-months a team from Sapere, including David Moore, Preston Davies, and Jamie O’Hare, has assessed Māori employment and business ownership outcomes in the health sector. The mahi sought to shed light on the prevailing landscape of Māori employment and business ownership in the sector. It delved into the key challenges that impede greater Māori participation, while also identifying key opportunities for growth. By harnessing these invaluable insights, the mahi culminated in a rautaki (strategy) that aims to drive a substantial improvement in both business ownership and employment outcomes for the Māori community, while also acknowledging te ao Māori health principles.

Māori economic participation in the infrastructure sector – Elevating enterprise ownership and labour market outcomes

Date: 01/06/2023

He tina ki runga, he tāmore ki raro (In order to flourish above, one must be firmly rooted below).

For the past 12-months, a team from Sapere, including David Moore, Preston Davies, and Jamie O’Hare, has assessed employment and business ownership outcomes in the horizontal infrastructure sector of Aotearoa New Zealand. The mahi sought to elucidate the landscape of Māori employment and business ownership in the sector. It explored the key challenges that prohibit greater levels of Māori participation, while also identifying key opportunities for growth. By harnessing these invaluable insights, the mahi culminated in a rautaki (strategy) aimed at driving substantial improvements in both business ownership and employment outcomes for Māori, while also recognising the unique cultural relationship Māori share with the whenua.

Future of Work Tripartite Forum research: insights into emissions-intensive, trade-exposed businesses (stage one)

Date: 01/05/2023

There is a collective desire to ensure that New Zealand transitions to a low emissions economy in a way that delivers a ‘just transition’ while avoiding economic shocks and job destruction in the process.

Key work initiatives related to this collective desire include the Just Transitions Partnerships programme led by the Ministry of Business, Innovation and Employment (MBIE) and the development of an Equitable Transitions Strategy under the Emissions Reduction Plan, co-led by MBIE and the Ministry of Social Development.

MBIE contracted Sapere to conduct this research involving Dylan James, Dr Jamie O’Hare and David Moore.

More information about the Forum can be found on the MBIE website.

Revenue required for investment grade credit rating

Date: 01/05/2023

DLA Piper instructed Sapere to undertake analysis and provide a summary of advice to the Australian Competition & Consumer Commission (ACCC) in relation to a variation proposal by NBN Co Limited (NBN Co) to its special access undertaking.

The team, comprising of Kieran Murray, Dean Nutsford and Tony van Zijl, were asked to:

• estimate the increment to revenue above the Annual Building Block Revenue Requirement (ABBRR) required by NBN Co to transition to an investment-grade credit rating
• calculate the portion of the Initial Cost Recovery Amount (ICRA) that could be recovered from that additional revenue.

The analysis focuses on these matters using NBN Co’s building block model and considers:

• scenarios based on the benchmark firm and for the actual firm
• sensitivity analysis for dividend assumptions
• variation in estimates of WACC
• different time periods for when an investment-grade credit rating is to be achieved
• shifting, or smoothing, allowed revenue and ICRA recovery over time to better match NBN Co forecasts of actual revenue.

Effective tax rates imposed on the incomes of New Zealand residents

Date: 01/04/2023

Leading tax consultancy OliverShaw commissioned Sapere to prepare a report on the effective rates of tax imposed on the incomes of New Zealand residents. We use statistical data to identify groups of taxpayers and welfare beneficiaries with levels and types of wealth and economic income that are reasonably “illustrative” of the general population of taxpayers and welfare recipients. We calculate the tax applying to those types and levels of wealth and income to produce effective tax rates. This approach is consistent with international effective tax rate studies. The key findings of the report are that the wealthy pay most of the tax collected in New Zealand and the wealthier a person is, the more tax they are likely to pay. We also found that average effective tax rates increase as the net real economic incomes of households increase.

Stormwater pricing study

Date: 02/02/2023

The New Zealand Infrastructure Commission, Te Waihanga, engaged Sapere to undertake a study on the pricing of stormwater services. The study includes:

• advice on best-practice pricing for stormwater services, leveraging insights from around the world
• an assessment of how current approaches in New Zealand measure up against best practice, and
• recommendations on future pricing of stormwater services in New Zealand, including how recommendations relating to the proposed transition to Water Service Entities.

For more information see the New Zealand Infrastructure Commission – Te Waihanga, website.

Infrastructure consenting for climate targets

Date: 25/01/2023

Sapere was commissioned by Te Waihanga, the New Zealand Infrastructure Commission, to look at how much energy and transport infrastructure New Zealand needs to support transition to a low emissions economy. Our research modelled how long it would take to process the necessary consents under the Resource Management Act and what it might cost if New Zealand failed to develop the necessary infrastructure.

