From ACT New Zealand <[email protected]>
Subject Free Press, 19 May 2020
Date May 19, 2020 12:09 AM
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Did We Miss A Stealthy Covid-19 Wave In February?

For the five Februaries from 2015 to 2019, an average of 1,114 over 80 year-olds died in New Zealand. This year it was 1270, up 156 deaths or 14 per cent. The same figure was up by 60 (five per cent) in January and 102 (8 per cent) in March. All of this from an Official Information Act request by a resourceful ACT member.

Probably Not, But…

The same data shows variations of 100 from the five year average in winter months, perhaps due to different flu seasons. This February’s results could just be a random variation. But February deaths are usually low and consistent, there is little flu about in the hottest month. Did the Government’s woeful preparedness in general and early Covid-19 testing in particular, mean we missed an early wave completely? These are the sorts of questions an eventual Royal Commission must ask.

123 Days

Today is 123 days from election day and 109 days until advance voting begins on 5 September. As the fog lifts on the Covid-19 crisis, a dash to election day appears. The Government’s Budget has set the scene for an election of stark choices. Throw money at every problem and require future generations to pay it back, or unleash the potential of businesses and innovators?

Interesting Correspondence

Young New Zealanders don’t only write to Jacinda Ardern. David Seymour has a latent army of fans who powered him through a whole season of Dancing With the Stars. We only wish they could vote in elections. They are now sending Instagram messages: ‘Hi, I am 16, where does the Government borrow all that money from, is this bad for young people?’ We can only tell them the truth. Government debt will hit $200 billion, and you who are around longest, young ones, will be around the longest to pay the most.

Not A Covid-19 Response Budget

The striking thing about last week’s Budget is how little was about Covid-19. Trains, horses, ferries, tree planting, state house building, reuniting refugee families and free school lunches are all existing Government expeditions only tangentially related to Covid-19. The welcome extension of the wage subsidy expires the week after the election, but the Government has $20 billion of unallocated spending to promise people before then. David Seymour’s well-watched speech in response to the Budget is online here. <[link removed]>

What’s Not There

What’s missing is a plan for a bottom-up recovery. One pundit called it an SME-free budget, noting the $10 million allocation for the Government to help businesses use IT (thanks, but no thanks). The aimless $400 million for tourism is out of all proportion to the $42 billion industry that is most acutely hit by the Government’s Covid-19 response. More importantly, there is no clear plan for getting to Alert Level 1, reopening the borders for tourism, export education, or vital horticulture workers, or upgrading tracing to deal with any future outbreak without finishing off what’s left of an economy.

What Is In There

The Government has two spending approaches. For new spending, this is a crisis. For old spending, this is business as usual. And so, new plus old equals deficits. The result is at least two years of $30 billion budget deficits. ACT’s Alternative Budget <[link removed]>, by contrast, shows how $7 billion a year of low quality spending could be cut to balance the books by 2024.

Heroic Assumptions

As Damien Grant notes <[link removed]> in another excellent column, the Treasury’s assumptions that economic growth will fall only 4.6 per cent before rebounding 8.6 per cent in 2022, and unemployment will rise to only 8.3 per cent before falling to pre-Covid-19 levels in a couple of years, are heroic.

Also Heroic

Treasury’s forecast of inflation well under 2 per cent for the foreseeable future seems similarly hopeful given the Reserve Bank just agreed to buy $60 billion of government bonds, funding their spending spree. The results of 1970s policies are inflation and unemployment, and we may be about to have an enormous generational lesson in the limits of state action.

We Have To Win

And we can. Just as Jacinda Ardern has owned the response to the crisis, she will own its downside. We expect the centre-right vote to recover as the costs of the Government’s policies become clear. Either of New Zealand First and the Greens falling below 5 per cent will prevent their vote from registering, pulling back the left by five percent if one fails and ten if both do. It will be the worst election in a generation to win but we have to save that generation from neo-Muldoonism.

MP Pay

After two months of campaigning by ACT, the Parliament has passed legislation to cut MP pay. This happened only after every other party conspired not to debate David Seymour’s amendment to make the 20 per cent cut mandatory for all MPs. The Remuneration Authority is now negotiating with MPs what the cut should be. We wish we were making this up. David Seymour’s speech on the legislation is here <[link removed]>.

The Rule Of Law

For yesterday’s Sunday Session, David Seymour interviewed <[link removed]> the erudite former Attorney-General Hon Chris Finlayson QC about the Government’s Covid-19 response as it relates to the rule of law. The main take out, other than an excellent exposition of what the rule of law is and why it matters, is that the Government should have seen the crisis coming and prepared itself to put in place restrictions lawfully rather than the ad hoc police state we suffered.

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