Kiwiblog

The NZ Herald slams the latest stunt by the anti-whaling activists:

Peter Bethune knew precisely what he was doing, and the consequences, when he boarded the whaling vessel Shonan Maru 2 to make what fellow-protesters described as a citizen’s arrest of its captain. …

Mr Bethune was intent simply on grabbing publicity. He, and the Sea Shepherd Conservation Society, wanted to prompt a diplomatic incident, thereby putting further pressure on the Japanese to end whaling. …

The Dominion Post argues against a city wide liquor ban:

On one of Wellington’s rare balmy nights there is little to compare to a quiet picnic on the south coast, watching the sun go down and the kids paddle in the surf as you enjoy some cold roast chicken, a nice green salad , and a glass of Martinborough’s best sauvignon blanc.

Soon that pleasure may come with the dubious frisson of being a law-breaker, and the prospect of a visit from police to tell you you are breaching a Wellington City Council bylaw. Under the proposed liquor ban, the wine has to be tipped out on the sand, or the picnic packed up and moved to a non-public place. If you refuse, you will be arrested. If you wait till police go away and then carry on enjoying your picnic, you will be arrested should they return.

That is the future that could face Wellingtonians should the city council go ahead and pass its city-wide booze ban.

It’s a daft idea that should be shot down. Have outdoors liquor bans in areas where there is a problem.

The Press talks about the future of their regional council:

Environment Canterbury chairman Alec Neill managed to put on a brave face after the damning report into his institution’s performance and governance yesterday. The reality is that if the Government adopts the recommendations in the report, ECan as we know it today will be gone. …

The report will provide vindication for the region’s mayors, business figures and farmers, who have been queuing up to slate ECan for some years.

They would also agree with the comment of review leader Wyatt Creech that ECan had a “fortress” and “we know best” culture. …

I predict it will be gone.

The ODT talks about electoral issues:

It will be recalled that, in 2005, the Exclusive Brethren attempted to influence the outcome of the poll by mounting a covert and costly campaign against the Greens and Labour.

Labour had also been concerned about the extent to which campaign finance was both anonymous and uncapped, raising the spectre, it claimed, of “big money” interests tilting the odds against a fair contest: the even playing field argument.

In an attempt to close loopholes in the campaign finance rules, and to prevent parties “jumping the gun” and subverting the spending caps, it also created a controversial regulated campaign period of three months prior to polling day.

Ummn, no. That was the old regulated period. Labour extended the period to be all of election year.

The ODT reports:

Speight’s, a long-time sponsor of the Otago University Students Association Orientation Week, will no longer be associated with the annual event on campus, following a move by the University of Otago to ban alcohol advertising and sponsorship.

This is heresy. O Week without the Speights posters will not be the same. People will still drink just as much Speights I predict.

The headline band this year is United States-based Health, described as a “fluid, spiky maelstrom of blood and neon, mirrorball and icepick”, which “mashes together disco and punk into a noisy, spastic tribal inhalation of sound”.

See you need to be under the influence of Speights to be able to cope with that music!

On Monday night, we had a rare meeting of Presidents and leading representatives from Young Labour, Young Nationals, Young Greens and Act on Campus.

It was to discuss some of the options canvassed in the Law Commission’s review of alcohol law, and on top of 15 or so youth reps, we also had executives from the Drug Foundation, Hospitality Association, Lion Nathan and the Law Commission (to observe and provide info).

The four youth sections came together three years ago to (successfully) fight against Parliament’s move to raise the purchase age of alcohol to 20. The idea of the meeting was not just to focus on the purchase age, but consider many of the wider issues and see if there was a consensus on what options they agreed with, and what options they did not think would be effective.

I was involved with the original Keep It 18 campaign, so facilitated the meeting and to a certain degree played Devil’s Advocate on some of the issues. Issues discussed included the purchase age, should there be a drinking age, a split purchase age for on and off licenses, supply of alcohol to minors, restricted hours for off and on licenses, other access issues, excise tax levels, price issues, advertising restrictions, loss leading, blood alcohol limits for driving, open alcohol in cars, should cars have mandatory alcohol ignition locking devices, fake IDs, should drinking or being drunk in public be an offence etc.

I thought the meeting was really good, Not that I agreed with them on all issues, and not that they agreed with each other all the time. But it was a very practical discussion from a group of young people with first hand experience of youth drinking. It was around 50/50 guys and gals, but I didn’t pick up any huge difference in perspectives between the genders. There were some issues where there were differences between “left” and “right” but a surprisingly large number of issues where there was widespread agreement. The result is the four youth sections are going to do a joint submission (which may be a first) on the stuff they agree on, and individual submissions (or minority reports to the main submission) on the issues they have different perspectives on.

