Breaking the internet

There are a lot of metrics folks can use when evaluating policy.

"Will this policy break the internet" is an important one. At least for me and the handful of folks who were online in the 90s. 

Age-gating social media, or otherwise making platforms/sites liable if kids see sensitive content there, is one way of breaking the internet.

It has not been going well in the UK, where making sites liable if kids see 'sensitive' content has meant geoblocks on content that could be considered sensitive, pending Know Your Customer verification that the person on the other end of the web browser is an adult.

My column in today's Post went through some of those issues. New Zealand Prime Minister Chris Luxon seems very keen on setting age gates on social media. Any policy putting liability on platforms if kids access the platform will require others to prove that they're adults - the same kind of KYC mess that the UK is getting itself into.

Depressingly, a proposed bill in the biscuit tin, from Labour, suggests fully following the UK in penalising sites that don't do enough to keep kids from viewing sensitive content. 

Breaking the internet should not be a vote-winner. C'mon. 

I'd love a Kalshi market on this one

There isn't really international law. 

There are treaties, there are conventions, there are norms, there are customs. 

But all of it is against a particular backdrop. 

If a country's government just doesn't wanna and it matters a lot to it, you're going to have a hard time making it unless you're ready to impose sanctions or invade. And if one of the ones that just doesn't wanna is on the security council, good luck with the invasion option. 

So international bodies work within that constraint. There are bounds on what's achievable based on countries' tolerance about being bound. 

And it seems important to stay within those bounds lest the whole thing collapse. 

I'd love to see a Kalshi or Polymarket contract on whether China or the United States or the Saudis will ever pay a fine assessed by the International Court of Justice for producing greenhouse gases. 

Here's The Guardian:

Today, Australia has found itself on the wrong side of history.

The International Court of Justice has handed down a landmark ruling in the most significant climate decision ever issued by a court. As a barrister representing Solomon Islands in the case, I was in the courtroom to hear the judges reshape the global fight for climate justice.

The world’s top court resoundingly rejected conservative arguments made by Australia and other high-emitting countries such as the United States, China and Saudi Arabia seeking to justify continued fossil fuel extraction. Instead, the court made a slew of progressive statements – ones that will have far-reaching implications.

Under international law, countries are now bound to rapidly reduce their emissions below 1.5 degrees of warming. Failure to do so could result in developed countries like Australia having to pay monetary compensation to developing countries or being required to rebuild infrastructure and restore ecosystems damaged by climate change. This means we could be entering a new era of climate reparations.

My bet: if claimant countries are careful, they will only sue countries like New Zealand, Canada, and some European countries. Ones that might at least pretend to comply with a ruling and provide some kind of transfers in response. Canada might promise to pay and then hand out coupons for Canadian cheddar, redeemable only on one single Tuesday afternoon between the hours of 13:45 and 13:46 at a Canadian Tire outlet in Iqaluit - subject to availability of cheddar and whether there is a Canadian Tire there in the first place. But it'd be something. 

If they sue the US, China, or the Saudis - they're not going to get compensation. 

And if they sue a mix of countries, some of which play nice and some of which don't, the whole ICJ process risks looking like a mug’s game. That risks delegitimising a court that might be better off maintaining a more modest, more enforceable remit.

I'm not an IR guy though. Weakly held view that this whole thing is a terrible idea with serious downside risk, happy to be convinced otherwise. 

The Guardian piece was from a couple of weeks ago; I'd had this post in draft. I was reminded of it though by comments from Labour's Deborah Russell in Carbon News, where Labour promised to reinstate the oil and gas ban:

Speaking in the general debate in Parliament last week, as the government was set to pass the bill to repeal the oil and gas ban, Labour Party list MP Deborah Russell slammed the coalition government’s lack of action on climate change.

Russell recalled Climate Change Minister Simon Watts’ comments earlier this year that “no one sends you an invoice” for climate change liability.

“But just last week,” Russell said, “the International Court of Justice delivered its judgment on the obligations of States in respect of climate change… it says that States must act on climate change or be held responsible.”

