Will the lockouts and last drinks regulation work?

Guest post by Rod Bogaards

The Queensland Parliament is soon to debate lockout and last drinks legislation. To achieve the objective of reducing alcohol-fueled violence the proposed Queensland legislation needs to pass two tests:

  1. Will it be effective in addressing the violence in entertainment precincts?
  2. Will it be efficient in addressing the violence in entertainment precincts?

Based on the Sydney experience, the answer to the first question is ‘probably’ and the answer to the second is ‘possibly not’.

In Sydney in January 2014, the NSW Government introduced a package of regulatory changes, including a 1:30am lockout and a 3:00am last drinks for entertainment venues in Kings Cross and the CBD.

Evidence by the NSW Bureau of Crime Statistics and Research shows a significant reduction in assaults in Kings Cross (down 32%) and the Sydney CBD (down 26%) following the changes. Interestingly, there was little evidence that assaults were displaced to other entertainment areas or neighbouring precincts. The only exception was the Star Casino, where the number of assaults increased. However, the increase in assaults around the casino was much smaller in absolute terms than the fall in assaults in Kings Cross and the Sydney CBD.

The NSW study authors concluded:

“…the January 2014 reforms appear to have reduced the incidence of assault in the Kings Cross and CBD Entertainment Precincts. The extent to which this is due to a change in alcohol consumption or a decrease in the number of people visiting these precincts remains unknown.”

Recent research undertaken on behalf of the City of Sydney confirms that visitor numbers to the Sydney Entertainment Precincts have dropped markedly since the reforms and that more people have been going home rather than staying in entertainment venues until closing times. For example, in Kings Cross there were 58 per cent fewer pedestrians in the precinct at 11pm and by 4am numbers were down 84 per cent compared to before the legislation was implemented. This “chilling effect” on Sydney nightlife has been described in a recent opinion piece by Matt Barrie in the Courier-Mail.

The NSW reforms appear effective in reducing alcohol-fueled violence, but they appear to do so by lowering patronage rather than improving individuals’ drinking behaviour. As noted by Professor Gordian Fulde, an advocate for the lockout laws from the St Vincent’s Hospital Emergency Department:

“It’s a completely different place. The shops are empty, people have lost their jobs, there’s no denying that. For every action there’s a consequence.”

There is limited evidence on whether the reduction in alcohol-fueled violence outweighs the costs of the “chilling effect” on Sydney night life (reduction in consumer choice/enjoyment and reduced business activity).

Ideally, a consideration of the similar legislation for Queensland would involve a rigorous assessment of the expected benefits and costs of the proposed lockout and last drinks legislation.

The recently released Legal Affairs and Community Safety Committee report on the proposed legislation discusses some of the positive and negative impacts on various sections of the community, but does not attempt to compare these impacts and explicitly conclude whether there is a ‘net cost’ or a ‘net benefit’ from the legislation overall.

The difficulties of using blunt regulatory solutions to address what are essentially cultural and social problems are numerous. If robust policy analysis is not done before ‘doing something’ it increases the risk of poor policy decisions and unintended consequences.

The Legal Affairs and Community Safety Committee recommends conducting an evaluation of the legislation after it has been in place for 18 months to assess the impacts on the community. Recent history indicates that the quality of such evaluation needs to improve if it is to yield useful evidence for policy makers. According to the Queensland Auditor General the last evaluation of Drink Safe Precincts was not well planned or implemented, and did not provide reliable conclusions on the effectiveness of the trialed measures.

Rod Bogaards is an economic consultant and former Director of the Productivity Commission.

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10 Responses to Will the lockouts and last drinks regulation work?

  1. Katrina Drake says:

    Very interesting commentary Gene.

    As you are aware I have been concerned for some time of the burden alcohol consumption has placed on our health system and economy. Something has to be done to address the problem.

    NSW Government must to applauded and supported for taking baby steps to stand up to the $36B alcohol industry. Assaults down in the order of 35% fantastic ! Think of the reduction of waste in health care from that small step.

    FIrstly, alcohol consumption is NOT entertainment. If people are going home from entertainment precinct early – it is because they have woken up to the fact that drunks are boring, and that there is no real entertainment to be found in these precincts. If you want people to hang around a precinct after mid-night there must be a festival atmosphere and actual live entertainment.

    Small steps, there is a very large and well organised alcohol advertising industry resisting change. Think of the tobacco industry in the 80’s.

