Monday, 20 April 2020

Free Press: Decision Day


It’s Cut And Dried

Since we went into lockdown, two things have become clear. The danger of COVID-19 is much less than first thought. The Prime Minister said without the lockdown ‘tens of thousands would die,’ but the curve was flattening even before the lockdown came into effect (there is a lag). The damage to the economy is much greater than ever imagined. Even Free Press underestimated it when we suggested ‘hibernate the economy.’ It is clear cut that the Government must lower the alert level this week.

But, But, But…

What’s an extra week’s insurance? The logic of exponential growth applies to the future as well as the past. If three incubation cycles of lockdown have not eliminated the virus then four will further reduce it but not eliminate it. So long as it exists it can still come back. On the other hand, another cycle of rental payments with no revenue will finish off even more jobs and businesses, and we’ll still face the prospect that we just pushed any future outbreak further into winter.

What SMEs Are Facing

Supermarkets retain lobbyists who talk to Wellington. A few months back the Government was going at them for being a duopoly. Now the Government has locked in the duopoly by closing their smaller competitors! It’s an example of how SMEs have been forgotten by the Government, who have little understanding of it.

Key Dates

Today is the 20th when businesses find out who’s paying last month’s bills. It sets the scene for compiling this month’s invoices. The cashflow crunch is about to become real and the Government’s simultaneous lockdown decision won’t be able to account for it. Then there are taxes due. We hear rumours the IRD has pushed the dates back but they do not appear to have written to taxpayers with this news in the same assiduous way they follow up missed payments. Altogether SMEs have had a raw deal from the Government’s lockdown policy.

A Good Read

Hard-arsed economic modeller Ian Harrison has published a demolition job on the Government’s COVID-19 modelling. It is worth the read, here. In short, the predicted high death numbers depended on (1) assuming the Government had no ability to trace and isolate infected people and (2) assumed that someone dying at 85 was that same as someone dying at 17. One can argue the ethics of (2), but together these adjustments bring the forecast deaths from the high thousands to the low hundreds.

A Mess, But What Would We Do?

ACT would have practiced open government. We would set up the key decisions to be made and openly invite input rather than keep to a rather narrow coterie of favoured academics. ‘The Government seeks submissions on modelling the likely spread of COVID-19 due by the end of this week. We will publish the submissions and seek criticism of them for two days then make decisions next Monday.’ That is how you harness the power of a free society, get better advice, and take people with you. The Government could have benefited from critiques like Harrison’s at the outset. The same applies to getting better testing and tracing, and so on.

Government Is Not the Solution To The Problem…

…Government is the problem, said Ronald Reagan. We may face a longer lockdown because the Government cannot trace people who are ill. It will not release the report it commissioned to assess its own tracing ability, but leaks say it is damning. As David Seymour argued in the Herald last week, when people say the future needs more government, we need it to do the job it has, not expand to replace parts of the economy it has destroyed.

You Heard It Here First

Three weeks ago Free Press argued that businesses should be able to open if they are safe, not if the Government deems them ‘essential.’ ACT kept beating the drum and, in a familiar pattern, the Nats started saying it and now the Government’s mantra is ‘safe not essential.’ The devil rests in the detail, though. It is illogical that butchers cannot open on a one-in-one-out basis but dairies can, while supermarkets remain open on a 50-in-at-a-time basis.

A Good Week

Besides safe not essential, ACT said MPs should take a pay cut over a month ago. We prepared the legislation to do it. We were puzzled when Trevor Mallard said he’d just phoned up the Remuneration Authority and asked for his pay to be cut. We tried doing the same and got told it needed legislation. Go figure. Now ACT has the legislation to do what the Prime Minister announced. She need only call us.

Health And Safety Nightmare

If you are a school principal you are liable for your students’ health and safety. A few years ago when the Health and Safety at Work Act was introduced, scared principals were putting their homes in trust. What do you do when the Government tells you to accept hundreds of kids from multiple ‘bubbles’ in close quarters? That’s what principals are asking.

Health And Safety Nightmare II

All company directors are also liable as Persons Conducting a Business or Undertaking (PCBUs). So if your staff are sending their kids to school and mixing multiple bubbles, are you liable for a COVID-19 cluster starting in your workplace? Are you liable to be shut down by Worksafe? By the way, who are Worksafe accountable to? There is no Independent Worksafe Complaints Authority such as the IPCA for the Police.

Back To School

Senior high school students feel the weight of the world on their shoulders. They believe (somewhat correctly, but not as much as they think) that their exam results define their life. It is insane that schools are being opened for Years 1 to 10 but not Years 11 to 13. If anything it should be the other way around but, as Auckland Grammar Headmaster Tim O’Connor has savaged the Government, they are being opened as daycare, not for learning, so they are opened for students who can’t be left home alone.

It’s A Mess But What To Do?

The Soviet Union gave rise to such fantastic wry humour because life was filled with contradictions. “They pretend to pay us, and we pretend to work,” is Free Press’s favourite. So it is in COVID-19 New Zealand. You have to keep your students safe, and let them come to school while the virus that shut down the world is still out there. The solution in both places is freedom. Empower people to make their own decisions within the laws of the land. In this case we should let Boards of Trustees and principals (and early childhood centres) make their own decisions. It’s the only way that principals, parents, and parents’ employers are going to find a way to balance competing objectives.