Russell referenced several of the judgement’s findings, including that States must regulate private actors' emissions, States have a responsibility around climate change and that climate action can trigger legal consequences.

Significantly, the finding opens the door for nation states to sue other countries for climate damages – legal consequences could include “full reparations to injured states”, including “restitution, compensation and satisfaction.”

I would hope that a sufficient defence for New Zealand would be:

"Every tonne of New Zealand emissions from any new gas well must be accompanied by the surrender of one NZU. If people burn gas, the ETS means that either someone else has reduced some other emission, or someone has sequestered a tonne of emissions - probably in a forest. So the new well has no effect on New Zealand's net emissions. The only thing that affects New Zealand's net emissions is the number of unbacked NZU that the government chooses to issue or allocate. And if you think that number is worth suing us over, whether new drilling is allowed or not is irrelevant."

Misunderstanding the policy process

Policy development happens through a complex interplay of politicians' directives, civil servants' work, and civil society input. 

Bryce Edwards is director at The Integrity Institute, which has been pretty critical about anyone's involvement in policy processes other than the bureaucracy and anyone considered to not have a financial stake in an outcome. 

Last week, BusinessDesk found the Institute's trust deed. Or, rather, decided it was worth checking over at the Company's Office to see what it says. And the whole document is really weird. Things that ought to be operational decisions for the Director are instead hard-coded into the deed. The rest is a combination of direction to do the obvious and specific targets they want investigated, like going after Transparency International. 

I'd threaded the thing; you can't link directly to a Companies Office filing. 

There's been a fair bit of tu quoque over this. But the best take I think thus far is from Deb Te Kawa. A snip:

Sometimes, those who claim to defend democracy are the ones who misunderstand it most. The Integrity Institute’s recent campaign, ostensibly about exposing undue influence over policy, has revealed something more troubling: a fundamental confusion about how policy advice, participation, and legitimacy actually work in democratic systems.

The policy advisory literature has long since moved past the myth of the neutral bureaucracy. As Craft and Howlett (2012) argue, modern advisory systems are pluralised and layered. Policy advice no longer flows solely from within the state. It emerges through dynamic interaction between political actors, ministerial advisers, public servants, and external stakeholders: including iwi, hapū, academics, commentators, lobbyists, consultants, contractors, industry and community interest groups, and civil society. This is not a breakdown in integrity. It is a shift in how democratic knowledge is produced and contested; a shift that has been underway since 1996, when we began correcting for the distortions of the 1980s’ new public management reforms.

Rather than engage with this shift, the Integrity Institute appears to reject its premise. In targeting Federated Farmers, the Institute frames visible, declared advocacy as inherently suspect. Yet publishing policy platforms, meeting with ministers, or advocating for sector interests is entirely within the bounds of democratic practice. As Craft and Halligan (2020) remind us, robust advisory systems must accommodate both internal and external sources of advice. To treat advocacy as corruption is to misread the core architecture of modern policy-making.

This conflation is not just technically inaccurate. It is democratically dangerous. Legitimacy in policy does not come from insulation. As I have been exploring in the Waitangi Tribunal Thursdays series, and arguing in The Practical State, it comes from contestability, transparency, and deliberative engagement.

Whether it’s iwi asserting rangatiratanga, unions calling for fairer conditions, or academics and researchers offering empirical insight, the presence of diverse voices is a safeguard, and not a threat. As the policy advisory literature insists, multiple advisory channels are vital for balanced decision-making in complex societies.

The real question, then, is not whether influence exists. It always does. The question is: what kind of influence, under what conditions, and with what visibility? The distinction between transparent, procedural engagement and opaque, privileged access is not semantic. It is constitutional. Effective oversight requires more than tracing contacts. It demands a grounded understanding of procedural fairness, institutional independence, and the layered nature of advisory input.

With that particular critique in mind, let's have a look at a different campaign. 

One that Guyon Espiner has been running, on the public dime, at Radio New Zealand, and at RNZ-Newsroom co-production The Detail. 

In his telling, shadowy alcohol industry influence stymied admirable public health efforts to adopt new and stricter Canadian low-risk drinking guidelines.

