What a relief that The Hobson has survived the Covid19 crisis; a little piece of localism nipping through to elude the giant hammer blows of a global pandemic.
I spent the lockdown at home with my family in Remuera. Like many, I suspect, I found it a special time. Sure I was busy on endless conference calls and zoom meetings, but we got back to the basics – lots of good food, exercise and family time. I even cooked beef cheeks.
Some things were different – the top of Mount Hobson was crowded most times I went up; some things didn’t change – the council does odd things. Every time I walked down Remuera Road I’d be overtaken by cavalcade of empty buses, roaring and belching toxic fumes.
There was a serenity and sense of national purpose.
The unfolding economic disaster, however, drained from the pleasure. I felt especially for small (and medium sized) businesspeople who have borne so much of the pain. Told, in the national interest, to close, but in many cases struggling to survive and seeing a lifetime’s work imperilled.
I’m writing this column they day after the Budget. And in it we see the cost of virus - $140 billion in projected extra debt (around $80,000 per household), as many as 160,000 made or to be made jobless and a big mountain to climb.
I’ve every confidence that we’ll bounce back. Kiwis will make new plans; find new opportunities.
But the challenge is serious.
The two over-riding questions are:
How do we avoid making the economic disaster worse than it needs to be?
And how can we get back on track?
We’ll reduce the damage by opening up the economy as quickly as we safely can. Concentrating not so much on what we can’t do, but on what we can do.
It quickly became obvious that our lockdown was too tough – in comparison to Australia where construction continued and the health outcomes were the same. We needed more speed. Even now, in Level 2 we should be doing everything we can to open up the Trans-Tasman bubble as soon as we can, and getting international students through quarantine to sustain that important industry.
Given the scale of the problem we need to avoid low quality spending. The budget includes a large number of big spending items – but very little detail or accountability for what it was to be spent on.
Then, to reduce job losses, we needed to get some cash into the hands of struggling small businesses, to cope with costs such as rent.
Incredibly, given the scale of the spending in the budget, we saw nothing there – beyond the welcome extension of the wage subsidy, which of course flows to employees.
Looking out, the key to get on top of the debt and to bring back jobs is to get the economy firing again.
Pragmatism around the 1-metre world will help. If we spend the next six months with our productivity hobbled by excessively rigid rules, enforced by clip-board Charlies, we’ll struggle.
Then, unlocking private sector investment is the key to growth and innovation. We won’t rely on Wellington committees to reinvent the economy; we’ll trust Kiwis to work out how to get back on their feet. We’ll keep taxes low, we won’t regulate firms to death or keep changing the rules, and we’ll back them to succeed.
Finally, we’ll use the Government’s balance sheet to invest in quality infrastructure – like National did with Ultra-Fast Broadband – in upgrading our skills, turbo-charging the innovation sector and in improving the quality of public services, such as health.
It’s one things to have grand announcements, such as for Kiwibuild’s 100,000 houses, Light Rail down Dominion Road and a host of other things; it’s another thing to deliver them.
Thankfully, we appear to have got through the worst of the health crisis – and with good testing and tracing we should stay there; the task now is get the economy back on track.
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