The report finds that, from 2028, consent processing times would need to be 50 percent quicker than they are projected to be under the RMA.

EPA reassessment of hydrogen cyanamide: a social impact assessment

Date: 01/01/2023

The EPA is presently conducting a reassessment of hydrogen cyanamide (HC), a budbreak enhancer used widely in kiwifruit orchards in New Zealand. Use of the chemical is found to increase the quality of fruit, while also lower costs of production and labour requirements. However, initial assessments of HC indicated that the risk to operators, bystanders, and the environment were above levels of concern, thereby triggering the reassessment process.

Typically, a reassessment includes comprehensive consideration of economic, human health, and environmental impacts. In this case, however, due to strong industry concern regarding mental health effects stemming from a ban or a phase-out, the EPA have also commissioned a Social Impact Assessment (SIA). This report, containing said SIA, will be considered by the Decision-Making Committee (DMC), and used to inform their decision as to the reassessment of HC.

Total household energy costs NZ

Date: 23/11/2022

Prepared for the Electricity Networks Association.

In the report written by by Toby Stevenson and Michael Young, the transition to a decarbonised energy sector will require considerable investment in renewable energy, provisions for system security, distribution and transmission.

It begs the question: what can we expect for total annual average household energy costs through to 2040?

The answer is simple: from 2026 all electric households can expect the total annual electricity cost, including the capital costs required to switch, to be lower than the combined petrol, gas and electricity bills (including the relevant capital costs) they would pay otherwise.

More information on the ENA website.

Aotearoa New Zealand: empowered by data

Date: 01/11/2022

Long term insights about the role of data in wellbeing and economic advantage (Draft for discussion) November 2022.

As a way to begin to understand the value of data-driven innovation, Stats NZ engaged Sapere to undertake research to look at the impacts of data-driven innovation on seven broad sectors of the New Zealand economy.

Combined, these sectors represent approximately 92% of GDP production in New Zealand. Sapere’s research estimated the value of current innovation arising from cost reductions and revenue increases now and into the future and included examining the pattern of adoption of innovation across the sectors.

Available on the Stats NZ Tatauranga Aotearoa website.

Benefits and costs of additional investment in wilding conifer control

Date: 06/09/2022

Prepared for the Ministry for Primary Industries on behalf of the National Wilding Conifer Control Programme.

This cost-benefit analysis (CBA) was undertaken in conjunction with Landcare Research to estimate the costs and benefits of controlling the spread of wilding conifers across the country. The CBA utilised geospatial modelling to analyse the impact of the control options proposed on the spread of wilding conifers across the country, and the consequent costs in water yields, productivity of agricultural land, fire risk, biodiversity, and cultural values from enabling wilding conifers to spread.

Cost benefit analysis of Building for Climate Change amendments to the Building Act 2004

Date: 01/09/2022

Report for the Ministry of Business, Innovation and Employment
The cost benefit analysis (CBA) of proposed changes to the Building Act to support waste and emissions reduction has now been released and the Bill to enable the changes introduced. The CBA was prepared by a Sapere team led by David Moore. We are pleased the team was able to support the Ministry of Business, Innovation and Employment with its analysis of the changes and its regulatory impact statement. The team enjoyed working with MBIE, the Energy Efficiency & Conservation Authority, the Ministry for the Environment and the Ministry for Housing and Urban Development in order to analyse the expected impacts to different stakeholders and emissions reductions resulting from the proposed changes. Thanks to David Moore, Angus White, Corina Comendant, William Li, Michelle Hall, April Chiu, Zabard Hartmann and Lockie Woon who helped meet timeframes with the challenges of COVID – a great cross-office collaboration.

Press release by the Hon Dr Megan Woods:
Building Act changes put the environment at the heart of how we build Cabinet Paper: Building for Climate Change – Proposed Amendments to the Building Act 2004

Assessment of mechanisms of managed retreat

Date: 11/08/2022

The Ministry for the Environment has made available our report to them assessing mechanisms to support managed retreat. We are pleased the team of David Moore, Angus White, and Kelvin Woock were able to support the Ministry in its important work in relation to climate change adaptation. The team enjoyed engaging with MBIE and the Treasury to test its initial findings and found reviewing experiences and mechanisms used (or proposed) elsewhere fascinating. We hope others find the report and our analysis interesting too. We continue to take an interest in climate change related issues across a number of other projects as well.
More information on the Ministry for the Environment website

A Future Capitation Funding Approach

Date: 05/07/2022

Addressing health need and sustainability in general practice funding

The Health Transition Unit commissioned Sapere to work with a reference group of sector experts to explore improved capitation approaches that support the sustainability of general practice, and respond to health need better than existing funding mechanisms.  The preferred approach is to use a combination of age, sex, ethnicity, deprivation and morbidity measures in the main formula for funding general practice, and to estimate the underlying cost of providing care, including making allowances for unmet need in priority populations.

