REPORTS

The Government’s response to the economic challenges of Covid-19 has primarily focused on new spending which will balloon public debt from 19% of GDP in 2019 to 30% in 2020 and peak at nearly 54% of GDP by 2024. It is only expected to modestly fall to 42% of GDP by 2034.A clear choice has been made to defer paying the costs of the Government’s economic response to the Covid-19 crisis into the future, either by lower levels of public... Read more

New Zealand is now on a dangerous path to higher public debt and unprecedented money printing with no credible plan for unwinding the situation before the next crisis, warns a new report by The New Zealand Initiative. Covid-19 and the various types of lockdown responses have caused many governments to go even more heavily into debt and print money to sustain asset prices with borrowed money. Read more

Since the first cases of the Covid-19 virus emerged in the Chinese province of Wuhan, several East Asian countries including Singapore, South Korea and Taiwan have successfully 'flattened the curve' of infection rates. The three countries used common public policies in the first 50 days since each registered their 100th case. Read more

Several legal scholars have raised concerns about the legality of the emergency powers during the Covid-19 crisis exercised by Government officials – specifically, the Director General of Health, Dr Ashley Bloomfield’s orders under the Health Act 1956 sending the country into lockdown on 25 March. The courts will decide the lawfulness of Bloomfield’s actions now that they have been challenged by former Parliamentary Counsel (and legal textbook author) Andrew Borrowdale (the Borrowdale proceedings). Read more

In preparation for New Zealand’s September 19 referendum on cannabis, all sides of the debate are sharpening their lines of argument. Read more

On 14 May, the Government introduced an Overseas Investment (Urgent Measures) Amendment Bill to the House and held its first reading on the same day. It had such little regard for public consultation the deadline for submissions was set for 4 pm on Monday, 18 May – giving submitters only two full working days. Read more

Alongside South Korea, Taiwan is one of the few countries to “flatten the curve” of Covid-19 without a national lockdown due to its prior experience with the SARS epidemic of 2003. New Zealand’s pathway is similar to Taiwan’s and there are lessons to be learned as New Zealand moves into Alert Level 2. Last week, Deputy Prime Minister Winston Peters suggested creating “international bubbles” for countries with Covid-19 success to introduce new trade connections and travel links. Read more

As New Zealand nears the end of the Covid-19 public health emergency, all eyes are on the economic recovery. The New Zealand Government has already indicated the post-recovery world will look quite different. It has also given itself great flexibility in designing policies for this crisis. For example, it has temporarily suspended the financial scrutiny forms called Regulatory Impact Statements, relaxed visa rules and is about to relax planning procedures. Read more

New Zealand’s universities have, at least since the mid-2000s, relied on foreign students for substantial parts of their income. Though the extent of foreign students’ contributions is obvious to anyone working in academia, they are not well appreciated outside the tertiary sector. Worse, even though reliance on income from foreign students has been designed into the tertiary sector’s funding model since the Clark administration, the Government of today seems to have forgotten, or at best underappreciated its importance. Read more

The Covid-19 pandemic and economic lockdown means many countries are looking inwards. But global cooperation will be an important lever out of the economic and social consequences of the virus. The New Zealand government should embrace the opportunity to reinforce its image as a clean, open and lawful nation. Read more

As the world struggles to contain Covid-19, many countries are at different stages of containment and mitigation since registering their first 100 cases. Some, like South Korea, are more than a month further ahead compared with New Zealand and could offer a good example of what might be expected as New Zealand transitions out of Alert Level 4 lockdown. As of April 20, South Korea is 91 days into its Covid-19 response compared to New Zealand's 52 days. Read more

The New Zealand Initiative supports government deficit spending during the Covid-19 crisis on the basis that it is funded by conventional borrowing. This report explains why funding deficits by central bank credit creation with no credible timetable for reversing the situation is a route to financial disaster. The cost of the Covid-19 Alert Level 4 lockdown in lost jobs and national income is horrendous, and the government spending response is unprecedented in living memory. Read more

In deciding whether to extend the current lockdown, the government must balance the likely benefits of reduced sickness and deaths against the cost of lost national income and jobs. To do so systematically requires an analytical framework that organises the available information. Read more

Singapore has set a high standard for dealing with Covid-19 and despite its decision to enter a lockdown this week, New Zealand can learn a lot from the country, according to a new report Lessons from abroad: Singapore’s Covid-19 containment model from the New Zealand Initiative.Although Singapore has enacted a “circuit breaker” lockdown to defend against some new sources of coronavirus, it could make this choice due to its earlier efforts to identify, control and contain the pandemic threatening its... Read more

The Covid-19 outbreak will likely lead to a significant economic recession. The government's pandemic response has rightly prioritised maintaining employment and the ability of firms to recover quickly when the crisis abates.To this end the Government was quick to implement a wage subsidy scheme but as the crisis has evolved, it is only right to ask whether this scheme remains fit for purpose. This report compares wage subsidy schemes in Canada and Australia with New Zealand’s Read more