Conference on ‘The Social Cost of Alcohol Abuse’, IRER – University of Neuchatel, Switzerland, 24-25 October, 2003

Keywords: Health;

Abstract

While New Zealand has some measurement of the social costs of alcohol misuse, which the paper reports, the interest in the country, and this paper, has been the shift to implementing policies whose focus is to minimise harm from misuse.

The paper traverses the policy environment from the initial revenue-raising role of the excise duty in 1840. As the frontier society moved to a settled society, policy from the 1890s moved to restricting the consumption of alcohol, with revenue remaining the main fiscal concern. However, in 1989 a new direction was undertaken in which aimed to minimise restrictions on low and zero harm alcohol consumption, and eliminate as far as was practical harm arising from misuse. Over the next 14 years various measures were taken culminating in the latest tax package of May 2003.

The paper traces through these changes. It argues that the policy transformation is not complete, and also discusses some of the inherent tensions in the new approach. In particular the shift from restriction to a liberal regime which treated liquor as a largely normal consumption good, with targeting on harm minimisation, resulted in easing of prohibitions on advertising of liquor.

But the paper also discusses the limitations of the economic approach, for it is not possible to use the policy instruments to target precisely on harm reduction without also limiting some low and zero harm consumption. This emphasises the need for non-economic policy instruments, most pertinently those which change attitudes to alcohol consumption where there remains a ‘frontier’ spirit.

‘It is a capital mistake to theorise before one has data’ Sherlock Holmes.

Keywords: Health;

Introduction

There as been various calls for a ‘cost benefit analysis’ of gambling in New Zealand. The expression ‘cost-benefit analysis’ (CBA) has a rigorous meaning in economics, and while there is no need for economics to insist that their meaning of the terms should be universally applied, it is helpful to recognise that the phrase is being used as a short hand for ‘an analysis of the costs and benefits’. Thus the CBA ends up with a single number – a total quantum of which summarises all the costs and benefits in an economy. But even were that quantum zero – so the costs and benefits netted out – there would still be considerable interest in the individual costs and benefits and their incidence. So until there is a consensus to the contrary, I propose to interpret the expression ‘cost benefit analysis’ to be synonymous with ‘the analysis of costs and benefits’ rather than economist’s technical term which in this text I shall refer to as ‘CBA’. I use the expression ‘cost benefit analysis’ to denote both.

Paper to the Unichem-Life Pharmacy Conference, Rotorua, 31 August 2003.

Keywords: Health;

You might expect an economist to focus on the state of public spending on health. Certainly were I the minister of finance I would. Indeed in a recent speech Michael Cullen expressed some dismay because since 1996 we have been increasing health spending faster than GDP and yet the problem of inadequate health funding appears unresolved.

This is a report was commissioned by The Select Committee on Health in August 2003.

Keywords: Health;

Executive Summary

Using a Cost Benefit Analysis Framework, this report reviews the NZIER Assessment of Regulatory Options for Therapeutic Products to answer the following two questions.