More things that perplex me: Shoeshine edition

I've been travelling and posting has been light. Last week I was at the Mont Pelerin Society annual meetings - an excellent week for catching up with old friends and finding out what is all going on in the world beyond New Zealand. I'm now spending a bit of time back in Manitoba before we head back to Wellington.

We passed by this standard feature of American airports on our travels.

I've wondered why New Zealand doesn't do shoe-shine stands. I always took the opportunity to get a shine while travelling through American airports, even as a grad student. The operators are professionals. They have dozens of waxes and polishes, know exactly what's needed for your shoes, and have great patter. It's like going to a good barber, except for your shoes. And it's great watching a competent professional at his (usually his, at the ones I've seen) job. 

When I tweeted complaining of New Zealand's lack of shoe-shine stands, I got this reply from James Shaw:

@EricCrampton The physical structure reflects and amplifies the social structure.

— James Shaw (@jamespeshaw) September 28, 2016

It doesn't seem implausible, but it still seems question-begging. Why do Kiwis consider it gauche to ask someone else to shine their shoes for money, but not to:

• Get a hot towel shave from a tattooed hipster barber;
• Get a manicure or pedicure;
• Pay for a massage;
• Hire a laundry or ironing service.

It looks like there's a great shoe-shine place in Vancouver airport, so it's not just some American thing. I'll stop there on my way home. The shoes are ...overdue.

In interest of revealing demand in hopes of inducing supply: were there a shoe shine stand at Wellington airport, I'd be happy to pay $15 for a shine every time I travelled through.

And it a Nathan's Famous or a Cinnabon wanted to open up there too, well, I'd get a lot more value out of that than I would out of heavily subsidised Singapore Airlines routes to Canberra.

Things I don't properly understand: Trump edition

Over the past months bemusement has shifted to horror. Surely, any day now, a hefty contingent of the GOP establishment would announce something like the following:

We have fine Republican candidates running in this year's Presidential election. They are two Republican governors who stand for Republican values of individual liberty, responsibility, and fiscal prudence. They recognise that America is great, and has to be a lot better for a lot of people. But they know too that American greatness is built on a foundation of shared American values that are open to all who hold them, regardless of their racial or religious backgrounds. 

If the prospect of a Trump Presidency makes you fear not only for the future of our party but also for the future of our country, don't sit this election out. Staying home will not only hand Hillary Clinton the Presidency, it will also deliver her a Democratic Senate. If Hillary gets the Presidency and the Senate, just watch what she does to the Supreme Court.

And there is a far better alternative. Gary Johnson and Bill Weld. They are fine Republicans, who this year are running on a Libertarian ticket. And they do more to espouse the core Republican values that we all share than do either Trump or Hillary. So join with us, and with the millions of young Americans who have already figured this out, and support Gary Johnson for President.

I thought this was going to happen well before the cutoff for the Presidential debates - Johnson/Weld needed 15% in the polls to be allowed into the debates. And then it didn't happen, and kept not happening.

What the heck has gone wrong with the Republican Party that they haven't yet disavowed Trump? Can they really let this happen? If Trump loses with the backing of the GOP establishment, changing the GOP after the election will be harder. And if he wins...

Meanwhile, Immigration New Zealand is still taking applications. Our refugee quota is much lower than our skilled worker intake, so get in while there's time.

Update: looks like my problem was that I just wasn't cynical enough.

A good couple of years for people who pushed the most cynical interpretations of the modern republican party

— Modeled Behavior (@ModeledBehavior) September 23, 2016

I had thought that the GOP establishment had enough invested in the GOP and its long-term success that they'd act in the Party's best interest. That interest cannot be a rump party supported by white-identity disaffected people who will never be more than 25-30% of the population. But each instead seems to be looking out for his own career interest in that potential rump party. Tullock's rationality of revolution might apply, or they might not even be thinking about any divergence of interest. Either way, it is very grim.

What Member's Bills are for

I'm really excited about this one.

Last year, Chris Bishop's Member's Bill on compensation for live organ donors was drawn from the ballot. New Zealand provided some small amount of compensation to donors for their lost income, but under ACC rules that come with strict caps on how much can be paid - for reasons that make sense for ACC but not for live organ transplant.