He's had a lot of airplay on this. If you're reading this in New Zealand, you've been forced to pay for it. 

So what is that shadowy influence?

David Farrar has the correspondence. 

The Brewers Association wrote to Ministry of Health asking for details on a review of the low-risk drinking guidelines. And there was also correspondence on the use of the alcohol levy - a small levy imposed on every bit of alcohol sold, used to fund various harm-reduction efforts. Producer levy schemes tend to have producer involvement. 

The Brewers also pointed out what looked like an error on the Health NZ website (recall that Health NZ is the operational arm, Ministry is policy). They thought that some proposed Canadian guidelines had actually been implemented. 

Health Canada had commissioned a third party to produce revised alcohol guidelines. That was a couple of years ago. Those proposed guidelines have not been adopted or ratified by Health Canada. And two different Ministers of Mental Health and Addictions, in late 2024 and early 2025, have confirmed that the 2011 guidelines remain the ones in place. 

Health NZ thought that Canada had tightened its guidelines and was taking this as basis for tightening ours. 

The Brewers pointed out an error. The Ministry of Health saw that error corrected. And Guyon Espiner deemed the whole thing an example of influence that needs to be stopped. Of course, on his podcast interview with The Detail, he hedges a bit - saying he's only raising questions and noting how interesting it is that a framework convention bars industry discussion with government in the case of tobacco but not for alcohol. Not that he's campaigning to get the framework convention extended to alcohol. 

Let's go back to Deb's piece. 

As Craft and Howlett (2012) argue, modern advisory systems are pluralised and layered. Policy advice no longer flows solely from within the state. It emerges through dynamic interaction between political actors, ministerial advisers, public servants, and external stakeholders: including iwi, hapū, academics, commentators, lobbyists, consultants, contractors, industry and community interest groups, and civil society. This is not a breakdown in integrity. It is a shift in how democratic knowledge is produced and contested;

The Brewers found an error. Min Health made the same mistake Espiner did, potentially based in motivated reasoning - wishing that the Canadians had given NZ an excuse to tighten guidelines here. 

That error was corrected, because we don't stick bureaucrats in towers and ask them to hand down advice from on-high. There is interaction. It is helpful. It makes things suck less. 

Some campaigners, like Edwards, and like Espiner, seem not to like it when that interaction results in policies that they like less. They seem to view it as inherently corrupt. At least Edwards isn't doing it on public funding. 

David Farrar's post with the correspondence went up on the 25th. 

The day before that, I submitted a column to Newsroom on the topic, because I'd first caught this on their site - they co-produce The Detail. I sent it through on Wednesday of last week for my usual slot on Tuesday - earlier than usual, because it was critiquing some of their work and I wanted to give them time with it. 

After asking that I add a lot more detail on the evidence around moderate drinking, they decided not to run it. There was an in-house view that Espiner had sufficiently couched what he'd said on The Detail. Perhaps there was a background worry that publishing a critique would make a likely press council / BSA complaint about The Detail piece more viable; I wouldn't know. 

I brought the piece back to 800 words; it was in Monday's Post as a full-page print piece (and presumably Press etc). An ungated version is here. I confirmed bits of the correspondence with the Brewers Association in the interval. 

The full piece I'd sent to Newsroom is below; it's a lot longer than the version at the Post, in part because they asked me to add a fair bit of content. 

I only saw Deb's piece after all this. But it's been rolling around in my head since then. The policy process really isn't what some of these campaigners seem to wish it were. 

Anyway - the piece that Newsroom declined. I declined to write a substitute piece for them for this week. 

The price of butter

When global dairy prices rise, so does the price of butter. Farmers sell milk to whoever will provide the best price. Producers will ship products to wherever returns are best. When people start seeing butter as a health food compared to stuff made of oils, demand for butter goes up - and New Zealand produces a lot of the world's trade product. 

Ministers of Finance should not be involved. 

It will whet populist demand for more of the same whenever prices rise for other things. 

The meeting this week with the head of Fonterra was set earlier, but turned into a media circus framed around the Minister holding Fonterra accountable for butter prices. It then turned into a supermarket beat-up over what the Minister thought might be ten or twenty cents on a block of butter. 