Not going to get into details of all the discussion, but there were three parts that stood out to me. They were:

1. When the current code of practice for alcohol advertising was summarised as banning ads that imply drinking can lead to sexual, sporting or social sucess, there was fairly widespread laughter as an automatic reaction. That was a very instinctive judgement that the current code is not working, or not being rigorously applied by all players. In fact many in the room cited ads that seem to quite specifically imply sexual, sporting or social sucess from drinking.
2. The discussion on the excise tax and price levels was very economically literate. There was a reasonable consensus that if alcohol use generates external costs (which it does), then there should be an excise tax set to cover the cost of that externality. However they rejected the notion that the tax be increased beyond covering the externality as a way to decrease demand, pointing out that would probably just send people into buying cheaper alcohol per volume (such as spirits). There was of course also reference to the considerable divergence in economists views of what the external costs of alcohol are, and the point was made that any figure used as justification for an increase should be very robust or bulletproof.
3. Very amusing in the discussion on price and excise tax was the points made by AoC that the real problem is people don’t pay for their own health care and a no faults ACC scheme which caused much merriment. Now to be fair to AoC their points are absolutely valid, but I did have to say I think we can assume that the Government is unlikely to privatise the health system and abolish ACC, so if we taken these as a given, then what is the best way to cover the externalities.

As I said, despite differences on a fair number of issues, it was a very mature and constructive discussion. I was really impressed with those who took part.

Also thanks are due to Labour’s Trevor Mallard (and his secretary) and Iain Lees-Galloway for providing a meeting room at Parliament, and attending (with useful contributions). When it became clear Parliament would be the best place to hold the meeting I considered the easiest way to get an MP to sponsor the meeting. I figured if I approached a National MP they might get worried about any perception of doing me a favour so I e-mailed Trevor on the rationale that no one could ever criticise him for helping me secure a room

As I said, was a really good meeting, and who knows there might be other issues in future they come together on.

I love this. The Scottish brewer BrewDog, of Fraserburgh was criticised for an 18.2% alcohol content beer. So it has now produced a 1.1% alcohol beer and given it a label of “Nanny State Beer”. Wonderful.

Very pleased to read in the Herald:

Liquor law changes which would have closed Auckland suburban bars before midnight will be scrapped after receiving a hostile reception from the hospitality industry.

Auckland City mayor John Banks and Aaron Bhatnagar, the councillor steering the changes through the council, decided at the weekend to abandon the changes. …

Realising something isn’t going to fly is one of the skills of politics. Of course some still want it:

City Vision leader Richard Northey said that rather than panic, Mr Banks and Mr Bhatnagar should have continued the process, listened to all sides of the argument and addressed issues with widespread support, such as the opening hours and location of off-licence alcohol outlets.

Alcohol Advisory Council chief executive Gerard Vaughan was surprised the policy was being dumped in the middle of public consultation, which was to run until October 7.

“We know that reducing hours is an effective means of reducing harm from alcohol,” he said.

Yes indeed. So let’s go back to the six pm closing shall we? But why stop there? If we force bars to only open between 2 pm and 4 pm that will reduce harm even further!

Mr Banks, who wants to be the first mayor of the Super City next year, said he had no doubt the liquor issue would have damaged a key constituency – the hospitality industry – with which he had a long association.

He said yesterday that the first lesson of politics was to bail out when caught out.

The Mayor, who last month voted for the draft liquor law changes, said he had never seen such a violent reaction to a policy issue “and I have put an end to it”.

Listening to the people!

As I blogged a few days ago, I think it is an issue best left to the new local boards anyway.

The Herald reports:

Publicans in suburban Auckland reckon the city council should leave the running of neighbourhood bars to the locals.

There’s a difference between suburban bars and inner-city boozers, says Jason Breen, managing director of Remuera’s Villager restaurant and bar.

Local bars responded to the patrons’ needs, which meant they needed flexibility.

Mr Breen is saying leave it to the local bar owners, but it got me thinking about another issue – why doesn’t the Auckland City Council not make any changes at all to licensing rules, and wait for the Super City.

Because then the new local boards will be able to set rules for their local communities, rather than have them set centrally. That would seem a win-win.

The Herald reports:

Hundreds of Auckland bars and restaurants will be forced to close at 11pm under planned city council liquor law changes.

The council wants all on-licence premises outside the CBD closed by 11pm, unless they are situated in entertainment precincts such as Ponsonby Rd, Parnell Rd, Newmarket or Mission Bay.

I’m glad I live in Wellington!

As a blogger I get invites to a number of media events, ranging from a new printer range (yawn) to the launch of a new alcoholic drink, which is far more fun.

On Wednesday Zumwohl had a briefing and tasting of their three Zumwohl spirits. It was on the top floor of the Majestic Centre, which was a nice backdrop for it.

The name Zumwohl, is German and is a traditional cheers type toast. Ulf Führer is a German born Kiwi who created the drink.

At first glance I thought Zumwohl might be a type of vodka, due to its clear nature. But it is considerably smoother than Vodka, being based on a German shot drink.

They have it in three flavours – natural, plum and feijoa. The natural was very drinkable, even without a mixer – considerably smoother than vodka.

We next tried the plum. The nose on it alone is quite superb, and the taste is very refined. The feijoa was similar. My favourite of the three was the plum, while Alexandra (a visitor from the UK who I dragged along to it) preferred the feijoa.

How good is it? Well I’m going to Liquor King this weekend to buy a couple of bottles.