We submitted on the bill, based on our report showing that the government saves about $120,000 in costs for every kidney transplant. Our report, and our submission, are here. We recommended:

• strengthening the compensation regime from 80% of lost earnings to 100%, up to a cap in case, say, a bank CEO becomes a live donor;
• playing fairly to those not in employment by compensating them as though they were employed full time on the minimum wage;
• providing live donors with priority access to transplants should they ever need one later;
• compensation should be handled by MoH rather than through Work & Income, who were not doing a great job with the cases they were seeing.

The bill came back from committee yesterday. It:

• strengthens compensation to 100% of lost earnings;
• makes some provision for those donors not in employment, so that existing work rules on benefit receipt don't make a mess of things, and so those on benefits who are in some part-time employment are not disadvantaged, but doesn't quite go as far as we'd have liked;
• does not implement a priority system, but that would have been too substantial a change to add into the Bill in the committee process anyway (room for future improvement);
• runs compensation through MoH.

I'm really happy about this outcome. The bill had great cross-party support all the way through, and I expect it will be passed soon. It will do a lot of good, and save the government money in the process. There aren't many Pareto moves out there, but this is one. 

Our press release yesterday on it was here. 

This is exactly the kind of thing that the Member's Bill process is for. Chris has done a fantastic job here. 

Not so hasty

A nice caution for the NZ boosters of a Vancouver-style tax on foreign home buyers:

It's taken just over six weeks, but B.C.'s controversial tax on foreign home buyers is now facing a major legal challenge.
A class-action lawsuit has been filed in B.C. Supreme Court on behalf of virtually all non-Canadians who have been forced to pay an extra 15 per cent under amendments to the Property Transfer tax act.
If the lawsuit is certified by the courts and succeeds, the province could be forced to repay hundreds of millions of dollars — much of the expected revenue now earmarked to pay for affordable housing for British Columbians.

The story explains how a Chinese student scraped together the money for a 10% deposit on a Vancouver house, before the tax, and signed a contract to buy the place. The tax means she has to find an amount of money one and a half times bigger than her deposit to pay the tax, or abandon the deposit and void the sale.

Among the interesting grounds for challenge:

The suit argues the provincial government has acted outside its jurisdiction, and that only the federal government has the exclusive power over "the conduct and regulation of foreign trade, aliens and the regulation of trade and commerce."
The lawsuit also claims the additional tax has the "sole effect of discriminating against [foreign buyers] because of their status as foreign nationals."
And that, her lawyer argues, violates more than two dozen international treaties that Canada has signed with nations ranging from Argentina and China, to Russia and the United States — the latter covered by NAFTA, the North American Free Trade Agreement.

The ever-reliable Alcohol Healthwatch

Whatever the survey, Alcohol Healthwatch is going to say it shows that the government needs to crack down on booze.

Today's edition:

An alcohol watchdog hopes a survey that shows more than one in four teens aged between 15 and 17 often drink a risky amount of alcohol serves as a sharp wake-up call.

About 27 percent of the teens questioned for the survey, carried out for the Health Promotion Agency, said they had at least eight drinks the last time they consumed more than two drinks of alcohol.

More than 50 percent said they had had five or more drinks.

Alcohol Healthwatch director Rebecca Williams said more needed to be done to reduce the availability and cost of liquor, and the marketing of alcohol.

Ok, let's turn then to the survey. It's the Health Promotion Agency's Attitudes and Behaviours towards Alcohol Survey (ABAS). Let's walk it through.

Back in March, the HPA reported that:

• 59% of kids aged 15-17 reported that they're non-drinkers. 
• 13% said they had consumed, but not in the past month.
• 29% said they'd consumed in the past month (56 kids)

There were 193 kids aged 15-17 surveyed. 60 kids reported having had a drinking occasion in the past 3 months in which they'd consumed two or more drinks; presumably 133 didn't. 

Of those 60:

• 45% (presumably 27 kids) had between 2-4 drinks;
• 28% (presumably 17 kids) consumed 5-7 drinks;
• 27% (presumably 16 kids) consumed 8 or more.

This week's release had a bit more detail on what kinds of alcohol were consumed by that group, but there really wasn't much in there otherwise that wasn't in the March release. 

