Banning racing

New Zealand will be banning greyhound racing. 

The Bill to formally end greyhound racing will be introduced to Parliament later this year. The public will be able to make submissions to the select committee as part of the process.

“It is important people get the opportunity to have their say. The decision to end greyhound racing was not one Cabinet took lightly. I acknowledge the impact that closing the industry will have on those involved.

“But globally the industry is winding down, with Tasmania recently announcing an end to greyhound racing. The bottom line is too many dogs continue to die and be seriously injured, and it is time to do the right thing,” says Mr Peters.

Ok. So the reason for banning greyhound racing is that too many dogs die and are seriously injured.

That is the basis for the ban, according to Minister Peters.

Let's go with that. 

I've asked my advisor about the rates of accident and death per racing start for greyhounds and horses.

Because we haven't banned horseracing. Indeed, we subsidise it. 

My advisor's answer, which presumably could be checked by someone with industry-knowledge:

Bottom line

Per start, a horse is more likely to die than a greyhound in racing, with the gap ranging from ~1.5× (NZ flat) to ~5× (Britain, all racing), and ~12× or more in jump racing. 

Greyhounds sustain more recorded race‑day “serious” injuries per 1,000 starts than Thoroughbreds in the datasets that exist, but those counts include categories (e.g., ≥22‑ or 43–90‑day stand‑downs) that don’t map cleanly onto how horse‑racing reports non‑fatal injuries. 

So on a first cut horses have a substantially higher risk of death per racing start than greyhounds have.

So if the government wanted to ban racing on basis of deaths, it should have started with horses.

Maybe there could be some CBA claiming a lot more benefits from horse racing per race as offset, or maybe people care more about dogs dying than about horses dying. 

But the simplest explanation here is probably the correct one.  

For a de minimus threshold for mergers

I've spent the last couple of days at the Competition Law and Policy Institute's annual workshop.

Webb-Henderson's Lucy Wright made a good case for a de minimus threshold for merger controls. Small mergers could have a safe harbour, or mergers in markets of insufficient NZ importance.

If we need to set a monetary threshold for a market of insufficient NZ importance, there's an obvious benchmark.

Same day as that session at the CLPINZ workshop, Terry Allen, former Chair of Serrato, had a piece in the Post. You'll remember Serrato. I've sometimes pointed to it as example of how the NZ Commerce Commission destroys value by chasing nth order issues when first-order issues are left by the wayside. 

Allen writes of their NZ startup:

In fact, Pioneer liked Serato software so much that when the company ran a sales process, it was the preferred bidder. Its offer not only valued the company at around $175 million, it also promised to establish a global music laboratory in Aotearoa and to grow the headcount of the chirpy little music company.

It was all going swimmingly until the Commerce Commission pulled the plug mid-2024.

The commission’s concern was that Pioneer’s parent company, AlphaTheta Corporation, already held a significant share of the global DJ hardware market.

Serato was a major player in the DJ software market. In the commission’s view, combining the two could “substantially lessen competition” in the DJ software and related hardware market — even though the New Zealand market for such products is tiny, accounting for well under 1% of Serato’s sales.

The merger review took a year and cost the commission more than $500,000 to investigate, according to the National Business Review. Legal and advisory bills for both Serato and Pioneer were well north of $1m.

The decision meant the reported $175m-plus deal was dead in the water, Serato remained independent, and the promised music lab never left the drawing board.

The Commerce Commission decision did four things. First, it cost the commission over half a million dollars and both Pioneer and Serato over a million in professional fees.

Second, it took the commission a full 12 months to make a call — effectively hitting the pause button mid-track for a year. Tacked onto pre-marketing and then running the process a second time the all-up time was more like three years. An eternity in a fast-moving tech environment.

Third, it made it jolly challenging to run the company on a daily basis while its future ownership was debated and delayed. We were lucky to have a top-flight management team keeping the home fires (and DJ decks) burning.

And fourth, it forced the company to run a whole new sales process but limit the participants to financial buyers rather than trade buyers — effectively narrowing the field to private equity.

I've heard reasonable-sounding arguments that NZ ComCom stuffed this one up in part by defining the market improperly. While Serrato's software is great for hip-hop artists, it's not as popular for artists that don't use scratch. Define a market narrowly enough and weird things happen. 

Allen points to the more fundamental issue:

In today’s world, an increasing number of Kiwi companies build and sell digital services, and are global from day one.

While the commission understood that Serato’s New Zealand revenue was a wafer-thin slice of the whole, the mere existence of any local sales meant it had to run the merger through its standard domestic-competition lens.

The second is that under-resourcing of the commission means even straightforward matters can take a year to determine. In the world of global M&A, that’s an eternity — enough time for opportunities, buyers and market conditions to change completely.

Both of these things need to change if we want New Zealand to continue to grow globally significant tech companies and realise top-dollar sales when their founders exit.

Otherwise, we risk sending an unhelpful message to the world: if you want to buy a Kiwi tech success story, prepare for a year in regulatory limbo, big legal bills, and the real chance the deal won’t happen at all.

