The other curve

April 6, 2020

In ordering a lockdown and putting New Zealand into a state of emergency, the government is firmly fixed on reducing the spread of Covid-19 to save lives and, ultimately, eliminate the disease.

That’s the health side of the equation. Roger Partridge argues a coherent Covid-19 strategy would also taken into account the economic one:

Professor Sir David Skegg raised the 64-thousand-dollar (or perhaps 64 billion-dollar) question in his testimony before Parliament’s Epidemic Response Committee this week. He asked whether the government had a clear the strategic objective for its unprecedented level-four lockdown.

Since the subtitle of Alert Level 4 is “Eliminate”, Sir David’s question might seem unfair. And Director General of Health, Dr Ashly Bloomfield, quickly clarified to media that elimination is indeed the goal.

But if elimination is the objective, it is troubling that Minister of Health David Clark referred to a goal of reducing the epidemic’s effect to successive “waves” of infection in his testimony before the Committee. There will be no waves of infection if elimination is successful.

Lack of consistency in messaging about the Government’s strategic objective is worrying. But there is a more fundamental concern with the elimination objective: the absence of a clear timeframe. Of course, we can eliminate the disease. If the four-week lockdown does not work, the government simply forces us into lockdown for longer. But at what cost?

A cost-benefit assessment sounds heartless when the goal of the lockdown policy is to save lives. But the country-wide pause has already triggered a domino-effect of business failures and job losses. Just as the coronavirus spreads exponentially, so does harm from the lockdown. For firms and workers, each day of lockdown causes more business failures and job losses.

It is easy to count the deaths of, or at least with, Covid-19. It will be harder to count the social costs, including lives lost, from both later treatment of other health conditions and the economic devastation, but they will be real.

These economic effects have health and wellbeing implications too. And at some point, the harm to the wellbeing of Kiwis from the lockdown may become greater than the benefit to the wellbeing of New Zealanders from continuing with it.

This will include more suicides, more domestic violence, more alcohol and drug abuse and delayed treatment for health conditions including cancer which could make a life or death difference.

Most estimates show unemployment soon running into double figures. Overseas estimates suggest if Governments are not careful unemployment could exceed 20% or even 30% – levels not seen since the Great Depression.

The hardship caused to hundreds of thousands of Kiwi families from widespread unemployment, the evaporation of job opportunities for the new generation of school leavers and the losses to the productive side of the economy which funds our social services and most of the population’s livelihoods, must all be factored into the Government’s strategic choices.

The business failures and job losses have both and economic and social cost that will feed off each other.

They will also result in less tax paid while demands on the public purse will increase.

Until it addresses this complicated equation, the Government’s Covid-19 strategy is at best only half complete. A well-informed strategy must consider both curves – the epidemiological curve and the economic curve.

In the meantime, Professor Skegg had some clear advice for the Government on the areas it must lift its game to give us the best chance of achieving the goal of elimination. The Government must fix the shortcomings with Covid-19 testing. It must enforce strict quarantining at the border. And it must improve contact tracing.

If the Government gets these tactics right, perhaps it can sidestep the bigger strategic decision. But it is fast bearing down on us.

In the meantime, the Government must be more transparent with New Zealanders on the difficult strategic choices the country is facing. If it isn’t, we risk drifting in a direction that may do more harm than good.

This response form the Prime Minister suggests she doesn’t understand that:

“A strategy that sacrifices people in favour of, supposedly, a better economic outcome is a false dichotomy and has been shown to produce the worst of both worlds: loss of life and prolonged economic pain,” Ardern said. . .

She is saying there would be fewer lives lost and less economic pain if the lockdown continues as it is which is not necessarily so. A better economic one would be a better social and health one too with fewer deaths from other causes.

The economic and social costs wouldn’t be so high if the government was to opt for safety rather than essential as the guide for which businesses can operate.

National on Sunday called for more businesses to be allowed to open up if they could prove they could operate safely.