An integrated approach to research, science and innovation system property investment

Date: 01/04/2022

The opportunity in the Wellington region – a report written for the Ministry of Business, Innovation and Employment.

With the client, we identified whether the strategic context for the research system could be used to improve the returns from the proposed Crown Research Institute investment plans. A time-constrained approach was a series of focused workshops with researchers, looking at capabilities and desired proximity. We produced provisional findings for future discussions and suggested an approach for these discussions.

Final Evaluation of the Red Meat Profit Partnership

Date: 01/03/2022

This report has three objectives as follows:

1. to investigate the outcomes of the Red Meat Profit Partnership PGP programme (RMPP) and assess what was accomplished by the programme and what its benefits to New Zealand are likely to be.
2. to review how well the programme was executed and governed.
3. to identify any lessons that would benefit other Ministry for Primary Industries (MPI) investment programmes and the SFF Futures programme as a whole.

Survey to better understand general practice costs – interim results

Date: 09/02/2022

Sapere has been commissioned to provide advice to the interim entities (interim Health New Zealand and interim Māori Health Authority) on options for the future of primary care funding. While there is information that we can use on cost for many aspects of general practice, expenditure by different kinds of practice on rent and overheads is often invisible. To ensure we have an understanding of the range of these costs for general practices as we develop our advice we undertook a survey of general practices to gather this information.

The survey was sent to members of Practice Managers and Administrators Association of New Zealand (PMAANZ) on 12 December and 2 follow up emails were sent. The survey is still live and we are still seeking further responses from general practice.

This report provides interim results based on a small number of responses received from 12 to 31 December 2021. We expect to update this report with new data in the near future.

Vertical integration and consumer benefit in the New Zealand electricity sector

Date: 20/12/2021

In response to the 9 August 2021 electricity outage in New Zealand, some commentators blamed vertical integration—where companies own both electricity generation and retail arms—as a root cause. However, these claims lack published analysis. While the Electricity Authority has raised vertical integration as a potential barrier to new entrants, it has also noted this may be becoming less of an issue.

This Sapere report by Kieran Murray, Toby Stevenson and Michael Young, reviews global and local evidence on vertical integration in electricity markets. It finds that such integration often arises as an efficient response to real-world market imperfections, such as information asymmetries and investment risks, rather than as a way to undermine competition. Extensive theoretical and empirical research, particularly in electricity markets, supports this conclusion.

The report makes two key points:

1. Vertical integration in electricity is an economically efficient structure that helps manage imperfections in wholesale and retail markets. Regulatory restrictions on it could raise electricity costs for consumers.
2. Greater competition, driven by market reforms that reduce imperfections, will naturally reduce the need for vertical integration. However, forcing de-integration through regulation will not create more competition and could be counterproductive.

In essence, vertical integration should be seen as a solution to, not the cause of, market challenges.

Analysis of Access to Innovation Facilities

Date: 01/12/2021

A Report for the Ministry of Business, Innovation and Employment, and the Ministry for Primary Industries.

A review of New Zealand’s access to innovation facilities in the food and beverage, forestry and wood processing, and advanced manufacturing sectors. We were asked to undertake an analysis of access to innovation facilities in the food and beverage, forestry and wood processing, and advanced manufacturing sectors. This analysis is designed to provide part of the evidence bases for development of the Food and Beverage, Advanced Manufacturing, and Forestry and Wood Processing Industry Transformation Plans.

Efficient price discrimination in the wholesale electricity market

Date: 01/12/2021

Sapere was asked by Meridian Energy to review the discussion paper ‘Inefficient Price Discrimination in the wholesale electricity market – issues and options’, issued by the Electricity Authority (Authority) as part of its Wholesale Market Review.
The Authority claims that the price discrimination implicit in the ‘Tiwai contracts’ between Meridian Energy, Contact Energy and New Zealand Aluminium Smelters (NZAS) raises the possibility that electricity may not have been allocated efficiently, and results in potential inefficiency costs of around $57 million to $117 million per year.

According to the Authority, the Tiwai contracts provide a potential illustration of how price discrimination may, in some cases, not be in the longer-term interests of consumers. That is, the Authority considers the Tiwai contracts to be an example of inefficient price discrimination.

