Archive for the ‘Uncategorized’ Category

General Debate 12 May 2016

May 12th, 2016 at 8:00 am by Kokila Patel

Soda sales soar in Mexico after sugar tax!

May 10th, 2016 at 11:00 am by David Farrar

The WSJ reports:

Sales of soda are climbing two years after Mexico imposed a roughly 10% tax on sugary drinks …

Purchases, however, are rising in Mexico after an initial drop, making the country a key-growth market again for soda giants Coca-Cola Co. and PepsiCo Inc.

Underscoring the resiliency of sugary drinks, the tax of one peso per liter has raised more than $2 billion since January 2014, about a third more than the government expected.

The tax data is the best proxy for sales. So the sugar tax has raised lots of money but not decreased sales, let alone decreased obesity.

While that public-health campaign is long gone, soda makers continue to advertise their products heavily and say it is unfair to single out something representing less than 10% of daily caloric intake.

In NZ they are just 1.8% of daily calories yet the tax and tax brigade insist a tax on soda drinks would reduce obesity. It would be like trying to reduce alcohol consumption by only taxing vodka.

Coca-Cola Femsa SAB, the country’s largest Coke bottler, said last Wednesday that its Mexican soda volumes rose 5.5% in the first quarter from a year earlier. Arca Continental SAB, the No. 2 Coke bottler, reported soda volumes surged 11%.

The turnaround began last year, when Mexican soda-industry volume rose 0.5% after falling 1.9% in 2014, said data service Canadean.

So as is often the case a small initial impact, that then disappears and reverses.

Antisoda groups aren’t ready to declare the tax a failure and say sales got a boost from unusually warm weather.

Blame climate change!

Even the initial downturn only lowered the average Mexican’s daily caloric intake by 6 to 7 calories, or 0.2%, according to the study.

That is equal to around two extra minutes of walking per day. Yes, seriously.

General Debate 10 May 2016

May 10th, 2016 at 8:00 am by Kokila Patel

Spending Demands in last year would require top tax rate of 100%

May 9th, 2016 at 9:00 am by David Farrar

Since the Budget last year I’ve been compiling a list of spending demands made by various MPs, unions, NGOs and others. For each spending demand I’ve calculated a ballpark annual cost of the demand, once fully implemented to see how much taxes would need to increase to fund the demands.

Well as of today the spending demands in the last year have topped a massive $14 billion. That would require the top tax rate to go from 33% to 100% to fund it.

And the scary thing is I have probably missed a few of the demands. This is just something I have done in my spare time. I’m hoping the Taxpayers Union will take up this task after this year’s Budget and keep a more robust check on things.

So what are the biggest items called for:

  1. 60,000 more state houses – $1.8 billion a year
  2. Eradicate all pests from the mainland – $1.47 billion a year
  3. Abolish tertiary fees – $1.2 billion a year
  4. Increase aid to 0.7% of GDP – $1.14 billion a year
  5. Change early childhood teacher ration from 1:5 to 1:3 – $1.04 billion a year
  6. Pay a community wage – $1.04 billion a year
  7. $1 billion a year for public housing  – $1 billion a year
  8. Increase welfare spending by $1 billion a year – $1 billion a year

Now these costs are not the work of hundreds of hours of economic analysis. They are a superficial ballpark estimate. In the case of the 60,000 more state houses, presumably there would be some rental income to offset them which I’ve not yet calculated. But there would also be ongoing repairs and maintenance and rental expenses. So again this is just about showing the huge amount of spending demands made by politicians and lobby groups, and how any Government that gave into them all would bankrupt the country. I’m sure people can and will quibble over individual cost estimates.

The spreadsheet of the demands is here –Spending Costs

I’ve broken down the demands by who is making them. Again this is incomplete. I suspect most of the stuff Labour MPs has called for, the Greens support also. So this is probably under-states the level of demand each group has made:

  1. NGOs – $5.54 billion
  2. Individuals – $3.51 billion
  3. Labour MPs – $2.47 billion
  4. Media – $1.56 billion
  5. NZ First – $1.44 billion
  6. Unions – $611 million
  7. Green MPs – $406 million
  8. Govt agencies – $181 million

Now again this is based just on if I have seen it in a news story. I’ve not gone through press releases from MPs, in which case I think the totals would be even higher.

