Working for New Zealand

Dr Oliver Hartwich
Insights Newsletter
27 March, 2020

These are times like no other. Unless you are well over 80, you would not remember an existential and comprehensive crisis like this. We are in uncharted waters.

The disruptions of the lockdown are felt by everyone. Every family, every local community, every business, every everything. The situation is costing us nerves, sleep, jobs and money. Nothing is anymore as it was just a few weeks ago.

It takes specialist expertise to deal with the public health challenge Covid-19 presents. The science is complex. We must trust the epidemiologists, virologists and biomedical experts to guide us. Politicians are well-advised to listen to the science. Most do.

In the same way, we need specialist expertise to deal with the economic policy challenge of the Covid-19 crisis. The unprecedented and simultaneous shutdown of the world’s economies creates a maze of challenges. To navigate it takes competence, experience and judgement.

Over the past couple of weeks, our Initiative team has worked tirelessly to help devise a way out of this crisis. Working from home, and almost literally 24/7, my colleagues have jointly mapped a pathway out of this disaster. The internet is keeping us together – along with our commitment to New Zealand.

In ordinary times, we release one or two papers a month. This week, the Initiative team has published four papers on the crisis.

Each paper contains evidence-based advice on what our country must do now to get through the immediate challenges. And each enables New Zealand to quickly recover from the Covid-19 shock.

My colleague Dr David Law has looked at how we can best save hundreds of thousands of jobs over the coming months. Having worked at the OECD in Paris, David is familiar with wage subsidy schemes from around the developed world. That is why he recommends New Zealand should follow the example of short-time work allowances, which worked wonders for Germany during the GFC.

Our chief economist Dr Eric Crampton, supported by research assistant Leonard Hong, has produced a blueprint for New Zealand to manage the public health challenges, support companies over the crisis and secure Kiwi families’ livelihoods. It is already influencing government policymaking.

David and Eric also warn us in a joint paper against introducing a Universal Basic Income. Though superficially appealing, such a scheme would be expensive and would not preserve jobs. In its place, they propose to extend the student-loan scheme to everyone.

Eric has also provided a timely paper to remind the Government that during the Covid-19 crisis it should triage other Parliamentary business and put unnecessary political activity on hold.

Meanwhile, our chair Roger Partridge has advised on the constitutional and parliamentary implications of the lockdown. Behind the scenes, Roger also helped to avoid a major legal calamity in labour law.

I have done my bit to ensure that critical companies can circumvent legal obstacles to serve New Zealanders during this lockdown.

And we have been in constant contact with politicians from the government and the opposition: to pass on issues, to give advice, to prevent mistakes.

Physically separated but united in spirit, our team has done what we do best. To work towards good policy.

We cannot pretend this crisis is an opportunity. But we do believe we can help New Zealand in responding to it.

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