Fishy Regulations

Fishy Regulations Picture_2

With our instantaneous and ubiquitous newsfeeds, bad news spreads like an out-of-control bushfire.  When we see something go awry, it seems the natural reaction is to regulate against it.   Often, these regulations are a snap-call made on emotive and highly charged issues of singularity, without the time and motivation to consider the totality of potential impacts.

We saw examples of this with the recent Uber Tax legislation in Queensland, where Comcar and limo rentals were also suddenly illegal; or zoning and use restrictions designed to support and protect property values that ultimately sanitise, close businesses, limit employment opportunities and ultimately reduce property values.  We see this everyday with tax regulation.  When we see what looks like a dodgy deal, we quickly slap a cornucopia of legislation on the table to placate the irate.  This knee-jerk reaction invariably adds a layer of bureaucracy and cost to a much wider group, yet the dastardly villains who precipitated the regulations usually find another way around anyway.  Like a comment made in anger, regulation once given is not easily taken away.

Economist Sam Peltzman published his ground breaking paper on the effects of regulation in the 1970’s and Professor Peltzman is one of the few economists to have an ‘effect’ named after him. In essence, ‘The Peltzman Effect’ refers to the counter=intuitive observation whereby the introduction of regulatory mechanisms may result in unintended consequences that negate any benefits – or worse.  This has been a remarkably durable theory when assessing countless regulations and risk mitigation strategies.  The effect was famously first applied to a US study around the introduction of mandatory seatbelts and automobile safety regulation.  Even more fascinating to me were his studies into US regulations of drug companies and the ultimate effect that this has had on the public.  Suffice to say that regulation has not always had the beneficial effect that we intuitively assume, and Professor Pelzmann’s research concluded that US drug regulations have killed far more people than they have saved.

When it comes to sport, a good example of The Peltzman Effect comes with an examination of the current crisis in which American Football finds itself.  Helmeted players of American Football enjoy an extensive array of body armour designed specifically to keep them safe.  However, in a classic observation of the phenomenon, the long term health effects from head and neck injuries are resulting in a marked reduction to the life expectancy of defensive line-backer’s as they use themselves as human battering rams, aided and seemingly safely cocooned by their body armour.  This effect is completely at odds with the original goal of those mandatory helmets.  The discovery of the dire health consequences has parents of young boys rightly concerned and they are leaving the sport in droves, with soccer being a massive beneficiary.   The move by our rugby codes to ban shoulder charges, but also limit the amount of shoulder padding players can wear may seem counter-intuitive to some, however this is turning out to be a sensible overall response to an issue of player safety when compared to their NFL cousins.

Since I became attuned to The Peltzman Effect some years back, I am now alert to situations where I see it at work.  I recently noticed that NSW fisheries had introduced mandatory life jackets for rock fisherman in high risk areas and, as a keen rock fisherman myself, I wondered if The Peltzman Effect was worth considering.  So I did a bit or research.

Recreational fishing is one of Australia’s most popular activities, yet it ranks as one of Australia’s most dangerous sports.  In NSW alone, more than 17% of the population is engaged in the activity.  Once you leave Sydney, this rises up to 30% in coastal NSW towns.  Fishing fosters a band of devoted followers, with their own favourite spots and methods.  I must say that there are few things more therapeutic than standing on a headland with a line in the water and watching the day slip by.

NSW is also one of the most dangerous places to practice the discipline of rock fishing, with 35 deaths reported since 2012.  The NSW Coroner’s report released in June 2015 into rock fishing deaths provides a sad and disturbing read.  One of the Coroner’s key recommendations was the introduction of mandatory life-jackets.  Of course there is ‘rock fishing’ and ‘ROCK FISHING’.  The most dangerous places are often difficult to access but also afford some of the most productive locations, where very deep water meets rocky platforms.  Amazingly, in a 2013 study, 8% of rock fishers could not swim and a further 7% confessed that they are poor swimmers.  A further 21% of rock fisherman regularly venture out alone.

NSW fisheries suggest that the average costs of recovery for an injured rock fisherman is somewhere between $450,000 and $600,000.  This cost, combined with the fatality rate, is shocking and we undoubtedly should save lives where we have the capability to do so.  However, I wonder whether lifejackets might have the desired effect when all the factors are taken into account over time.  Anyone who has rock fished will know the temptation to move to the perfect spot, where the water is deeper, or the angle is just right.  Or when that cracking fish is flopping on the ledge below, or that $80 lure is hooked on some cunjevoi, tantalising the fisherman to climb down and retrieve his prize.  It is plausible to think that fisherman who wear a lifejacket because they have to (rather than because they are conscious of safety) will be afforded a feeling of security that may in fact promote riskier behaviour and more accidents.

Only time will tell and I would hope that a proper analysis is made over time.  Of course, it is rare that we see regulations removed, and more often, ever more regulations are added to plug holes as they appear.  And one needs to look at where the incentive structures lie.  Clearly the lifejacket suppliers are fully behind these regulations, as would be public service who will require more inspectors to help police these new regulations.  Even then, what about the safety of the life jacket police operating in these high risk areas – I hope this is monitored as well.

A balanced assessment would also take account of any corresponding reduction in the number of rescue staff and improvements in their own safety as a result of fewer call outs in the middle of the night.  Like the volunteer coast guard, there are many, many volunteers who selflessly put themselves at risk to help others in distress.  It would be good if they could stay safely in bed instead of scrambling down a coastal cliff in pitch dark to rescue fishermen pursing their risky passion.  As a small boy, I vividly remember my father being woken in the middle of the night to take part in a search party for a fisherman washed off the rocks at Noosa.

Let’s hope that these new regulations do in fact reduce injury, save lives and reduce community costs; and that we don’t see another example of The Peltzman Effect at work where risky behaviour is in fact promoted.  Let’s face it, the swimming statistics alone would indicate that there are some high risk taking individuals involved in the sport of rock fishing.   To take the counter-intuitive position that Sam Peltzman might, perhaps another solution might be free surfing lessons at the local surf club so that rock fisherman learn to understand and respect the immense power of the sea like their surfing cousins quickly do.

I do support giving the lifejacket idea a go.  However, it would be great if all regulators were obliged to track the total effectiveness of their regulations over time and feel empowered to make the counter-intuitive play to remove regulation when it isn’t having a net beneficial effect.

I for one would like to live in a country with less regulation – not more.  Unfortunately, at present the ‘mores’ have it.

 

About Peter Robertson

Born and bred in Eumundi and Nambour, in strong company indeed. After studying Maths and Physics at uni in Brisbane, I pursued a business career that I sometimes worry is best described as ‘Jack of all trades – master of none’. Having safely made it to my mid 50’s, I am still yet to have a real job – but I expect to grow up someday. My love of sport has never waned and I regularly play tennis, golf and surf. Other pursuits include fly fishing and trekking. I have been serving on a few private and NFP boards in sports and other areas to keep me out of mischief.

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