What about the time trend? None reported in the HPA survey. I think HPA runs ABAS regularly, but the only one I can find on their website with results for youths aged 15-17, other than the most recent one, is the 2013 ABAS. There:'

• 48% of kids aged 15-17 said they had not consumed alcohol in the past 4 weeks because they were non-drinkers;
• 14% said they drink, but hadn't in the past month;
• and 38% said they had consumed in the past four weeks.

The 2013 survey was a bit different on the risky-drinking question: instead of asking about whether the kid had an occasion in the past 3 months in which they'd consumed 2 or more drinks, they respondents how often in the past 4 weeks they'd consumed five or more drinks. In 2013, of those saying they had had any alcohol in the past 4 weeks (38% of the sample), 57% said they'd had five or more drinks at least once. In 2016, 55% of the 60 kids (31% of the sample) who'd consumed two or more drinks in the past 3 months had had 5 or more. That has to be a decline. [Update: I give one scenario here where it could be an increase, but I don't think it is given the NZ Health Survey figures.]

So Alcohol Healthwatch takes what looks to be a substantial decline in kids reporting drinking as reason for more controls on alcohol. 

Oh, and remember too the NZ Health Survey. Drinking, and hazardous drinking, remains down among kids aged 15-17.  Here are the trends for that group.

	Consumed alcohol in the past year		Hazardous drinkers (AUDIT score ≥8, among total population)		Consumption of 6+ drinks on one occasion at least monthly (total population)
2006/07	74.5%		19.5%		25.0%
2011/12	59.6%		11.7%		13.4%
2012/13	55.9%		8.0%		12.0%
2013/14	60.6%		15.3%		12.5%
2014/15	57.1%		10.8%		10.7%

The most predictable thing ever

Here's the Adam Smith Institute on New Zealand's sperm shortage.

The world simply will not make sense if you do not grasp the first and most basic thing you must know about economics. Which is that incentives matter.

What the incentive is, what the action or activity is, those are things which can all vary wildly. Whether something acts as an incentive or a disincentive can change too. But it really is crucial to understand that whatever else might be going on, incentives matter:

In 2004 the New Zealand government introduced legislation banning anonymous sperm donations and preventing donors from receiving any payment for their services.

Donors in New Zealand have minimal costs covered (such as travel to the clinic) but are not compensated for their time, which after rigorous medical testing and counselling, can be significant.

Under the new law, the sperm donor must also agree to being identified to any offspring when the child turns 18.

A decline in sperm donations following the introduction of the legislation coincided with a sharp rise in same-sex and single women applying for donated sperm.

It's not difficult to predict is it? On the application side the greater controls mean that fertility through donation is more desirable. On the production side the greater controls make production less desirable. Note that there's no money floating around this system but we've still got a change in demand and a change in supply.
And given that we've not got a price that can change to balance them we've got a mismatch.

We've covered the gamete-payment ban many times before here at Offsetting. But it is interesting how, in the same week that the Opposition is talking about wanting to get rid of the requirement that single mothers on benefits name the child's father (which lets the government collect support from the father), we're also talking about sperm shortages caused by not allowing payment or anonymity.

The 2004 Act is here. One night stand: legal. Prostitution: legal. Providing valuable consideration for provision of a human gamete: up to a year in jail, $100k fine, or both. Bit odd that whatever benefit is provided to the donor in a motivated one-night stand doesn't count as a valuable consideration.

One of our staffers here at the Initiative, who will remain nameless unless she wishes to be named, wondered whether there might yet be a market opportunity here. Business plans welcome in the comments: bridge the gap caused by the legislation, while not doing anything illegal in the process. I can kinda think of one, but y'all go first.

Update: the Herald reports that the Minister is considering allowing in foreign sperm. I wonder if Winston is worried. More seriously, think of the mental gymnastics required to think it ok to indirectly pay foreign donors via foreign clinics, but bad to allow domestic payment? Come on, National. Learn to liberalise for once. Do you have to keep everything dumb that Aunt Helen gave us?

