Excessive taxes on alcohol - backpacker beware

Share |

If you value drinking alcohol, you might want to consider not coming to NZ for a holiday. NZ is already charging a tax of $2.47 per litre on alcohol between 2.5-14% concentration, whether beer or wine. The government is also taking measures, probably punitive, to regulate the campervan trade in NZ.

These are big disincentives for foreigners to travel to NZ, and yet the government is considering another increase in alcohol tax to 'reduce binge drinking among the young'. This is the most insane policy you could imagine. First of all, the tax has already been increased for the same reasons before, to no avail. Is this not simply about using 'punitive taxes' to resolve holes in the national budget. Business will of course need to pass on the costs, which will see a bottle of beer priced between $7-8, and a glass of wine between $16-18. I suggest the increases might even be greater if businesses experience a fall in patronage.

My guess is that the policy would result in several negative effects:

1. Increases organised crime activity in the realm of boot-legging. Maybe the sellers will give you a rebate if you bring your own potatoes.

2. Closure of businesses - restaurants and bars are big employers in NZ, so more taxes is simply going to stop people going out. Expect rural town employers to be particularly hard hit, which will mean population declines in rural areas as rural people are forced to move to the city. I suspect they will move to Australia instead.

3. Less tourism - The backpacker trade will die off because alcohol would be a major expense for this group. They might not spend as much as the premium traveller, but they spend 1-6 months in the country (compared to a few days for business travellers and 1-2 weeks for wealthy retirees), with all funds being recycled through the economy, as well as spreading to the rural areas through the backpacker network. Expect more tourists to head to Australia. OK, Australia does not have the mountain vistas of NZ, but USA, Canada, Europe does, so travellers from those countries will not miss them. Australia will be a more holiday friendly place.

4. Greater use of alcohol substitutes - You can't use punitive measures to correct some action you consider inappropriate. There is a need for education - but not the idiotic messages we are accustomed to on TV. The problem is more fundamental. The problem is that academics do not understand the alcoholism issue. What they don't realise is that kids are going to explore other options like 'glue sniffing', meth, etc. The implication is that the government is driving people into more illicit activities as well as more dangerous activities. Having researched this issue I can tell you that the behaviourist school of stupidity is driving public policy on such issues. Governments are therefore labouring under the misconception that humans are animalistic. The reality is they totally lack any theory of values.

I will be among the first to suggest that alcoholism consumption is a problem, but the solution is never greater taxation. Taxation is slavery - not education! It might change behaviour at the margin, or in the short term, but the 'externalities' of such policies are far greater than any benefit. The implication is greater use of meth, greater use of methylated spirits (i.e. cheaper), greater illicit activity.

NZ might just learn that one of the appeals of travelling to NZ is the low cost of living. After all it is so far away, and does not have a lot of culture to offer. Basically its an 'outdoors experience'. My advice is - ditch the taxes, as well as the bureaucrat/academic reports which suggest punitive measures are the best way of avoiding youth binge drinking.

Send a message to the NZ government that taxation is NOT the solution! Take a holiday in Australia if you are in this part of the world. Better still punish the Australian government (who do the same thing) and tax a holiday in the Philippines or Vietnam. Alcohol there is just $1/beer. With the savings you will be able to buy an apartment for $50K. :)

Another paradox of these silly policies is that youth unemployment is pretty bad in NZ, and kids wanting a sense of efficacy are turning to alcohol or drugs to medicate their low self esteem. The government I believe is quickly taking this country into an escalating crime regime. You guessed it! That means more taxation to regulate behaviour because we didn't learn in the N^{th round of tax increases. We need a change in government administration so we can avoid the spiraling crime and incompetence as practiced by Western governments around the world. They are truly the pits. There is simply a complete lack of good sense and reason needs to be the standard of value. What qualifications do these people have? What life experience? The problem is they are not analytical thinkers. They are lawyers with 'good memories'. Precisely not the type of people you want drafting law.}

^{Details on NZ tax - see Wikipedia.}

Performance of Wanganui Mayor NZ

Share |

Michael Laws is a rather high profile mayor in NZ. Mostly it is because of his antics. It always gets a lot of national attention, as well as derision. His conservatism is popular with the retirees in Wanganui I suspect. But let's look at his performance. The council rates are increasing by 4.5% in 2010/11. This seems most enough when you consider inflation, but one might ask why councils can't achieve cost reductions through efficiencies, particularly when we are talking about a rural region subject to steady population.