“Our economy has already faced unprecedented devastation since the Government closed it down, we should be doing all we can help revive it and protect businesses and jobs,” economic development spokesman Todd McClay said.

“To date the decision making has been too arbitrary and there are too many inconsistencies. For instance, allowing dairies to open but not local butchers or greengrocers, agriculture to continue but not forestry, cigarettes to be manufactured but community newspapers cannot be printed.”

“If a business proves it can operate safely, provide contactless selling and ensure physical distancing then they should be able to operate.”

What’s the difference between butcheries, greengrocers and fishmongers following practices that keep their staff and customers safe, and supermarkets operating as they are now?

What’s the risk in greens keepers working by themselves on a golf course?

Why can’t  more businesses that sell online be able to do so? If it’s safe to sell a heater or a winter jumper why not a scanner or a shirt?

Why couldn’t some road works be done safely while there’s so little traffic? Why can’t some building continue as long as the tradies work alone or at safe distances from each other and without sharing tools? If an urgent repair to a vehicle can be done safely, why not a warrant of fitness?

All the arbitrary emphasis on essential rather than safe is doing is allow overseas online businesses to compete with domestic ones which might not survive the shutdown.

While Baur might have pulled out of New Zealand anyway, the government’s declaration that only daily media was essential has killed some of our best magazines.

The latest update on Covid-19 cases does show that the lockdown appears to have stopped the steep spike in cases seen elsewhere.

That doesn’t mean we can relax, but it ought to allow the government to take a broader look at its strategy and its social and economic costs.

The lockdown does appear to be achieving its aim of flattening the epidemiological curve, but the government is not doing nearly enough to consider the economic curve and the social costs that will result from that.

Flattening the Covid-19 curve is good but not at the cost of flattening the economy more than is necessary.


Too much of a good thing

October 9, 2019

The government has posted a $7.5 billion surplus:

The Government has unveiled a bumper $7.5 billion surplus and the lowest debt levels in almost a decade, the latest Crown accounts reveal.

That level of Government surplus has not been seen since at least 2008, just before New Zealand felt the full effect of the global financial crisis. . . 

It’s taking all that money yet failing to deliver on its promises.

Surpluses are good, but $7.5 billion looks like too much of a good thing.

The government is either taking too much, spending too little, or both.

National’s Economic Development spokesman Todd McLay says:

“The Government should be looking to stimulate the economy by letting New Zealanders keep more of what they earn.

“Instead, it has piled on more and more taxes to the point where Grant Robertson is sitting on a big surplus while those living outside Wellington’s beltway struggle with rising living costs.

“One of the reasons debt is lower than forecast is because the Government is failing to invest in the infrastructure New Zealand needs.

“It has cancelled or delayed a dozen major new roading projects right across the country and replaced them with projects that weren’t ready, and won’t be ready for some time yet.

This isn’t just taking more tax and doing less with it. Stalling new roading work risks a loss of skilled people who will head overseas if there’s a gap between current projects finishing and new ones starting.

“Meanwhile, the Government has been piling on taxes. It has legislated to milk an extra $1.7 billion from motorists through fuel tax hikes and extra GST, while its misguided housing policies have pushed up rents and burdened landlords with extra costs and regulation.

“National legislated for tax relief that would have put more than $1000 a year extra into the back pockets of New Zealanders. This Government cancelled that. 

“We will index tax thresholds to inflation so that New Zealanders aren’t taxed more by stealth every year because of the rising cost of living.”

Sound economic management requires much more than creating surpluses.

The government must take enough, but not too much, and it must scrutinise all its decisions to ensure its spending effectively and prudently.

The large surplus suggests the government could be investing more in infrastructure and filling some of the gaping holes in the health system.

It also shows it is taking far more than it needs and it could be leaving us all with a little more of our own money by way of tax cuts.


A tale of two caucuses

June 26, 2019

National leader Simon Bridges announced a minor reshuffle of portfolios yesterday:

“Paul Goldsmith will become the spokesperson for Finance and Infrastructure following today’s announcement from Amy Adams that she will leave at the next election.

