top of page

In a prominent One News editorial, Jack Tame asks "Why don't politicians act on our most harmful drug?" He says, "A study by Otago University, published in the Journal of Psychopharmacology, used 17 different harm criteria to assess the impact of different drugs on New Zealanders. The study considered harm to the individual as well as society at large, and in the end the results weren't even close. Top of the pops, a full 17% ahead of second place, wasn't methamphetamine or opiates or tobacco, but good old-fashioned, buy-it-at-the-supermarket booze".

On and on Tame goes, "By some estimates alcohol harm in NZ costs roughly $8 billion a year .. Governments have deferred substantive action on booze laws in NZ. They've ignored expert advice & the conclusions of their own reviews". He wants "restrictions on alcohol advertising". Great. Tame (and Otago Medical School) equate alcohol consumption with being a methamphetamine addict. They argue, based on such costs, that heavier regulation, particularly on advertising, and perhaps higher excise taxes, of alcohol is the way to go.

Spot their mistake? Alcohol consumption has huge costs to many people. It also has huge benefits to many people. Since the start of time, humans worked out the benefits wildly exceed the costs. Those benefits are hard to quantify, since they include the psychological pleasure from having a glass of wine or beer to relax. Yet they exist & estimates can be done. Has Tame not heard of cost-benefit analysis, which weighs up both sides of this equation?

More pertinently, has Otago Medical School not heard of cost-benefit-analysis? When it came to giving advice on Covid, again it only looked at the costs of not implementing long and severe lock-downs. Sure, there were costs to health outcomes, but there were also benefits. What were those benefits? Well, for one thing those severe lock-downs and the botched reaction by the Minister of Finance and Reserve Bank are partly to blame now for our high inflation, run-away cost-of-living and the recession. The billions of lost output we are currently suffering could have been used by Pharmac to buy drugs, eliminate waiting lists and save our health system by recruiting more doctors and nurses. Yes, the benefits of not locking down so hard and for so long are real and large and ongoing.

The moral of the story is that it would be good if someday the folks at Otago Medical School (and Jack Tame) who like to give advice to our government took a course on Cost Benefit Analysis. A great Covid one was done by Professor John Gibson at the University of Waikato. His opinion piece called "Safety at all Costs Costs Lives" has a link below.


Regards Auckland's new Penlink road, upon which construction has begun, making access to the Whangaparoa peninsula easier, it was reported yesterday that, "Transport Minister David Parker has no plans to review the decision of former Transport Minister Michael Wood, who ignored official advice to not toll the new road & went ahead with charges for motorists". Well that's because the official advice was a load of hogwash. Wood & Parker got it right.

Meanwhile, consistent with the atrocious economic advice that National keep getting across a swathe of economic issues, the media report that, "National is promising a review of the O Mahurangi Penlink road north of Auckland if it wins this year’s election, saying it will look to scrap tolls and extend it from two to four lanes".

Is the National Party incapable of coming up with a principled approach to anything when it comes to economics? Our infrastructure is falling apart and economists around the world nearly entirely support user pays in the form of tolls to help fund new projects. Even far-left socialists in France support toll roads & France is packed full of them. American is packed full of them. When left & right-wing countries both share the same policy on an issue then one suspects that maybe its not about partisan politics - its about doing the right thing. If tolls are not used then the funds must come out of general taxation and what is the National Party's policy on tax? It wants to cut taxes.

We flew out to NZ the world's leading urban economist, Ed Glaeser, at huge cost, to talk to the movers & shakers 10 years ago to explain how to fix our infrastructure - Stuff ran the headline, "Road tolls are the best option for funding the development of Auckland's $12 billion transport program, two economic experts say .. 'I am not intrinsically opposed to providing more highways, but I am intrinsically opposed to providing more highways that are paid for by the general taxpayer, not the drivers themselves,' said Glaeser, who has spent years examining what makes cities successful".

The University of Auckland put on a Deans Distinguished Lecture that I organized. David Parker attended that event 10 years ago when he was relatively unknown and in Opposition. Good on him - he obviously got a lot out of it - as the benefits of tolls were discussed. It's a shame, by contrast, National continues its tradition of shunning the advice of the best economists in the world. By the way, if National is against user-pays, like tolls, and also has a policy of cutting general taxation, then maybe the Party should have the honesty & decency to tell Kiwis that it intends to run down our infrastructure, at the same time as resuming record high rates of immigration.

National's policy on water infrastructure is now for the Council to go and borrow the funds. I advocated central government borrowing to fund a massive infrastructure reconstruction program back in 2014 when National was in power but it was rejected by Bill English who wanted to "balance the budget". My view was that interest rates were at historic lows in the aftermath of the Global Financial Crisis so it made sense. Now National plans on borrowing to fix water infrastructure at a time when interest rates are surging. For the Party that says it knows how economics works, its policies beggar belief.


Home: Blog2


Thanks for submitting!


Robert MacCulloch

bottom of page