Letter From the UK (About Smoking in Australia)

Plain Packaging Fails 

Cigarette Sales Rise in Australia

by Andre Walker  

6 Jun 2014

Breitbart London

Cigarette sales in Australia have increased since the introduction of plain packaging, according to the Australian. The increase has come from budget brands that are no longer identifiable as being cheaper due to their packaging.

Total sales in the first full year since the new packaging came in showed an overall increase of 59 million individual cigarettes across the country. This represents one of the few incidences of cigarette consumption increasing in a modern Westernised country. The increase of 0.3 percent reverses the downward trend of 15.6 percent in the previous four years.

Plain packaging was introduced in December 2012 and was hailed at the time by Labor Health Minister Nicola Roxon as the “world’s toughest anti-smoking laws”. But the plan appears to have backfired as half of the increase in sales have come from the cheaper brands, suggesting that smokers merely switched brands and smoked more because they were cheaper.

Research by InfoView, which monitors the industry, showed market share for cheaper cigarettes rose from 32 percent to 37 percent over the year.  Cigarette giant Philip Morris, which owns Marlboro, says it had not seen a drop in demand since the new packaging came in. Whereas British American Tobacco Australia said the number of people quitting had dropped, and sales volumes were increasing.

The Australasian Association of Convenience Stores chief executive Jeff Rogut said sales by his members grew by $120 million or 5.4 per cent last year. He said: “Talking to members, one of the most common refrains they get from people coming into stores is, ‘What are your cheapest smokes?”He also claimed that the move to lower priced cigarettes was leading to people coming back more often.

The projected tax take from tobacco in 2017 – 2018 is $10.98bn compared with just $7.85bn this year, suggesting that the Australian Federal Government is aware that its laws are unlikely to have the stated effect of reducing smoking.

Australia introduced plain packaging despite warnings to the parliamentary inquiry – set-up to look at the subject – from a number of group that plain packaging would either have unintended health consequences or have little or no benefits.  When the inquiry reported in 2011 it stated there were concerns that plain packaging would “force manufacturers to compete on price, rather than brand, with the unintended consequence of reducing the price of tobacco products”.

The figures released relate to legally sold and taxed cigarettes, but the increase in sales may be much higher when counterfeit and black-market cigarettes are included. Plain packaging makes it far easier for criminals to produce fake cigarettes, which are of a far lower quality and much more dangerous that those produced by reputable firms.

In one case reported on by the Herald Sun earlier this year Australian customs seized 80 million counterfeit cigarettes. This has led to campaigners claiming that it might be safer if packaging became harder to copy instead of easier.

The UK has toyed with plain packaging despite concerns about the health risks. Health Minister Jane Ellison stated earlier this year that she did intend to push ahead with the policy but it was not included in the Queen’s speech.

The country is already awash with counterfeit cigarettes as tobacco taxes are much higher in the UK than they are in continental Europe. Unsuspecting customers in bars and nightclubs buy what they believe are ‘bootlegged’ cigarettes from France: i.e. cigarettes from genuine manufacturers that have been brought to the country without paying tax. In fact what they are getting are dangerous, unregulated counterfeits from China.

However, the country may still push forward with plain packing to placate the growing anti-smoking industry who push for ever more draconian laws even if the rules are of dubious benefit to public health. The industry comprises charities, campaign groups and NHS bodies all employing large numbers of activists.

Letter from the UK (About Vlad the Impaler)

 A Good News Day

In politics and government, the unintended consequences are usually the silent killer.  In this case, however, it appears the unintended consequences of Vlad the Impaler’s lawless soft-war overreach into the Ukraine, with its implicit threats to Europe, is going to prove a great boon to the European Union, whilst ending up a  self-inflicted economic blow to Crazy Ivan.  Vlad will have impaled his own nation’s foot with his short-guy-syndrome, tough-talk sabre-rattling. 

Vlad had calculated that Europe would be suppliant and cowering before the might of the Russian bear, since it depends upon Russia for natural gas. But . . . 
 

Vladimir Putin: Hero of the European Union

By James Delingpole  

14 Mar 2014

Breitbart Britain

Vladimir Putin’s adventurism in the Ukraine has had a strange side effect: it may well have prolonged the life of his chief rival and antagonist – the European Union – by several years. (h/t Benny Peiser – Global Warming Policy Foundation)

Until Russia began rattling its sabre, the EU’s economy was locked in a downward death spiral.
There are lots of reasons for this (excessive regulation; the difficulties of having northern and southern European economies operating at very different speeds; incompetence, waste and an ageing demographic…), but if you had to pick the one factor that was dooming it above all, I’d say it was environmental regulation. Specifically, the EU’s ongoing war on fossil fuels and its championing of expensive, inefficient, “renewable” energy have virtually destroyed the economies of Spain and Portugal, given Denmark the world’s most expensive electricity, and hamstrung even the industrial might of Germany.

