The After-M*A*S*H

Dr Eric Crampton
Insights Newsletter
5 March, 2021

During the pilot episode of M*A*S*H, surgeon ‘Hawkeye’ Pierce wrote a letter home explaining the difference between surgery at a Korean War mobile surgical hospital, and the surgery back home.

In normal surgery, you have time to get everything right. Clean sutures mean less scarring. Finesse matters.

But at the field hospital, things are just a little different. Taking the time to save the leg of the man in front of you, while saving his life, means the man on the next gurney over dies. He needed attention too.

Hawkeye called it meatball surgery. It wasn’t pretty, but it was the least bad option.

The government performed some admirable meatball surgery in the pandemic’s early phase. The wage subsidy scheme came through unbelievably quickly and prevented a lot of labour scarring. A make-do border system was thrown together with bailer wire, and largely held in keeping the virus out while making it nearly impossible to travel.

A year in, policies set in a mobile army field hospital might stand reassessing.

The government promised $2.6 billion on ‘shovel-ready’ projects to prevent mass unemployment. None of the projects received more than the most cursory cost-benefit assessment. Consenting delays meant that not even the shovels were shovel ready, so the projects have not yet started.

The construction sector is running flat out. Without better assessment, the shovel-ready projects risk pulling scarce workers away from important jobs for building projects that add little value.

On the other side, if the government believes that border controls will have to run long after everyone is vaccinated, it really might be worth investing in systems enabling far more people to travel.

The government’s books show that things have, thus far, not been as bad as anyone has expected. But there is no extra money burning holes in the government’s pockets.

If we strip away one-off spending due to Covid, and if we strip away the effects of downturns on tax revenue and benefit spending, a substantial structural deficit still remains through 2025 – the end of the forecast period.

The Budget update might revise the numbers, but new spending programmes without new taxes would worsen the structural deficit. New Zealand needs to maintain debt headroom to deal with natural disasters.

The time for meatball surgery in the Covid response is over.

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