I am a very big fan of enabling more supermarket competition by easing regulatory barriers. If there are super-profits to be had in NZ grocery retail, someone can then enter to chase them down. 

I just can't see it doing much on the price of butter though. For a pretty specific reason. 

In the 2000s, there was a similar beat-up over milk prices. At the time, Al & Sons was selling much cheaper milk at corner stores (dairies) in Christchurch. I'd regularly buy two 2-litre bottles for the price of one normal-brand bottle at the supermarket. 

Some prices are particularly salient. Butter. Milk. They're the kind of thing that dairies can stick placards up at the door about. And that's how I'd go and find Al & Sons. A dairy on my drive home through Woolston had the placard up advertising cheap milk, so I'd pop in and buy some and maybe a couple other things. 

Butter is at least as salient as milk, given the current fooferah.

So. 

Let's think it through. 

Imagine you believe the problem is Fonterra. If it is, that's an obvious opportunity for anyone who might want to undercut Fonterra by selling cheaper butter. There are lots of producers out there. And there could be more. NZ regulations require Fonterra to sell milk to competitors at a regulated price. If you want to start up your own butter company, you don't have to buy a pile of trucks to go start collecting milk. You can just get it on tap. 

So it isn't gonna be a Fonterra thing.

Maybe you figure it's really a dastardly supermarket thing. They've rigged the whole game and told every butter producer that they'll never buy another block of butter from them if they sell to anyone who'd sell it at a lower price. I don't buy any of that. But suppose you believed that were the true state of the world. 

Now remember Al & Sons. They didn't bother with the supermarkets. They just sold through the dairies. If you want to set up a butter plant selling only to dairies, that's perfectly fine. Nobody will stop you - but you will have to comply with the health regs. Al & Sons folded, I think, after the combination of the Christchurch earthquakes and a tightening of health standards made everything too hard. 

But there are lots of other operators. Any one of them could decide to flip to a dairies-only strategy if the supermarkets were creaming things too much. Whatever excess margin they figure the supermarkets are taking, they could split between themselves as producers, the dairies as retailers, and customers through lower prices. Dairies could set up the placards outside. Cheap butter would attract punters in. 

I expect that the government has to understand this, otherwise they wouldn't have referred to about ten to twenty cents in potential savings on a block of butter costing in the $8-$10 range. That may not be a margin large enough to encourage anyone to flip to a dairies-only distribution strategy. Which seems prima facie obvious given that nobody is putting up 'cheap butter here' placards outside of dairies. 

And surely this isn't the reason to oppose poking holes in GST. It must be the journalist not quite getting it right, right?

Both Australia and the UK do not apply GST (or its equivalent) to basic goods including milk and butter. For example, an $8 block of butter in New Zealand would cost about $6.96 if GST were removed. However, Willis has ruled that out, arguing it would effectively act as a subsidy for supermarkets, with no guarantee savings would be passed on to consumers.

Taking GST off butter would be a terrible idea regardless of incidence. 

Meanwhile, our grocery commissioner considered that Woolworths was being sneaky in pointing to GST as something that needed to be accounted for when making international price comparisons.

"Just as an aside on that pricing; It's a bit sort of sneaky, to say if you take GST out, and if you do this, and if you do that, and do a few fancy arithmetics, we are cheaper than others are."

The Commissioner is just bad and wrong here. If the object of the comparison is to tell whether prices in one market are roughly competitive with prices in another market, you have to adjust for differences in tax. 

Greater supermarket competition could well reduce prices to consumers across a large shopping cart full of goods. But it's not likely to do as much on any individual product - and particularly not one like butter where prices are particularly salient. It's more typically the kind of thing where a retailer might run thin margins to get punters in the door - and potentially risk being damned for an anticompetitive 'aggressive loss-leading' practice. And taking a international spike in butter prices as reason for raking companies over the coals is a bad idea. It whets demand for populist responses to other price changes. 

Bring on the price control boards, because that's where this path leads. Some days, I wish National and ACT were in opposition, simply so that there would be push-back in Parliament on this sort of thing. 