I’ve been drinking vodka since I was 12 years old (yes explains a lot) and while I wouldn’t quite go so far as to say I’ll be giving up vodka for Zumwohl, it certainly will be my preference when I have a choice between them.

I’ve yet to put it to the ultimate test – how well it mixes with L&P, but it is surprisingly very drinkable straight. Possibly too drinkable as you tend to drink faster than entirely wise when it is very nice.

A few bars around Wellington are launching the drink this weekend. It is also available in Auckland, and a few bars elsewhere.  For my 2c, it is well worth trying if you are a spirits fan.

The Press reports:

Over half of male university students make themselves vomit after bingeing on alcohol.

New research by Canterbury University psychologist Natalie Blackmore found 57.58 per cent of men and 42.26 per cent of women students reported self-induced vomiting after drinking alcohol.

I thought at first the figures would be even higher! But then I realised they are talking about having a voluntary chuck so you can carry on drinking or have less of a hangover, rather than the more traditional involuntary chuck.

If we are talking about a voluntary or self-induced chunder, those figures do seem very high.

The findings, in Blackmore’s master of science thesis, also showed many who self-induced vomiting believed it was acceptable, especially among men.

My experience is far from being acceptable, having a chunder would gain you days of hassling. But again that was for involuntary ones. I really can’t recall many people at all who self-induced.

Stuff reports:

A top policeman wants people banned from entering bars after 1am, but his call has divided police bosses.

Christchurch area commander Inspector Derek Erasmus also wants bars closed by 3am as police struggle to grapple with “a heaving, throbbing mass of drunkenness” on weekends.

But Wellington’s police bosses and the hospitality industry say it would be a disaster and would not deal with the drinking culture.

Yay. Great to have the local Police being sensible.

Wellington area commander Inspector Pete Cowan said a single law change would not deal with weekend drinking problems or the drinking culture generally.

He said Wellington police had looked at a one-way-door policy a few years ago but realised it would not work unless all 247 licensed premises in the city centre signed up to it.

“I do not want all the businesses to close at the same time. Thousands of people put out on the street at once, that would be absolute chaos.”

Absolutely. And many people don’t even hit town until midnight. A 1 am one way policy would mean you have to stay at the same place all night.

The Herald reports:

The sexual history of rape-case complainants may no longer be able to be raked over by defence lawyers in potentially far-reaching reforms proposed by Justice Minister Simon Power.

He is considering making evidence about a complainant’s previous sexual relationships inadmissible without the agreement of the trial judge.

I am broadly supportive of such a move, but have to admit I thought there already were restrictions on such details being detailed in court? One of our friendly defence lawyers want to clarify.

There are some occasions where past relationships could be material. If for example a complainant said she did not consent as it was their first date, and she would never sleep with someone the day she met them – then evidence that she is lying and has had a one night stand before would be relevant. But only because it is contradicting a claim she made. If she made no such claim, then I would say it is not relevant how many one night stands a complainant may have had.

Mr Power said rather than the complainant being ambushed in court with cross-examination about her past, a judge should first rule on its relevancy.

Which seems sensible.

He also proposes changing the definition of consent so someone would have to say “yes”, rather than the current law where a defendant is able to argue the woman did not say “no”.

Here I have to say, the proposal is impractical. Power isn’t exactly proposing this change – more just floating the possibility. But I think consent is often implicit, not explicit, based on how someone responds to you. I think Canada may have gone down this path, but to me it reeks of almost having to sign a statutory declaration of consent before sex.

Mr Power has also asked the Law Commission to investigate introducing a European-style inquisitorial justice system in sexual offending cases.

He said using such as system – where the judge is involved in collecting and determining the facts of the case – instead of the adversarial system that required “harrowing” cross-examination of victims was “worth a look”.

Fairly openminded on this. Fair to say though a high level of persuasion would be needed to change from the current system.

Mr Power says alcohol – a “facilitator” for crime – has to be dealt with if the Government is to have any impact on the crime rate. He says this will be done in one package of law reform this parliamentary term and will take into account the ongoing work of the Law Commission. It has already suggested limiting the opening hours of liquor shops and bars, raising the drinking age to 19 or 20 and increasing tax on alcohol.

I hope his comments do not mean the Government will just automatically legislate whatever the Law Commission recommends. The quality and relevance of the research they have used to date in citing the need for change has been seriously lacking.

Simon also announced his views on the provocation partial defence, which I will deal with in another post. His speech is online here and is a very good read. I’m incredibly impressed by the pace of work by Simon – he has achieved a lot in six months and by the end of his first term, will have a huge amount of law reform behind him.

On a final note did anyone else see Valerie Morse on TV last night holding up a sign calling for all prisons to be abolished at Simon’s speech. I’d like to ask Valerie what she thinks should happen to Clayton Weatherston and Graeme Burton. I guess she’ll just claims they are victims of the colonialist capitalist oppressors.

BERL have done a fuller response to the criticism of their study. An extract:

BERL freely accept comment and debate on our publicly released reports. The project brief for this study was focussed on providing detailed information on the costs of alcohol and other drug abuse to New Zealand society. Measurement of benefits was clearly outside the scope of the project. We cannot accept criticism for not covering issues that were outside the project’s terms of reference.

