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Dr Muriel Newman

Dr Muriel Newman

Bureaucracy Rules


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A couple of months ago, a news story dubbed “Lemonadegate” made international news. It involved the daughter of a New Zealander living in London, who was fined £150 for setting up a stand and selling lemonade without a permit. She was five-years-old.

According to her father Andre Spicer, a professor of business studies, it was the school holidays and his daughter wanted to run a stall like they had at the school fair. With fond memories of growing up in Whangarei, where he and his brother had helped with fundraisers, a lemonade stand seemed like a good idea. Four jugs of lemonade were duly made, an old table was found, signs were drawn, and off they went to set up at the end of their street in Tower Hamlets.   

A music festival was taking place in a nearby park, so business was brisk. The lemonade quickly disappeared and with the money tin filled, the five year old was happy – that is until four local council enforcement officers turned up and explained that since a “trading permit” had not been obtained, a £150 fine would be imposed.

The little girl burst into tears and sobbed all the way home – a positive and worthwhile experience, changed in an instant.

It turns out that to operate a stall, a ‘street trading licence’ is needed from the council. They are available to anyone over the age of 17 and cost £75.

This week’s NZCPR Guest Commentator, Chris Snowden, head of lifestyle economics at the Institute of Economic Affairs in London, followed the debacle and explains:

“Tower Hamlets council have since cancelled the fine and apologised to the family, saying. ‘We are very sorry that this has happened. We expect our enforcement officers to show common sense and to use their powers sensibly. This clearly did not happen’.”

He goes on, “The incident has been almost universally recognised as an extreme example of jobsworths mindlessly applying the letter of the law when they could use their discretion… The law used to be enforced by the police and we knew who they were. Today, we have an army of wardens, support officers, compliance officers and co-ordinators with varying degrees of authority whose only unifying feature is a high-vis jacket.”

Chris expressed his concern about the underlying motivation of some of those who choose to work in ‘enforcement’ and asks, “What if the law is an ass?” – “What if agents of the state do not use their powers sensibly?”

And that’s a problem that now afflicts New Zealand. Bureaucrats have become so risk averse that instead of applying their common sense and discretion, they stick to the letter of the law like glue.

In the past, we have written about the bureaucratic persecution of Biddy Fraser-Davies, the award-winning artisan cheese maker from Eketahuna, who has epitomised all that is wrong with the regulatory environment in force in New Zealand today.

Biddy, whose Cwmglyn Farmhouse Cheese is served at the country’s top restaurants and at Government House when they have Royal Visitors, was being hounded out of business by the officious rules and regulations being imposed by the Ministry for Primary Industries under the new Food Act: “MPI is determined to close me down with their excessive demands for repeat testing of raw milk, immature cheese curd and final product testing of Cwmglyn mature raw hard cheese.”

She explained how she makes her cheese from the milk of four healthy and contented Jersey cows in a purpose-built dairy. While only paying $100 to her local council for food safety compliance when she set up her business in 2003, the excessive regulatory requirements of the Food Act were crippling her small enterprise, with costs of over $500 a week.

In desperation she wrote to the Head of MPI, the Minister for Primary Industries, and all other Members of Parliament, asking for help. We published her letter as an NZCPR Guest Commentary and encouraged NZCPR readers to add their voices to her call for reason.

I am pleased to report that Biddy has been in touch with an update. The regulatory requirements being imposed on her have finally been reduced to more reasonable levels.

So thank you to all those NZCPR readers who helped to ensure that the persecution stopped and that common sense prevailed!

But Biddy is not alone in being a victim of the food safety bureaucracy.

Kaye van der Straten from Northland has been trying to register her fermented tea business – that has the backing of Northland’s regional development body, Callaghan Innovation, and Massey University – for nearly a year. She has called for a total clean up of food safety laws, claiming that MPI officials are not only incompetent, but they made her life “extremely stressful”, and nearly killed off her fledgling business.

Kaye estimates she is $380,000 out of pocket because of the capital costs involved in complying with the Food Act, as well as lost trading, and says the government’s goal of making it easier for businesses to deal with officials is “laughable”.

Back in 2012, National announced that one of its Better Public Services goals was to make it 25 percent easier for businesses to deal with the government by 2017, For the first three years they were on track, with businesses reporting in 2015, that it was 16 percent easier to deal with government agencies.