“Paul is the natural choice for the Finance role. He has done an outstanding job holding the Government to account in the Economic and Regional Development portfolio.

Shane Jones will be very happy with this change, though he shouldn’t relax, the two taking over Paul’s portfolios will be just as effective at holding the Minister to account.

“Regional and Economic Development will now be split across two spokespeople. Todd McClay will look after Economic Development, while Chris Bishop will take over the Regional Development and Transport portfolios.

“Chris has done a brilliant job as spokesperson for Police and deserves to take on more responsibility.

“Jo Hayes has been appointed the spokesperson for Māori Development and Treaty of Waitangi Negotiations following the departure of Nuk Korako. Jo is a passionate advocate for Māori.

“Gerry Brownlee will pick up the Foreign Affairs portfolio, Brett Hudson will take on the Police portfolio and Tim Macindoe will become the Shadow Attorney-General.

“Other changes include Michael Woodhouse as the Associate Finance spokesperson, Maggie Barry taking over the Disability Issues portfolio, Stuart Smith will be the spokesperson for Immigration, Todd Muller will be the spokesperson for Forestry, Nicola Willis will take on the Youth portfolio and our newest MP Paulo Garcia will become the Associate Foreign Affairs spokesperson.

“I’d also like to take this opportunity to thank both Amy Adams and Alastair Scott for their valuable contributions to the National Party and Parliament. Amy was a brilliant Minister across a range of portfolios. The changes she made to domestic violence laws as Justice Minister have made families in New Zealand safer. Amy has excelled as our Finance spokesperson and has been an outstanding member for Selwyn.

“Alastair should be proud of the work he has done to prevent drug driving, and for the way he has represented and advocated for the people of Wairarapa. I’m pleased they will be here for the rest of the term to help us form policies for the 2020 election.

“National is the largest and most effective Opposition this country has ever seen. I’m proud to lead such a talented and hardworking team.” 

There are no surprises there and there will probably be none in tomorrow’s reshuffle of Cabinet but there is a major difference between the two caucuses – there’s plenty of talent in National’s with many MPs capable of becoming Ministers.

By contrast Labour’s is a shallow pool and, as Barry Soper noted:

. . .The reshuffle will be minor because most of those who should be in Cabinet are already there. And the amount of time Ardern’s taken getting around to shuffling the chairs just goes to show how hard leadership is for a person who clearly finds it hard to be hard. . . 

Ardern doesn’t have much to choose from and, if past form is a guide, will be reluctant to demote the poorest performers.


Working groups breeding working groups

August 16, 2018

First the good news – the government is providing $8.5 million to better manage freedom camping.

 . . .Recycling collection facilities, infrastructure and operating costs in Grey District will receive a $850,000 funding boost.

Westland District Council has been allocated about $780,000 for new camping facilities and to cover operating costs, education and enforcement.

Tasman District Council is set to receive $660,000 from the fund to improve tourism infrastructure in the lead up to summer.

Queenstown Lakes, Buller, Mackenzie and Waitaki district councils will receive more than $500,000 in the lead up to the tourism season, with Mackenzie and Waitaki receiving a joint payment. . .

Visitor numbers are well in excess of ratepayers’ ability to fund infrastructure for tourists. This money will be thinly spread in areas with great and urgent need but it is a good start.

But then there’s the bad news.

The working group set up to review freedom camping wants five more reviews.

One of the Government’s infamous 140 working groups has, incredibly come back with a recommendation to have five more reviews, National’s Tourism spokesperson Todd McClay says.

“Tourism Minister Kelvin Davis’s Responsible Camping Working Group has reported back not with a plan but with a recommendation the Government reviews the Freedom Camping Act, the compliance regime, the administration system, the camping-grounds regulations and the ‘responsible camping rules’.

“That’s right. Five more reviews leading us to the extraordinary situation where we have working groups calling for working groups.

These working groups are like mushrooms, breeding more of their kind in the dark.