This raises to me the question of why the hell did the Government spend $135,000 on a report that won’t be of great use for decision makers, as it deliberately ignores benefits. I’m not angry at BERL – I’m angry at the Ministry of Health and ACC for wasting our money.

Crampton and Burgess have done a detailed ten page response to BERL’s response. First they note:

Prior to corrections, we had found net external costs of $146.3 million. Our adjustments produce a net positive figure for alcohol consumption: net external annual benefits totalling $37.8 million, an overall adjustment of $4,832 million from BERL’s original estimate. However, given the margin of error in work of this sort, we would regard both our initial figure and our corrected figure as suggesting external costs roughly equal to collected tax revenues.

It is worth noting that our adjustments were made without access to BERL’s calculations, our request for access declined by BERL on 15 May on grounds of protecting intellectual property. We provided BERL with an early draft of our paper seeking comment in case we had erred in our reverse-engineering of their figures; now, nearly a month later, they have raised objections leading to an adjustment totalling only $36 million. We not aware of any substantive errors that remain in our critique; we welcome additional feedback.

They also look at the issue of benefits being excluded:

Regardless of the terms of reference, BERL’s treatment of benefits in their report is integral to their headline costs calculation. As BERL correctly points out at page 173 of their report, private costs can only be counted as social costs if there are no offsetting private benefits:

BERL’s treatment of private benefits adds $2.2 billion of private costs to their headline costs for alcohol. Plainly, and regardless of the scope of the RFT, BERL’s treatment of benefits is material to their method, directly affecting their measurement of the costs of diverted resources, and more subtly affecting all of their other cost measures.

It does sound like BERL is trying to have it both ways. Crampton/Burgess compare drinking to skiing:

Consider, by analogy, skiing: a risky, but enjoyable activity.
If we wished to count the “social costs” of skiing and wanted to include all of the costs borne by those skiers who broke their legs while skiing, we would need to weigh those costs against the benefits enjoyed by all of the skiers who made it down the slope without accident. Alternatively, we could consider only the external costs of skiing. Counting all of the private costs as social costs by virtue of an unsupported assumption that gross benefits are zero does not provide a useful cost figure.

And this is the crux. If you ignore benefits, you can find any activity has horrible costs. If you ignore benefits, it would be logical to conclude that skiing should be restricted or banned.

And their conclusion:

BERL has chosen not to defend its economic cost report on grounds of economics. Instead, BERL’s main strategy has been to attack the personal values and world view of its critics. BERL’s use of analogies suggesting our personal acceptance of murder and drink driving are in the nature of personal smears. BERL disingenuously continues to allege that our results hinge on perfect rationality and perfect information, in spite of our repeated rebuttals of that point. Their complaint that benefits are out of scope and beyond criticism is obviously incorrect: their treatment of benefits is the basis on which private costs are included alongside external costs. BERL’s treatment of benefits defines the methodology.

And finally:

Most seriously, BERL has not explained what policy makers can do with a cost report that by BERL’s admission has no policy relevance absent benefits. Without this explanation, we are left to observe that the methodology used by BERL produced very large headline cost figures, their report repeatedly mischaracterised those costs as welfare measures, that these costs were misinterpreted by at least one group of policy makers and BERL did not to our knowledge make any attempt to correct this misinterpretation until after our critique of their work was released and picked up by the mainstream media. It is this non-response by BERL that motivated our review.

Identifying a use for BERL’s report on the important issue of alcohol misuse is a matter that remains unexplained

Hopefully the next time the Ministry of Health and/or ACC has to front up to a select committee, an MP or two can ask them that exact question. And ask for our $135,000 of taxes back.

I’m pleased to see that BERL have responded to some of the criticism of their report concluding the cost of alcohol abuse in NZ was close to $5 billion a year.

Treasury have apologised to BERL for some of their comments, on the basis that BERL were not asked to do a full cost/benefit study. In that regards, it is fair enough that BERL not be criticised for working to their brief.

However as someone interested in public policy, there are real questions abotu why Government agencies both commissioned something that was not a full cost benefit study and further why it was promoted by such.  The research was being treated as gospel, and we now know it was research only looking at costs without benefits.

BERL have said Crampton and Burgess made some mistakes in their analysis, and Crampton has blogged that yes there were two mistakes. However they only add $36 million onto the costs. And as it happens they had also missed out the portion of excise tax collected by Customs which increases external benefits by $197 million. This means that their original figure of a net cost of $146 million is now a net benefit of 38 million. That is close enough to zero – in other words the current excise taxes cover the external costs of alcohol, and there is no case for increasing them.

I hope suitable scrutiny will be directed towards other research reports which do not look at both benefits and costs, and get used by lobby groups and government agencies incorrectly.

Roger Kerr makes some good points in a recent column:

Liquor is in many ways not special. Hundreds of products – matches, detergents, electricity, pharmaceuticals, motor vehicles and firearms, for example – cause problems if misused.