Kieran Murray and Vladimir Bulatovic demonstrate that the tests applied by the Authority, for distinguishing efficient and inefficient price discrimination, are at odds with the established literature on price discrimination, and that the Authority has wrongly characterised the Tiwai contracts as an example of inefficient price discrimination. Their report also demonstrates that rather than an efficiency loss of $57 million to $117 million as arrived at by the Authority, the better measure of the total efficiency gains from the Tiwai contracts (relative to a scenario in which the smelter ceased production) is around $40 million to $120 million per year, applying the Authority’s assumptions consistently.

The report shows the Authority has wrongly interpreted its own analysis, and provides an example of welfare enhancing price discrimination, not inefficient price discrimination as the Authority concludes.

Assessing the emissions footprint of the fibre networks relative to other fixed broadband options in NZ

Date: 25/11/2021

International studies show that the fibre network has a lower carbon footprint than other broadband options, primarily due to energy savings. This paper provides a first assessment of the emissions footprint of the current New Zealand fibre network, with a focus on internet provision to households and small to medium-sized businesses. Fibre (GPON and XGS-PON) is compared to Copper (VDSL), Hybrid fibre-coaxial (HFC) and 4G/5G fixed wireless (FWA 4G/5G).

The report was prepared by Corina Comendant and Kieran Murray on behalf of Chorus, Northpower Fibre Limited, Tuatahi First Fibre and Enable Networks Limited. November 2021

Occupational regulatory regime for engineers: Cost-benefit analysis

Date: 01/11/2021

The Ministry of Business, Innovation and Employment (MBIE) has consulted on reforms to occupational regulation of engineers twice before, but due to feedback, neither time has the process resulted in the introduction of new occupational regulation for engineers.

In response to the feedback received during the 2019 consultation, MBIE has developed a new proposal for an occupational regulatory regime for engineers, with a wider scope, encompassing all professional engineers. MBIE released a discussion document for consultation in May 2021.

MBIE analysed feedback and further refined the proposal and engaged Sapere to develop the regulatory impact statement (RIS) and undertake a cost-benefit analysis (CBA) on proposed licensing and registration of engineers.

The implications of competition and market trends for media plurality in New Zealand

Date: 01/11/2021

This report for the Ministry for Culture and Heritage examines the state of media plurality in New Zealand. Sapere examined how competition and market trends have affected the media, and whether public policy interventions may be necessary to address specific issues or market barriers.

Sizing of the backyard and micro-commercial egg production in Australia

Date: 01/10/2021

Sapere was engaged by our long-standing client Australian Eggs to develop a methodology and approach for estimating the level of production in the backyard (households raising less than 15 hens and whose level of production is typically driven to meet personal consumption demands) and micro-commercial (small-scale operations with up to 1,000 hens) segment of the egg industry (collectively referred to as the ‘informal sector’).

This involved a desktop review of existing assessments of the informal sector and consultation with a range of industry stakeholders to collate best estimates of the potential size of the informal sector in each stakeholder’s relevant market. Insight from the desktop review and consultations formed the basis for the construction of multiple models, which we extrapolated to the national scale to produce Australia-wide estimates.

Methodology for Estimating the Underfunding of Māori Primary Health Care

Date: 27/07/2021

Sapere were asked by the claimants to respond to the Waitangi Tribunal’s recommendation that a methodology be developed to measure the underfunding of Māori PHOs and providers. The Tribunal provides context to its recommendation:

We recognise that there is a compensatory aspect to this process, in that it responds to acknowledged historical underfunding. However, we make no recommendations at this stage as to the final destination of any such compensation… … Our initial thinking is that, if a final sum can be agreed upon, first, it could be used in part to compensate those Māori primary health organisations and providers still in existence and, secondly, it could be future-focused, perhaps with a view to supporting the development of additional Māori primary health organisations and providers.

While the recommendation is specifically to develop a methodology, we necessarily have applied the methodologies we recommend as a proof of concept in order to ensure that they work and are fit for purpose. We therefore present both methods and tentative results.

The scope of services we consider is that of Māori primary health care services providing care to Māori whānau – by Māori for Māori, accessible to all. However, some of the issues identified in the analysis apply to funding for Māori wherever they may be receiving services.

Dr Tom Love has written an article about this important work – click here to read.

