Just a spoonful of sugar…

George Osborne, who gave up folding towels at Selfridges to have a go at managing the UK’s finances, has just lobbed a hand grenade into the taxation public policy debate. Somewhere among his usual farrago of bribes, cuts, back-of-an-envelope growth prognostications and hoary platitudes about compassionate conservatism, he managed to find a way to plug his little finger into the £4bn fiscal hole in the dam: a tax on sugary drinks.

With his trademark sardonic smirk, he gushed about how the revenue raised would be poured back into funding school sports. All jolly good, I suppose: a Tory Chancellor caring so deeply about worrying rates of child obesity, that he introduces a policy which will reduce sugar consumption and get kids more active again. Call me a cynic, but I don’t think this policy will achieve, or is intended to achieve, what it is supposed to – more on that later. Yet I have been more interested in the reactions to this from across the political divide, both in the UK and back here.

National, in the guise of Health Minister Jonathan Coleman, moved quickly to dampen down speculation that they might adopt a similar policy here. Labour and the Greens are probably agonising over this: on the one hand, they have been banging the drum about rising obesity rates, especially among Maori and Pasifika children, for some time; on the other hand, if National were to follow their British centre-right counterparts in adopting the policy, there would be more miserable hand-wringing from Labour in particular about National stealing all their best ideas and taking the credit.

Sugar presses all the same addictive buttons as cocaine, at a fraction of the price!

Unusually, I find myself in agreement with ACT leader David Seymour’s analysis, which means I need a stiff drink and a lie-down. The data from Mexico, where a similar tax has been trialled, is inconclusive. While consumption of fizzy, sugary drinks has fallen among the poorest quartile by 12%, consumption of other untaxed beverages has gone up: the tax does not apply to fruit drinks and juices which also have high levels of sugar. And what about other foods with large amounts of ‘hidden’ sugar, such as processed foods? It is all too easy to target Big Soda in the first instance, as it is compressed into a handful of corporate global behemoths (Coke, Pepsi etc.) and therefore handy villains for the most passionate political advocates.

Hence, any real attempt to use excise taxation to influence healthy behaviour surely needs to be more comprehensive if it is to work. Obesity rates may well start falling in Mexico, or they may not. Supporters of a sugar tax point to the successes of hiking duty on tobacco, and price has long been accepted as having a powerful effect on changing habits. Yet it seems these signals are best read by those from middle and higher socio-economic groups, who have quit in steadily increasing numbers over recent decades. Inveterate smokers these days tend to be concentrated in low socio-economic groups, and disproportionately among Maori and Pasifika. This is classic user pays. It is a semantic argument as to whether the tax revenue covers some or all of the associated healthcare costs for smokers, but it is an unavoidable truth that people whose smoking habit takes a significant slice of their meagre earnings are making a huge personal contribution to tax coffers which offsets their drain on health resources.

Why would it be any different for sugary drinks? A tax on it is one of consumption, and is therefore regressive. There is already evidence that mere lobbying for a sugar tax in the US has prompted better educated and more affluent consumers to reduce their consumption of fizzy drinks quite drastically. Many of those of lower socio-economic status, however, may well struggle to wean themselves off sugary drinks, as many have with cigarettes. Their personal freedom to purchase and consume is unaffected, but they would now contribute to the cost of treating their potential obesity themselves. Again, this is a very user pays, free market approach to the problem. Chillingly for Labour, there is nothing to stop John Key adopting such a sugar tax to burnish his ‘progressive’ credentials, knowing full well that the burden will actually fall mostly on poorer people, and to use the revenue for a tax cut!

…and pay tax on it, and then tomorrow you may die.

The danger for Labour and the Greens here is that they fall into the same tactical elephant traps again and again which National keep setting for them. The Greens’ advocacy of a sugar tax to ‘combat obesity’ has distracted them from its regressive nature. If National now adopt one, as Osborne has done, they will claim it as a progressive policy (and public perception is likely to agree with them), ignoring the fact that it may only just be a handy extra revenue stream funded disproportionately by the poorest Kiwis.

The same criticism could be levelled at Labour for their currently suspended policy of raising the retirement age to 67. It is nothing other than a benefit cut which would hurt the poorest Kiwis (who generally work in the worst / most arduous jobs). As a teacher, it wouldn’t kill me to work an extra two years, but it might well do if I laboured at something more menial. Of course, many on the left just assume that any policy decision of Key’s is neoliberal, and therefore raising the age is the compassionate, progressive thing to do, without considering on whom the burden of consequences falls the most.