Nevertheless, there are external social costs, such as drink driving, which give rise to legitimate concerns.

The challenge for policy is to target these problems with effective interventions (and enforcement of existing laws), not to penalise with regulations or taxes the vast majority of responsible drinkers.

As one commentator has noted, “Raising taxes on alcohol to prevent problem drinking is akin to raising the price of gasoline to prevent people from speeding.”

Absolutely. Too often the Government goes for the easy approach which pubishes everyone equally, rather than target those causing the problem.

The Law Commission needs to engage with this analysis and follow the Generic Tax Policy Process for any recommendations on tax.

Similarly, it should follow the required Regulatory Impact Statement process for any recommendations on regulations in its forthcoming discussion paper.

That process requires a demonstration that the benefits of any recommendations or regulations exceed the costs. Competent analysis requires benefits and costs to be quantified, not just asserted, otherwise serious public policy errors could be made.

It is highly unlikely that proposals to restrict liquor outlets, for example, would meet a cost-benefit test.

I agree. They won’t stop problem drinkers getting alcohol but will make it harder for most people to buy alcohol conveniently.

Instead, the Law Commission should focus on ways of internalising the external costs of alcohol abuse.

For example, why should those who injure themselves in an alcohol-fuelled assaults or burglaries enjoy generous ACC benefits? Many foreigners would regard such treatment as ludicrous. Will Sir Geoffrey Palmer, one of the ‘fathers’ of ACC, be open-minded enough to look at such an obvious remedy?

Similarly, if we are willing to confiscate the vehicles of boy racers, why should we not confiscate the vehicles of serial drink drivers?

Target the offenders, don’t try and social engineer the entire population.

I have previously covered the damning critique done my Eric Cramption and Matt Burgess of the BERL study which found the cost of alcohol consumption was around $5 billion a year. Crampton and Burgess cited multiple errors in the BERL study (including no counting of benefits) and concluded it was actualyl less than 5% of that.

NBR reported last week a response (finally) from BERL:

Adrian Slack says Berl was only commissioned by the Ministry of Health and ACC to look at the social costs and not the benefits of alcohol, and would have needed an additional $135,000 were it to extend its remit to examining the benefits and policy implications. …

A pity that it was not made clear at the time it was costs only. I wonder why the Government would see value in commissioning a paper that looks at costs without benefits. Anyway onto the next comment my Mr Slack:

He accused Dr Crampton & Mr Burgess’s critique as being based on strong assumptions about perfect markets, perfect information, and individual rationality.

“So for example someone who murders someone, from the individual’s point of view, Eric would be, I presume, quite comfortable with that. The person who decides to murder someone else makes an evaluation of what are the benefits and costs to me of this action? Society says ‘well some people do murder other people’, but society says ‘that’s not good.’”

Now that was not a type. He just said that Eric Crampton would be comfortable with someone murdering someone (from an economic perspective). This is BERL’s response instead of a detailed point by point response to the 30 to 40 errors cited in the report?

Paul Walker responds with disbelief – not just from the sillyness of the analogy, but the repeating of economic mistakes:

If the only costs of murder were the internal cost to the murderer then we may not be too concerned with murder. BUT, there are some obvious, to most people if not Adrian Slack, external costs to murder, that is, the loss of life of the victim. The victim is the victim because they have not willingly agreed to be murdered, that is what makes murder, … well … murder.

I have no doubt that both Eric and Matt are opposed to murder, and for the very good reason that it violates the victim’s property right in themselves. Murder is not a market transaction in the sense that it is not a voluntarily agreed to trade resulting in both parties being made better-off.

One of the major points that Matt and Eric made about the BERL report is that BERL didn’t seem to know the difference between internal and external costs. The Slack quote above only reinforces that point.

Indeed an own goal. Eric Crampton also responds:

Economists tend to think that murder is a bad thing. Why? Well, despite the murderer presumably enjoying the act, his gain comes at a cost that he doesn’t personally bear: the death of his victim. That’s the kind of cost that economists tend to call an externality. And so economists tend to support laws against murder. We similarly tend to support laws against theft: while the thief tends to think taking other folks’ stuff is a good idea, the thief’s victims tend to be hurt by it and the thief won’t weigh those folks’ losses against his gains. In these kinds of cases, individuals’ rational calculation of their own costs and benefits lead to socially bad outcomes because of the substantial external costs.

Eric goes on to say that having BERL paint him as pro-murder (economically) is gettign close to a version of Godwin’s Law where you should concede defeat if that is the best you can do.

Blaise Drinkwater also comments on the costs vs benefits issue:

But just because I buy that the BERL report is a costs curvey only, I’m not obligated to buy the report, which bungled the costs badly. Remember, the BERL report said that alcohol costs New Zealand’s society the equivalent of $4,794m, using an “international framework” that seems to have as its main justification the academic equivalent of a circle-jerk. Burgess and Crampton, employing more mundane economics, came up with a figure of $662m. BERL is yet to explain satisfactorily why their headline figure seems to out by a factor of seven.

That is what I am most interested in. I do hope BERL does a more robust and detailed response than they have to date, so people can then judge with confidence which figure is most useful.

