Ticket Scalping is a Secondary Market Activity

Noting Wednesday’s Dominion Post cover story on the ballooning black market in RWC tickets, I recalled a Business Roundtable submission we made on the Major Events Management Bill in 2008. We said

• No case is made that the common law is inefficient or problematic in respect of scalping.
• Ticket scalping is a secondary market activity. It provides a valuable social function like other secondary markets in that tickets can end up in the hands of those who value them most highly.
• It also caters for the needs of those who cannot spare the time to queue, those who do not know whether they will be too busy to attend an event until close to the time at which it is being held, those who change their minds after an event is sold out, and those who find they cannot make use of their tickets and can offer them for resale.
• There are many ways that promoters can limit scalping activity if they wish to do so, such as making tickets non-transferable, limiting the numbers that any one individual may buy, or auctioning a block of tickets themselves.
• Such a law would be difficult and costly to enforce, given selling mechanisms such as the internet and the black market.
• There seems no logic in applying such laws solely to ‘major events’. If they were justified they should apply generally.

Business New Zealand made a similar statement at the time. This was an MED initiative that continued its fine tradition of mindless intervention.  It was hard at the time to see a case for the government to intervene between willing sellers and willing buyers, or that it would have been effective had it chosen to do so. The same arguments appear to hold true today.

Obsessive Compulsive Disorder

Yesterday I read a commentary in the NZ Herald loaded with erroneous claims about the Education (Freedom of Association) Amendment Bill. It was signed by a group of student association leaders (with a strong vested interest in retention of the status quo) arguing that student association membership should be compulsory.

In fact the case for voluntary student membership (VSM) is overwhelming. The New Zealand Business Roundtable made a submission on the Bill strongly in favour of it. Without delving too deep into the issue here I thought I’d comment on a few of the glaring misconceptions in the piece (placed prominently opposite the editorial page in the Herald).  

The subheading:

Student leaders outline what is wrong with Act’s bid to make association membership voluntary

The signatories are not student leaders, they are students’ association leaders elected by a tiny minority of students (typically 5-10%). The vast majority of students would not be able to name their association leader. A 5-10% voter turn-out does not give anyone a mandate as a leader.

The decision of National members of a parliamentary select committee to ignore tertiary institutions, students and the public by supporting an Act bill to impose voluntary student membership on students’ associations is disgraceful.

‘Impose voluntary’ is an oxymoron. Impose means being forced to do something. Voluntary is the ability to choose. This Bill would give students the opportunity to choose whether or not they want to belong to an association.

Students don’t want this. Tertiary institutions don’t want this. The committee received 4837 submissions on the bill, with an overwhelming 98 per cent opposed.

The number of submissions, for or against, is not an accurate representation of how students think. If only 5-10% of students bother to vote in the students’ association elections, you would hardly expect a tidal wave of written submissions (which aren’t compulsory like essays or association membership). You would, however, expect organised association representatives and employees with a vested interest to submit en masse.  The idea that trade union membership should be made compulsory if most submissions to a select committee favoured it doesn’t pass the laugh test.

If it is a decision made on the principle of freedom of association, it is flawed. Students have less choice; they will no longer be able to come together as a universal collective.

How absurd. Under VSM, students can still join an association to come together as a collective if they choose. And when have students ever come together universally? On any issue there will be differences of opinion among students. Accordingly, under freedom of association, students can form groups, unions and associations on issues of concern of their choice.

Students’ associations nationwide work hard for students. They provide vital services such as welfare, representation and advocacy for students who cannot make ends meet, have problems with a landlord or need help resolving a grievance.

If that is the case then there is no reason why students presented with the information would not choose to join an association. Unfortunately though, student unions are often notoriously badly run – see Victoria University law student Jenna Raeburn’s excellent submission for examples.

As a direct result of the passage of this legislation, students will see an increase in costs as tertiary institutions scramble to introduce services that all stakeholders consider essential.

All stakeholders? Union leaders do not represent the views of all students who are the most important stakeholders. New Zealand taxpayers are also stakeholders because they subsidise tertiary education, and it is likely that taxpayers, and students, would consider many of the ‘services’ provided by associations as non-essential if not wasteful. For example, I understand that 70% of the 2009 VUWSA budget comprised administration costs. Furthermore, some services could be sold or contracted out and it is likely that in general costs would go down.

The current law is flexible and inclusive. It does not breach freedom of association, as students have a choice whether to join their associations, both on a collective level through a referendum and an individual level through opt-out provisions.

A collective referendum does not provide freedom of association. That would be akin to forcing all New Zealanders to join the National Party – if a majority of people voted to in a nationwide referendum. The ‘opt-out provisions’ consist of exemptions on religious or ethical grounds, but the membership fee must still be paid and goes to a charity of the students’ association’s choice – so the association still controls the membership fee.  Hardly freedom of association. 

All workers in New Zealand (except under exceptional circumstances eg consumer protection in the case of professions such as medicine) are rightly entitled to freedom of association, yet currently students are subjected to compulsory union membership. VSM is a no-brainer.

David Farrar blogs on this here

A toast to moderately common sense

Just back from the Alcohol Law Reform Stakeholders’ lockup where I found myself coincidentally sitting next to fellow stakeholder Doug Sellman.  Doug would have found a lot less to be pleased about in the government’s response to Geoffrey Palmer’s Liquor Review than I did.   Staying well away from the sledge-hammer, wowserish measures advocated by Doug and his colleagues that would penalise responsible drinkers and do nothing to curb abuse, the government’s decisions instead largely reflect a sensible, pragmatic response to the issues.  It’s pleasing to see many of the arguments set out in our submission were listened to.  For a good rundown on the package see David Farrar’s summary here.

There are a few strange quirks – for example the drinking hours proposed would put paid to a champagne breakfast – and some anti-consumer proposals for further study, such as introducing a minimum price system for alcohol.  And some, like the latter idea, are unlikely to pass the sniff test in any proper regulatory impact analysis.

But the serious omission, in my view, is anything much in the way of strategies to deal with abuse (see page 16 of our submission), emphasising individual and parental responsibility, disincentives and penalties for abusive behaviour, making abusers face the consequences of their actions (eg denying ACC benefits for self-inflicted harm), better enforcement of existing laws, and social sanctions. 

There are, of course, deeper causes that lie behind many of the problems of alcohol abuse, such as dysfunctional families, poor parenting and welfare dependency, and these urgently require attention.  But in the meantime, measures of the sort outlined above, that sheet home the costs and shame of alcohol abuse to those who abuse it, would go a long way to curbing our problem drinkers