Listener: 23 February, 2008. <>
<>Keywords: Health; Regulation & Taxation; <> <>Sir George Laking rendered many services to New Zealanders. Perhaps none was as important as his chairing the 1989 government committee that recommended today’s liquor licensing regime. <> <>The consumption of liquor has always been a problem, less so in the distant past when spirits were weaker. Sugar plantations in the West Indies led to cheap strong spirits, and to Hogarth’s famous etching of “Gin Lane” with its wry “drunk a penny, dead drunk tuppence”. <> <>The Maori did not have the sugar to make liquor. Early Europeans “quarried” resources – seals, whales, timber, gold, kauri gum – and moved on when the resources were exhausted. Their living was harsh, temporary and lubricated by liquor. Towards the end of the 19th century, refrigeration enabled permanent sustainable settlement. To eliminate the quarry mentality many supported prohibition. <> <>Laking recalled being a six-year-old when his Methodist teetotal father campaigned in the referendum of 1919. The country actually voted for prohibition, but when the votes of overseas soldiers were added, the majority was reversed. Over the years the prohibition vote fell away, but a combination of wowsers and the liquor industry left us with a liquor supply system that was limited, crude and profitable. Older readers may remember the six o’clock swill, with the concrete floors of public bars covered with sawdust. Reform was slow, complicated and erratic. <> <>We don’t know why the soldiers voted against prohibition, nor why Laking changed his mind from the family tradition. But I can’t help feeling that, like those soldiers, his overseas experience – he served in missions in Washington and London before becoming our second Secretary of Foreign Affairs – taught him there were more civilised ways to imbibe than standing up to one’s ankles in sawdust and “piss”. <>
Whatever, he chaired the committee that recommended the sweeping away of the myriads of restrictions and exceptions, to be replaced by a simple regime where any responsible supplier could get a liquor licence. His principle was that the purpose of our liquor licensing should be to promote civilised drinking. As a result, small bars and restaurants flourish in even our smallest towns. <> <>That switched pressure to other means of curbing the excesses: a tax regime that raises the price of cheap liquor, host responsibility, a vigorous enforcement of the drink-driving laws. Perhaps surprisingly, more liquor outlets have been accompanied by falling average alcohol consumption. <> <>The biggest worries are rising consumption by teenagers and binge drinking in the 17 to 27 age range. Neither group has yet learnt to deal with their liquor: older generations set them bad examples. <> <>We are trying to promote a more responsible attitude to safe drinking among adults (“It’s not the drinking; it’s how we’re drinking”), but behavioural change takes a long time. I would also favour more vigorous legislation for teenagers. Instead of mucking around with an ineffective statutory drinking age, we should make it an offence for anyone to supply a teenager with liquor that they use to get drunk. That would allow a responsible adult – say, a parent – to supervise moderate teenage drinking. Once the drinking became unsafe, the parent would be subject to this law. <> <>Underlying this is the central problem of any policy change. It will make some people better off, and it will make some people worse off. Getting the balance right is never easy. Giving us all more civilised drinking may have made it easier for some to abuse liquor. But it is foolish to restrict all our pleasures because of the abuse of a few. (We could reduce road deaths by requiring someone carrying a red flag to walk in front of every car.) <> <>George Laking knew about this fine balance from his 60 years of public service. After he retired from our foreign service he became our second Ombudsman, implementing the Official Information Act. Following that, he chaired the Legislation Review Committee, which improved legislation and on occasions cut back its excesses. And he chaired the Liquor Reform Committee. I think of him whenever I raise a glass. Cheers! <> <>****************
THE MOST SUCCESSFUL REFORM? My choice of the most successful recent microeconomic reform is the 1989 Sale of Liquor Act, when a hundred years of clumsy complicated liquor licensing was largely swept aside to be replaced by the primary concern of regulation was health effects. The result has been a competitive flourishing of drinking establishments, especially in big cities consumers have civilized choice. But liquor consumption did not rise. It was falling before the reforms, and the downward trend has continued. There is anecdotal evidence for changed drinking habits which reduce alcohol misuse. Liquor licensing has a limited role in tackling alcohol misuse. Teenage binge drinking seems to have risen, perhaps as a result of TV liquor advertising. Legislative tidying up is still necessary. Why cant I buy liquor on a Sunday, yet drink liquor bought on weekdays? It seems like the South African prohibition against dancing on Sundays: married couples were advised not to have sex on the Sabbath, in case it led to dancing. The 1989 liquor reform benefited consumers, but it did not raise productivity. Sometimes the reforms give demand side improvements (better for the consumer) without supply side ones (improved productivity). In the opposite way, supply side changes in the government sector seem to have diminished quality of service to consumers.