I think one of the biggest opportunities for saving public money is by adopting a per volume cost for water usage. I note the impact of free water on the community. My neighbour said 'Andrew, don't worry about wasting water, its free'. I replied 'nothing is free', someone always pays. The reality is that Wanganui water is expensive because it is derived from bores as opposed to regulated dam storage. The implication is that if there was an increase in population, we would need to develop more boring capacity. I note that the council recently developed new boring capacity to substitute for the failed no. 1 bore. It should have simply adopted a pro-rata pricing of water. Now, this might be harder than it sounds, i.e. Maybe the water in NZ is unmetered. I guess, unlike Australia, they are so accustomed to having free water. Even so, even if usage was collectively based on the premise of 'user pays', it might still have some effect, even if weaker. i.e. My neighbour would be less inclined to say 'its free', knowing that collectively I was paying more because of his actions.

Another big mistake is for Wanganui Council to have paid $20 million (my understanding) for Wanganui Gas. This utility is a legacy of the old electricity and gas board days. By buying the balance of the utility from its JV partner, it is exposing rate payers to commercial risks which we don't need. Consider for starters that the industry is undergoing consolidation. How is its retail arm 'Energy Direct' going to compete with the full service providers. I might add that the window of opportunity to sell this utility is dying. Consider that the ratio of residential to industrial gas prices in NZ are the highest in the world- even higher than statist Japan, where consumers always get a bad deal. Literally slaves to the state. NZ residential gas prices based on last years prices are 10x greater than the prices for utilities. The reason of course is that the NZ privatisation scheme was a sham, and the very uncompetitive regime for gas and electricity in NZ. Consider that consumers are baying full price for electricity, when most capacity is operated at almost zero cost. Water is free, and no fuel cost. Markets demand you pay the marginal price, which is the cost of high-cost wind, also near-free to operate, but costly to install. The implication is that if some person decided to commission a 600MW power plant, prices could halve, and the utilities would still make a great profit. The current regime is huge profits for the utilities, as well as government, and it raises the question of whether the utilities have paid huge kickbacks to secret bank accounts in Switzerland in order to structure 'deals' like these. Hard to say if its incompetence or corruption. There is a fine line between stupidity and deceit.

It ought to be apparent though that Wanganui Council has on benefit to derive from being in the industry given that the returns are never going to be greater. Get out why you can! Coal seam gas would erode their profitability when developed in the Waikato Basin, greater convergence can be expected, etc. There is better ways to attract jobs that by propping up historical practices.

It is apparent that the council is creating a problem of future unfunded liabilities by underspending on the maintenance of public infrastructure. These problems or cost items will not disappear, which means that the Council is moderating rate increases by increasing future contingencies. I am a believer in very small government, so the idea of a local government having $84 million in debt is ridiculous, particularly one which cannot attract people (i.e. rate payers). Worse still is the fact that they project it will increase to $96 million before falling. Who can know that is reasonable - that the debt will fall to $66mil in 2018/19? Are they projecting a population explosion to justify it, or an increase in future rates? Hard to see if this is possible if they are pushing capital outlays into the future.

Laws makes the argument that Wanganui will be among the 'elite' group of 16 councils (of 73) able to reduce debt in this period. This says nothing since Wanganui is among the few councils likely to be forecasting stagnant population growth. i.e. No capital expenditure demands. Such 'relativist' statements are therefore misleading.

I do think the council is doing a good job improving the visual appeal of the city. This will attract tourism, and improve property prices. Wanganui is a great place to live, and I also support their desire to improve the negative perception of Wanganui. People seem to think this town is overrun by gangs. I have yet to see any gang activity in the year I have lived here. Not seen a gang member at all, and we live close to hot spots of trouble. Maybe this is the result of the anti-crime initiatives, because I must say in the first 8 months of living here, I was seeing a police car every day. Now its once a week.

I also appreciate the opportunity the council has given to make public submissions. Not a believer in representative democracy, but better than nothing. No accountability, so its one-sided representation. What is the point of disclosure if you have no recourse for 3-4 years; and that recourse is zilch in comparison to the rest of the unthinking electorate.

