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The plan for Monday

Written By: - Date published: 9:43 am, April 18th, 2020 - 30 comments
Categories: Economy, Free Trade, Globalisation, health, health and safety, labour, trade, uncategorized - Tags: ,

Even if New Zealand gets out of the immediate Covid-19 infection better than most other countries, the result is still a wrecked world and a slow recovery.

What we face is something like an Australian firefighter with a hose and a tanker facing an onrushing wall of flame: they successfully dampen down a defined circle a few metres around the truck, but when the dark smoke clears what remains is a lonely circle of green among a vast landscape of charred smoking black.

Even our most reliable trading partners whose populations buy our goods will be very slow to start spending again on any scale as they themselves deal with everyone else’s uncertainty. Confidence requires trust, and that’s gone for a while.

The economic fallout defies calculation. Many countries face a far deeper and more savage economic shock than they have ever previously experienced. In sectors like retail, already under fierce pressure from online competition, the temporary lockdown may prove to be terminal. Many stores will not reopen, their jobs permanently lost – they will be our friends, relatives and neighbours up and down our street. Millions of global workers, small-business owners, and their families are facing catastrophe.

In response we are witnessing the largest combined fiscal effort since World War 2. Our own government has already spent over $10 billion on direct wage subsidies to businesses since it started just a few weeks ago.

What we are now waiting for from government after the announcement on Monday is the near-impossible upon the near-impossible: when we get out of the health disaster, how do we get out of the economic disaster – and retain our social fabric and the governments’ social license to do any more. How much chemotherapy can we take?

What we are now waiting for, then, is quite unreasonable to expect – but we must.

If the response by our businesses and households is risk-aversion and a flight to safety, it will compound the forces of stagnation. It is unlikely that the public sector response to accumulated debt will be austerity.

So Monday’s Prime Ministerial announcement must only allow us a mere moment to appreciate how we avoided the worst of a global fire.

Monday must signal how we will be collectively organized to rebuild our country.

30 comments on “The plan for Monday ”

  1. Treetop 1

    Employment lawyers are going to become the busiest they have ever been as I predict that there is going to be a rise in employment disputes when it comes to safety.

    I am not sure if employees will get ACC cover for exposure to Covid-19.

    • Ad 1.1

      The rules in that respect haven't changed.

      The Health and Safety Standard Operating Procedures – across all industries – have certainly changed.

  2. Adrian 3

    Your firefighter example is interesting. A matter of a few weeks after the fires Eastern Australia was drenched in rain and within days most of the place was greener than anywhere in NZ has been for 4 months. For an example look up Russell Crowe's before and after shots of his NSW farm. Now replace the rain for the huge financial stimulus that most countries are about to do and I wouldn't be surprised if we are not saying in a few months "How the bloody hell did that happen ?" I hope so anyway.

    • Ad 3.1

      A lot were expecting a so-called "V" shaped recovery out of China.

      None of the commentary now says that's happening.

      In fact since reinfections are likely, it could easily be "W".

      The firefighter thing was a simile, nothing more – let's not over-extend it.

      • RedLogix 3.1.1

        A lot were expecting a so-called "V" shaped recovery out of China.

        The Chinese economy is highly dependent on trade and right now their customers are all on an enforced holiday. And when they come back many will be taking their business elsewhere.

        This is three crisis at once for China; their insane debt bubble (think sub-prime in every economic sector all at once), their rapidly ageing population that precludes a consumption based recovery, their huge dependence on exports, and a fatal blow to their credibility all bode very poorly for the CCP right now.

        I do wish the best for my Chinese friends and family, but in this I'm really only conveying the concerns they are telling me.

    • RedLogix 3.2

      The eucalypt species is remarkably fire adapted.

      It's quite remarkable to drive through an area that burned less than a year ago and see how fast it recovers. The tree actually sprouts millions of tiny temporary leaves directly from it's trunk, allowing the core of the plant to collect just enough energy to sustain it's recovery. It's quite a sight, blackened trunks everywhere, covered in bright green leaves.

    • Gabby 3.3

      Let's wait and see how long that green lasts.

  3. RedLogix 4

    I've been using this site to track the numbers right from the beginning. Not because I have any reason to believe it's veracity over any other, but because it's been consistent and transparent.

    The number that I'm scared of is the one in the headline banner, where it calculates the CDR (Case Death Rate). A month back when China dominated the data it was close to 3.4%. Now it's double that at 6.8% … and this is now based on much larger numbers.