Previously:

• Measures guaranteed to reduce supply
• Things I'd never considered: Talmudic law edition (the most fun)
• Wise investment ; A bargain at twice the price
• Gresham's seed (my favourite I think)
• Unintended consequences: assisted reproductive technologies edition

Elephant curves

I've seen the elephant curve in more than a few news stories about inequality. The curve suggests that while income growth has been strong in middle-income countries, income growth for the poor to middle class in rich countries has been very weak.

The Resolution Foundation dug into things and found that the trough is mostly dismal performance among former Soviet economies and Japan, with population growth and countries transitioning from fast growing developing countries into slower mature ones also playing a role. 

Here's the Financial Times on it.

Here's Resolution's Head of Research's tl;dr:

Tl;dr - population growth in EMs means a compositional effect which pulls down income around 80th percentile. pic.twitter.com/XdGcW3vvIG

— Duncan Weldon (@DuncanWeldon) September 13, 2016

Tl;dr 2: yes, Chinese & emerging middle class are the big winners of globalisation. But western low/middle earners aren't really losers.

— Duncan Weldon (@DuncanWeldon) September 13, 2016

Meanwhile, growth in household incomes in New Zealand remains broadly shared.

Get moving already

Two years ago, we at the Initiative pointed out that housing costs were what were behind many of the stats worth worrying about in poverty and inequality.

This year's stats make it so obvious that it's unavoidable.

New Zealand has some problems with low productivity and consequently lower wage growth than we'd like, but growth in household incomes is broadly shared. Here's household income growth since 1990. The tracks for the 20th percentile, the median, and the 90th percentile are identical. Some blips along the way where one outpaces the other for a bit, but they start and end at the same point.

And the data cuts strongly against this kind of read on things:

Paul Goldsmith just said growing the economy would address child poverty but economy and poverty have both grown significantly since 1990.

— Jan Logie (@janlogie) September 8, 2016

The growing economy has seen increasing household incomes across the board. This isn't some "only the rich benefited" thing. On child poverty, I'm going to give a great big blockquote from Perry's latest report.

Housing costs and the longer-run trends in child poverty (1982 to 2007, 2007 to 2014)

• The BHC 50% CV-07 anchored line rate was lower in 2015 than what it was in the 1980s, around 10%, down from around 20% (see chart below), and the BHC moving line rates were around the same in 2015 as in the 1980s (see Figures F.3 and F.4 on the following pages).

• The AHC long-run trends are quite different: the AHC 50% CV-07 rate was still just a little above what it was in the 1980s, and the moving line rate in 2015 was much higher than in the 1980s.

• The graph below shows the different trends for BHC and AHC anchored line measures respectively.

• A key factor in explaining the longer-term differences between AHC and BHC rates is that housing costs in 2007 on average made up a higher proportion of household expenditure for low-income households than they did in the 1980s.  For example, in 1988 16% of households in the bottom quintile lived in households that spent more than 30% of their income on housing.  In 2007 there were 38%, after peaking at 48% in 1994. 43% in 2015.

• Both the income-related rental policies introduced in 2000 for those in HNZC houses and changes to the Accommodation Supplement (AS) settings in the mid 2000s helped to reduce net housing expenditure for some low-income households compared to what it would have been. This support contributed to the reductions in child poverty as measured on an AHC approach from 2001 to 2007.

• The policy settings for the AS have remained unchanged since 2005.

What we've got here, between those two graphs, isn't some "Oh, the gains from growth only go to rich people and leave people behind" story. It's largely a housing cost story. Low income rates for children are well down if we look at before housing cost incomes, but flat at a higher level than the mid-80s on an after-housing-cost measure.

Now Perry's AHC and BHC table above uses a fixed-line low-income measure: they anchor things based on a prior year's income, but inflation adjusted. They take a prior year's low-income threshold, set as a fraction of that year's median income, then just inflation adjust that number for every subsequent year. So if current incomes are above a prior year's inflation-adjusted low income threshold, then that counts to the good side.

But you get a similarly large gap between AHC and BHC figures if you use a relative measure instead. More tellingly, the fraction of low-income people with very high housing expenditures relative to incomes has increased a fair bit despite the household income growth in the first chart.

Misdiagnosing the problem means you are going to screw up when trying to fix it with policy.

Time to get moving on housing.