However, the trend has reversed , with businesses saying it’s only 7 percent easier to deal with the government in 2017 than in 2012 – largely as a result of workplace health and safety legislation and food safety laws.

The new Food Act, which came into force last year, was introduced in response to what the Government claimed was the massive cost to New Zealand of food borne illness. However, closer scrutiny of the data used to justify the wholesale regulation of the food sector, shows the figures were unreliable.

While the claimed economic impact of six food borne illnesses was said to be $162 million a year, medical care only cost $6 million. The balance was made up of inflated estimates of the cost of regulation, compliance, lost work output, and lost quality of life.

In other words, by grossly inflating the ‘cost’ of food borne illness from $6 million to $162 million, the Government justified the bureaucratic regulation of the whole food industry. 

Any food businesses deemed to be ‘high risk’, such as a restaurant, has to provide a regulated “food control plan”. Medium risk businesses, such as bakeries, are accommodated under “national programmes”, while low risk businesses, such as fruit and vegetable sellers, need to register a “food plan” by February 2019.

While those selling home-grown produce at markets or gala days for fundraising purposes, are exempt, they may still be inspected – since they too are required to ensure their produce is “safe and suitable” for consumers. And if they sell their produce more than 20 times a year, they will also need a food plan.

With strict industry protocols already covering many food producers, the new regulations are widely regarded as an unnecessary burden that are increasing compliance costs and driving up food prices. They are also stifling innovation in a sector of the economy, that has created many successful entrepreneurs.

EasiYo Yogurt, which is now available in more than 20 countries around the world, started out in school teacher Len Light’s kitchen, as he searched for ways of making affordable yogurt for his family of eight children.

Lisa Er used her time as a young mum on a benefit, to experiment with chick peas and her food processor in the kitchen, creating the well-known Lisa’s Humus. By the time she sold to Sanitarium, she was employing over 100 people.

Food entrepreneur Anna Tait-Jamieson, who also started out in the family kitchen, believes that the desire to eliminate risk in the food sector – through overly restrictive laws – is killing off innovation and enterprise: “We need small businesses to succeed because they do what the big companies don’t – they innovate, they set trends, they test the market, and the big companies follow. You see it across all food categories – craft beer, artisan bread, coffee, ice cream, even butter.

“I speak from experience having introduced fresh pasta to New Zealand many years ago. We started small, built the business over several years (with no food safety issues) then sold it to a multi-national company who saw value in further developing the category. Could we have built that business under the current food safety regulations? Given the compliance costs, I don’t think so. Neither, I suspect, would Kapiti Cheese who started at the same time. They’re now owned by Fonterra. That’s how it works in the food industry. Small companies innovate and big companies follow, or take over.”

The food and beverage sector has been called the ‘lynchpin’ of New Zealand’s economy, employing one in five workers, and generating over half of our export earnings. But rather than encouraging growth within the sector, the new Food Act is having a stultifying effect.

Food safety in New Zealand used to be regulated under two separate regimes – the Ministry of Health administered the Food Act 1981, covering food sold on the domestic market including imported food, and the Ministry of Agriculture and Fisheries administered related legislation including the Animal Products Act and the Veterinary Medicines Act.

In 2002, the Labour Government instigated reform by establishing the New Zealand Food Safety Authority, as a semi-autonomous body attached to the Ministry of Agriculture, to administer all food related legislation. In 2007, it was elevated into a stand-alone government department employing almost 500 staff.

Labour’s plan was to introduce a ‘risk-based’ approach to food safety. Following directives issued by the United Nations, aimed at harmonising food regulations around the world, and using guidelines developed by the UN’s Codex Alimentarius Commission, international standards intended for large food producers were to be applied across the board. 

When National was elected to office in 2008, it continued Labour’s plan, passing the Food Act in 2014, to shift the responsibility for food safety from the government to producers, leaving the State as the regulator, setting the standards, as well as auditing and enforcing them.

The problem is that in trying to eliminate all food risk, the system has become overly bureaucratic – as was demonstrated only too clearly during the recent ‘burgergate’ scandal. The burger at the centre of this ‘gate’ was the famous Governor’s Burger served at the Duke of Marlborough in Russell – New Zealand’s oldest licensed premises – and involved a medium rare beef mince patty. According to new regulations issued by MPI, mince patties have to be cooked at higher temperatures and for longer than previously advised.

