The real leader of the opposition, David Seymour, is advocating that we allow private enterprise to take over the country’s quarantine system, the system that so far has managed to shield us from everything but the occasional community outbreak of covid that has been dealt with successfully, at least so far.
From his press release:
“With every passing day, New Zealand’s isolation is turning from its great strength to its greatest weakness. As the rest of the world moves on from COVID, we must be prepared to move with them.
“Under ACT’s plan, owners of currently mothballed hotels could seek a licence to operate MIQ according to strict criteria. These criteria would make for safer MIQ than the standards met by the Government. The criteria are:
Only those with a negative pre-departure test would be eligible
Only vaccinated travellers could use this MIQ
Only vaccinated people could be on site, regardless of their employment status
All people on site would have to be saliva tested every second day
Providers must be licensed, and could lose their licence for breaching these conditions.
“These criteria are much stricter than the Government’s MIQ scheme which takes unvaccinated travellers and tests them only three times in 14 days, and still can’t guarantee that all workers on site are vaccinated or tested.
And so far his proposal has received some positive responses from the media, with no negative push back like saying that the idea proved to be disasterous for Melbourne.
If your criteria is that we need to open up the borders so that farms and orchards and restaurants can employ cheap labour again then the current system is a failure. If your criteria is that we need to be kept safe then the successful prevention of the spread of covid after 158,014 people have been successfully through quarantine with only a handful of problems would suggest that the system was working rather successfully. You could loosen things up. But the threat of the spread of Delta Covid would logically warn against taking this risk.
If you want to see how spectacularly bad private enterprise can handle quarantine then Melbourne in the past 12 months provides a shining example.
The essence of the problem was that the Victorian Government hired private security firms to manage Melbourne’s Quarantine hotels. The organisation was shambolic and breaches of the quarantine resulted in the three month lockdown that Melbourne endured last year.
The ABC has this description of what happened:
… [A] number of cases of coronavirus in late May and early June (2020) were linked to infection control breaches.
Genomic testing has linked many of the state’s recent infections back to private contractors working at two quarantine hotels.
Reports have also emerged of contractors having sexual relations with guests and families being allowed to go between rooms.
It comes as two men who both spent a fortnight in hotel quarantine in Melbourne tested positive after returning home to New South Wales and the Northern Territory.
Chief Health Officer Brett Sutton on Thursday distanced himself from the decision to use contracted security guards, saying it was not made by him.
“But it was jointly oversighted by emergency management within the Department of Health and Human Services, Emergency Management Victoria and Department of Jobs Precinct and Regions,” he said.
The problem is identified in this article by Richard Holden in the Conversation. From the article:
But what can economics tells us about why this happened?
Thanks to the literature on “incomplete contracts” that led to a Nobel Prize for Harvard University economist Oliver Hart, quite a bit.
Using private contractors for hotel quarantine was destined to fail. It all boils down to a trade-off between costs and quality.
Using private providers is a good option when keeping costs low is more important than high quality. This was not such a case.
Hart’s classic 1997 paper on “The Proper Scope of Government” (co-authored with Andrei Shleifer and Robert Vishny) mostly considers privatisation in theoretical terms, with some discussion of prisons, garbage collection, schools, health care, policing and a few other things.
The animating idea behind the “incomplete contracts” approach is that there are some contingencies that contracts, no matter how detailed, can’t cover.
This could be because parties can’t conceive of all future contingencies. Or perhaps they understand what’s at issue but it is hard to codify that in a way a non-specialist court could understand.
Making those day to day decisions with a profit margin motivation will always mean that the cheaper rather than the safer option will be taken. And you can’t draft a contract covering every possible contingency.
As the Royal Commission Inquiry report into the breaches highlighted oversight and responsibilites were confused and there was no training of staff in prevention measures. From the report:
IPC measures are essential to a successful quarantine program. It was necessary to have those with the expertise in infection prevention and control deliver that training. Nothing short of constant reinforcement, supervision and oversight from those with the necessary expertise was what was required in such a highly infectious environment.
There were no infection prevention and control experts stationed at the hotel sites to give guidance, oversight or supervision on the range of risks to which hotel staff would be exposed and what they needed to do to mitigate those risks.
Advancing a proposal to provide privatised quarantine services may serve ideological preferences but there is a great deal at stake. And recent experience across the ditch suggests that it is a rather stupid thing to do. As Richard Holden states some services should be provided by the state and the measure of success should be the overall effect on the community, not on how cheap the job can be done.
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