Easing open the bars of the Covid cage

Dr Eric Crampton
4 August, 2020

Family coming to stay for the weekend is hardly a reason for home renovations. In a pinch, folks can bunk in together for a while. But if they’re going to be around for the next couple of years, well, it might make sense to put in the extension or build a sleepout. And the longer you wait to get started, the more miserable the experience for everyone.

Last week’s Friday Covid document dump confirmed that the Government is on the same page as the world’s experts on how long this pandemic has yet to run. A 15 June paper titled “A Sustainable Quarantine and Managed Isolation System” warns that a best-case scenario would have an immunisation programme beginning in early- or mid-2021, “with population immunity achieved late-2021”.

Alternatively, it may take “several years” for the pandemic to burn out.

In the best-case scenario, it would be more than a year until widespread immunisation could allow normal international travel to resume, without need for restrictions, isolation and testing. But it could take much longer. And the same paper warned that “current arrangements for quarantine and managed isolation were stood up under significant urgency in March and April 2020 in response to an emergency and are no longer sustainable.”

In other words, we are starting to figure out that the relatives sleeping on the couch are going to be around for a while and it’s worth getting on with the renovations that will let us all live a bit more comfortably.

The worse things look abroad, the more tempting it is to just keep the border closed. Keeping the border entirely closed will not happen: about a million Kiwis live abroad and have the right to return. And the costs of preventing others from travelling will rise substantially if the pandemic lasts at least another year.

Effective capacity in managed isolation has increased to just over 14,000 arrivals per month. While that sounds like a lot, the average month in 2019 saw over 250,000 Kiwis returning home after business trips, foreign study, holidays, or visits with friends and family. Non-resident Kiwis returning home from abroad for the longer term added about another 1,750 per month.

There will not be a lot of Kiwis keen on travelling to the Covid-ridden parts of the world, but the longer the pandemic lasts, the harder it will be to continue to defer travel. Even if Kiwis cut their travel to a quarter of what it was before Covid, they would still take up more than four times as much room as is available in the managed isolation system. Add to that tally the Kiwis abroad who would also like to come home, as well as the overseas specialists necessary in a wide range of business and infrastructure projects, and the need to safely scale up managed isolation becomes rather obvious.

If the Government expected vaccines or effective treatment to be just around the corner, maintaining the system as it is could be defensible. People can usually defer travel for a few months, barring emergency cases. Holidays to visit family and friends abroad can be delayed. Big trips abroad are once-in-a-lifetime events for a lot of us and putting them off for a year might not matter so much – and especially when going abroad is particularly unappealing. Business trips can be delayed, with video chats taking their place in the short term.

But the longer this all lasts, the harder it is to defer travel.

The odds of family emergencies abroad get higher over longer periods. 1.2 million Kiwis were born overseas. If ten percent of them have a family emergency in any given year requiring a trip abroad, that’s 10,000 spaces in managed isolation per month as they return home.

The costs of forgoing business travel increase as opportunities deferred become lost contacts and contracts – over 32,000 Kiwis returned from business trips abroad every month, before Covid. And companies here needing foreign experts can only defer those arrivals for so long before costs start rapidly escalating.

None of this is any argument for prioritising ‘the economy’ or business over health. Any outbreak here resulting in another lockdown would be economically devastating. Rather, it is an argument for building the systems and infrastructure necessary to be able to safely accommodate far more travellers than the system can currently handle.

By these numbers, scaling up is critical even if we consider only the needs of Kiwis. If we allow ourselves to think a bit more broadly, it becomes even more important.

New Zealand’s success in managing Covid makes the country a very attractive proposition. Students who would have studied in America, but who do not like the prospect of lectures via Zoom, could find studying here to be a very attractive alternative.

And many abroad, working remotely due to the pandemic, could bring their jobs with them to work remotely from here instead. As they would continue to be paid by their overseas employers, their work in New Zealand would count as the export of a service while they spent their earnings, and paid taxes, here. Other countries rightly see this opportunity: last week, Barbados began offering a one-year remote working visa encouraging people to bring their jobs with them to their island in the Caribbean.

These longer-term visitors, happy to cover their own costs in managed isolation as condition of entry, could reinvigorate the more tourism-dependent parts of the country and help ensure that our universities not need costly bailouts.

The Cabinet Paper released last week admitted that border arrangements cannot meet “future demand for increased arrivals to support the social and economic recovery”. The system has to scale up by rather more than the Government has so far announced.

But the system is not scaling up. And the election campaign may be a big reason that these necessary renovations to the managed isolation system are being deferred.

While Labour is almost certain to win, its biggest electoral risk remains a Covid outbreak stemming from failures at the border, and especially if it has done anything that could be portrayed as having loosened restrictions, or as having mismanaged the necessary increases in capacity.

Capacity and capabilities at the border have to increase; we have deferred the necessary renovations for too long already. The election cannot come soon enough.


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