An MPI official explained to the restaurant that they could only ignore the new recommendations, if they agreed to an assessment to prove that their Governor Burger was safe. But having already lost money by spending “about a month” filling out forms to comply with the new food laws, they were not prepared to lose thousands more, on inspectors.

Instead, the Duke’s executive chef Dan Fraser took to Facebook to announce the demise of the burger: “It is with great sadness and regret that we will no longer be able to sell ‘The Duke’s governors burger’. The MPI laws are bureaucracy gone mad. We are only allowed to cook our burger to a dry, rubbery well-done and I’m not proud to serve this. I wonder how our minister of primary industries ‘Nathan Guy’ eats his burger? Maccas maybe? Also off the cards is steak tartar, carpaccio, and perfect duck/chicken liver parfait.”

The response from MPI was swift. The new regulation was withdrawn and the Governor Burger is back on the menu!

In 2014, now Deputy Prime Minister Paula Bennett announced she was waging war on loopy council rules and regulations.

Perhaps it’s time for another assault – this time on loopy laws.

Are any political parties listening?

THIS WEEK’S POLL ASKS:

Should the Food Act be replaced with more practical regulations? 

Vote x 120

*Poll comments are posted below.

 

*All NZCPR poll results can be seen in the Archive.

Click to view x 120

THIS WEEK’S POLL COMMENTS

If you thought that Man-made Global Warming was the greatest threat to humankind, then think again! Bureaucracy – UN, Socialist led – is far more pernicious & damaging!! David
There are a lot of silly, stifling rules introduced by the present nitwits ( of whom I used to be a supporter) that need abolishing. My friend (70 yr old woman) wants her roof painted but if she employs a tradies she must pay for scaffolding, to have it erected and dismantled, plus hireage for the time she has it, but if she gets up on the roof and does it herself there are no problems (unless she falls off and needs ACC). She is doing it herself! Congratulations to Biddy with her little cheese enterprise and the way she stood up to the clip board brigade and their interference. Carolyn
There is something wrong when bureaucracy is allowed to choke small business out of existence. They should be able to flourish and grow with much less stand over tactics! Kevan
Political correctness again AND the fact that Maori are so untrustworthy and lacking in common sense that NZ rules need to be ultra strict – and of course that affects all of us! u
The Country is a Mickey Mouse outfit run by Donald Duck! Jim 
It should be designed as a safety measure not to cripple the business owner. Warren
Keep it basic & simple. Eric
YES!!! It is obvious!! big food companies are lobbying Govt to do what they say say is right( in their own interest) and palms are greased to achieve that. Politicians in charge don’t give a fiddlers fart about free enterprise as long as they are paid or respectively kept in their handsomely paid ‘jobs’  Michael
Time National took notice! Brian
Don’t really know apart from reading the stories within, from that intel will say yes!!! Wayne
Yes: But it will never happen, we have too many in government that would be on the dole.  Robert
The time to read and fill out patronising pathetic paperwork full of ministry speak has cost my cafe $1000’s in lost productive time.It seems an empty exercise in butt-covering. Legislaters just never stop legislating . The ones who suffer most are the little people at the bottom of the food chain who have to fit more unproductive paperwork into the same tight time schedule on low pay. It’s stressful and humiliating. Mary
Trust Labour to establish the NZ Food Safety Authority and they’ll do more of the same if they get into power, along with more new taxes. Monica
The comments in your article reflect those from friends and acquaintances who are trying to do their bt for the community and are stifled by officialdom. The last thing that the Duke of M needs is somebody getting food poisoning so if they are happy to serve it that should be the end of the matterHow much this is costing the country must be eye-watering , not only in the food industry but others too.. But don’t get me started on bureaucracy. It’s the biggest industry in New Zealand. Sort it out and quickly. Mike
Absolutely essential! Jim
Everyone in local and Govt. Depts. area all covering their own backsides so they do not get sued. We have swung so far to the left we have lost sight of the word and thought of COMMON SENSE. Wayne
Is there no common sense left? Lance
Get rid of the whole government department.  Wayne
National is more Bureaucratic at the moment than Labour has ever been. Matt
Yes, but how does one defeat the virulent and rampant ‘Political Correctness’ disease that is still defiling our intelligence and sense, that still drives a gullible society like ours?  MervB
Yes, there are too many bloody bureaucrats with too much to say, the world has gone mad with these idiots, common sense and responsibility died years ago.  Athol