Two economists – Eric Crampton and Matt Burgess, has scrutinised a report by BERL, which cost the Government $135,000. The BERL report concluded the annual social costs of alcohol was $4.79 billion (and has been quoted as a reason to tax alcohol more etc), while Crampton and Burges says BERL have exaggerated costs by 30 fold. Crampton blogs:

“What we found shocked us. BERL exaggerated costs by 30 times using a bizarre methodology that you won’t find in any economics textbook,” Dr Crampton said.

“BERL has virtually assumed its answer. The majority of the reported social costs rest on two very strange assumptions which BERL has asserted without any reason or evidence,” said Dr Crampton said.

“The report assumes that one in six New Zealand adults drinks because they are irrational; that is, they are incapable of deciding what is good for themselves. BERL further assumes that these individuals receive absolutely no enjoyment, social or economic benefit from any of their drinking,” Dr Crampton said.

“These assumptions allowed BERL to count as a cost to society everything from the cost of alcohol production to the effect of alcohol on unpaid housework. That’s bad economics.”

Among other serious flaws, Dr Crampton said the report’s external peer review was done by the authors of the report’s own methodology, important findings in academic literature that alcohol had health and economic benefits were ignored, BERL did not properly warn readers about the limitations of its methodology, and used language in the report that was frequently misleading.

And that is just from the press release. The actual report is as savage as I have seen in critiquing an economic work:

This paper reviews BERL’s report, finding it contains serious deficiencies. For reasons of time, we focus exclusively on BERL’s tabulation of the costs of alcohol. Methodological errors account for approximately forty percent of BERL’s listed costs: double-counting of the costs of insurance and the costs of insured losses; counting as costs all of the alcohol consumed by harmful drinkers rather than just the portion harmfully consumed by those drinkers; incorrect use of multipliers; not accounting for cohort differences between serious alcoholics and the rest of the population in labour force characteristics; and, assuming an implausibly large reduction in crime in the absence of alcohol.

And further:

First, for alcohol consumers BERL uses an epidemiological basis to define the threshold for economic harm. This definition is crossed after 1.8 pints of beer and is low enough to catch one New Zealand adult in six. …

Second, BERL assumes all harmful alcohol and drug consumption is irrational. Irrational consumers are incapable of detecting private costs in excess of private benefits. To the extent those private costs exceed benefits, they are counted as social costs. Third, BERL assumes irrational consumers enjoy zero gross (not net) benefits, meaning all private costs are counted as social costs. The second and third assumptions are not justified – they are simply asserted by BERL. The effect of these assumptions on BERL’s cost estimate is profound. An analysis that would otherwise be confined to externalities is instead inflated by private costs.

And even more:

The credibility and independence of BERL’s work is also questionable, further limiting its usefulness. The analysis ignores most of the large body of peer-reviewed economic literature in favour of a few (mostly commissioned) reports by a very small subset of health economists whose reports have been subject in that literature to many of the same criticisms leveled here. BERL’s report can be reasonably characterized as a New Zealand implementation of a methodology developed by Professors Collins and Lapsley, cited over 100 times in the BERL report. These same authors provided the external peer review of the report.

And finally the summary:

It is customary in reviews like this to offer at least some praise, but BERL’s report has few redeeming features. Beneath its professional veneer, BERL’s report fails in multiple dimensions. Its conclusion is assumed. Its core assumptions defy both reason and the body of peer-reviewed literature. Its headline figures are overstated by an order of magnitude. The methodology is without foundation in the economics discipline, and the report has been peer-reviewed by the authors of its flawed methodology. Its literature review is highly selective. The report contains elementary errors and misunderstandings of economics, and policymakers are likely to be misled by the report’s loose terminology and spurious comparisons1
2. The BERL Study . In sum, these flaws render the report of negligible use for subsequent policy-making.

Now that is brutal. And the Government paid $135,000 for this report and the Law Commission has been citing it as a rationale for its advocacy.

I suspect the BERL report is just one of money where only costs are looked at, benefits ignored, and costs inflated to the maximum.

John Roughan on Saturday had an excellent post on the benefits of competition:

Twenty years ago a visit to a wine shop was not much better than a prowl around supermarket shelves today. There was a limited range of popular varieties, some priced to clear.

You made a selection with minimal assistance and knew from bitter experience not to try anything unfamiliar, particularly if it was red.

Twenty years ago, when Parliament passed a law allowing wine to be sold in supermarkets, everybody supposed it would spell the death of the wine shop. So much for supposition.

I have a nearby supplier these days who has noted what I like, knows my modest price preference and, more often than not, has a new vintage to recommend. Invariably, it is superb.

This is key – not all competition is price based. It is service based also.

Here’s to him, here’s to all the customers that keep him solvent, here’s to supermarkets that force him to compete on service, here’s to the Sale of Liquor Act, 1989.

Bravo.

I mention this because the liberal liquor laws of the late 20th Century are in imminent danger of reversal. The sale of alcohol from supermarkets, the proliferation of suburban liquor stores and the lowering of the minimum purchasing age to 18 are blamed for under-age and binge drinking, domestic violence, even armed robberies.