    You are correct in that blunt regulatory solutions won’t affect change. What is needed is broader acceptance of the harmful effects of alcohol. Realisation that people will actually have a much better night out if they drink far less.

    Parliamentary precincts should be alcohol free – to support better decision making.

    A more appropriate label for the alcohol industry would help – not classified under entertainment – the sickness industry as opposed to health. Also, further restrictions on the alcohol’s advertising and sponsorship of sports, events and political donations to level the playing field.

    I have already written to my local Member, advising him that I am expecting him to lead the way in recognising and reducing the harm caused by the alcohol industry. Like tobacco reform, this will be a long and hard fought change to behaviour.

    Also, the statistics coming from the Casino cannot be compared to that of Entertainment precincts, as casino are much more heavily secured and monitored by there own security forces, and their problem patrons are swiftly rejected out into the ‘entertainment ‘ precincts.

  2. Kym Whiteoak says:

    The evidence of a reduction in violent crime appears to be statistically grounded, but the evidence of the ‘chilling effect’ less so. In fact, the number of on-premises liquor licences in the precinct appear to have grown by 13 per cent, as referenced in this: http://www.smh.com.au/comment/flawed-city-of-sydney-report-fuels-alcohol-lobby-20160207-gmnmgg.html

    This is hard to reconcile with Barry’s anecdotal claims of venue closures.

    It’s also worth considering that late night foot traffic in Kings Cross appeared to be on a downward trend well before the new laws were introduced: “…pedestrian numbers on the strip were down 48 per cent between 2010 and 2012, long before the laws were introduced.” (same source as above).

    It’s possible that the Cross might be ‘gentrifying’, leading to more residential properties and fewer late night venues. This might also help explain why an increasing proportion of pedestrians are ‘going home’, not going out. Not being a local, I can’t offer an opinion.

    I agree that a dispassionate look at the evidence is needed. I am always somewhat sceptical of arguments put by the alcohol industry, given that they make a significant proportion of their money from binge drinkers and thus have a strong financial incentive to encourage such drinking.

  3. This is a very interesting public policy issue. Without having read all the literature and reports, from personal experience in Sydney of Kings Cross and other places like The Corso in Manly (albeit a few decades ago) one takes a calculated risk in being out after midnight in these types of locations. It’s a personal choice. That does not diminish the terrible number of tragedies, especially relating to coward punchers. This is not a new phenomenon though.

    The issue I have is that the public picks up the bill for these alcohol fuelled incidents in terms of policing, emergency depts, court system and then sometimes the prison system. We all know that many policy issues can be best solved with properly targetted pricing mechanisms. Yes, there are already licensing fees and taxes on alcohol but do they really reflect the costs to the public purse? I would be more in favour of extra policing of hot spot areas with the cost being passed on to the traders. If they understand that serving drinks to intoxicated people will likely result in more violence and hence more policing as the response from Govt. with the costs passed to them, they will make a commercial decision to manage their service of alcohol better to maximise their profits. There is a chance of free-riding with this however where one or two premises continue to serve big drinkers knowing any increase in violence and police cost would be spread among fellow traders. This would need a solution.

  4. Katrina Drake says:

    ABS says Australians spend $14B on alcohol and $8B on Health care. Our problems is not that don’t spend enough on health care, we spend far to much poisoning ourselves.

    • Gene Tunny says:

      Thanks Katrina, a very interesting comparison you’ve made. I’ll have a look at the data. I’m guessing that $8bn figure is private expenditure on health care (and doesn’t include govt expenditure). Even so, it nicely illustrates your point that we don’t look after ourselves enough.

  5. Ian says:

    Hi Rod and Gene, thanks for the post. While I do find the economic considerations interesting, I think, in this case that’s not really the point. When you have family member, permanently brain damaged from an unprovoked, alcohol induced random act of violence and have to live every single day with the dislocation, pain and economic loss that this induces perspectives change completely. For young people – and their whole families – to have their lives in many cases ruined forever the burden is too high. The clubs and bars will still continue to employ people with earlier closing hours etc, and people will find other things to do and ways to support themselves. This happens every day, all the time. They will get over it. You never get over brain injury. Ever.

    • Gene Tunny says:

      Ian, yes, good point. I agree there is a serious problem that needs to be addressed. The question is how to address it in an effective and efficient way. Thanks for the comment.

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