The cost of consenting infrastructure projects in New Zealand

Date: 01/07/2021

Sapere was asked by the Infrastructure Commission / Te Waihanga to quantify and evaluate the costs, including in relation to time, and risks of consenting infrastructure in New Zealand.
This report provides a detailed picture of the costs that infrastructure developers face when seeking to consent new projects and outlines some issues with the current regulatory framework. Our analysis is based on a sample of 186 infrastructure projects, large and small, around the country.
The team included David Moore, Jeff Loan, Sally Wyatt, Kelvin Woock, Sally Carrick, and Zabard Hartmann. The report was finalised in July 2021.
Further information can be found on the Infrastructure Commission website

Review of potential security, reliability, and resilience concerns arising from future scenarios for the electricity industry

Date: 29/06/2021

This review by David Reeve and Toby Stevenson was commissioned by the Electricity Authority. In recent years a number of organisations have modelled scenarios of the New Zealand energy sector. The Electricity Authority is now undertaking a review of the potential impacts of technological advances and future changes on the long-term reliability, security, and resilience of New Zealand’s electricity system. One of the initial steps in this review is to assess whether existing recent modelling asks and answers questions specific to this review or whether additional modelling is required. The assessment would include specifying modelling still required to address the issues in the review.
Each exercise has had different purposes in mind, but they share the desire to understand the implications of policies targeting our emissions profiles and the consequence of major decisions in the sector, such as moving to 100 per cent renewable electricity, or the closure of industrial plants, such as Rio Tinto’s aluminium smelter in Southland or Methanex’s methanol production plant in Taranaki.

Systematic risk and the role and measurement of equity beta: a report to the AER consumer reference group

Date: 01/06/2021

In this report, Sapere provided an overview of issues that arise in the estimation of beta, with particular reference to the Australian electricity and gas sectors that are supervised by the Australian Energy Regulator (AER). The list of issues is unlikely to be exhaustive, but it is, hopefully, representative of the major themes that arise in practice. Sapere’s aim is to provide an independent perspective on beta estimation issues relevant to the AER and the Consumer Reference Group (CRG).

Market power mitigation in the wholesale electricity market (WEM)

Date: 30/03/2021

This report, jointly written by Sapere and Robinson Bowmaker Paul, has been prepared for the Energy Transformation Taskforce to assist its comprehensive review of whether the existing market power mitigation measures are suitable for the new Wholesale Electricity Market (WEM).

Drawing on a series of relevant reviews previously conducted in the WEM, it addresses: the market power mitigation mechanisms required for the new WEM; the optimal design of these mechanisms; and the rationale for these recommendations.

Independent review of community pharmacy services (Stage one)

Date: 01/12/2020

Sapere were commissioned by the Central Region Technical Advisory Service (TAS) as input into the first stage of the Service Model and Funding Review agreed by the National Annual Agreement Review (NAAR).

The purpose of the Review was to identify best practice evidence-based services aligned with New Zealand’s strategic direction for pharmacy/pharmacist services, including identifying any potential change options for current community pharmacy services.

Business Case for Investment in Low Voltage Network Monitoring

Date: 23/11/2020

The purpose of this report, prepared for the Electricity Networks Association, is to make the general case for investment in monitoring the low voltage network. It follows the ‘Better Business Case’ approach with the analysis being structured around four cases.

The business case has been prepared by Sapere, with input and feedback from an industry working group, facilitated by the ENA, at key stages of development. It has also been informed by the preparation of a Primer and Guideline document, also prepared by Sapere for the ENA, which provides information on LV monitoring internationally and guidance on the selection and use of LV monitoring technology.
The Primer and Guideline document is available online

Briefing to Incoming Government on Climate Action Priorities

Date: 01/10/2020

Sapere Director Toby Stevenson and Jeff Smit of DETA Consulting prepared a briefing representing the collective views of the Sustainable Business Council NZ and Climate Leaders Coalition members on climate action priorities.

The report sets out 26 recommendations, including three key recommendations, for the incoming government and focuses on policies and projects that will accelerate decarbonisation in New Zealand. The three key recommendations are: increased investment in low carbon transport; an expansion of programmes to make process heat more efficient and low carbon; and speeding up the adoption of methane reduction technologies.

Open Insurance: The Consumer Data Right and Insurance

Date: 01/09/2020

This report by Dr Richard Tooth and published by the Financial Rights Legal Centre is the first comprehensive attempt to understand the concept of Open Insurance in Australia.

Open Insurance as a concept has yet to be fully defined either by government or industry. The report looks at the use of consumer data and the concept of Open Insurance through the lens of the consumer, and examines how the Consumer Data Right model is likely to apply to general insurance. It also explores the risks and issues associated with its implementation, both for the insurance sector and for consumers, and proposes a set of recommendations for areas that need further examination and research.