In a damning indictment on its lack of work in Opposition this Government came to power with so few ideas it’s launched 140 working groups and inquiries costing $170-odd million, to tell it what to do.

“Now it turns out not even those working groups have any answers and decisions are being kicked further down the road, with Mr Davis saying his ‘cross-Government plan of action’ is still off somewhere in the never-never. We’re talking two years before any major legislative change will bring relief to most popular tourist destinations, and to the communities in those areas.

“Worryingly, Mr Davis also says even those recommendations the Responsible Camping Working Group did make won’t all be ready in time for this summer’s peak influx of tourists.

“That will be hugely disappointing for a sector which generates $14.5 billion of export earnings.

It’s not just disappointing for tourism, it’s frustrating for locals who have to put up with rubbish and human waste left behind and councils who have to pay the bills for cleaning it up.

New Zealand’s natural beauty and relatively unspoiled countryside are among the reasons tourists want to come here.

Too many freedom camping, washing themselves, their dishes and their clothes in rivers and lakes, and leaving their rubbish and waste behind are damaging the environment and posing health risks.

An answer to the problems needs to be found and acted on in the next few months before the summer tourism rush starts.

“This is symptomatic of a Government that loves to set up reviews and working groups rather than actually get on and do the job. At a time when businesses are crying out for certainty this Government gives them less.

“What is Mr Davis actually doing? Tourism is a full-time profession and it deserves more than a part-time minister.

“In the meantime, the Government could pick up National MP Anne Tolley’s Freedom Camping Bill which would prohibit Freedom Camping more than 200 metres from public toilet facilities, provide more organisations with the right to restrict freedom camping, and provide for instant fines that have been issued to be collected by rental car companies. That will make an immediate difference.”

All of this could be easily implemented, could take effect and make a difference immediately.

Tourism competes with dairying as our top income earner.

We owe it to the people who contribute to that to provide them with facilities and infrastructure they need to visit without despoiling our country.


More bloody meetings

August 8, 2018

Prime Minister Jacinda Ardern’s return from maternity leave was supposed to start with an announcement to boost business confidence.

Instead of which she introduced Trade for All which is once again more hui and little doey.

It’s a bit like putting the produce-laden cart before the lumbering Clydesdale as the Government tries to bring the public on board with free trade deals and what they’re calling a ‘Trade for All’ agenda.

It seems a bit like the coalition cobbers trying to salve their guilt for opposing the likes of the old Trans-Pacific Partnership and now supporting it since its name has become more of a mouthful with Comprehensive Progressive added to its title. . . 

And just like all Government announcements without substance they’re setting up a board to advise on how to woo the great unwashed when it comes to trade. And as usual they’ve appointed the chair with the boardroom chairs to be filled later, or as the blurb said “in due course”.  

There would be no need to spend time and money trying to improve their supporters’ poor perception of, and misconceptions about, trade had Labour not spent so much effort in opposition campaigning against it in contradiction of the long-established bi-partisan approach both Labour and National took in the past.

This is using taxpayers’ money to talk to their supporters because most other people understand the benefits and importance of trade.

Their blurb was stating the bleedingly obvious, they want trade benefits to flow to all New Zealanders, they want them to be felt throughout the country, not just in the major cities. . 

Trade has always benefited the whole country for goodness sake. Most of our significant exporters are in rural New Zealand, they’re called dairy, sheep and beef farmers, winegrowers and orchardists. They do well and the whole community benefits.. . .

Businesses will be relieved that Labour has seen the trade light again, but setting up yet another committee and doing yet more consultation won’t help confidence.

The Government’s ‘Trade for All’ agenda is simply a rehash of National’s work on trade and won’t make up for plummeting business confidence caused by the Government’s anti-growth policies, National’s Trade spokesperson Todd McClay says.

“Trade for All is nothing more than a shameless rebranding of National’s Trade Agenda 2030 which was aimed at creating opportunities for our exporters to compete on the world stage.

