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Thursday, 23 September 2021 09:55

Questions over Govt's Covid strategy

Written by  Andrew Bayly
Andrew Bayly Andrew Bayly

OPINION: Questions have to be asked about the Government's Covid strategy.

The Government's principal approach has been to impose a line of defence at our borders to stop the virus coming in. It has dawdled with rolling out vaccinations across the country. We are currently second-to-last in the OECD (overall about 119th in the world) and have less than a quarter of our population fully vaccinated.

This delay is not only a health issue, but increasingly an economic one, as the cost of lockdowns is huge - both to the economy and to the taxpayer. The current lockdown is costing the economy about $1.9 billion per week and the first fortnight cost the taxpayer $1.25 billion.

Relying solely on a line of defence at our borders has not worked. There have been at least a dozen border control failures, the most recent allowing the dangerous Delta virus to take hold in Auckland. All can be tracked to mishaps at MIQ facilities. Once through the border, our abysmal vaccination rate meant we had no choice but to impose an extended, national lockdown.

The other danger area is our ports, and we have had three near-misses with ships coming into Tauranga, New Plymouth and Lyttelton with Covid cases aboard. Proper facilities should have been established away from our cities, such as at our military bases. These would have provided immediate access to greater space, cooking facilities and ease of providing entertainment options for those in isolation.

According to budget documents, Finance Minister Grant Robertson has already allocated around $45 billion of the $50 billion Covid Response and Recovery Fund that was set aside to deal with the pandemic. This leaves only about $5-$6 billion unallocated in the kitty. Around $12 billion has been squandered on projects completely unrelated to the pandemic.

Robertson's response to this issue? Don't worry, we will borrow more money - and the economy is strong anyway. This attitude highlights two worrying issues.

The first is that over the past 18 months, our debt has almost doubled from $60 billion to just under $120 billion. More troubling is that at the rate the Government is borrowing - currently about $110 million every day - our debt is forecast to increase by approximately another $65 billion over the next three years to $184 billion. That's about $100,000 for every household in New Zealand.

It can be appropriate to increase debt to fund measures to stabilise the economy in a shock or respond to a natural disaster. But not for many of the pet projects that have been funded out of the Covid Response and Recovery Fund. 

Wherever I have been over the past few months, the first issue raised by business owners is the shortage of talent. There are two edges to this.

The first is there is a maximum level of employment - and we are close to it. In normal situations, firms have a choice as to who they hire; under-performers are not hired. However, with our borders closed and skilled labour in short supply, firms are not investing in growth as much as they could, or they are downscaling their businesses so they can meet customer expectations. Neither is a good outcome.

The second issue relates to our immigration settings. It is outrageous that we have many thousands of immigrants who have been here from the start of Covid last year whose visa status is unclear. They are unable to bring their loved ones through MIQ to join them here in New Zealand. Understandably, many are leaving. 

The Government has been too slow to provide certainty for these people. The huge risk is that both our migrants and young Kiwis will leave New Zealand in droves as the rest of the world opens up.

Andrew Bayly is National's Shadow Treasurer.

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