Our business is part of the food chain and the rules are just overkill. Wayne
Also acros the board of ‘regulations’. not just the food industry. Mike
Sense must prevail. Bryan
Our local raw milk suppliers closed their business some months ago due to the draconian regulations. Brenda
Far to many crippling laws in NZ, try the building industry !!! Simon
Not with the upsurge of Immigrants from countries that have little or no food hygiene in place. Ease the rules and NZ will soon have an upsurge of 3rd World food related illness. More ‘common sense’ need to be shown by inspectors on the front line, that is, if they have the training or common sense themselves to recognise a genuine hazard and are not just council employees filling in a tick box form. Tom
Once bureaucrats gain a foothold there is only one way, more bureaucracy. David
Reality is the thing here. Laurel
Best we do away with two things. One, the people that administer these regulations, and the regulations themselves. Make one law, anyone found to be serving unsanitary food shall be fined, jailed or both. Look out for your own arse mate. Sam
A little common sense would go a long way. Send the bureaucrats out picking fruit instead.  Willy
As many Kiwis do, they shop at farmers markets up and down NZ. The stall operators that help to make these markets successful have had some pretty hefty compliance costs foisted on them in the name of food safety. In talking to one such gentleman at the French Market in Ak , his compliance went up significantly with the advent of the super city beurcracy at the time. I may have it wrong but one sees compliance is being increased to put these important small companies out of business – incrementally of course. I wonder if these folk from MPI have actually the intestinal fortitude to mortgage their house and go into business and experience what is like to be confronted with the stupidity of some of the compliance that makes no common sense – oops those two words are banned. Ross
Once again laws set by idiots! So called for the good of people. Fraser
And get rid of at least half of the power hungery half wits that run the system and the other half that are on the road who do not use commin sense in enforcing/interpret the rules. Richard
Time there was some reality back in the food laws some of what has gone on over the last few years has just been plain stupid. Russell
This is not just the food industry. Common sense has long served us trade and producer people. Now there is no longer allowed to be common sense because every instance has to be regulated. Problem is that without common sense, there will never be any “experience” gained because that will also not be allowed!!! Neil
Compliance costs are crippling business and bureaucrats continue to bend the truth to justify their beliefs. Ray
Of course, sack all inspectors. Gerard
Next they will want to inspect home kitchens as well. John
Asking offialdom to exercise common sense is like asking politicians to be honest – never going to happen.  John
Of course it should be. Anything that allows small businesses to innovate and get new products up and running must be welcomed. The bureaucracy around anything as well as food safety must be cut down and be a more practical set of rules. Colin
If a government is serious about innovation and business growth, it should set a climate in which situation in which businesses, especially small enterprises, can grow and flourish. It seems the current Food Act does the opposite with its nit-picking compliance regulations. Laurence
Sounds to me like it needs to be reformed. Maddi
Too many rules and regulations. David
We need a more commonsense approach to food safety. Compliance costs are excessive and often ridiculous.  Wayne
I like to drink raw, organic milk. The supplier has had to go through such loop holes and now I am supposed to collect my milk or have him drop it at my unattended home when I work with a perfectly good fridge in the kitchenette. His costs have gone up so much, as have mine. Pamela
The over inflated costs of food illness reminds of the creative accounting the Ministry of health promoted for the cost of tobacco use. This was quickly rebuffed by a reliable and knowledgeable accountant, but the media did not promote the rebuttal. So most public are not aware that the facts and figures used by the Ministry of health to justify the discrimination of Tobacco use is dodgy, like the food illness cost. In fact I would be very surprised if the Governments and Councils data are not all seriously skewed to justify their position.  David
Please, let us introduce a little common sense into our over-beaurocratised country and its laws. Political parties take note! Rob
It is not just the Food Act that needs replacing. Most of the bureaucratic similar acts this country is afflected with come down to its inability to pay its way. It reduces our ability to compete internationally as well as internally. It is the major problem that is consistently holding us back and letting us be controlled by modern day Luddites. Brian Brian