    Of course both the numerator (the number of deaths) and the denominator (the number of proven cases) are subject to substantial uncertainty. The data is not being collected uniformly and reliably across all nations. But however you cut it, the CDR trend is rising slowly and inexorably, it looks like this damned virus is more lethal than expected.

    In this NZ's plan to eradicate, even on narrowly utilitarian grounds, will prove to be the right one. And this is even before we consider the long term impact of what I suspect will be a long fat tail of chronic medical issues arising in the survivors.

    Australia looks on track to eradicate as well; their govt is just as committed as ours, just taking a somewhat less draconian Level 3 style approach that seems to be working well enough so far. In a few months the two nations will likely open up to travel again as a regional bubble … but the rest of the world looks like being off-limits for the foreseeable future. Worst case it could be years of highly restrictive travel.

    China and the USA are both going to go through substantial turmoil, although there are good reasons to expect the Americans to emerge in a few years time regenerated and resurgent economically. But it looks increasingly likely that CV19 is going to be the event that brings this second major phase of globalisation that started in 1945 to an end. The US will accelerate it's process of regionalising back into it's continental shell; the rest of the world will be largely left to it's own devices … for both good or ill.

    The ANZAC entity will perforce have to regionalise as well. The US may not totally ignore us, but we can no longer assume their implicit security guarantee. While this may not seem very important at the moment, the very powerful question of food security in our region may well become the next acute question.

    While our tourism industry has gone away and is unlikely to return in any similar form soon, our agriculture is about to resume it's place as our crown jewel. But the ground is shifting rapidly which means some agile and tough minded diplomacy is necessary. We must repair our political relationship with Australia and play our part in the security of both nations.

    Then we'll need to consider fresh trading relationships within SE Asia. Singapore is the established player here, but Taiwan and St Korea have even greater potential. Plus these are all nations who have well managed CV19. If NZ and Australia both approached this challenge as partners rather than rivals it's entirely possible to make this work well.

    To borrow your firefighter metaphor … yes as the immediate firefront passes over us we will find ourselves isolated as a nation on the tiny patch of green we managed to save. But the eucalypt forest recovers fast, and in very clear stages the green starts to return. The world will likely not return to a fully globalised form for many years, but there is no reason to think a lonesome NZ will remain stranded at the far end of the world. We have the great good fortune as a nation to have good strategic partners and potential friends in our neighbourhood.

    • Ad 4.1

      Cheers Red I try not to sound too pessimistic. Just hungry for the actual plan.

      The nations we have close trade ties with in Asia are also the ones recovering fastest. It's as if health recovery defines our new de facto trade-preferred group.

      It's impossible to see trade barriers not going up from the EU, UK, and US. That part of globalization is in decline and we will be damaged through it.

      Both New Zealand and Australia will have comparative advantages to many countries which will get stronger:

      – Media freedom

      – Reflexive democracies, low corruption

      – Strong health, police, and judicial systems

      – Stuff people will always want in very high quality food and minerals

      – Attractive places for skilled and wealthy migrants to live

      – Relatively low regulations, ease of doing business, and now the one to emphasize:

      – Safety and cleanliness and low people-density

      So we have some things to reposition on.

      • Tricledrown 4.1.1

        If the govt is prepared to spend enough we can come through this reasonably well off compared to the rest of the world.We had massive shortages of IT ,Construction,Caregivers if the govt pushes money and training in these areas it will soften the blows.

        • New view 4.1.1.1

          Tricledrown
          “If the govt is prepared to spend enough we can come through this reasonably well off compared to the rest of the world.”

          don’t loose sight of the fact that the Government has no money of its own. It’s yours and mine and what this Government borrows will be paid off by you and your children maybe even our grandchildren.
          Some people talk like the Government is Father Christmas. Yes this money has to be spent but it will be at a huge cost to our future.

          • Tricledrown 4.1.1.1.1

            Rear View you have no idea how economies work you have been sucked into the economy works like a household budget right wing propaganda pushed by the like of Reagan and Thatcher who both ran up massive debts. We have had much higher debt in the past .We have come through levels of debt at 260% the economy grew and debt went down. Read a little about the economic history of NZ.

            The US has grown with debt levels at 130% ,110% higher than us.

            Economies can sustain high levels of debt.

