Year on year CPI increase in the September quarter is 4.6%. But a big chunk of that is the GST increase.
If meth had followed the CPI, the price of a gram would have increased to $756, not $768, so maybe enforcement action pushed the price up a bit (although we ought to be pretty sceptical) . But the more interesting question is whether we should have expected price inflation in illegal markets to incorporate the GST increase.
Obviously, drug dealers don't charge GST on meth. But they do pay GST on a pile of their inputs where those inputs are bought in legal markets. And, they don't get to claim that GST back on quarterly returns either. So they'll have had a GST-related increase in their production costs. Since a smaller proportion of their inputs will be GST-affected, the CPI index for illegal sector goods should be lower than for other goods if we don't net out GST effects from either. So the real price increase is likely a bit bigger than a straight CPI-adjustment would have it.
It's worth noting the large disconnect between Key's rhetoric in the press release and the actual report's findings. Here's Key:
Here's the report (prior reports). Relevant findings:The fourth Indicators and Progress report for the Government's Tackling Methamphetamine Action Plan shows government agencies' work is continuing to contain the growth of methamphetamine ('P') supply networks, Prime Minister John Key announced today."This initiative has been in place for two-and-a-half years, and we can see that efforts to crack down on those who are importing, manufacturing and selling P and its precursors are working," says Mr Key."Six months ago, there were signs that supply chains were being disrupted, due to the efforts both at the border and domestically. We're now able to see that the dedicated resources on the frontline are continuing to squeeze the P trade."
..."The coordinated action against P by a number of government agencies is producing results," says Mr Key. "This report shows that, over time, the work to contain the methamphetamine trade is achieving the right results. All indicators suggest 'containment' and this should be seen as success.
"Any softening in our hard-line stance against P could undo several years of good work. Those who profit from the misery caused by P should realise we are committed to stamping out the harm this drug is causing New Zealand communities."
- Purity is down a bit, decline "close to being statistically significant".
- What about availability?
NZ-ADUM data shows a similar trend as IDMS, in that availability has remained stable/easier over the past two years. (p. 10)And, 60% of frequent users report no change in difficulty of getting P; rest split evenly between "easier" and "more difficult". (p. 14)
- Convictions for possession/use up from 1327 in October 2010 data to 1557 in October 2011 data; convictions for supply and dealing more than doubled. But still availability has either not changed or has increased.
- Customs is seizing less pseudoephedrine at the border and is instead seizing more P.
- But, the price of a "set" of ContacNT (pseudoephedrine precursor) hasn't changed since September 2009 (p. 13). Recall that the government only announced plans to make pseudoephedrine prescription-only in October 2009. So despite that none of us can get anything that works for a runny nose, the black market price of pseudoephedrine is unchanged. John Key and Peter Dunne have screwed over every New Zealander with a cold for absolutely no benefit.