The new elitist temperance movement

Nick Cater | Visiting Lecturer | insights@nzinitiative.org.nz
The wowsers are back on a futile mission to enforce public morality through statute.

In Australia, as in New Zealand, a new temperance movement is testing the boundaries of prohibition to encourage better manners. It advocates restricting the sale of alcohol and increasing the price to control excess consumption.

As with earlier temperance movements, however, a laudable social objective is muddled by a moral crusade. The early twentieth-century temperance movement attempted to impose their version of morality by preaching sobriety; today’s moral enforcers want to set the boundaries of appropriate behaviour.

Their justification is an apparent increase in public drunkenness in cities and towns, particularly among the young, and reported incidents of alcohol-fuelled violence.

In Australia, the federal government joined the crusade in 2008 by raising tax on so-called alcopops: sweet, pre-mixed spirits said to be a favoured tipple of the young. It was well received by the moral establishment, but had no practical benefit. Drinkers reacted to the price signal by changing their consumption patterns.

The wowsers’ untested assumption is that a late night culture of pre-loading and binge drinking is an indication of loser public morals and the corruption of youth. An alternative explanation is that public drunkenness is a consequence of loser policing and the corruption of public policy.

The offence of being drunk and disorderly was abolished in New Zealand, New South Wales, and most other Australian states some 30 years ago.

When a New Zealand Law Commission report recommended reintroducing the offence three years ago, the main objections were that it would impose an unreasonable burden on the police and unreasonably target Maori and other minorities.

Paradoxically, no such objections are raised to roadside random breath testing, a draconian and intrusive form of policing that, nonetheless, has a demonstrable public benefit.

There is unlikely to be a demonstrable benefit from the proposed ban on off-licence sales in Wellington after 9pm.

It will, however, produce a warm inner glow in those who advocate the measure. Like the temperance crusaders of the early twentieth century, the twin motives of doing good and being seen to do good have become intertwined.

We should resist the commandeering of the law as a platform for expressing private virtue rather than a means of enforcing public good.

Instead, if we are prepared to curtail public liberties to prevent drunks taking charge of a motor vehicle, why not consider similar measures to prevent them taking charge of a fist?
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Solving housing supply without any more houses!

Luke Malpass | Research Fellow | luke.malpass@nzinitiative.org.nz
The New Zealand Herald ran two contributions on the housing affordability debate this week. The first was by the Bank of New Zealand’s Tony Alexander advocating the restriction of foreign investment in housing. The second was by Gareth Morgan proposing a new taxing agency to tax housing properly.

Both proposals conspicuously lacked any ideas or plans to address the fundamental problem: a lack of houses compared to market demand.

Mr Alexander’s argument is political and social rather than economic. He cites community fears about Chinese people buying houses and forcing up the price for locals. He believes that the Chinese buying levels are lower than anecdotes suggest, but that such purchases are nonetheless leading to a rise in xenophobic attitudes towards them.

To combat this, he suggests allowing foreigners to only buy newly built houses rather than existing stock.

Unfortunately, given that the rate of new house building cannot keep up with demand as it is, this proposal is unlikely to make any great difference. And the theory that restricting foreign ownership of houses will somehow lessen xenophobia is debatable.

Dr Morgan on the other hand suggests an economic perspective, saying that housing is not taxed sufficiently compared to other forms of investment, distorting investment decisions. This is a reasonable proposition and a widespread view.

Staggeringly, however, he proposes that the government should depoliticise taxes by contracting a third party to design and administer the tax system: emphasising fairness, equity and simplicity. Such an agency would have the equivalent of a policy-targets agreement with the government (as used with the Reserve Bank) and would be expected to deliver on such agreements.

Dr Morgan argues that this would tax housing fairly in the same manner as other wealth by removing incompetent politicians from the process.

This proposal is undemocratic in theory and unworkable in practice. Handing over taxing powers to an unelected technocracy is an affront to Parliament, stripping it of one of the most important powers it holds – the elected power to tax. And in practice, any policy-targets agreement would become politicised anyway, as taxation is far more multi-faceted and less agreed upon than a stable currency.