Unjust speeding tickets legislation in NZ and Australia

Share |

I have some strong views against the punitive speeding tickets, parking fines legislation stretching over several countries.
My concern is:
1. The punitive nature of the action - often there is no intent to speed, and it can hardly be construed as 'negligence' to wonder over the limit if the conditions justify it.
2. The lack of effective recourse - who wants to waste time going to court to save $150
3. The arbitrariness of the legislation, ie. In Australia I was fined for speeding going up a steep hill, when the steep limit is the same going down the other side. The limit was artificially low.
4. The arbitrariness of cameras - particularly in Australia - I was caught driving out of a town at 70kmph when the conditions were excellent, i.e. up hill, good clearance, fine weather, good road
5. The lack of scientific validity for the claims made, ie. Where is the evidence that 'speed kills'. I would argue this legislation is an over-simplification used by govts to raise taxes. NZ is going the same way as Australia. I can't live there any more. Its like living in police state.
6. Externalities - After I was caught for speeding, I was driving a further 5 hours in a state of stress. What about the sudden braking in response to 'natural' fears about a speeding camera. or the paranoia about police cars everywhere. Everyone's driving ability is different. If there is no scientific basis for the legislation, there will be harmful externalities. Another is my loss of confidence in government, the political system. The accountability that society has is under-funded, arbitrary, and loop holing.
7. Unfairness - The way this legislation attacks people of principle and the poor, as opposed to pragmatic & wealthy souls who give it no mind. Yes, we want more mindless people in society, and we want fewer critical thinkers because we live in such a workers paradise. Some people can't afford the cost of living in a police state.
8. The disparity in application - The police drive with impunity. Years ago I went on a skiing trip in Australia with police recruits. They were drinking whiskey whilst driving 100kmph on a back country road. In northern NSW, a local policeman warned drinkers in a pub that he would be watching a certain road on Melbourne Cup day. Meanwhile, outside Taree NSW, a local policeman patrols the highway because he does not want the discomfort of catching locals and potential friends. Justice is hardly served by either practice - cameras or no cameras. Give the policeman a clever answer and you escape punitive damages.
Perhaps you were thinking that these 'unmeasured' externalities are worth it. Think again. The fall in the road toll is not because of compliance with speed limits, it is because of the gradual improvement in roads as we straighten precarious highways, upgrade to dual-carriage ways, adopt road partitions to stop head on collisions, which have more to do with distraction and tiredness than anything else. A group that is less responsible are drinkers, particularly teen drinkers. Clearly there is a problem with this group, who don't care about the legislation anyway. This group needs special attention, but I would argue their 'rebellious' attitudes are more a response to the 'arbitrary' and punitive nature of our justice and policing system.

I do want to look at this issue in more detail - here is the statistics for NZ.

This legislation is poorly targeted and needs changing. The Consumer NZ non-profit group needs your support, and I suggest providing your insights to marc@consumer.org.nz.
---------------------------------------------
Andrew Sheldon www.sheldonthinks.com

The problem in NZ politics - ok Western democracy

Share |

This instance highlights the lack of integrity in the Maori Party, but most particularly the parliamentary process since this behaviour is typical of politicians. Tariana Turia is the co-leader of the Maori Party. But she is also a minister in the NZ coalition with the National Party. In a recent parliamentary vote she was obliged to depart from her party position (which she supported) in order to vote with the government (ie. National Party).
The issue was the policy initiative of the National Party to limit assistance to single mothers I think to dependents less than 6 years of age. The stupidity of the system is that this is actually encouraged, and worse still because it is deemed acceptable.

Do we have any hope of good policy when:
1. Ministers are more loyal to the Cabinet than their own principles
2. Ministers sacrifice the interests of one group for the sake of another
3. Policy issues are decided by votes (i.e. numbers) rather than reasons or principles (concepts)
4. Minister self-interest is about retaining one's career.

The implication is that the system actually rewards such displays of disloyalty. This is the problem with the system and it needs to change. I don't know why people are so proud of our democracy. Any idiot should be able to see how rediculous the system is. It actually rewards bad behaviour.

96% anti-mining, but not 100% pure NZ

Share |

A Wanaka geologist has come out arguing that the government's numbers are overstated as to the mineral potential of NZ, or at least the potential of Stewart Island. This does not surprise me at all. The reason I think the government is pushing for mining has less to do with the desire to see mining in these areas, and more to do with the desire to encourage exploration so that the government actually knows if there are minerals in the country.
Most particularly, the government needs to encourage more energy exploration. What happens on land is actually less important than at sea. NZ needs energy - particularly gas, and it needs to substitute imports with local product. I think the government purely wants to convey that it is pro-mining, after all who wants to explore in a country which is so anti-mining.