            Spending that money on projects that increase productivity is the best option.

      • RedLogix 4.1.2

        Exactly. There are moments when the horror of what is happening on the other side of the world leaves me despairing. It's not just the personal tragedies and grief, but you just know the world as we have grown up with has gone away. There is a deep sense of loss in that.

        But you are also perfectly correct, NZ and Australia have so much to be thankful for, your list covers the fundamentals well. The really interesting challenge from the left wing perspective is inequality … how to re-position and re-balance ourselves in the world in a manner that reduces inequality and enhances social cohesion.

        In this I keep returning to the fundamentals of nation building, strong external security, strong internal transport and communication, strong governance, balanced demographics, energy and food security, and a balanced economy. The Eco-Modernist ideal that leverages evolving technologies to progressively decouple human development from it's impact on nature is the shining progressive light. In this we cannot retreat into isolationist autarky, we will always depend on trading partners to some degree.

        As a nation we first have to decide what we want. Only then can we put together a plan to get there.

        • Ad 4.1.2.1

          Your EcoModenist link is several posts in itself. It's confident and often non-intuitive in its optimism. Hence refreshing.

          Pope Francis did one five years ago which was less optimistic and sought to integrate alleviation of poverty with alleviation of environmental damage in all its forms.

          http://www.vatican.va/content/francesco/en/encyclicals/documents/papa-francesco_20150524_enciclica-laudato-si.html

          I've got a post on New Zealand's declining water quality coming up – I'll have a think about the Eco-Modernist manifesto in that context and see what else I come up with.

          • Poission 4.1.2.1.1

            You have read the report on the study week from the pontifical academy of science.Where the worlds experts on catastrophe theory (and complex systems) reviewed the problems and science to allow better decision making ie policy.

            Premise
            The problem. The world is facing major threats caused by the expansion of human activities, among them the deterioration of the environment, the depletion of natural resources, and the destabilization of economies and social order. The long-term threats (in the scale of decades) to the sustainability of our planet, like global warming, are accompanied by the immediate dangers of natural and man-made disasters; our vulnerability to them is greatly magnified with each passing year, and this undermines our ability to maintain a sustainable and productive world into the twenty-first century and beyond. Human society has increasingly recognized such threats. Throughout the world, huge resources, hundreds of billions of U.S. dollars, are being spent annually to counteract them. While these efforts are commendable because they prevent part of the potential damage, on the whole they have reached a kind of stalemate: the destabilizing factors prevail, and the scale of possible catastrophes is rapidly growing. Both history and common sense tell us that basic research is pivotal to breaking such a stalemate. Indeed, since ancient times, basic science has repeatedly rescued humanity, providing "new solutions to old problems". The present study-week will engage in the search for such new possibilities, focusing on the major responsibility of today's scientific community. At the same time, we recognize that scientific initiatives can be useful only if they can be implemented as a public policy and are acceptable to society from moral, ethical and spiritual points of view. These issues are also included in the programme.
            How will this study-week differ from the escalating multitude of scientific meetings, from technical discussions to global forums, that are already dedicated to these problems? The distinctive features of this study-week will be:

            brainstorming discussion without any formal limitations;
            – a small number and a high level of participants;
            – a focus on cutting-edge basic research;
            – a focus on what can be done, rather than simply alerting the audience to growing threats.

            In combination these features are unique, so that this study-week will not duplicate other meetings devoted to similar subjects, but will complement them.
            Why the Pontifical Academy of Sciences? Since hardly anybody else has the capacity to set up such an unusual meeting, with a potential for affecting the global agenda, we believe that the Academy has a responsibility to do so.

            Keilis-Borok et al.

            http://www.accademiascienze.va/content/accademia/en/publications/scriptavaria/scienceforsurvival.html

        • woodart 4.1.2.2

          its already happening. the $25 a week increase in benefits and doubling the power payout will be a big leveler. it slid through without whingeing because of the looming lockdown. never would have happened otherwise. very shrewd move by grant and jacinda. now we have even have righties calling for top end tax increases. shock,horror! they are even recanting(some of them) trickledown.!dont forget we even had an increase in the minimum wage in the middle, and because suddenly essential workers like supermarket staff were one of the big winners, it went through with nary a whinge. ceo's are falling over each other in their haste to take a salary cut, last one to do so looks like a piker. at the beach I live , airbnb houses are suddenly up for rent at nearly reasonable prices . commercial landlords will have to sharpen their pencils as many big office dwellers have suddenly realised they are paying rent for no good reason.