Alcohol, cancer, and exercise

While the links between alcohol and any particular disorder are irrelevant in the grand scheme of things where the net effects on mortality and morbidity are what really matter, the link with cancer has been getting a lot of airtime - and a lot of attention from the dedicated team at the University of Otago.

And so this is then interesting. The relationship between alcohol and cancer seems to vary by exercise. While there's a straight linear increase in cancer risk with alcohol consumption among those with little physical activity, those engaging in more than 15 hours per week of MET [some measure of exercise] showed a J-curve relationship - albeit one where the bottom part of the J wasn't statistically different from zero.

The paper also finds the standard J-curve in all-cause mortality risk, but less tightly estimated. The base of the curve is lower among those getting more exercise though, so you should then take moderate alcohol use and exercise to be complements rather than substitutes. Or, at least, exercise seems to knock back the cancer risk of drinking to basically nil except at heavy drinking.

For what it's worth, I get my exercise incidentally: chasing children and Pokemon, or chasing Pokemon with the children. Wanting a beer afterwards is nature's way of telling us that we should have a beer after exercise. Evolution gave us these preferences for a reason....

HT: Evan Roberts

Pharmacy only

The folks over at the public health blog argue that access to nicotine for vaping should only be through pharmacies, or maybe through some licensed registered shops.

One thing is obviously missing from their tallying of the relative costs and benefits of pharmacy-only access. I'll copy their table below.

A brief summary table

Attribute/issue	Pharmacies	Vape stores
Product array	Likely to be more limited	Likely to be more diverse and include the newest products
Product expertise	Less likely to have personal experience and specific product expertise	More likely to have personal experience and specific product expertise
Tobacco cessation expertise	Staff likely to be trained in smoking cessation support	Staff more likely to require formal cessation support training
Experience with regulations	Accustomed to dealing with regulation of restricted substances	Less experience in dealing with regulation of restricted substances and of advertising restrictions
Profit motivation	Less incentive to sustain sales beyond cessation?	More incentive to sustain sales beyond cessation?
Outlet numbers and locations	More outlets covering greater proportion of NZ	Fewer outlets, may have limited reach in some areas
Pricing	May have lower sales volumes and be less price competitive (except perhaps if pharmacy chains were involved).	May have higher sales volumes enabling lower prices – but potentially lower purchasing power than pharmacy chains.
Customer profile	Likely to be more diverse	Likely to be less diverse
Monitoring costs for regulators	Low as pharmacies are already fairly regulated and should be highly motivated to sustain their reputations	Potentially higher given the potential profit motivation (as per above)

Here's a hint. Suppose you're a parent and you need to get Bonjela for a teething kid. It's 11.30 at night. Does it make a difference if it's pharmacy-only?

There's something pretty obvious missing here that reflects a lack of concern for the user's perspective on things?

They also really fail to establish the case for having the things only in regulated outlets as compared to corner shops, with sales restricted to those 18+. Just because enforcement of 18+ isn't perfect in tobacco shops is hardly reason to lock everything up in pharmacies.

About last night

Parliament can be a confusing mess. I still don't quite know what happened last night, but it does look like a substantial missed opportunity.

First off, some background.

Labour's Phil Twyford has long supported one very sensible change to zoning: abolish rural/urban growth boundaries and instead put in place transport corridor designations for future growth and infrastructure funding provisions based around recouping through tax some of the uplift in values that comes from being next to the designated corridor.

The Auckland Unitary Plan fixed some of the problems with the old Metropolitan Urban Limit: the Rural/Urban Boundary is farther out than it was, and there's provision for expansion through private plan, but the boundary still can bind, and how flexible the plan will wind up being for proposed extensions is anybody's guess.

Further, ACT has long supported abolishing urban growth boundaries.

That sets the stage.

Nick Smith's bill to extend the duration of the Special Housing Areas. ACT critiqued that bill for failing to abolish the urban growth boundaries or to set out funding for infrastructure.

The bill wound up needing an omnibus Part Two for Parliamentary reasons that I don't understand. For further Parliamentary reasons that I don't understand, that meant opposition parties could put up as many amendments on it as they wanted. And so the usual shenanigans ensued.