“But while National was consulting on Trade Agenda 2030 with businesses, exporters and the public Labour, NZ First and Green MPs were marching in the streets against the TPP.

“While the Government’s backflip on trade is welcome, it won’t be enough to turn around New Zealand’s worst business confidence levels in ten years.

“We know this is a direct result of bad policies like raising taxes, restricting foreign investment and axing oil and gas exploration – yet the Government refuses to acknowledge that, choosing instead to lecture businesses over their supposed bias. . . 

Instead of action, all this announcement offers is more talk.

And rather than providing reassurance it merely shows that the government doesn’t understand business and has no idea how to address the understandable and growing lack of confidence.

Businesses don’t need yet another bloody committe and more bloody meetings.

They need policies which recognise the importance and value of business.


Rural round-up

August 18, 2017

Why will the least swimmable rivers receive less funding for clean up?:

Labour – Let’s answer this – why will regions with the least swimmable rivers receive less funding to clean them up?

IrrigationNZ is continuing to challenge the logic of Labour’s water tax proposal, after finding that regions with more swimmable rivers will receive more funding from the water tax, while those with the least swimmable rivers will receive less funding to clean up rivers.

“We pointed out to Labour in our meeting with them yesterday that region’s with more irrigated land actually have more swimmable rivers, while areas with lower proportions of irrigated land have more rivers graded poor for swimming,” says IrrigationNZ Chief Executive. “The data doesn’t support the idea that irrigation is a main cause of river pollution.” . . 

MPI wins farmers’ praise for cow disease response – Gerard Hutching:

Federated Farmers have given government officials grappling with the cow disease Mycoplasma bovis a pat on the back for their efforts in dealing with the issue.

Biosecurity spokesman Guy Wigley said farmers who met in Waimate last week to hear the Ministry for Primary Industries’ (MPI) latest update were impressed by the scope of what was being done.

“They are getting a huge number of tests done over the next month – 33,000. Farmers were impressed with the professionalism of the staff.” . .

Murray Grey cattle first choice for King Country breeder :

Bringing a cold young lamb inside on a cold spring mornings is a good excuse for a cold young farmer to take a break too.

It has been a wet season on Mike Phillips’ Honikiwi farm about 15 mins northwest of Otorohanga.

“The past month has been really busy and the weather’s not playing ball at all this week. I’ve come in to heat up a lamb so it’s a welcome chance for me to dry out too. I’m feeding about 30 orphan lambs at the moment so we’re in a bit of a routine.”

It’s a far cry from the day he named his murray grey cattle stud – Paradise Valley Murray Greys. . . 

McClay – Government approves TPP11 mandate

The Government has approved a negotiating mandate for Trans-Pacific Partnership 11 (TPP11), which will ensure New Zealand businesses remain competitive in overseas markets.

Trade Minister Todd McClay says New Zealand will be pushing for the minimal number of changes possible to the original TPP agreement, something that the remaining TPP11 countries have agreed on.

“TPP11 ministers have committed to moving forward with the agreement as quickly as possible,” Mr McClay says. . . .

Commitment to TPP11 applauded:

New Zealand’s mandate to negotiate for the new Trans Pacific Partnership (TPP11) is good news, says ExportNZ.

New Zealand has taken a prominent role in moving the agreement towards completion following the US decision to withdraw from TPP negotiations this year.

ExportNZ Executive Director Catherine Beard says it is positive that all 11 members of the TPP group have agreed to stick closely to the terms of the original TPP agreement and are moving at pace towards concluding the agreement. . .

Dairy industry body joins GIA biosecurity partnership:

The Dairy Companies Association of New Zealand (DCANZ) has become the fifteenth and largest industry sector to join the Government Industry Agreement (GIA) biosecurity partnership, Primary Industries Minister Nathan Guy has announced today.

DCANZ is the national organisation representing the dairy processor and exporters sector, comprised of 11 members responsible for 99% of the milk processed in New Zealand.