But it’s amazing what the threat of war – or, best case scenario, of being held hostage by Russian oil and gas producers – can do to concentrate the mind.

Consider the tough new environmental laws passed by the EU parliament in Strasbourg this week. The significant part is – much to the irritation of the green activists who infest the EU – the new regulations specifically excluded shale gas.  For the EU this will be, if not necessarily a life-saver, at least a pretty significant dose of economic Viagra. We’ve seen, already, how the shale revolution has benefited the US, where the gas price is roughly a third of what it is in Europe. What has been sorely lacking, until now, is the political will within EU’s member states to exploit their shale gas reserves. In France (because it can: it’s got nuclear) fracking is banned, as it is in Bulgaria. And even those countries which are more or less pro shale gas – eg Britain and Poland – have been pitifully slow to get fracking.

But just look at what a difference Putin has made.

On Tuesday, the Polish government announced that its home grown fracking industry would be tax-free through to 2020.

Günther Oettinger, EU energy commissioner, has called for the building of more terminals for liquified natural gas and for EU members to begin drilling for shale gas.

Markus Beyrer, the secretary general of Business Europe, the EU employers’ association, has called on EU leaders to be “less emotional” (i.e. less vulnerable to eco-hysteria) in their approach to fracking.
He said this week:

“We think that we have to balance climate policy, but also cost competitiveness and security of supply. And of course, recently, the issue of security of supply has been added an extra element of external dependence.”

Gordon Moffat, director general of steel industry group Eurofer told Reuters:

“Given the absolute necessity for Europe to diversify its sources of supply of gas and to find solutions to the huge energy price differential with its main competitors, we see no alternative but to proceed as rapidly as possible with shale gas exploitation as part of the energy mix in Europe.”

In other words, Vladimir Putin has achieved something that economists, industrialists, analysts and conservative politicians have found quite impossible: he has finally persuaded the EU that when push comes to shove, survival is a much more attractive option than meaningless obeisance to some imaginary green sky fairy.

So, Europe’s dependence upon Russian gas will reduce, even possible vanish in time.  The economic cost to Russia will be significant, since oil and gas represent one of the few forex earners for the anaemic Russian economy.  But to add cream on the cake, the asthmatic stranglehold of the Greens on Europe–a miasma thicker than Beijing smog–has been eased by a breath of fresh new air, courtesy of Vlad.  All thanks to the law of unintended consequences. 

What the hero of the former Soviet Union has accomplished in just a few short weeks is remarkable, to say the least. 

The "Invisible Hand" At Work

 Vlad the Impaler Whacks France

Providence has a way of trammelling the avarice and humbling the hubris of  the New Model Man.  Believing he answers to no-one but himself, the Great Humanist Man steps forth to create, as if ex-nihilo, the perfected human society.  His key tool is law–the laws of command and control. 

At that point, all of creation seems to conspire against our pathetic Hero, making nugatory his grand designs and utopian schemes.  We call this the work of Providence–or what Adam Smith termed the Invisible Hand.  Christians know and believe it to be the Hand of the Living God, governing the world to secure His purposes, not those of our pathetic Hero.

Taxing the rich more has become fashionable again in the envy-dripping drawing rooms of our modern Don Quixotes.
  Let’s extract more money off the rich so that we can fund our utopian plans. From Obama to David Cameron to Francois Hollande–glistening avatars all of the New Model Man–the envy wealth tax has been applied.  But a counter conspiracy begins, as if by magic.  The rich move.  They decamp to more clement places. 

The latest example is French actor, Gerard Depardieu who has decamped to live in Belgium, and, in one of the most delicious ironies of the year, has been granted Russian citizenship by Vlad the Impaler.  This from Stuff:

Depardieu has waged a battle against a proposed super tax on millionaires in his native country. French President Francois Hollande plans to raise the tax on earned income above €1 million (NZ$1.58 million) to 75 percent from the current 41 percent, while Russia has a flat 13-percent tax rate. . . . As Depardieu’s criticism of the proposed tax roiled his country, French Prime Minister Jean-Marc Ayrault called him “pathetic.”Depardieu responded angrily in an open letter. “I have never killed anyone, I don’t think I’ve been unworthy, I’ve paid €145 million in taxes over 45 years,” the 64-year-old actor wrote. “I will neither complain nor brag, but I refuse to be called ‘pathetic’.”

