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Home / The Country

Dr Muriel Newman: Bureaucracy rules, OK?

Northland Age
31 Aug, 2017 04:30 AM6 mins to read

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Dr Murial Newman

Dr Murial Newman

A couple of months ago, 'Lemonadegate' made international news. It involved the five-year-old daughter of a New Zealander living in London.

According to her father, 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, 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.

"The incident has been almost universally recognised as an extreme example of mindlessly applying the letter of the law. The law used to be enforced by the police, and we knew who they were."

A music festival was taking place in a nearby park, so business was brisk. With the money tin filled, the five-year-old was happy - until four council enforcement officers turned up and explained that since a £75 trading permit had not been obtained, a £150 fine would be imposed. A positive and worthwhile experience changed in an instant.

Christopher Snowden, head of lifestyle economics at the Institute of Economic Affairs in London, says: "Tower Hamlets council has 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'.

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"The incident has been almost universally recognised as an extreme example of mindlessly applying the letter of the law ... 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."

In New Zealand bureaucrats have become so risk-averse that instead of applying common sense and discretion, they stick to the letter of the law like glue.

Northlander Kaye van der Straten has been trying to register her fermented tea business that has the backing of 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 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".

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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. But 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.

By grossly inflating the 'cost' of food-borne illness, 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.

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

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 Yoghurt, now available in more than 20 countries, started out in school teacher Len Light's kitchen, as he searched for ways of making affordable yoghurt for his family of eight.

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 Lisa's Humus. By the time she sold to Sanitarium she was employing more than 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."

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The problem is that in trying to eliminate all food risk, the system has become overly bureaucratic, as demonstrated by the recent 'Burgergate' scandal. The famous Governor's Burger, served at the Duke of Marlborough in Russell, included a medium rare beef mince patty. According to new regulations, 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. Having already lost money by spending "about a month" filling out forms to comply, they were not prepared to lose thousands more on inspectors.

Instead, executive chef Dan Fraser took to Facebook.

"It is with great sadness and regret that we will no longer be able to sell The Duke's Governor's 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 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.

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