And much more no doubt.

I don’t know if higher prices will deter binge drinking and other sins. The researchers assure us it will. Nor do I know whether wine shops will continue to offer an assiduous service if supermarkets can no longer advertise today’s price differentials.

What I do know is that the benefit competition has brought for consumers like me is unlikely to figure in the decision. The benefits of competition seldom attract social research.

Eric Crampton has already analysed some of this research and found that it only looks at costs, not benefits. Any decisions on alcohol should be made on a rational basis.

Look at what fun we have to look forward to if Labour gets back into office. This is what Lianne Dalziel wants:

1. Increased tax on alcohol
2. Ban supermarkets and grocery stores from selling alcohol
3. Increase purchase age to 20 for off licenses
4. Most bars and nightclubs to be forced to close at 1 am
5. Bottle stores to close at 8 pm

Lianne forgot the one about needing your parent’s permission to be out after 9 pm if you are aged under 30.

The Herald reports some proposals from the Law Commission:

One of the issues for later discussion was the substantial gap between the taxes the country received from alcohol purchases, $795 million, and the estimated social cost of harmful misuse of alcohol of $5.296 billion.

“It does seem to me that the taxpayer should not be asked to shoulder as much of the burden as is currently being met from public funds,” Sir Geoffrey said.

“It does seem that the case for increasing the price of alcohol to ensure drinkers contribute more to the costs imposed on society is persuasive.”

He suggested increasing the excise tax would be appropriate.

The estimated social cost figure is no doubt exagerrated – they probably assume that a crime commited when drunk would never have happened if sober etc. But nevertheless there may be an economic argument to increase the excise tax. However if you increase it too much, you will just help the black market out. You also may push people away from drinking in bars (a more controlled environment) and into buying alcohol more cheaply from bottle stores, which is more likely to lead to binge drinking.

The legal drinking age should also be increased he said.

There is no such thing. Sir Geoffrey should know better. There is a purchase age and it should not be raised. A 19 year old should not be a criminal for buying a bottle of wine.

What they should do is look at whether there should in face be a drinking age, and if there should be an offence to supply alcohol to those under the drinking age.

There was an equally strong case for limiting the hours off-licences could be open.

“I do not understand why bars need to be open to 6am on a Sunday morning.”

People once said they should not be open at 7 pm. It is not for Sir Geoffrey to understand. If enough people want a drink at 6 am, then why not. Having said that, most bars now close by 5 am.

There was also a strong argument for lowering the blood alcohol from 80mg per 100ml for adult drivers to 50mg per 100ml.

No there is a very weak argument. A very small proportion of crashes involve a driver with blood alcohol between 60mg and 80mg per 100ml.

“For under 20-year-olds it should be lowered to zero regardless of licence status.”

This I agree with.

The ODT reports:

Labour MP Lianne Dalziel has called for supermarkets to “lose the right” to sell alcohol because the practice of making a loss on alcohol products in order to entice people into their stores was behind a “significant number” of alcohol-related issues, she said.

“These people are pouring alcohol into our streets,” she said.

Ms Dalziel said the 1989 decision to allow wine into supermarkets was the “most dangerous, low-reaching, appalling decision that Parliament has ever made”.

Really? Wine is our problem? I’m sorry, but I think beer and spirits play a far far bigger role in alcohol abuse and related violence and crime, than being able to buy a bottle of wine with your groceries.

I buy most of my wine direct from vineyards, but it is nice to sometimes be able to grab a bottle when at the supermarket. And Lianne want to make this illegal?

Very pleased to see balanced and sensible view from Simon Power on alcohol issues:

“But in the end we have to ask ourselves how broad an issue this is when it is such a critical part of offending and if you want to drive the crime rate down in New Zealand you can’t do that without having a discussion about alcohol,” he told Radio New Zealand.

Of course. The challenge is how you target those who can not handle alcohol, without needlessly interfering with the vast majority who can enjoy a night on the town without incidence.

“I don’t think that you can have a serious discussion about reducing offending in New Zealand without asking yourself some serious questions about the proliferation of liquor licensing in New Zealand.”

One has to be careful to generalise. I don’t think the fact that many cafes now serve wine, or you can have a beer at Downstage is creating problems.

Mr Power said he did not personally believe raising the drinking age is the answer to the problems.

The issues of parental responsibility and education were important and raising the purchasing age did not deal with the issue of drinking in homes.

Absolutely. I tend to favour a law change that targets irresponsible supply of alcohol to minors. It would be hard to word, but worth doing in my opinion.

“I can’t be convinced that you need to walk into a bar for the first time at 3 o’clock in the morning to have a drink. It just seems to me that the range of hours that we’re making alcohol available are very very wide.

I don’t think many people get their first drink at 3 am. However if one is having a night out dancing in Courtenay Place, then you are still going at 3 am. Maybe you could have bars remain open, but not serve alcohol – but realistically they won’t stay open if they are not making enough money to pay wages and costs.

I’m reluctant to politicise the alcohol theft issue, because while it is Labour this time which has the stupid staff members, there have been plenty of stupidities done over the years by staff from all parties – including myself! Of course theft is at the more serious end of the scale.