I drew the third slot in our Insights newsletter this week; it's meant to be a satirical take. 

I wrote this. It has been such a stupid week. 

Buttering up a slippery slope

You might not remember 2025, even though it’s only two decades ago. AI was only just getting started. Looking back, it is easy to tell where the path back to price setting boards started. 

This was before synthetic fermentation, when New Zealand still exported a lot of butter and global markets set the price. Whenever butter prices dropped, consumers barely noticed. Whenever they rose, people screamed. 

The orthodox economics still practiced elsewhere, and back then, sometimes even in New Zealand, offered an obvious solution. When global dairy prices rise, farmers make more money and pay more tax. Government collects taxes and gives money to poorer people, with payments adjusted for inflation. People then decide what to buy. 

Unfortunately, some prices draw a lot of attention. The spike in fuel prices during the 2020-2022 pandemic saw the government subsidise road users. People started to think that the government should step in whenever prices increase.  

That populist turn solidified under the 2023-2026 National government.  

A July 2025 meeting between the Finance Minister and the head of a large milk company caused a media frenzy about butter prices, followed by condemnation of supermarkets. Both drew popular applause. 

Things slid from there. People came to expect public excoriation of businesses whenever prices increased unexpectedly.  

In short order, the Minister was having to devote two or three days every week to these circuses. It was seriously impeding other government business.  

So, the Minister delegated the job to a new Board established to supervise prices and to bring a more formal bureaucratic process to the inquisitions.  

The new Labour-led government in 2026 kept the Board but broadened its role. It was more convenient for everyone involved.  

Previously, anyone reducing prices risked prosecution for predatory pricing. Anyone increasing prices had to be gouging. And keeping prices the same was obviously collusion. It was a risky time. 

In the new order, the Board and the businesses it supervised agreed on prices for the next year. Officials viewed government-enforced price coordination as obviously beneficial.  

The real cost of everything rose considerably. Shortages of some things and surpluses of others abounded.  

Government had first call on short supplies of butter and often used it for industrial purposes. It is a fine lubricant, useful for making slopes more slippery. Most of the rest was exported. 

But at least the prices listed on the empty supermarket dairy shelves were low.  

Compensation for regulatory takings - reader mailbag

I've had a couple of recent columns explaining the in-principle case for compensation for regulatory takings. 

Such compensation is recommended in the Regulatory Standards Bill, and is likely to be part of proposed Resource Management reform. 

The shorter version of the argument was in our Insights newsletter; the longer one in The Post, ungated here. A snip:

The Regulatory Standards Bill sets a principle that legislation should not take or impair property without fair compensation. And, where practicable, that compensation should be provided by those benefitting. Parliament remains free to ignore that principle.

In some cases, the beneficiaries are the broader public and compensation should be provided by the government. In other cases, a smaller group would benefit. Where practicable, that benefitting group should be the one to provide compensation.

Done sensibly, none of this would prevent beneficial regulation. Instead, it would help solve an imbalance and inequity in how things are currently done.

Governments can be tempted to use regulation in cases where a spending measure would be more effective for achieving some desired purpose, simply because government can ignore the cost that regulation imposes on others. Compensation would bring a more level assessment.

And requiring that the beneficiaries compensate those harmed from loss of legal rights accords with many reasonable views of equity. Where the gains to the winners exceed the losses to the losers, those gaining can compensate those losing and everyone is better off.

The excellent Brent Layton emails with a fun Wellington Council regulatory takings case. He writes (I've bolded one bit):

Dear Eric

I “enjoyed” reading your recent article on the logic behind the Regulatory Standards Bill containing provisions pointing decision makers towards consideration of compensation to those subject to a regulatory taking. I also “enjoyed” watching on a streaming service you and Bryce interact with two Labour MPs and a TPM MP at a Select Committee hearing on the Bill. If any group in the country should be supporting compensation for regulatory takings it should be the TPM, but she clearly did not get this. The Labour MP’s seem to not realise that principled regulation will be in the interests of everyone, but particularly those without wealth to exploit regulatory loopholes and inefficiencies.