Better measurement of the direct and indirect costs and benefits of resilience

Date: 01/09/2020

Sapere was engaged by Waka Kotahi NZ Transport Agency, to undertake research to identify and develop critical techniques and methods that can be used to value and monetise the costs and benefits of resilience in transport infrastructure, described in a way that can be incorporated into the Economic Evaluation Manual (EEM).
The resulting research paper aims to contribute to Waka Kotahi by:
• developing and testing methodologies to better measure the direct and indirect costs and benefits of resilience
• identifying key factors, variables and matters that should be considered in the (ex-ante) cost–benefit analysis (CBA)
• providing guidance on how these key factors, variables and matters can be obtained, valued and monetised.
The study describes the different techniques and methods that can be used to assess resilience in transport schemes and projects. The study will help to better assess resilience in transport schemes and projects and improve decision making.
The full report and a summary version can be found on the Waka Kotahi NZ Transport Agency website.

Distributed Energy Resources: Understanding the potential

Date: 01/07/2020

Sapere was commissioned by Transpower to investigate the potential value of Distributed Energy Resources (DER) in a New Zealand context.
Transpower is seeking to advance the discussion about how the electricity industry and market may need to evolve with increased penetration of DER. This report broadly considers the value of DER to the New Zealand Electric Power System, what economic incentives might encourage use of DER and what the current barriers to deployment and transaction costs are.

The timing of this work is significant. Transpower analysis suggests there could be significant uptake of DER within five years. The authors analysis confirms this. Our assessment also suggests that higher specification equipment would be needed than might otherwise be installed to unlock the full value potential of DER. To ensure that the best decisions are made for DER technology, investment signals for the services DER can provide should be put in place now.

Executive Summary

Full report below.

Sexual violence prevention initiatives for disabled people in New Zealand

Date: 01/07/2020

The purpose of the project was to identify and assess sexual violence prevention initiatives that are available for disabled people in New Zealand, to identify any gaps, and to provide advice on what is needed for disabled people in the future.

We completed over 30 interviews, held a hui and ran a survey for organisations and individuals from the disability and sexual violence sectors. These informed our stocktake of sexual violence prevention initiatives for disabled people and allowed us to identify gaps, future priorities, and enablers and barriers to service. We also completed a rapid review of literature to determine key success elements for sexual violence prevention initiatives for disabled people. These were used to assess the initiatives identified in the stocktake.

Upper North Island supply chain strategy: infrastructure workstream report

Date: 30/06/2020

This report accompanies the integrative report that summarises the findings of a collective of consultants led by Sapere in relation to the Upper North Island Supply Chain and the options for a full move of the freight operations of the Ports of Auckland Ltd (POAL).
This report documents the work within the infrastructure workstream, with respect to matters of capacity and cost for port, rail and road infrastructure for each option.

Please also refer to Upper North Island Supply Chain Strategy on the Ministry of Transport’s website.

Upper North Island supply chain strategy: land value workstream report

Date: 30/06/2020

This report documents the work undertaken within the land value workstream. It uses a total economic value framework to identify the plausible economic benefits from alternative uses of Auckland waterfront land under a scenario where the Ports of Auckland freight operations are relocated elsewhere.

Please also refer to Upper North Island Supply Chain Strategy on the Ministry of Transport’s website.

Analysis of the upper North Island supply chain strategy working group options for moving freight from the ports of Auckland

Date: 11/06/2020

Sapere was engaged by the Ministry of Transport in response to Cabinet’s request to officials for further advice on the Upper North Island Supply Chain Strategy (UNISCS).

Further information is available on the Ministry’s website:

• Associated reports from Sapere
• CBA technical notes
• Competition workstream report
• Infrastructure workstream report
• Land value workstream report
• Regional economic development workstream report
• Incentives and financial implications workstream report

Upper North Island supply chain strategy: incentives and financial implications

Date: 01/06/2020

In this report, we explore whether there is enough financial incentive for ports to take up options without Government intervention.

Please also refer to: Analysis of the Upper North Island Supply Chain Strategy Working Group Options for moving freight from the Ports of Auckland

Upper North Island supply chain strategy: CBA technical notes

Date: 01/06/2020

This note is part of a work programme to inform an officials-led assessment of the options for a full move of the freight operations of the Ports of Auckland Ltd.
Sapere was engaged as the lead consultancy to prepare a cost benefit analysis (CBA) of the options. The approach and results of the CBA were summarised in an integrative report, which is the main output of the work programme.

This note is one of a range of supporting reports across the other workstreams forming the work programme. It sets out in more detail the components, assumptions, sources and ultimately the treatment of inputs integral to the derivation of costs and benefits.

Upper North Island supply chain strategy: regional economic development possibilities

Date: 01/06/2020

Officials are undertaking a programme of additional work following the independent working group report on the Upper North Island Supply Chain Strategy. This workstream considers Regional Economic Development and Social Impact.