Had personal experience, a meat pie manufacturer wanting to export, gave up after months of ongoing new demands every time NZFSA came to re-inspect. Hugh
Of course. Barry
Yes, the Act needs to be be made much more fair, simple & easily monitored with plenty of common-sense applied. Cyril
We are bogged down with bureaucracy. This needs to change! john
Yes, definitely. There is far too much beaurocracy in this country and far too many little Hitlers willing to carry out their duties the nth degree. Brenda
It seems that street prostitution is about the only activity free from interference. Peter
Time for common sense but are any political parties listenening? Cindy
All these food inspectors and work safe N Z employ over zeolus people who love laying down the law and in a normal working career would struggle to succeed .This current Government has made lifefor small busnisse very tough and are killing growth which desroys the new generation from becoming independant. Ken
You don’t know the effects some of these well intended laws have. Ron
The food act is not the only one that should be replaced. I’m starting to feel like I’m living in a prison. Don
Bureaucratic madness ?? So whats new ??  Pierre
The regulators have used a sledge hammer to crack a hazel nut, in doing so they have nearly killed off a lot of small enterprises. Tony
The Food Act doesn’t need replacing. That would open up a whole new can of worms. It does, however, need to be taken to with a very sharp knife. Dave
New Zealand is becoming overrun by over zealous bureaucrats that want to spoil progress of the little fellow…..we have become so overrun with RULES and REGULATIONS for the ones that want to make good that the others that continually break laws and cause horror and fear get away with a slap on the hand with a wet bus ticket and continue their way of life of mayhem and destruction to those that doing good and no wrong. Marylin
The Law does not deliver natural justise. A mandatory Just Culture requirement througout all local and Government Departments would put to rest any Bureacratic injustice. David
Including food of origin labels on as much as is practical (eg not on every grape, but maybe on every mango) Geoff
I have worked in the food industry for over 30 years and the regulations are ridiculous !!!!! Ian
Obviously Davina
Get rid of the Bureaucracy, they are killing NZ business, & stopping producitivy, with there dumb laws. Geoff
and many other silly laws too. Roderick
Sadly, not only is this highly desirable but it is time we recognized the damage being done by the Health and Safety Police. Let us have some common sense input into these officials. Peter
It is not just the food sector being strangled by bureaucracy and ill thought out legislation. Peter
Common sense is needed not stupid adherence to Law without thinking. Jan
Yes and get rid of GM wheat. Graeme
Unfortunately most inspectors are failures in their own profession and seem to love being in a position of power. Half the time they don’t know the law and use the interpret word freely. Charlie
The sooner the better. Tom
The current rules are draconian. Frank
Not just the food act but all the acts with crazy money gobbling compliance issues. Anne
Surely a little more “caveat emptor” is all that is necessary? Jan
Isn’t it all common sense? Chris
Time to get rid of all the unnecessary regulations and the useful idiots who dreamed them up.  Steve
NZ is small & has to keep it simple. Andrew
Most definitely. Regulations should be proportional to the size and nature of the food producer/seller. Alan
We are undermining the Kiwi way with more and more regulations & bureaucracy. Les
Regulations should be practical and workable not a bureaucratic hammer to keep “everyone in line”.  Gary
For some silly reason, when governments regulate, we end up with common sense running out the door. One day soon we will have no common sense. It will be regulated against by the government of the day. George Orwell sit up and take notice. Lloyd
CONGRATULATIONS TO BIDDY FOR STICKING TO HER ..GUNS I think you have said it all, really? Mabel
Laws tend to go from the sublime to the ridiculous without any checks or balances. This is a case in point. Dennis
A myriad of small food enterprises are seen as a competitive threat to the big food companies; that is the main reason the food safety regulations are imposed. Also, is it in the rational self interest of any food supplying enterprise to lose customers through bad hygiene or inferior product ? If there must be a law to justly penalise then make sure it is objectively or reason-based. Keep government out of business. A good dose of free market capitalism would propel this country to unimaginable heights and be the envy of the world and not a Venezuelan- style socialism that is waiting in the wings of the corridors of power. Don
This only one area of bureaucracy gone mad. Arthur 