Earlier this month my partner and I were among a smallish group of landowners in Wellington subjected to a significant regulatory taking over collectively a large area of land. The Wellington City Council adopted its new District Plan. Under it approximately 20 hectares of our backyard in Karori is designated an SNA. The Wellington CC SNA restricts the rights of landowners to use and develop the land subject to it very materially. 

For us, the impact is not as great as for most other owners for three reasons. Most of our land subjected to the SNA is already subject to a QEII Trust covenant that constrains its use and development anyway. In addition, I made submissions on the Council’s initial proposal and got most of our non-QEII Trust land out of the SNA designated area. Most of my neighbours did not make submissions, some, at least, because they mistakenly thought the change of government had put an end to councils imposing SNAs. The proportion of their land now covered by an SNA  designation is in many cases very high. We had also done quite a bit of development in the area affected by way of putting in tracks, drainage of tracks, building reinforcement to stop the stream eroding areas, etc. knowing that Wellington CC was determined to effectively “take” the land. Maintenance rights are better than development rights under the SNA.

Our experience illustrates a point you made very clearly; that the absence from a need to consider compensation to those adversely affected impacts adversely the area taken. The initial Wellington CC proposal relating to our place contained a lot of land that was covered in gorse, blackberry, Darwin’s barberry, and buddleia. The extent to which there was natural vegetation it was limited to immature mahoe pushing their way up through the pest plants. There was also an area containing a cluster of very mature macrocarpa. The land had been farmed with goats until the 1990’s. 

The council had arrived at its proposed SNA’s through looking at articles, some very old, on where a botanist thought there was significant natural coverage or something else worth protecting and from looking at aerial photographs. Anything that looked like bush from a few thousand feet, was included. I think that no compensation would be paid meant the “planners” were able to take a wide view of what should be an SNA and wait for the landowners to complain and provide evidence that the area did not contain significant natural features.

In my submission I argued that, if there was a net benefit to the community, those adversely affected should be compensated. This would ensure the land designated is properly scrutinised. I also included photos showing that a lot of the areas on our land the planners wanted to include were not areas of natural vegetation. The Chair of the Hearings Panel organised for an independent botanist to come out and view the land in detail. The panel itself also paid us a visit but did not do a detailed inspection of the site. They looked along the valley from a good vantage point where you could see that the vegetation in the areas I had identified in the photos was not natural.

The upshot was that after receiving the botanist's report 3 of the 4 areas I had pointed out did not contain significant natural vegetation were excluded from the area designated as an SNA. The fourth area was still included in the SNA, this included an old but still used farm track flanked by gorse and the cluster of macrocarpas. I wrote to the Chair of the Hearings Panel and pointed out the inclusion of this area in an SNA was clearly a mistake. He replied there was no appeal until after the Wellington CC had adopted the plan. However, when I checked the plan released with the adoption I found the land containing the macrocarpas and the gorse flanked track are outside the legally imposed SNA. Possibly I misread the earlier map. I wish I had of taken a screenshot.

We have decided we will not appeal because the costs would be high and we think we may be net beneficiaries of Wellington’s regulatory taking, or, alternatively, we think it possible the SNA will become redundant by legislation as the impact on land and house prices gets wider recognition. We own in total a block of  approximately 65 hectares in Karori. The area - approximately 30 hectares - that could in future be developed for residential subdivision is outside the SNA. The effect of Wellington’s SNA designations is to severely restrict the supply of alternative land that could be developed. If the SNA designations remain, our developable land will be a scarcer asset and probably significantly more valuable. If the SNA designations get over-ridden by legislation, then it would have been pointless to have spent the money to appeal. 

From society's perspective, I think the SNAs should be over-ridden by legislation and a regime be introduced by which Councils that want to protect areas have to negotiate and reach agreement with landowners, including over payment of lump sum or annual compensation. From a personal point of view, we suspect we have been winners from the actions of the Wellington Council. To hell with those wanting and needing affordable housing; we are boomers and deserve to fly business class. 

Keep up the good work.