“It’s very pleasing to have DCANZ working with the Ministry for Primary Industries and other industry partners on biosecurity,” says Mr Guy.

“The dairy industry is a crucial part of New Zealand’s economy, making up over a third of all New Zealand total exports. It is vital we work together to prepare and respond to biosecurity threats. . .

Silver Fern Farms Announce Winners of the Inaugural Plate to Pasture Youth Scholarships:

Silver Fern Farms has awarded six Plate to Pasture Youth Scholarships to an exciting group of young people from around New Zealand who are developing their careers in the red meat, food and farming industries.

Silver Fern Farms Chief Executive Dean Hamilton says the talent emerging from the scholarship applications indicates a bright future for the broader red meat sector. . . .


Rural round-up

July 5, 2017

Rangitikei dairy farmer Stu Taylor changes the way he employs dairy farm staff –    Jill Galloway:

The social lives of workers are changing and dairy farmers must change the way they employ dairy staff, says a Rangitikei dairy farmer.

Dairy farm owner near Santoft Stu Taylor said he aimed for a roster of five day on and two day off for the 30 staff employed at his farm.

At the DairyNZ ‘People Expo’ in Palmerston North, he said he was committed to a better way of working for dairy farming. . . 

Rural women ‘in crisis’: Letter reveals dark side of farm life – Ruby Nyika:

Rural women struggling with mental illness have been neglected for too long, a Waikato woman says.

In a pleading letter sent to Rural Women NZ, Mary Anne Murphy calls for more mental health support and funding specifically for rural women.

Murphy, who no longer lives rurally, felt compelled to act after government ministries announced at Fieldays that $500,000 would be committed to Rural Mental Wellness, targeting struggling farmers. . .

New father Richard Morrison wonders what is ahead in farming for his young son:

Thirteen weeks ago I entered into a new venture: fatherhood. I try and imagine what the future may have in store for little Henry but that task is challenging and a little daunting.

I think about the change we have seen the last 35 years, since my childhood, and even the last 17 since I entered the workforce. The world is a bigger place and it moves a lot faster: I was able to attain a university degree without using a computer – now some toddlers seem to be attached to them.

The prospects for one little person is hard to foresee in this big, fast moving world but there is one thing I do know. Growing up in New Zealand on a farm, in a tight knit rural community, with access to quality local schools prepares you incredibly well for life. This is as true today as it has been for the last 100 years. . . .

Kiwi farmer wins Australasian business management award:

New Zealand sheep and beef farmer Jonny Elder has taken out the 2017 Rabobank Business Development Prize, a trans-Tasman business management award for up-and-coming farmers.

Selected from a group of New Zealand and Australia’s most progressive young farmers, graduates of the 2016 Rabobank Farm Managers Program (FMP), Mr Elder, from Northern Southland, was recognised for his management project – which demonstrated how he had utilised the learnings from the program to create and implement a business plan to maximise the potential of his farm. Designed for emerging farmers, the FMP focusses on the development of business management skills, with an emphasis on strategic planning, leadership and self-awareness. . .

Dairy farmers moving to ‘good returns’ from beef calves – Andrew McRae:

Demand for beef calves is driving down the number of bobby calves being processed and providing a lucrative side business for dairy farmers.

On dairy farms, where 70 percent of all calves are born, those not needed as dairy replacements have traditionally been sent for slaughter.

But that’s now changing, according to Doug Lineham, from Beef and Lamb’s Dairy Beef Integration Project. . . .

Pacific Alliance FTA negotiations hailed:

Federated Farmers says it’s excellent news that New Zealand is underway with free trade agreement (FTA) negotiations with the Pacific Alliance countries of Mexico, Chile, Peru and Colombia.

The announcement by trade minister Todd McClay that the five nations will strive to improve market access and level the playing field is an important step in the New Zealand Trade Agenda 2030 strategy. It also represents the ongoing commitment from four members of the Trans Pacific Partnership (TPP) to improving the trade environment in the Pacific region. . .


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