Absolutely. I remember when (years ago) applying to the court for a local community public function liquor licence whence a clean glass had to be supplied with every new bottle of beer sold because of potential ‘dirty’ dust. The Judge commented “they don’t require a clean glass be supplied when selling beer in a can. THEY haven’t worked out yet that the same ‘dirty’ dust doesn’t settle on cans! Wearing official and often officious attire does not automatically mean knowledge and common sense! Of course most food ‘administrators’ know better than anyone else – as seen from their ivory towers!  Stuart
Fewer, simpler laws with more emphasis put on consequences should you cause harm. That would hopefully increase personal responsibility & put a few lawyers out of business.  Fiona
Commonsense must prevail. June
Bureaucracy going going GONE MAD!! Graeme
We have far too many petty bureaucrats killling the New Zealand way of life. They stifle freedom and innovation and ultimately it is the consumer and taxpayer who bears the cost. Frank
Of course. There is no doubt about it. The government wants to make money and make money they will do by whatever means. They are not for the little people, never have been. I am glad this is election year because I for one will not be voting for National who are and have always been money hungry, forgetting about the people who put them there. Kerin
The Food Act must be replaced with something sensible and allow for the cottage based producer.  Frank
How about we replace a few of the politicians with more practical options while we are at it. Tina
Existing rules are too complex and petty. Ross
These laws are economic bullying by big business. They go to the Government and request draconian legislation (under the pretext of Health & Safety) to make it too expensive for small business to compete with them. Then they can drive down quality and drive up prices. These are anti-competitive laws. By all means have some kind of grading (if this is felt to be necessary to protect the public) but then let the consumer decide.  John
Bureauocrats are only trying to justify their jobs. Far too many Government Departments. Jan
Absolutely. Sheena
Dundrige is the word that applies to this and so many other bureaucracies. Common sense are the two words that got lost in the desire to create and maintain jobs for even more bureaucrats under successive Governments in New Zealand. John
…common sense and K I S Silly… CH
But there’s a much broader, more serious aspect to all of this: bureaucracy has now become “government by stealth”. These petty officials, whose powers often far exceed their ability to use them wisely, constitute a collective force which controls almost every aspect of our lives; and, because they are unelected, we have little say over who they are and what they do. What’s more, if they choose to be small-minded, or even downright spiteful, there’s nothing that most of us can do about it. It’s all very well for central government to introduce laws aimed at a better standard of living for all of us, but if those laws are nonsensically applied (as in the case of the food regulations) then those laws actually become detrimental to society. It’s time that all bureaucratic appointees – both in central and local government – were made to be more accountable for their actions; which means that if they get it badly wrong, then they are publicly and meaningfully sanctioned.  Graham
That may also reduce the amount of plastic packaging that’s put into the landfills. Chris
I’m giving a presentation at ConventioNZ today ‘Wanna save a weka, eat a weka’. Roger 
The law in this case is an ass. Graeme
Some regulations are just not practical in many jobs. Robert
I think we need to go back to the 60s and use common sence Colin
Cake stalls used to be a number one way of raising money for organisations with no financial backing. And ‘lemonade stands’ area great way for children to learn the art of entrepreneurship and giving value for money. Susan
Don’t have regulations you can’t police. Peter
Govt control, that’s what it’s all about! Ian
Food is not the only area of regulation stupidity – try building! Collin
Yes and tackle the workplace safety rules as it as well. Tim
At the moment it is ridiculously clumsy and expensive to comply with. It is far too rigid for small producers of low risk foods.  Lois
Why on earth did National carry on with Labour’s mad food regulation. They have made a monumental mess in the food industry. The sooner someone repeals these stupid laws the better. And while they are at it, some honest research should be done to identify the actual cost of food-borne illness, rather than the overblown figures being bandied around. Paul
Yes, the law should be repealed and replaced with something based on common sense! Kath
Why is it that governments want to continually regulate us? Don’t they trust people at all?  John
Food definitely needs to be regulated, but the idea of trying to eliminate all risk based on bureaucratic decision making is a disaster waiting to happen. David
Absolutely the law needs to be repealed and replaced by something based on common sense, that is workable. What is so wrong with the system we used to have anyway? Murray