That last line of the penultimate paragraph is very clearly tongue-in-cheek - Council has restricted the supply of land that might compete with Brent's when developers want to build more greenfield housing in Karori. Which likely makes him better off all-up, but he'd clearly prefer that the SNAs hadn't happened. 

If council wants more land in parks in the green belt, it should buy land and add it to the green belt. Stealing it via SNA isn't right.

The map of the SNAs, at least as of the draft district plan, is here.

Social media slippery slopes

Yesterday, I went through what I see as a trilemma for age-gating social media access. 

A system putting obligations and liability on social media providers to keep kids off the platform will have at least one of the following three problems:

1. Easily worked around by those under the age limit;
2. Cumbersome for those over the age limit;
3. Ends internet pseudonymity. 

I think the proponents of the proposed Member's Bill that National has endorsed envision the system being light-touch and consequently leaning on the first part of the trilemma. It's about 'sending a message' as much as it is about developing a workable regime. 

The Bill is broad enough to encompass all kinds of ways of running it. It depends what you think counts as "reasonable steps". 

Consider the lightest-touch version. 

The Minister designates only Snapchat, Instagram, Facebook and Twitter - leaving everything else alone. And the Minister signals that they don't want the platforms going overboard on what's 'reasonable'. 

The platforms then require users to confirm that they are over the required age. They use various AI tools to watch for accounts that might be under-aged. Some of them, like Instagram, already do this - they try to push teenaged users onto a teen-version of the platform. 

If they suspect a user is under-aged, the platform will issue a challenge. "We think you're actually under the age limit. If you can't prove otherwise, we'll suspend your account or punt you into the kids' version (if that kid version is still legal)." 

For users falsely identified by the automated tools as being under the age limit, the trilemma applies. Either the challenge is easily worked around, or it is cumbersome for those over the age limit, or it's the end of pseudonymity. Being a light-touch regime, it leans on the former.

This does not seem like a political equilibrium. 

People will forget about the tradeoffs when it is obvious that kids are still on the networks. The Minister will put the platforms "On Notice!" that they have to do more to close loopholes. 

That pushes the designated platforms to tighten up. More users will face cumbersome checks confirming that they are over the age limits. It will be harder to maintain pseudonymity if those accounts need to be verified with a real ID. 

The more the regime is successful in keeping kids off of the regulated platforms (at cost to adult users), the more that kids will be pushed onto platforms that have not yet been designated. Those platforms will then be designated. Discord. WhatsApp. Various videogames that have chatrooms or that enable chat. 

Compliance burdens continue to rise, except on platforms outside the reach of New Zealand regulators, like 4Chan. 

The stable equilibrium at the end of that? Substantial hassles for users over the age limit and/or the end of pseudonymity, some kids deterred from using platforms, others out on forums that are far worse than where they are now. 

Recall that John Key's ban on pseudoephedrine-based cold medicines remained in place for more than a decade after it was very obvious that it had done nothing to stop meth while inconveniencing everyone with a cold. 

A social media trilemma

Australia has required social media platforms to come up with ways of excluding under-16s.

Chris Luxon has followed suit for New Zealand, backing a proposed Member's Bill that is now in the ballot.

I think the evidence on social media harms for kids is strong enough for parents to keep an eye on things, but not strong enough to justify bans. 

But leaving that aside, suppose you wanted to implement one. 

I think a trilemma applies for any system that puts the obligation on platforms. If you want to set penalties for kids found to be on social media, that trilemma wouldn't apply - but I doubt effective penalties would be credible.

Anyway. The trilemma. Or at least my asserted trilemma. Disprove me by providing a system that does not suffer from at least one of these problems:

1. The system is easily circumvented by those under the legal age. 
2. The system is onerous for those over the legal age.
3. The system means the effective end of social media pseudonymity/privacy.

Consider solutions grounded in zero-knowledge proofs. 

A verifier confirms my credentials are consistent with my being aged 16+. I authorise it to reveal that to anyone providing it with a key that it generates for me. I give that key to my preferred platform. The platform isn't required to disclose that it's Twitter or Facebook or whoever. There's just an API that takes keys and confirms whether the person associated is over the age or not. 