Please also refer to: Analysis of the Upper North Island Supply Chain Strategy Working Group Options for moving freight from the Ports of Auckland.

Upper North Island supply chain strategy: competition assessment

Date: 01/06/2020

This report considers the potential impact on competition of alternative options for handling sea freight currently shipped via the Ports of Auckland Ltd.

Please also refer to: Analysis of the Upper North Island Supply Chain Strategy Working Group Options for moving freight from the Ports of Auckland

The COVID-19 business policy response – what now?

Date: 21/05/2020

When the economy was wound down in late March by the government’s response to the COVID-19 pandemic, policy was rapidly made to protect businesses and jobs. As we move into a new phase of the pandemic response, in terms of what business can operate and what civil interaction is permitted, what should the government’s policy toward helping businesses be now?

Essential Freshwater Regulations – Industry Impact Analysis

Date: 01/05/2020

Sapere was engaged by the Ministry for the Environment to assist with an estimation of the potential impact of regulations resulting from the National Policy Statement for Freshwater Management (2017) and the Essential Freshwater package on the dairy, beef and sheep farming sectors.

A peer review and our response to it is also available on the Ministry for the Environment’s website.

Review of governance of Distributed Energy Resource (DER) technical standards

Date: 21/04/2020

Sapere was retained by Australia’s Energy Security Board to review governance of technical standards for Distributed Energy Resources (DER). Working with engineering experts from Cutler Merz, this work involved extensive stakeholder consultation, desktop research, a survey and a webinar. It resulted in a set of proposals for change.

COVID-19 – uncertainty and our economy

Date: 01/04/2020

Every event that results in heightened uncertainty is different. The impact of the COVID-19 pandemic and associated preventative measures on the New Zealand economy will be far-reaching, but what is the impact of uncertainty? What can be done to help New Zealand avoid the worst? And what can we learn from past crises?

In this article, Sapere Senior Managing Economist Michael Ryan looks at the impact of uncertainty caused by COVID-19, and shows how clear policy guidance can help New Zealand avoid the worst of the economic impact.

COVID-19 and financial crime: Fraud expert warns of heightened risk of fraud and cybercrime

Date: 01/04/2020

The COVID-19 pandemic has seen significant changes in the way in which many businesses operate.

Sapere Forensic Director and Head of Investigations, Gary Gill, looks at the increased risk of phishing emails, payment diversion and other financial crimes, due to the COVID-19 pandemic.

National Insurance Project – A review of disaster insurance across Australia and New Zealand

Date: 15/01/2020

The report provides a review of disaster insurance across Australia and New Zealand. Its includes a review of the levels of non-insurance/underinsurance, information issues and other factors affecting affordability and insurability.

A review of the fiscal cost estimate of moving to averaging accounting for existing forests within the Emissions Trading Scheme

Date: 01/12/2019

Kieran Murray and Gary Blick of Sapere were asked by the New Zealand Carbon Farming Group to review the estimates of fiscal impact relied upon by Ministers when deciding forests registered in the Emissions Trading Scheme (ETS) before 2019 would not be permitted to use ‘averaging accounting’.

They conclude that the accounting treatment underlying the fiscal impact assessments provided to Cabinet appears to be an uncorrected legacy of the Kyoto obligations as the issue and surrender of NZUs by foresters no longer impact the Crown’s net worth in substance.  If the accounting treatment is retained, the allocation of units to ETS forests under averaging and offsetting would be equivalent to what would otherwise occur over a full rotation cycle.

Review of the Transforming Dairy Value Chain Primary Growth Partnership

Date: 01/11/2019

Sapere was engaged by the Ministry of Primary Industries to evaluate the achievements and expected outcomes from the Transforming the Dairy Value Chain Primary Growth Partnerships Programme.

More information about the programme can be found on the Ministry’s website.

What new whistleblowing laws mean for HR

Date: 24/06/2019

Amended whistleblower laws come into effect in Australia on 1 July. In this article for the Australian HR Institute, Gary Gill, Head of Investigations at Sapere Forensic, looks at what they mean for HR professionals.   Reproduced with permission.

Analysis of local government cost drivers

Date: 16/05/2019

The Productivity Commission is currently investigating whether existing funding and financing arrangements are suitable for enabling local authorities to meet current and future cost pressures. The Commission is seeking to understand the influence of prices on local government expenditure, exploring the prices faced by local government, the drivers of price growth, and the overall contribution of prices.