Even if we accept that the savage hikes in smoking excise tax over the years in OECD countries has worked in reducing smoking, it would be easy to forget that the progressive governments which introduced them suffered at the polls, and saw many of their most loyal working class voters desert them, never to return. There are fairer and more effective ways to reduce obesity and address the growing costs and needs of an ageing population that should be considered.


When the Donald met the Bern

Is Trump unstoppable? “Hell, yeah!” as Ed Miliband might say. The last time I opined on Mr. Trump’s campaign, it was early days, and most lefties were content to pass round the popcorn, wondering smugly which of Trump or Tony Abbott would provide the most entertainment. Well, the Mad Monk has been unfortunately ousted by the altogether more electable Malcolm Turnbull. It would be fair to say, however, that the Donald has er, exceeded expectations.

The writing was on the wall when he won three of the first four Republican primaries; or I should say, when ‘establishment hopefuls’ Rubio, Bush, Kasich, Christie etc failed to win any of the first half dozen primaries. Nobody from either the GOP or the Democrats has ever won the nomination, let alone become President, with such a poor start. And when the only alternative to Trump appears to be Cruz, an uber-conservative evangelical whose uncompromising weirdness makes him almost as unpopular with the rest of the party, you know that the once mighty Republican Party is in a terrible hole.

On the other side of the fence, another ageing maverick who is big on rhetoric and pie-in-the-sky promises, and light on how on earth he proposes to fund them, is pushing Hillary Clinton all the way. For Big Bern however, as Nate Silver at 538 has pointed out, the Democrats’ more sensible primary system – awarding more of their delegates proportionally, rather than allowing big states such as Ohio and Florida to be winner-take-all, for example – means that the all-important delegate math is simply not on his side. I’m ready to eat humble pie if the Bern prevails, but the aftermath of Super Tuesday III has seen Clinton should pull steadily further ahead.

Of course, this is because the Democrat primaries have boiled down to a two-horse race pretty early. Imagine if a third candidate – a moderate such as Elizabeth Warren – was still in the race. There would be a strong possibility that Sanders, like Trump, would hoover up all the angry and disaffected, while the establishment support would be split. This is exactly the strategy Trump has been employing, with stunning results.

Hey, you! Yeah, the snivelling asshole from the lamestream media! You said I would lose and you were dead wrong. Ahahaha!

To put it another way, as Nate Silver has done, if Trump were a Democratic candidate (stop laughing at the back – he has flirted with it in the past and even donated to Bill Clinton!), the fact that delegates are awarded proportionally would have enabled him to be stopped much more easily. Yet the Republicans’ more shambolic blend of primaries and caucuses, and equally confusing half-proportional, half-winner-take-all, has allowed media-savvy, reality TV king Trump to exploit it ruthlessly.

And while Sanders now looks like failing in his bid for the nomination, he has also given the Democrat establishment an almighty scare. Comment from across the spectrum has tended to bewail the dysfunctionality of these primaries, and in one sense it is hard to argue with that, given that after a total spend of $2bn, mostly on attack ads and endless phone polling, America is looking at three ‘front-runners’ with a combined age of 211. I don’t wish to sound ageist, but that is a brutal comment on the next generation of both major parties.

Yet I do not share the pearl-clutching pessimism of those who think that a Trump presidency will hasten some kind of Armageddon with Putin or the Arab world. As a clever populist with an eye for shameless soundbites, Trump is proving a fierce campaigner, yet like Sanders, he is likely to disappoint his many fans should he be elected President. Congress holds the purse strings, and will be unlikely to fund either Trump’s grandiose border wall or Bernie’s fanciful and exorbitant spending promises. And a swathe of voters who perhaps felt that a bright new era of politics was imminent, will shuffle off more disillusioned than before.

50% ginger toupee. 50% orange skin. 100% maniac.

It would be pretty sadistic to laugh at the US political elite’s predicament: and much as I enjoy a dose of political sadism, I actually have a wee scrap of sympathy for them. Trump and Sanders are outsiders: neither have been committed in any meaningful way to the parties whose nomination they seek. Why shouldn’t ‘party elites’, who understand that moderate candidates who sail close to the centre are the most electable, do their utmost to prevent extreme ideologues from capturing the party. Across the world, serial rebels and iconoclastic insurgents such as Jeremy Corbyn and Nigel Farage have been making the headlines; yet the former’s pleas for unity and the latter’s assertion that he is “not a career politician”, despite spending the better part of two decades in the European parliament, are laughable.

Straight-talking, sloganeering, anti-establishment mavericks have been promising milk and honey to the disengaged since Cleon of Athens in the 5th century BC. And they have invariably been huge disappointments.