Unfortunately, among the shenanigan amendments that had zero chance of passing (like banning foreigners from buying houses, taxing everything, the usual stuff), Phil Twyford had his amendment to abolish the urban growth boundary and to fund infrastructure.

In a House sitting under urgency with piles of, from National/ACT's view, silly amendments going through, Seymour didn't find out that Twyford's amendment was in there.

I expect that Seymour would have loved to have had the chance to have voted to abolish urban growth limits.

But he didn't find out about it. Seymour notes in the house that he had one hour's notice of the amendment being in there - if that were a phone call from Twyford, that would be Seymour's fault for not having gotten his vote in. If it were an email, I expect it would be Twyford's for not having gotten proper notice to Seymour; if Seymour had just given his proxy to National on the set of amendments, it would have taken more than an easily missed email to sort.

And so Twyford's amendment failed by one vote.

The vote to abolish rural-urban boundaries failed by one vote - and a vote that would have flipped had that vote known about the amendment.

Here's the amendment that could have been, along with a confusing-to-me suggestion that it "passed with amendments proscribing parking minima, and requirement to mitigate/adapt climate change", which I presume refers to its having passed as Labour policy rather than in the House last night.

Passed with amendments proscribing parking minima, and requirement to mitigate/adapt climate change. @TransportBlog pic.twitter.com/R4Kzs4JYbo

— Phil Twyford (@PhilTwyford) September 7, 2016

Vancouver examples

Bottom line: it's too early to tell what effect Vancouver's tax on foreign buyers has had.

Second bottom line goes to the University of Victoria's* Lindsay Tedds:

@EricCrampton Oh god no, please no. Do not follow our lead.

— Lindsay Tedds (@LindsayTedds) September 4, 2016

A snippet from my piece at The Spinoff this morning on it:

If you followed reporting on it in New Zealand, you could be forgiven for having reckoned that Vancouver’s tax on foreign buyers has solved its housing affordability problem. Vancouver implemented a tax on foreign buyers in August; sales then dropped 23%. And some realtors report substantial drops in what they viewed as speculative demand – less heat at auctions, and fewer rushed purchases.

Does that mean the tax worked? It is far too early to tell, and anybody claiming otherwise may be trying to sell you something.

While sales dropped 23% in August, July’s sales were down 27% from June’s. And this wasn’t simply a seasonal effect in mid-summer: July’s sales were down 19% on the year prior, according to the Globe and Mail.

So what’s going on?

Catch the rest over there....




* The University of Victoria is in British Columbia, in the provincial capital city of Victoria, just across the strait from Vancouver. It is not, and has no particular relationship to, Victoria University of Wellington.

On that one, if whoever named Victoria University of Wellington had a whit of consideration for future Canadians moving to New Zealand, they'd have just called it The University of Wellington. Not "Victoria University of Wellington".

Further on that one, is the university's name confusing to anybody else? It feels like it's supposed to be Victoria: University of Wellington, like the University's real name is Victoria, with University of Wellington as a kind of a second name.

NZ's Victoria University of Wellington was established as Victoria College in 1897, then Canada's Victoria College opened up in Victoria in 1903, later becoming the University of Victoria. A 1933 Act renamed Wellington's Victoria College as "Victoria University of Wellington". Maybe the "of Wellington" was tacked on to avoid confusion because there were two Victoria Colleges floating around for a while.

Whatever the history, it always reads like it's the Wellington branch campus of some other University called Victoria. Like how the University of California has The University of California at Los Angeles, The University of California at Long Beach, and The University of California at Davis (and so on), or how New York has the State University of New York at Buffalo, and the State University of New York at Albany (and so on).

For my first decade here, I called it Victoria University at Wellington instead of "of Wellington". The name ordering is just jarring. Like saying "The hairy brown big dog" instead of "The big brown hairy dog." It's just one of those rules, and whoever came up with "Victoria University of Wellington" done went and broke it. But changing all the stationary now would be expensive, and nobody ever wants to fess up to this kind of thing having been a bit of a mistake for getting close to a century and in need of a tweak. Like the snitch in quidditch. It just lingers.

Otago is a funny place

Nothing in this story makes sense.

A Dunedin shop that makes and sells cordials and soda on one side of the shop, and brews and stocks alcohol on the other side, is getting shut down by the licensing authority. Why? Because the cordials side is too popular, so they get less than 85% of their sales from alcohol.