The idea that 100% NZ was always a brand which was intended to attract tourists. The reality is that whilst NZ has some terrific landscapes, the urban areas of NZ are very untidy. There is lot of rubbish in NZ. People discard there rubbish indulgently. I often see people throwing rubbish from cars, kids coming home from the pub or friends leave bottles in the street, or worse break them on the pathways. There is a lot of this, though of course some areas are worse than others.
I don't see this in Australia, which I truly think is 96% pure.....if you excuse the mass clearing of trees on the tablelands 100 years ago.
But consider this about Australia:
1. Half of Tasmania is a national park or wilderness
2. Half the coast of NSW is national park
3. Most of the ACT is national park
4. The bulk of the Snowy Mountains is national park
5. The Great Barrier Reef is national park
6. Sydney Harbour is a national park - you can readily eat the fish caught in it
7. Sydney is surrounded by national park - almost completely surrounding it. You can view for 30-40km in some directions its so big
8. Cape York - 'the dog ears' of Australia is national park

In NZ, they have dairy effluent going into the rivers. The forest is really only confined to the ranges whilst all the flats are farming land. The only place where there is really unmodified land use is the West Coast, Alpine areas, Fiordland, and some of the Taupo Volcanic Zone. It is a smaller country, but is the "100% pure NZ" reputation justified based on the facts. Of course it makes clever marketing.

In fairness NZ is a very beautiful country...perhaps the country can do with fewer puritans. I prefer Australian nature in many respects because the walking trails are actually shorter and better suited for tourists. In NZ it is all a bit undeveloped and walking trails tend to be for the overnight hikers. I'd like to see more of NZ opened up for the tourist to actually enjoy it rather than simply drive by. Of course if tourists are so utterly inconsiderate of other tourists, maybe such plans need to await a better quality of human being.

The paradox is that Australia produces so much mineral wealth from mining, but it utilises less than 3% of its area for mining, and thats just based on mining title, not actual mining area. Despite that it has such large tracts of wilderness. The country is so large you would likely never see a mine site. The bad news is that its all so spread out. NZ, you can drive around and see it all in two weeks. You'd never see a mine there either. Why the worry? Well its mostly government hype because they want to encoureage exploration. It was probably an electoral promise. Now they can take the campaign contributions with a clear conscience.

Mining in NZ

Share |

A big issue in the press this week which highlight the problems the government is encountering reforming the economy. The issues is mining in national reserves. NZ has vast areas of protected reserves. Conservation groups have ensured that historically these areas were not open to mining. The purists among them will tolerate no mining. The reality is that leaving open the prospect of mining actually ensures that mining companies explore, otherwise if mining is precluded, no company will explore. The problem is these people know nothing about mining, and fears are actually exaggerated. A number of factors to consider: The size type of mining, the jobs created, the likely local spending, provisions for spending in the economy, e.g. wages, taxation, etc. There is a large open cut gold mine in Waihi, in the Coromandel which some oppose. This mine comprises a huge whole in the ground. Despite being adjacent to the town, the only sign of mining is likely to be extra trucks on the road, vibration from the two (2 x 2 minutes) rounds of blasting each day. Perhaps the biggest issue is likely to be dust in the air as blasted and crushed rock is hauled around and stockpiled. Undercover drawing from stockpiles and covered conveyors can reduce this, as well as spraying of roads. Visually there will be a big hole in the ground, however this is not visible on flat land. An open cut into the side of a mountain might be visible from the road, but often miners plant trees to hide them, or the pit is obscured by mountains, poor access, etc. Most mines are remote from urban development and you would never know they are there unless you are one of the few who fly around at low altitude. There are impacts to groundwater sometimes, as mining does not remove all the ore, only the commercially viable material. Peripheral ore remaining will leach, potentially into streams or the groundwater, so remedial work is required to limit this, which can be hard.
The land area affected by mining is small. The biggest threat posed to NZ is coal mining on the West Coast of NZ, and places like Otago. Coal mining effects large areas, so is likely to pose the greatest change to land. If I was a NZ'er, I would be more worried about damming rivers for hydroelectricity.

Researching property online in NZ

Share |

Need help buying property in NZ?
If you are researching property in NZ here is a useful tool for reviewing population, income, education and other particulars for the households in each district. Its old data but it provides a useful guide. Refer to this blog entry. These are particular useful tools for foreigners with little knowledge of NZ.