Implementing HealthPathways across Queensland: A case study

Date: 16/05/2019

Dr Tom Love of Sapere conducted a case study of the implementation of HealthPathways in Queensland.  HealthPathways is a platform that provides tailored, locally relevant guidance to general practitioners on the management of conditions in the community and referral to specialist hospital services. HealthPathways is intended to increase the consistency of referral patterns, avoiding unnecessary referrals where patients can be managed in primary care, and freeing up resource to increase access to specialist care for those patients who need it.

What is really driving innovation in our plant-based sectors?

Date: 01/05/2019

As part of its review of the Plant Varieties Act 1987, the Ministry of Business, Innovation & Employment commissioned Sapere to complete an independent economic analysis of the Plant Varieties Innovation system. This Sapere report presents an analysis of the innovation systems that sit behind the development and use of plant varieties in New Zealand.

Corporate governance in the transition to a low-carbon economy

Date: 01/03/2019

In this article, Sapere Director Toby Stevenson discusses how the transition to a low-carbon economy will change the workplace as a result of firms being forced to adapt their competitive position. Business leaders must approach this issue as any other strategic threat and opportunity, or suffer the consequences.

Formative evaluation of Business Link Pacific

Date: 01/03/2019

Gary Blick & Preston Davies of Sapere were engaged by the Ministry of Foreign Affairs & Trade to contribute to a formative evaluation of Business Link Pacific (BLP), a development activity funded by MFAT with the goal of building the market for business advisory services in Pacific Island countries, thereby enabling small-to-medium enterprises to access services to grow.

The problem of chronic pain and scope for improvements in patient outcomes

Date: 01/10/2018

Sapere was commissioned by the Faculty of Pain Medicine of the Australian and New Zealand College of Anaesthetists to investigate the cost of chronic pain to New Zealand. Our report finds that chronic pain costs more than diabetes or dementia yet there is no comprehensive plan to address it.

A circular economy for Auckland – scoping the potential economic benefits

Date: 02/05/2018

This report provides a view on the potential economic benefits of a more circular economy for Auckland. It has been commissioned by the Sustainable Business Network to inform its report on the circular economy opportunity for Auckland. The estimates provided here are intended to provide an initial indication of the “size of the prize”. As a first attempt at examining the potential of the circular economy in a New Zealand setting, this report is also intended to be a stepping stone for more detailed analyses in future.

Prepared for the Sustainable Business Network.

Insurance influence on road safety

Date: 01/02/2017

This paper considers how reforms to the insurance sector regulation could improve road safety outcomes at lower cost. Insurers can influence road safety outcomes in a number of ways but the regulatory environment limits their incentives and flexibility to address road safety.

The cost effectiveness of bowel cancer screening in New Zealand: a cost-utility analysis based on pilot results

Date: 01/07/2016

Sapere was contracted by the Ministry of Health to undertake cost effectiveness analysis of bowel screening in New Zealand, based upon the information generated from a pilot. We conducted microsimulation of a number of screening scenarios, both for the New Zealand population as a whole and for a Māori population. We found bowel screening to be highly cost effective, and in some scenarios actually to be cost saving from a health system perspective.

Analysis of demand for home and contents insurance

Date: 04/08/2015

The extent to which households are not insured is an important issue for the Insurance Council of Australia, the insurance industry and policy makers. The paper presents the results of an empirical study on the factors that influence insurance demand and result in households being uninsured. A key focus of the paper is the impact of state premium-based taxes on decisions to purchase insurance.

Decentralising Welfare – Te Mana Motuhake O Tuhoe

Date: 01/08/2014

We were engaged by the Ministry of Social Development and Tuhoe to explore whether there were opportunities to decentralise any aspects of the government’s responsibility for providing welfare support as part of their Treaty settlement. The report provides an overview of what the full spectrum of decentralisation could hypothetically look like.

Measuring long run marginal cost for pricing

Date: 01/03/2014

This paper examines the economic issues of determining long-run marginal cost (LRMC) for the pricing of services. It describes and analytically compares the main methods used for estimating LRMC and discusses the issues in using these to set prices. While the paper has been developed in the context of a review of water and waste-water, the analysis and findings have application to most infrastructure sectors.

Using subjective well-being in policy

Date: 28/02/2013

This paper provides a background on subjective well-being (SWB) and provides guidelines for how and why well-being measures should be used in public policy. It includes case studies of the application of well-being measurement to policies and programs as well as Australian data sources for well-being measurement.

Australian household insurance: understanding and affordability

Date: 01/02/2012

This report analyses the results of a survey of 1200 households on home building and home contents insurance. It seeks to understand household attitudes to insurance, their likely decisions around how they insure in response to affordability pressures and associated outcomes for under and non insurance. The survey

A feature of the survey was the selection of 300 households (the High Risk Sample) from areas which were determined to be of particularly high risk of flood, storm surge and cyclone.