But I find myself slightly annoyed by Phil Goff’s response. Now generally I think Goff is making good judgement and calls, but Stuff quote him:

Labour leader Phil Goff said the staffers’ actions were “totally unacceptable”.

“I deeply regret that that action was taken. It is perhaps a message for young people at Christmas functions – watch how much you drink and remember you will be accountable for your actions afterwards.”

Umm, I hope Phil is not suggesting all young people steal things when they have had a few drinks.

And I am not even sure blaming what happened on alcohol is a good idea. They were loading the wine into a car. So either one of them were sober enough to drive, or they were also going to be drink driving.

Phil also said:

Mr Goff said he did not know the individuals personally.

But the Herald reports:

Aidan Smith was arrested after allegedly being caught taking the wine to a car outside Wednesday night’s party, which was attended by Prime Minister John Key and a collection of other ministers and senior MPs.

Smith was still working as Labour MP Pete Hodgson’s assistant yesterday. He is due to leave that role soon to work for the party’s finance spokesman, David Cunliffe. He has previously worked in the party’s research unit.

He is listed as working in the Research Unit, which is part of Phil Goff’s leader’s office. Now one must take Mr Goff at his word that he has never met Smith, but all I can say is that in my experience it would be very very rare for an Opposition Leader not to know all of his office staff. In fact often they will know most of the MPs secretaries also. Its unclear whether he was Hodgson’s secretary, or a researcher working for Hodgson (which makes him part of the Leader’s Office).

As to the four involved, I had a degree of sympathy initally based on an assumption it was an opportunistic fit if stupidity. You’re the last people at a party and there is a box of wine, and you think hey it is paid for anyway, we could have drink it anyway, and hate it to go to waste. Now don’t get me wrong – that is still wrong, but I can understand with some empathy how that may happen. But according to the Herald it was very calculated:

A group of up to four people, also believed to be Labour staffers, were seen acting suspiciously as they came in and out of the party, which was held in Parliament’s Doidge room and spilled into the area outside.

Press Gallery chair Vernon Small of the Dominion-Post and deputy chair Jane Patterson say they tracked Smith to the carpark.

It is believed that the group of four were taking full bottles of wine from the bar then smuggling them individually out the gate and up to the car.

A partygoer claims to have seen one making fake phone calls as an excuse to go in and out of the party.

If this is correct, that is pretty inexcusable. Now it is possible the accussed denies the events, so I won’t comment further than this for reasons of natural justice. But if the above account is accurate, that makes it very serious.

Stealing is stupid. Stealing from journalists is even more stupid. Stealing alcohol from journalists is terminally stupid.

NZPA report:

Wellington, Dec 18 NZPA – Up to four Labour Party staffers face the sack after they were allegedly caught stealing alcohol from a parliamentary Christmas function.

Police were called to Parliament in the early hours of today after the four people were seen loading surplus alcohol from the Press Gallery Christmas party into a car on the precinct.

One of the men was detained and arrested at the scene, allegedly with over $400 worth of wine in his car. He has been charged with theft.

The man’s accomplices escaped, but NZPA understands security footage shows four people were involved in the alleged theft — all of them junior Labour Party staffers.

$400 worth of wine is probably around three dozen bottles or so. Apart from the fact it is wrong, and also an abuse of the hospitality of the galley – it is also stupid considering the number of security cameras and guards around the place.

I left around 1 am and it was still going strong. I’m curious as to what time the alleged theft took occurred.

Goff will be ropeable. They will either be MPs secretaries or members of Goff’s personal office.

Labour leader Phil Goff said the staffers’ actions were “totally unacceptable”.

“I deeply regret that that action was taken. It is perhaps a message for young people at Christmas functions — watch how much you drink and remember you will be accountable for your actions afterwards.”

Mr Goff said he did not know the individuals personally.

In which case my assumption is they are secretaries/EAs – probably for new MPs. Their MPs will be very upset that their first staffing decision has blown up in their face.

UPDATE: Despite Goff saying he does not know any of them, they may actually be from his office, not MPs Secretaries. Not that I met everyone there last night, but there were not a lot of secretaries there.

The ODT reports:

Drunken teenagers at a party funded by a high school’s anti-drink-driving group have trashed a rural Southland hall.

Bottles were thrown at passing cars and into a children’s playground during the out-of-control party, organised by high school pupils using money from the St Peter’s College SADD (Students Against Driving Drunk) committee, last Friday.

Good old Gore never disappoints

The Herald reports:

A third of university students who drink alcohol suffer memory black-outs from drinking too much, a new survey has found.

Otago University alcohol researcher Dr Jennie Connor said yesterday this was a surprising finding from the internet-based survey by an international team of researchers.

My only surprise was that it is only one third.

But later in the story I see this was about just the last four weeks. In that case, one third is pretty high.

Now this sounds like a fun junket:

Associate Justice Minister Lianne Dalziel is learning first hand how a country with a reputation for heavy drinking is handling its alcohol problems.

I think this problem may require a lot more study!