Meanwhile, a message to local founders is base your company overseas and only sell your services to foreigners.

That’s not the kind of remix New Zealand should be famous for.

Set a de minimus standard such that if the NZ market is trivially small, it isn't worth the Commission's time. 

So that venture capital won't be scared of backing NZ startups for fear that NZ ComCom will block their reasonable exit if the play pans out and a large international company wants to buy their startup. 

How to define the threshold for the de minimus standard for a market of insufficient NZ importance? A number bigger than the market for hip-hop DJ software in NZ seems like a reasonable starter. 

To what policy problem is this the solution?

On my drive in to work yesterday, RNZ's Corin Dann challenged the Prime Minister about one part of his meeting with Australian PM Albanese. They had apparently promised to work toward some kind of joint ID and driver license system. 

I have rented a car in Australia using a NZ driver's licence. That was ages ago now. But has that gotten harder somehow? 

I understand that passports are required for proof of age if you want to buy alcohol, with licensees not recognising trans-Tasman driver licences. But is that a problem to which a joint driver licensing system is a solution? Or is it simpler to tell licensees that they can rely on trans-Tasman driver licenses as proof of age, while supplying sample copies of the various Oz state driver licenses (and the one NZ one) so folks are familiar with both and better able to recognise fakes.

If a bar in one Australian state can rely on driver licenses from other Australian states and the world doesn't end, it doesn't seem that much harder to teach the guy at the door how to also recognise a NZ driver licence. 

What is going on here? 

The joint statement by the two PMs gives a couple of hints.

10. Prime Ministers also launched a new phase of work to deliver mutual recognition of accredited digital identity services, and commended the cooperation between New Zealand and Australian States and Territories to facilitate the verification of digital drivers licences across borders.

24. Prime Ministers reaffirmed their commitment to ensuring all Pacific countries have access to safe, secure and stable banking. They welcomed ANZ’s announcement of its long‑term commitment to the region, secured by an Australian Government guarantee, and the Commonwealth Bank of Australia stepping in to provide banking services in Nauru. They also welcomed Australia’s announcement at the 2025 PIF Economic Ministers’ Meeting of further support for secure and inclusive digital identity systems across the Pacific. Prime Ministers noted Australia’s and New Zealand’s contributions to the Pacific Strengthening Correspondent Banking Relationships Project and recognised the importance of regional action to address the decline of correspondent banking relationships.

On a bit of checking:

• NZ and Oz agreed to develop a Digital Identity Mutual Recognition Roadmap back in 2019/20, or at least it was noted in the Australian Digital Transformation Agency Annual Report for 2019/20.
• NZ has a Digital Identity Services Trust Framework Register, but nobody has yet registered as an accredited services provider. So the mutual recognition roadmap would presumably be for trans-Tasman recognition of these things as they develop.
• NZ has NZ Verify for verifying mobile driver licences. So far, NZ doesn't have a mobile driver's licence. But the Verify app can check the authenticity of mobile licenses from some US states and Queensland. ISO 18013-5 is currently supported, others may be in future. 
• The digital identity work for the Pacific is most likely related to everyone having figured out that KYC requirements just kill international remittances. Rather than ditch KYC, they're going to eKYC. 
• ACCC is regulator for Australia's digital ID; OAIC is privacy regulator there. The Digital ID Act 2024 came into effect 1 Dec 2024. It's a voluntary accreditation scheme for providers of digital ID services. 

There has been Twitter speculation that all of this is about age-gating social media. It looks like this push started well before anyone was talking about that. 

But Australia is running trials on ID/age verification setups for social media age gating; it looks like a report is soon due. 

There are defensible use-cases for privacy-preserving verification. Having a system where I can request that the authenticator provide confirmation of specific details about me to a third party, and that third-party being able to confirm those details with or without needing to know anything else about me, has value. 

When the government set the Covid check-in app, it baked privacy in right from the outset. Scanning in at a place would let you get a notification that someone else who had scanned in at that place around the time you were there wound up testing positive for Covid. Done poorly, it would be a privacy nightmare. But they had folks like Andrew Chen working on it. It was fine. And there was lots of open discussion about it when it was being developed, so everyone knew that people who cared about privacy were in on the ground floor in building the thing. 

When the first a lot of us would have heard about a government digital ID is in context of a trans-Tasman agreement for mutual recognition, in context of Australia wanting to age-gate social media, and nobody particularly trusting that the age-gate system isn't intended to result in the kind of censorship being seen in Australia - not so hot. 

Just a bizarre thing for the government to highlight without having put up explanations ahead of time. 

The PM's talk had this as all being about mutual recognition of driver licences. Which is obviously a weird justification. We already recognise each other's licences. And if Oz and NZ makes it tough for bars to recognise each other's licenses as ID, that's far more easily solved by just letting bars use the other country's driver's licence. The rest of it isn't needed for that problem. 

Instead - both countries are working toward digital IDs, both countries five years ago agreed that they'd recognise each other's digital IDs, and this seems just to be reaffirming that prior agreement. I'd love there to be more assurance around privacy being important in the design of any of these in NZ. Because there are very bad versions that should not be supported.

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.