Both proposals are examples of the muddled thinking we have on housing. They seek to influence demand at the margins but do nothing to address supply or how to build a single new house.
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Get smart - use a computer

Rose Patterson | Research Fellow | rose.patterson@nzinitiative.org.nz
Last week I heard a 60-something-year-old talk about getting some files out of his ‘machine’. I imagined some kind of futuristic filing cabinet but it turns out he was talking about his computer.

It got me thinking: how do older people keep up with the information and communication technology (ICT) skills needed for the modern world? ICT skills are useful in their own right, but increasingly they are becoming interlinked with other foundational skills such as numeracy and literacy.

This week, Andreas Schleicher, Deputy Director for Education and Skills for the OECD, was hosted by the Ministry of Education and Treasury. He spoke about the importance of continuing to invest in people’s skills, even after formal education. The OECD’s Skills Strategy, Better Skills, Better Jobs, Better Lives, promotes “investing effectively in skills throughout the lifecycle; from early childhood, through compulsory education, and throughout a working life.”

Investing in skills ‘throughout a working life’, particularly towards the end of one’s working life, is often overlooked in New Zealand. We have an ageing population: the proportion of the labour force aged 55 and over was one in six in 2007, and is predicted to rise to one in four by 2020.

And even though retirement looms for a large chunk of the labour force, it doesn’t necessarily mean the end of working life. According to the Equal Employment Opportunities Trust, most New Zealanders expect to work 15 hours per week even after officially ‘retiring’.

This means older people will need to continue investing in their skills. There is evidence that they are already lagging behind. The 2006 Adult Literacy and Lifeskills Survey found that those aged 55–65 have lower levels of numeracy and literacy than younger people.

So how do older people keep up their skills? Reading more books may not be the answer. The Ministry of Education reported in 2010 that “computer use is strongly associated with higher literacy and numeracy”. Part of this can be explained by higher computer use among higher-skilled occupations, but there was also evidence that computer use also improves literacy and numeracy.

Cranking up the machine (aka the computer) may be the way to invest in the skills necessary in today’s working world.

All things considered ...

• Graph of the Week: Courtesy of the fantastic Statistics New Zealand. How many bananas are we eating and at what price?
• Nick Cater is giving some talks for The New Zealand Initiative next week. His book The Lucky Culture has had ‘more launches than NASA’, including by Australian Prime Ministers John Howard and Kevin Rudd. To book a seat for ‘The Rise of a New Ruling Class’, click here.
• To read about Cater’s book, The Lucky Culture, visit www.luckyculture.com.au.
• The government is investigating more ways to tax the already over-burdened people of New Zealand. This time, it is going after online shoppers and GST.
• You are the chain-smoking ex-Chancellor of Germany and your own political party wants to ban your favourite menthols. What do you do? Hoard them, of course!
• Divorce is not easy. But is it really so difficult that having your husband whacked is an easier option?
• Gareth Morgan reckons that a group of unelected technocrats can do a better job of determining tax policy than our politicians. Funny, it hasn’t turned out that way in Europe. But still, bad ideas have a way of getting around.
• The good people of Christchurch have displayed sense on two counts: 1) they have given their councillors the worst poll rating ever, and 2) they still don’t want the central government to take over.
• Speaking of which, you know there is something wrong when more people know the name of the city council’s CEO than the mayor’s. Here are some reasons why Christchurch City Council’s CEO, Tony Marryatt, might be unpopular.
• The Ashes have begun! For those keen followers of test cricket, here is where you can listen to the dulcet tones of Henry Blofeld summing up the play from overnight.
• And finally, it’s Mr Darcy! Except that Jane Austen’s most famous character is 3.7 metres tall, made of fibreglass, and in a lake as a permanent display.

On the record
• The rise of a new ruling class, Luke Malpass, The National Business Review, 12 July 2013
• Think tank questions whether import savings from high dollar passed on, Dr Oliver Hartwich on Morning Report, Radio New Zealand, 12 July 2013
• New largesse stars in Greece's theatre of the absurd, Dr Oliver Hartwich, Business Spectator, 11 July 2013
• Nick Cater and The Lucky Culture come to New Zealand, Voxy.co.nz, 10 July 2013
• 'Bunyips' under fire, The Weekender, 6 July 2013

ends

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