Depardieu said in the letter that he would surrender his passport and French social security card. In October, the mayor of a small Belgian border town announced that Depardieu had bought a house and set up legal residence there, a move that was slammed by Hollande’s newly-elected Socialist government.

Overnight, the French government’s tax base shrinks.  Put taxes up upon the wealthy and less wealthy people pay in tax.  Funny that.  The law of opposite unintended consequences at work.  The New Model Man is consigned to shouting insults and shaking clenched fists.  And for Depardieu, to be aided and abetted by Vlad the Impaler adds bitter insult to cruel injury.

The Kremlin statement gave no information on why Putin made the citizenship grant, but the Russian president had expressed sympathy with the actor in December, days after Depardieu reportedly said he was considering Russian citizenship. “As we say, artists are easily offended and therefore I understand the feelings of Mr. Depardieu,” Putin said.

Who would have thought that Vlad was such a tender hearted, sensitive guy?

But this is not just a French phenomenon.  In Maryland, US the state government deliberately targeted the wealthy in an envy tax to plug its deficit hole as its reckless spending on creating the New Model Man and the perfected human society yawned into a chasm.  The results were perfectly predictable:

A new study finds Maryland’s attempt to raise tax revenue by hiking taxes on “the rich” has backfired, as the state’s wealthy job creators simply packed up and moved.

“The study, by the anti-tax group Change Maryland, says that a net 31,000 residents left the state between 2007 and 2010, the tenure of a ‘millionaire’s tax’ pushed through by Gov. Martin O’Malley,” CNBC reports. “The Change Maryland study found that the tax cost Maryland $1.7 billion in lost tax revenues. A county-by-county analysis by Change Maryland also found that the state’s wealthiest counties also had some of the largest population outflows.  “In total, Maryland has added 24 new taxes or fees in recent years, Change Maryland says. Florida, which has no income-tax, has been a large recipient of Maryland’s exiled wealthy.”

Maryland is worse off than ever before.  Its utopian pretensions are crumbling into dystopian folly.   They have just been whacked by the Invisible Hand of the Lord.  And it’s not just Maryland:

Maryland isn’t alone.  As California raises taxes on that state’s productive citizens, many have fled to Nevada and Texas in record numbers.

All in all, states with lower taxes, especially lower taxes on the rich, are finding job growth grow at twice the national rate.

The Great Humanist Man steps forth proudly to cast off the shackles of the Son of Man.  He, Who sits enthroned in the heavens, laughs at their folly.  His providential law of opposite unintended consequences once again smacks down the arrogant and the proud. 

This, of course, is not to say the rich are righteous.  Far from it in many, many cases.  The difficulty of a rich man entering the Kingdom of Heaven remains a timeless reality, as does the extreme difficulty of a camel passing through the eye of a needle.  But it is to say the confabulations and conspiracies of  the New Model Man to create the perfect world are as condemned as any secular Unbelieving rich person’s arrogance.  That the two should work against each other, frustrating their respective dreams and pretensions, is as ironic as Vlad extending the sensitive hand of compassion to a wealthy man.  Usually he imprisons plutocrats, then steals all their property.  For the good of Russia, naturally. 

Douglas Wilson’s Letter From America

Unintended Mission Consequences

Church Government – Theses on Missions
Written by Douglas Wilson
Wednesday, August 24, 2011

C.S. Lewis famously says somewhere that when Jesus tells us to feed the poor, He does not give us lessons in cooking. There are certain craft competence issues that we have to figure out ourselves, relying on industry standards and our own sanctified wits. Of course, industry standards of craft competence and our own sanctified wits do not outrank the Scriptures, but we will discover, if we reflect on this carefully, that craft incompetence and folly have attributed to Scripture things it never said.

For example, we have not a word in Scripture that instructs us how missionaries from a first-world nation should interact with a third world nation.
The book of Acts contains absolutely nothing about frontier missions. All the mission work in the book of Acts occurs, if I may speak this way, in North America. Mission trips were the equivalent of a church in Toledo deciding to plant a church in Baltimore. We do not have an apostolic example for work among bush men or aborigines, and we ought not to act like it just involves just a little bit more than a plane ticket to Baltimore and willingness to share.

I am not speaking here of the necessity of universal missions. The imperative encompasses everyone. Preach the gospel to every creature means that we should preach the gospel to every creature (Mark 16:15). But since we must start somewhere, it should be done in an orderly way, one which takes into full account the true nature of the obstacles confronting us.

Because we have not recognized this reality, we have done an awful lot of damage, all of it swathed in the rhetoric of good intentions. The devil hates the poor, and one of the most pernicious things he has done to them is change all the labels on all the medicines in the first aid kits carried around by earnest and worthy good samaritans. But this trick notwithstanding, it has become apparent to many that we are doing real damage.