Otago police aren't known to be reluctant to object to licensing renewals, but didn't object to this one. The District Licensing Committee renewed the licence, then the medical officer of health and district licensing inspector appealed to the Alcohol Regulatory and Licensing Authority.

The mayor seems unimpressed:

Dunedin Mayor David Cull said the legislation was hard to make sense of.

"To drive a small company out of business because it sells both cordial and alcohol in close proximity, when supermarkets do the same, isn't logical," he said.

Cull said it was pointless to have a local DLC if any decisions it made were going to get overruled.

What was the basis for the appeal?

The appeal focused on the company's use of a curtain to separate the two sides of its business – which trade under "Wests Cordials" and "Wests Southern Liquor".

Poore and Cashell-Smith argued the curtain did not stop all customers using the same till and entering through the same door.

That meant it was the same premises and in order to qualify for a liquor licence, it needed to prove 85 per cent of sales were from alcohol – which it had not done.

Wests points out that if they sold more alcohol, then they'd not be shut down.

I wonder if Mayor Cull needs to revisit his town's local alcohol policy. None of the rules that were put on Wests seem to make any sense, and application of those rules through ARLA is leading to an outcome that the town doesn't want.

I also wonder how it can be the case that the health system is apparently starved for cash at the same time as medical officers of health apparently have infinite resource to shut down bars and bottle shops.

HT: Eli Gray-Stuart

Disharmoney

This past week's subscription to The NBR was covered by Tim Hunter's excellent piece on the regulatory mess facing peer-to-peer lender Harmoney.

The Financial Markets Authority seems fine with Harmoney. But the Commerce Commission is suing it because it can't figure out who is the lender (the peer-lenders, or Harmoney), and whether Harmoney's fee-structure is then consistent with a pile of other regulations or not.

A regulator could scarcely be more destructive without procuring a giant wasps’ nest, agitating it vigorously and releasing it into the previously calm interior of its victim’s compact Parnell office space.

The problem comes of stupid legislative drafting saying that a credit fee cannot be "unreasonable", but that doesn't define unreasonable. And so it gets more confusing:

It sounds like bland bureaucratic nitpicking but it isn’t because, under the CCCFA, a credit fee must not be “unreasonable” – and according to the Supreme Court’s May decision in a case involving the commission and retailer Sportzone, that means it can be set to recover only the costs specific to a lending transaction.

For an online provider like Harmoney, whose business is based on trying to make the cost of each transaction close to zero, the consequences of that restriction would be significant.

But is it a credit fee?

Under the CCCFA, a credit fee is charged by a lender to a borrower but, if Harmoney is an intermediary, it can’t be a lender, right?

Not according to the Ministry for Business, Innovation and etc because compliance with the CCCFA requires the lender to be identified to the borrower, and Harmoney couldn’t identify its lenders in that way, so set up a trust to take the money from individual lenders and act as the named lender.

It doesn't get better from there. FMA seems to have the more sensible position, and scraps with the Ministry and Commerce Commission about it; Harmoney's stuck in the middle. Hunter suggests it could all have been solved by clearer regulation just requiring lenders to disclose the APR: the annual percent interest rate equivalent inclusive of all fees.

File under: Not the outside of the asylum.

23 and NZ

I knew that 23andMe was having FDA trouble in the US: the FDA restricted 23andMe from providing health advise based on its genetic tests except where the FDA approved the specific tests. As Gizmodo put it, you're getting less service for more money, but with an FDA seal of approval on those tests you can get.

I didn't know that 23andMe was self-censoring in other jurisdictions absent positive government approval. And NZ is consequently a censored regime.

Angry at @23andMe - we bought 2 new kits and they no longer show medical information, only genealogy. Avoid.

— Lance Wiggs (@lancewiggs) September 4, 2016

@lancewiggs @EricCrampton Quite unfortunate, but the approach now is one of positive clearance of the service by country, and there are many

— Alex Khomenko (@akhomenko) September 4, 2016

@EricCrampton I'm guessing it will take a review of local legal and regulatory landscape and resolution of any possible issues.