General Debate 9 May 2016

May 9th, 2016 at 8:00 am by Kokila Patel

General Debate 8 May 2016

May 8th, 2016 at 8:49 am by Kokila Patel

General Debate 7 May 2016

May 7th, 2016 at 8:00 am by Kokila Patel

US charter schools doing well

May 6th, 2016 at 3:00 pm by David Farrar

Nina Rees writes:

The latest U.S. News & World Report ranking of the best high schools in America is particularly strong on this point. U.S. News ranked schools on the basis of academic quality, as reflected in test scores. But rather than simply take into account raw data, U.S. News also looked at which schools are serving all students, across socioeconomic backgrounds. This year, for the first time, schools also had to meet a minimum graduation rate requirement.

Given the emphasis on serving all students at high levels of quality, it’s no surprise that charter schools are disproportionately represented on the list. Charter schools are public schools that are given greater autonomy and freedom in exchange for raising student achievement. They tend to cater to a largely minority and disadvantaged student population, particularly in inner cities. Though they only account for about 7 percent of public schools in the United States, they make up one-third of the top 100 schools in both the U.S. News and Washington Post lists. About 1.5 million students have graduated from charter high schools over the past 25 years.

Tell me again why some are so against charter schools? Oh it’s because they are not controlled by unions/

General Debate 6 May 2016

May 6th, 2016 at 8:00 am by Kokila Patel

The driverless truck

May 5th, 2016 at 10:00 am by David Farrar

Tech Crunch reports:

A convoy of self-driving trucks recently drove across Europe and arrived at the Port of Rotterdam. No technology will automate away more jobs — or drive more economic efficiency — than the driverless truck.

Shipping a full truckload from L.A. to New York costs around $4,500 today, with labor representing 75 percent of that cost. But those labor savings aren’t the only gains to be had from the adoption of driverless trucks.

Where drivers are restricted by law from driving more than 11 hours per day without taking an 8-hour break, a driverless truck can drive nearly 24 hours per day. That means the technology would effectively double the output of the U.S. transportation network at 25 percent of the cost.

And the savings become even more significant when you account for fuel efficiency gains. The optimal cruising speed from a fuel efficiency standpoint is around 45 miles per hour, whereas truckers who are paid by the mile drive much faster.

So better for the environment also. Sad for truck drivers, but fairly inevitable. Arguably will be safer also as computers don’t get tired.

General Debate 5 May 2016

May 5th, 2016 at 8:00 am by Kokila Patel

Big food companies are saying eat less

May 4th, 2016 at 11:00 am by David Farrar

USA Today reports:

After spending years trying to convince consumers to buy more of their famous-name products, now some of the biggest players in the food industry are trying to get people to eat less of them.

Burgers are shrinking, cookies are becoming thinner and package sizes are getting smaller.

In at least one case, a company is telling customers to cut back on its more indulgent foods. Mars, maker of M&Ms and Uncle Ben’s rice, said earlier this month that it would start labeling some of its products to indicate that they should only be eaten occasionally, due to being higher in sugar, salt or fat.

Mars is the latest company to take this seemingly counterintuitive approach. A look at grocery aisles and restaurant menus shows how prevalent the trend has become toward products with leaner messaging.

Responding to consumer pressure.

Other changes nudge customers to make healthier choices on their own, such as posting calorie counts on menu boards. The Subway sandwich chain became the largest restaurant chain to start posting the health information earlier this month.

Information is better than taxes or regulation. Having calorie counts on menus and boards is probably one of the most effective things you can do to help people make informed choices.

General Debate 4 May 2016

May 4th, 2016 at 8:00 am by Kokila Patel

Permissionless Innovation

May 3rd, 2016 at 2:00 pm by David Farrar

Adam Thierer writes:

Permissionless Innovation

Experimentation with new technologies and business models should generally be permitted by default. Unless a compelling case can be made that a new invention will bring serious harm to society, innovation should be allowed to continue unabated, and problems, if they develop at all, can be addressed later.

Precautionary Principle

This is the belief that innovations should be curtailed or disallowed until their developers can demonstrate that they will not cause any harms to individuals, groups, specific entities, cultural norms, or various existing laws, norms, or traditions. The tension between these approaches dominates almost all modern technology policy debates.

The NZ I want is one that allows innovation without permission.

A good 10 point checklist is provided for policy makers:

  1. Articulate and defend permissionless innovation as the general policy default.
  2. Identify and remove barriers to entry and innovation.
  3. Protect freedom of speech and expression.
  4. Retain and expand immunities for intermediaries from liability associated with third-party uses.
  5. Rely on existing legal solutions and the common law to solve problems.
  6. Wait for insurance markets and competitive responses to develop.
  7. Push for industry self-regulation and best practices.
  8. Promote education and empowerment solutions, and be patient as social norms evolve to solve challenges.
  9. Adopt targeted, limited legal measures for truly hard problems.
  10. Evaluate and reevaluate policy decisions to ensure they pass a strict benefit-cost analysis.