The response of many in the old guard has been to point to the label, which clearly says that it helps the poor, and to insist on doubling down. “But why are things not improving?” someone asks. “It’s been seventy years of this now.” Those who point out that the poor are not actually being helped are then accused of being callused toward the poor, which is nothing more than being contradicted by the label on the bottle that is killing people. We should stop feeling so bad about that. You would think that the Scriptures mandated things like keeping dictators in power or creating cultures of dependency.

Practitioners of the old nostrums float in like so many little white messiahs, make a mess, and return home with a slide show to get more funding.

Men who do not understand  the law of unintended consequences, and who are not willing to think through how that law might apply to the work of missions, are men who should be removed from the mission field. One of the principal areas where unintended consequences kick in is in the realm of politics, about which more later.

>The Law of Unintended Consequences is Relentless and Implacable

>Hubris and Folly

When civil government determines to do things not appointed for it by God and arrogates to itself illegitimate power to do them, evil unintended consequences always follow. We are often told that one “cannot fight City Hall”. What is more profoundly and universally true is that one cannot fight the Living God.

Human cultures and societies either submit to His wise and life-giving stipulations or they drown in a sea of their own folly. Through bitter experience, arrogant rebellious cultures are made to learn that good intentions count for nothing when disobedience to God is in the air. The sting is always in the unintended consequences. However, the evil consequences of naive, well meant, yet disobendient actions by civil governments are merely untintended by men; God, however, intends them and brings them to pass, so as to chasten and punish the wicked.

Today’s example of punishing unintended consequences is President Obama’s attempt to exert government control over the health sector in the United States. We quote from Patterico:

Obama — Health care benefits beginning:

The most critical and controversial parts of the recently passed health care reform bill won’t take effect for more than three and half years, but President Barack Obama wants Americans to know that the historic legislation is already spurring positive changes in the insurance business.

“While it will take some time to fully implement this law, reform is already delivering real benefits to millions of Americans,” Obama said in his weekly radio and video address out Saturday morning. “Already, we are seeing a health care system that holds insurance companies more accountable and gives consumers more control.”

AT&T (via Doug Ross) — Health care benefits ending?:

Someone inside AT&T leaked an internal Powerpoint presentation that measured the financial impact of DemCare.

AT&T estimates that it can save upwards of $4 billion annually by dropping health care coverage and paying the penalty tax instead.

They’d be foolish to keep their health care benefits and, in fact, shareholders should demand the company capture that income and return it in the form of increased dividends and R&D.

The Administration may have its thumb on the insurance companies but it can’t control those Unintended Consequences.

The Democrat’s health law intended to ensure that the costs of health insurance could be controlled and that it could be extended to every US citizen. The civil government has no direction or mandate from God even to consider such a thing. The US federal government has broken covenant with God and with its people. The outcome: health insurance coverage will shrink drastically as companies stop providing health insurance for their employees.

>More Unintended Consequences on the Way

>What Goes Around Comes Around

The Law of Unintended Consequences says that when a government attempts to bring about a social good by positive legislation, the unintended consequences result in the exact opposite actually occurring. “Positive good” laws result in creating social harm.

The Law of Unintended Consequences cannot be ignored, prorogued, or repealed. “Positive good” laws produce bad unintended consequences because laws cannot redeem people or make them good. That is not the way the creation was made to work. People simply work their way around or exploit the law to maximise their own advantage, and the advantage of those to whom they are responsible. And so they should. Taking care of one’s own is a God-given duty.

President Obama either does not understand the Law of Unintended Consequences, or he disbelieves its existence. Consequently, wanting to create a new world through positive laws, he is providing plenty of material to illustrate and demonstrate the law’s existence and power. Not that we expect that he will learn lessons and change tack any time soon. There is such a thing as invincible ignorance. A hundred blows on the back of a fool make no impression, whereas a mere word to the wise is sufficient.

With much fanfare, the Democratic Congress and the President recently created the the “Credit-Card Consumer Protection Law”. The intent of the law is pious. It seeks to protect consumers who have been awarded credit cards. “Nefarious” practices of credit cared companies have been outlawed. What practices, you ask? Well, credit card issuers will no longer be able to charge late fees so easily. The lending contracts will be less adjustable at the discretion of the credit card issuer. Obama thinks that this has ripped consumers off. Well intentioned, to be sure.

