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  • rmacculloch

In Support of the Northland Tooth Fairy

During the period of the lock-downs, our Prime Minister made world headlines for saying that the Tooth Fairy and Easter Bunny were “essential workers”. They no doubt appreciated the kind words, but in real life it turns out the Tooth Fairy is under prosecution for falling foul of Ministry of Health regulations.

The background to this story is that a Kaikohe woman, known by locals as the "tooth fairy", is facing seven charges brought by the Ministry of Health, one charge of claiming to be a health practitioner and six charges of performing a restricted activity. Newshub reports that she "has a fine arts degree and 10 years of experience making and repairing dentures in labs in Auckland and Hamilton". Her clients say she charges about a third of the price of dentists. However, it turns out that one is not permitted by law to make dentures in NZ without various forms of certification.

These kinds of occupational regulations often impose huge costs on society with few associated benefits. There are important instances where they are vital to ensure a trusted service that protects one’s health and safety. One would not want any Tom, Dick or Harry calling themselves a General Practitioner who didn't have the relevant medical qualifications and training. However, under cover of this rationale, many other occupations are subject to a raft of local and central government regulations that must be satisfied in order to practise. Pharmacists and hair dressers are two other examples. As for my profession, anyone can call themselves an "economist" and regularly do. They can even offer formal advice using that title to our political leaders who run the country. I studied economics for 12 years to earn a crust, but don't advocate prosecution of those calling themselves "economists" who never went to a single class.

How can occupational rules become subject to foul play? Because they can be used to push up prices in certain industries and restrict competition. Newshub report that the Ministry of Health launched its investigation - not after complaints from clients - but from local dentists. Successive governments in NZ refuse to undertake stringent cost-benefit analyses to work out whether the benefits of many of our onerous occupation rules exceed the costs. To the extent that the Tooth Fairy's clients are happy with the service they have received and may otherwise not have been able to afford dentures, then maybe the cost of our denture regulations do indeed greatly exceed the benefits?

The past five US Presidents, from Reagan to Obama, have endorsed and strengthened cost-benefit analysis over the past three decades. A remarkable political consensus has arisen in the US under which Republicans and Democrats have come to agree on the vital need for cost-benefit analysis, which has become part of the informal constitution of the US regulatory state. However, no such consensus exists in NZ, which goes a long way to explaining why it is such an expensive place to live - since people who can offer a perfectly competent service are being shut down to protect the businesses of the "insiders".

For the Newshub article, see:


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