— Alex Khomenko (@akhomenko) September 4, 2016

On those, Thomas Lumley chimed in:

@EricCrampton They probably want to make claims that would constitute a "therapeutic purpose" in the sense of the Medicines Act, so Medsafe

— Thomas Lumley (@tslumley) September 4, 2016

So. Can we get our acts together in NZ so that folks here can get full-version access to 23andMe? Please?

There is a workaround in the meantime though:

@lancewiggs You can analyse the raw data for health info with patience & a little scientific literacy; look at https://t.co/5IaoDkrpl2

— Sara 🎉 (@pikelet) September 4, 2016

Satire gets harder

Hard to write satire when the Guardian publishes this earnest piece:

The World Health Organisation ranks bacon, ham and sausages alongside smoking as a cause of cancer, placing processed meats in the same carcinogenic category as asbestos, alcohol and arsenic. The World Cancer Research Fund advises eating cured meats as little as possible – ideally not at all. And there’s persuasive evidence that, compared to a solely plant-based diet, eating meat shortens life and makes people sicker and fatter.

Against this background, the NHS allows fast food chains in its hospitals. Patient menus offer a wide selection of meats every day. And creamed potatoes, beef casserole and sweet chilli pork and rice are recommended “healthier choices”. Patients can tuck into disease-promoting animal flesh, but do not enjoy unrestricted hedonism. Meat eaters who enjoy a relaxing cigarette after dinner are prevented from doing so, apparently in their own and others’ best interests, thanks to a blanket ban on smoking.

The usual argument for banning smoking but not banning meat-eating runs through externalities - harms that your smoking may impose on others, that your meat-eating doesn't. But is the distinction that sharp? The health harms of second-hand smoke seem rather overstated; the main external cost borne by someone sitting in a restaurant with a smoker is having to endure the smell of cigarettes. But vegans may feel the same way about the smell of grilled flesh.

It might sound like a crazy long-shot, but where NZ's public health people are already pushing for plain packaging on Coke, maybe it isn't a crazy long-shot. First it'll be mandatory vegan sections in restaurants, to mitigate the harms of smelling and seeing meat. Then stronger fans. Then when those are unable to overcome the smell of bacon, separate rooms for the meat-eaters, with the rest of the restaurant being vegan. And then the full ban.

What's in it for Canterbury?

In all the talk about a merger being the potential salvation for Lincoln University, I've yet to see anybody explain why Canterbury would want to merge with them.

Canterbury merged with the old Christchurch teacher's college while I was there. That college had a a bit of a commerce faculty; I think some of the folks who had there been employed wound up helping out in Foundation Studies - the remedial ed part of the university. If I recall correctly, nobody was particularly keen on assimilating it into Canterbury's commerce faculty.

Lincoln has a strong agricultural school, but its cash cow had been (at least by reputation) a business school serving, in part, international grad students of a quality bar lower than Canterbury would have admitted. Lincoln's agricultural school ranks well worldwide; nothing else there does. Canterbury beats Lincoln on any PBRF weighting you might want.

What's then in it for Canterbury? Departments at Canterbury would have to merge with Lincoln departments; departments at Canterbury, some of which have had to downsize recently as well, might not appreciate being forced to take on faculty from Lincoln rather than having the opportunity to hire from a broader field. Some may fear for their departments' PBRF rankings. It will then buy senior management some hassles at Canterbury.

I have a tough time seeing this as a goer except in the following scenario - a not implausible scenario. Come 2017, as I understand things, the support the government has provided to Canterbury post-quake ends - or at least would need renegotiating. Since the earthquakes, the government has been funding Canterbury as though it hadn't lost nearly as many students as it did lose. Canterbury's student numbers might be a bit short of what would be required for this to not mean a big funding cut in 2017.

In that case, you could imagine Canterbury negotiating a merger deal that comes with ongoing financial support to help them through the transition, with departments told to lump the merger as the alternative would be staff cuts when the extra support dries up.

Disclaimer: I left Canterbury in 2014 and have not asked anybody there what's been going on in the finances and in the merger rumbles; I'm going off intuitions that are becoming rather dated. But, still - whatever the case you want to make for Lincoln needing to merge, you might also need some reason for Canterbury to accept the merger.