Hear the great orator himself:

“Contracts are drafted not to inform but to confuse,” Obama said. “Mysterious fees appear on statements. Payment deadlines shift. Terms change. Interest rates rise. And suddenly a credit card becomes less of a lifeline and more of an anchor,” he said.

The measure requires 45 days’ notice before lenders can increase a card’s interest rate. It would prohibit retroactive rate increases on existing balances unless a consumer was 60 days late with a payment. Companies would have to restore the original, lower rate if a cardholder stayed current six months after a late payment. Banks will have to comply with the new law in nine months.

Credit card lending is unsecured and risky by nature. Therefore, it requires lenders to charge a higher interest rate to compensate for the higher risk. They have to do this if they are to take care of the lenders. Without lenders they would not be able to issue credit cards in the first place. Late fees, interest rate adjustments, and additional charges have all served to keep the interest rates charged on credit cards artificially low. the extra charges have subsidised the interest rate charge, and kept it down. It is these charges–which have fallen particularly upon those who have lower credit ratings–that is, those who are poorer, which have offended Obama and others. But these charges have only been a proxy for higher interest rates.

Now, as a consequence of the new law, interest rates on credit cards will rise. The risk still has to be paid for or compensated for. Now it will come where it should have come all along–via the actual interest rates charged. And, since the rates will be less flexible, safety requires setting rates at the higher end of the scale, “just in case.” According to one market expert,

Card issuers are likely to raise interest rates “so they can continue to maintain a level of profitability,” he said. In the long run, “you’ll see much more competitive interest rates” for people with the best credit ratings, said Truono, now a managing director of BDO Consulting in New York.

Unintended consequence numbers one and two. Overall rates will rise; secondly, well-off people will pay lower rates. The rich will get richer, while the poor will have more of their meagre cash flow eaten up in higher interest payments.

Moreover, fewer people will be able to get credit cards–particularly poor people, or those on the fringes of poverty. An “inalienable” right of American consumers is going to disappear for many, according to those who actually have grass roots experience–that is, those who actually know how these things work.

“The unintended, unpleasant, undiscussed consequence of this legislation is that banks will cut credit to reduce exposure to future loan losses,” Hammer said. . . .

“You’ll see a reduction in credit available to subprime customers, and even those in the near-prime range where the card companies have a hard time gauging what the risk is,” said Scott Valentin, an analyst at Arlington, Virginia-based FBR Capital Markets Corp.

Unintended consequence number three.

Those on the fringes, and desperate, will be forced to go to loan sharks who do not require a credit history because they have “other ways” of ensuring payment. The “black market” for credit will explode and the poor and vulnerable will be gouged cruelly by it. The very people it was designed to protect will be made more vulnerable as a consequence of this measure.

Unintended consequence number four.

And finally worst of all for a President hoping to get re-elected, the new protection law is going to slow down the US (consumer led) recovery.

The credit-card legislation will reduce the number of individuals who have access to cards and discourage the use of credit cards for those who have them, which “clearly cannot help the recovery in the near term,” said Martin Feldstein, an economics professor at Harvard University in Cambridge, Massachusetts, and a former head of the National Bureau of Economic Research.

Unintended consequence number five.

But, never mind. Give them a couple of years and the “do gooders” will be back at it. Deeply insightful and caring politicians will start to say it is discriminatory and unfair that poor people do not have access to credit cards, and that nasty banks and financial institutions are charging them higher interest rates than rich people. This will be framed as racist and institutionalised discrimination against minorities. The NAACP will get involved with its righteous indignation at megaphone volume.

More laws will be passed requiring credit card companies to stop their racist and discriminatory practices and to issue cards to members of underprivileged minorities, and requiring that they be charged equal interest rates along with rich white folks. Who could oppose that? Its fair, after all. To aid and abet the entrance into this brave new world, Government supported companies will be set up to purchase credit card outstandings, taking them off the balance sheets of banks, to encourage the provision of credit to disadvantaged folk. Credit card companies will rapidly expand their business books; credit volumes and amounts outstanding will rise exponentially, and–well, banks will collapse.

“It’s the dirty, greedy, rapacious bankers’ fault,” the sanctimonious politicians will fulminate. Others, with longer memories, will merely shake their heads and say, “Here we go again.” The more things change, the more they stay the same. The Law of Unintended Consequences remains alive and well. As do naive, stupid, dumb politicians and judges, afflicted with overweening hubris–and voters who are complicit in the same sins.

The moral of the story is clear. No matter how populist or well-intentioned a politician or legislator you may be, the Law of Unintended Consequences will get everybody in the end. You either do things God’s way, or everyone pays the price of foolishness and pride. This, of course, is not music in the ears of Athenians. But it is the tune they will end up dancing to whether they like it or not.