Let’s have the Productivity Commission evaluate our current laws and policies against this checklist.

The only way as a country we get richer is with innovation.

A journo on anti vaxxers

May 3rd, 2016 at 11:00 am by David Farrar

Lachlan Forsyth at Newshub reports:

I’m a poorly researched schill who’s been brainwashed by Big Pharma, apparently.

I shouldn’t be surprised. My story addressing commonly held myths about the flu jab brought the anti-vaxxers out in force.

  • “In the pocket of big Pharma.”
  • “One-sided hatchet job.”
  • “One lemon drink in hot water every morning will keep the flu at bay.”
  • “Seventy percent of cot deaths happen within 10 days of a vaccine.” (This is the sort of vile comment that infuriates me. Not only is this completely and utterly false, it’s incredibly dangerous.)
  • “Why didn’t you do your research?”

Hang on, why do the anti-vaxxers assume I haven’t done my research?

I have. I just choose to listen to the scientists, doctors and researchers, rather than the cranks, frauds and nut-jobs.


Well said.

It’s the same rationale that says if you’re building a bridge, you listen to engineers; if you’re getting a wisdom tooth extracted, you go to a dentist; if you’re having a WOF done, it’s better to ask a mechanic than your neighbour Phil who once electrocuted himself by chewing on a car battery.

Why do people think that a bit of googling and reading on the internet is an adequate replacement for years of professional study and research?


Doing your own research is a good thing. But if you only are looking for research that supports your beliefs, and will ignore all other research, then it is less of a good thing.

Hickey on land tax

May 3rd, 2016 at 10:00 am by David Farrar

Bernard Hickey writes:

The benefits of a 1 per cent land tax on that engorged base of land values shouldn’t be sneezed at either. It would generate $6.7 billion of tax revenues that would allow either income taxes to be cut across the board or for the GST rate to be cut back to 10 per cent.

Key could engineer a massive new tax cut switch that would help address the housing affordability crisis and reset the incentives for business investment in one swoop.

This is key. A land tax that increases overall tax revenue for the Government should be resisted. A land tax which allows other taxes to be cut (especially income taxes) is a different proposition.

A 1% land tax would allow the top tax rate to go from 33% to 27%, the third rate from 30% to 24%, the second rate from 17.5% to 12% and the bottom rate from 10.5% to 5%.

The politics of it would be awkward, but not insurmountable. It would be progressive tax (ie, it hurts more as wealth levels rise) that falls more heavily on some more than others, in particular richer and older people, and especially those on New Zealand Superannuation.

However superannuation is calculated on average after tax income, so they would get a big boost.

The benefits are obvious. It would finally send the right signals to investors, that capital gains are not completely tax free, that more productive and intensive use of land makes sense, that land banking does not make sense, and that investing in equipment, research and development would be as sensible as gearing up to buy land.

Most taxes reduce whatever is taxed – income taxes reduce labour, capital taxes reduce investment, consumption taxes reduce consumption. A land tax can’t reduce land – instead it incentivises better economic use of land.

General Debate 3 May 2016

May 3rd, 2016 at 8:00 am by Kokila Patel

General Debate 2 May 2016

May 1st, 2016 at 10:11 pm by Kokila Patel

General Debate 1 May 2016

May 1st, 2016 at 8:00 am by Kokila Patel

General Debate 30 April 2016

April 30th, 2016 at 8:00 am by Kokila Patel

Almost half of Britons pay no income tax

April 29th, 2016 at 12:00 pm by David Farrar

The Telegraph reports:

Almost half of Britons pay no income tax while the richest are now shouldering the biggest burden on record, a new analysis has found.

The Institute for Fiscal Studies said that the proportion of working-age adults who do not pay income tax has risen from 34.3 per cent to 43.8 per cent, equivalent to 30million people. 

Over the same period the amount of income tax paid by the richest 1 per cent has risen from 24.4 per cent to 27.5 per cent, meaning that 300,000 people pay more than a quarter of the nation’s income tax.

It is much the same here. Almost half the households pay less in income tax than they get in direct payments such as benefits or child/family tax credits.

General Debate 29 April 2016

April 29th, 2016 at 8:00 am by Kokila Patel

General Debate 28 April 2016

April 28th, 2016 at 8:00 am by Kokila Patel

General Debate 27 April 2016

April 27th, 2016 at 8:00 am by Kokila Patel

General Debate 26 April 2016

April 26th, 2016 at 10:47 am by Kokila Patel