          • RedLogix 4.1.2.2.1

            All welcome and helpful (at least for some) developments. When a crisis hits strong societies respond with more social cohesion not less.

            Still the crisis always passes and we revert back to the mean. What people here really want are pivots that take us in another direction altogether.

    • Poission 4.2

      In this NZ's plan to eradicate, even on narrowly utilitarian grounds, will prove to be the right one. And this is even before we consider the long term impact of what I suspect will be a long fat tail of chronic medical issues arising in the survivors.

      Two more weeks of level 4,will enable NZ better to sustain the winter.

      With regard to the issues such as the impacts of CV, where x is cv ,f(x) and f is the ICU lack of appropriate PPE (and use) etc ,it is imperative to invoke the precautionary principle.

      we cant have a rainbow,without a little rain.

  4. Jum 5

    Two more weeks. But, loosen for infrastructure projects in usually high density areas, stalled at present, while 4 remains in place. Any work that can take place while the streets and public buildings are practically empty could be enacted under this advantage.

    When two men can sue the Prime Minister during this pandemic, for daring to close down the country for the safety of all its citizens, and it now goes through the usual judicial process, requiring the PM to defend her/her government's and scientists' expertise and advice, with all seriousness, we'll most certainly survive this crisis and come out so much the better for it, because hopefully we’ll be following a greener path – people and profit, despite current fears and serious money issues for many.

    To accuse her of taking those actions to enhance her political chances is just political nonsense and the accusers are political stooges for moneyed interests.

    https://www.msn.com/en-nz/news/national/jacinda-ardern-is-sued-over-coronavirus-lockdown-and-is-accused-of-imposing-strict-measures-in-new-zealand-for-her-political-gain/ar-BB12MG82?li=BBqdg4K&ocid=SK2MDHP

    • Foreign waka 5.1

      I agree, 2 weeks we were given to go into lock down it will take 2 weeks at least to get out of it. Preferably in stages that make logistical sense.

      To have schools opening first is a bit odd as every parent knows that these are the hot beds of spreading any illness at the best of times. As results of learning are universal, tempering with this by having pupils attend voluntarily only serves some adults being sick of having to be parents all day long. Logistically a nightmare with social distancing not enforceable.

      The schools have been closed for weeks now and no one could enter. The budget was removed for cleaning/sanitising. Imagine the mayham if this has to happen within 24 hours! Schools should be told that within 2 weeks they have to be ready for teaching. Maybe it has to be that some subjects are still another week or two further out to make sure distancing and resources are in place to be operational (the important word in all of that). Any school holidays should be cancelled until December to allow for a catch up of the curriculum teaching.

      Roading and building projects – not many cars out there and distancing is certainly not an issue. So why not start with that?

      This is not the time to ponder to interests but to make sure to get the country back onto its feet as safely and quickly as feasible.

      I think so far our leaders did a fantastic job, lets hope that will continue.

    • patricia 5.2

      Yes Jum agreed.

      • Anne 5.2.1

        Ditto, but I have to say that – like Ad – I'm at screaming point for a session at the hairdressers so I hope our mental well-being is regarded as an early necessity. wink

        • Jum 5.2.1.1

          Someone I know is a lone hairdresser and received a very quick financial response from Government for cover of lost custom. The family backup for her is also excellent. That appears to be the best outcome for an individual under these trying business conditions. Certainly, in keeping a longer lockdown re strengthening tracing arrangements, especially, I imagine Government can then start zooming in on the businesses, without backup systems, which need that bit extra, financially.

          • Anne 5.2.1.1.1

            Yep Jum. I know. I was being a bit naughty..

            I'm not referring to you in any way, but there are a tiny handful of commenters here who don't seem to understand 'tongue in cheek' even with the obligatory emoticon and it keeps me entertained. Yeah, naughty. But I'm not the only one.

  5. georgecom 6

    Level 3 for a couple of weeks and reassess. if things are looking fine move cautiously to level 2 and monitor. keep boarders shut.

  6. Sacha 7

    The bigger plan will come in May. Next week will be more tightly focused on getting us all from 4 to 3 in another fortnight.

  7. R.P Mcmurphy 8

    so there will not be a hardly davison, jetski, chainsaw and leaf blower for everyone?

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