The platform doesn't know the identity associated with the key. The verifier doesn't know which platform has asked about my age. All good, right? 

I'm 16. My 15 year old friend hands me their phone. I log into the verifier on their phone, presenting my credentials. It generates a key. My friend takes back the phone, logs into Twitter, asks it to authorise using that key, and it does. 

Zero-knowledge proofs are great for a lot of purposes but they aren't going to help you much if the person seeking authentication is happy to have someone else take that authentication. 

So we have the first tine of the fork. And a bit of the second tine - there is a burden imposed on every person using the platform, not just those under the age limit. 

Govt says aha! We will require frequent verification challenges or you will not be considered as having taken all reasonable efforts to keep kids off the platform. 

Well, now you're firmly into fork tine 2. It's a recurring hassle for users. 

Maybe the platforms use AI tools to restrict the challenges to those who it thinks might be underaged. Tine 2 then applies to a narrower set of above-age-limit users. It'll be a big hassle for a few years after you pass the age limit. 

Want to make it simpler? Here's an easy way. The platform gives you the option to just upload your driver's licence; it then occasionally takes a picture of your face to make sure that the user is the person who presented the credential. No having to log into other sites, none of that. 

But now we're on tine 3. The end of internet pseudonymity. And the Chinese Government now has everyone's ID from TikTok. 

The legislation as drafted winds up with a mix of all three. Platforms can use whatever method they like for verifying age. And they have a defence against $2 million dollar liability if they provide evidence that they relied on a presented ID that wasn't right.

So it's easy for kids to circumvent - get a friend's ID.

It's a hassle for adults, who all have to provide ID.

And it's the end of internet privacy/pseudonymity, because the system Chris Luxon's endorsed will find it simplest to collect and store everyone's passport or driver's licence. 

And those can always be subpoenaed later, if anyone says anything wrong on the internet. 

Maybe allow competition?

The Initiative's Insights newsletter generally concludes with a more light-hearted column.

The case that our Michael Johnston took on in it this week lent itself to lots of different approaches. 

This was my take on the same topic - but from a different angle. Because I tend to think about things in terms of statutory barriers to entry. And Jennifer Roback Morse lives in my head. 

Imagine that you lived in a small town with one pharmacy. The next town is a long drive away.

And the town’s pharmacist is the most culturally insensitive, if not outright racist, person you’ve ever met.

Friends avoid going there to avoid being ridiculed for their health conditions.

You’ve had enough. You know that the town would be better off with another pharmacy. So you decide to open one.

You buy a shop right across the street from your soon-to-be competitor.

You’ll hit your first roadblock pretty quickly.

You aren’t a pharmacist. You’d obviously planned on hiring a pharmacist, but you were going to own and control the business.

The pharmacist cartel has ensured that nobody except for pharmacists can compete with other pharmacists. It’s in the Medicines Act. And it helps protect the shop across the street.

Because you care about your community and because you refuse to give up at the first bureaucratic impediment, you find a solution.

Instead of hiring a pharmacist, you partner with one. You loan that pharmacist a lot of money to buy into the business. Your partner gets 51% ownership and effective control of the pharmacy’s operations. You get 49%, interest payments on that loan, and the joyful anticipation of driving the other guy out of business by providing your town with better service.

But then you hit your second hurdle.

You need a license to dispense funded prescription medicines. That licence comes from the government. And the government prioritises applications for licenses in places that are underserved.

Your town is small. It can’t sustain two pharmacies. Your plan is to drive the racist across the street out of business by providing a better and more inclusive service.

But your application to dispense funded medicines goes to the bottom of the pile. Because the town that can sustain one pharmacy already has one.

The Pharmacy Councill this week announced that all pharmacists will be required to undertake ongoing cultural competence training and activity.

Their guidelines are as cringe-inducing as you might expect. And I doubt that cultural competence training does much to help a racist to achieve enlightenment.

I wish instead that it were legally simple for new pharmacies to drive culturally incompetent ones out of business.

It would be more effective.

But I doubt the pharmacists’ cartel would like it.