A fascinating story at Politik. The OIA papers revealed:

There was no overwhelming health reason why students from China could not have come to New Zealand universities this year. Instead, the Ministry of Health feared the students might create extra work if they were allowed in, and that appears to have been behind the decision to ban them.

So universities had seven quarantine or isolation facilities ready to go where foreign students could live for two weeks to ensure they didn’t have Covid. They also had 50 GPs and nurses lined up to manage them.

The officials said the health risk was “minimal” and 2,000 students could be allowed in.

So why didn’t it happen?

Basically the Immigration Service has no electronic system to check traveler eligibility – it has to be done manually by phone calls and could not cope with bulk exemptions.

So we have lost scores of millions of dollars of revenue from foreign students but due to a health risk, but because the bureaucracy used a manual system.

The sentencing notes for Mark Hayden are a terrifying and sad read.

Hayden was found guilty of vehicular manslaughter despite not being the driver of the car. His cousin (who also died) was the driver. But the facts make clear they were beyond reckless. It was almost inevitable they ended up killing someone.

Basically they drank two bottles of vodka and dozens of people called the Police about their driving. The driver tried running other vehicles off the road.

When finally pulled over by Police they refused a breath test, abused the Police, tried to run the officer over and then took off. The car went across the centre line and killed the 72 year old driver, along with his cousin who was driving.

The driver, Stephen, was seven times the legal limit and Mark Hayden was five times the legal limit (four hours after the crash). Now Hayden wasn’t driving but he was clearly encouraging his cousin and just as reckless.

If he was the driver, a 25 month sentence would be ridiculously low. It still seems low considering he spent hours in a car with a drunk driver egging him on.

But when you read the notes he has never been in legal trouble before. He has three school age children. He is very remorseful and unlikely to reoffend. So maybe the end result is about right?

His initial sentence was 54 months but he got 10% off for his remorse, 20% for lack of prior offending and good previous character, 8% off for having to serve his sentence away from his family in Australia and 25% off for his guilty plea.

I really don’t know. The actions of him and his cousin were beyond reckless. Killing someone seemed almost inevitable and a family lost their father because of the two of them. But would having him serve longer achieve anything?

Stuff reports:

A controversial new coronavirus law has been hastily passed, despite coming under fire for allowing police to search homes without a warrant.

Despite widespread concern, the Government rushed though the powerful legislation for Alert Level 2, but legal experts say the new enforcement law is better for the public than the extreme emergency powers used under lockdown.

There are now calls for the Government to take the unusual step of returning the law to parliament, so it can again be scrutinised while it’s being used.

The law, which passed 63 – 57, had to be hurried through the House as it was required for the enforcement of Alert Level 2 restrictions such as social distancing – set to begin at 11.59pm on Wednesday.

Eight weeks ago the opposition offered to work with the Government to pass a special law for responding to Covid-19. The Government refused. Then suddenly on Tuesday they table a bill and ram it through all stages in just over 24 hours.

And the Greens sat there voting for it at every stage.

Chief Human Rights Commissioner Paul Hunt said he had “deep concern” about the lack of scrutiny and rushed process for the Bill. 

“For weeks the Government has known that we would be moving to alert level 2. It has not allowed enough time for careful public democratic consideration of this level 2 legislation. There has been no input from ordinary New Zealanders which is deeply regrettable,” Hunt said.

“This is a great failure of our democratic process. The new legislation, if passed in its current state, will result in sweeping police powers unseen in this country for many years.” 

If National had done what Labour and the Greens have just done, the Greens would be flying to Geneva to complain to the United Nations.

The Herald reports:

A distraught Invercargill mum was forced to kneel down in mud and kiss her son goodbye through an unzipped body bag after he died in the first week of lockdown.

Police held up a blanket so neighbours could not see Angela clutching onto her 18-year-old son Brody, with tears streaming down her face, not wanting to let go.

It would be the last time she saw her youngest child – because of level 4 Covid-19 restrictions, funerals were banned. …

On the morning of Saturday, March 28 – day three of lockdown – Warren found his son. He is suspected to have taken his own life.

“He was our world. We were very close. Finding him like that, that’s what I see when I go to bed at night,” Warren said.

Brody left a note but his parents haven’t been able to read it because police took it for forensic examination.

The teenager had two brothers – he was extremely close with both. His 23-year-old brother lives about 5km away and had to say goodbye to Brody via Facetime.

His 26-year-old brother lives in Wellington. “He’s just pretending like it hasn’t happened until he’s able to come down.”

Sharron Hanley, funeral director and owner of MacDonald and Weston, received a call from police that morning to transfer Brody to a funeral home.

She described the ordeal as the most horrendous she had ever seen in 20 years of work.

“I have never seen anything so horrible, it was really really awful and it’s just so wrong what this family have been through.” …

Again common sense out the window. Australia has allowed funerals, limiting them to ten people. Their public health outcomes have been as good or better than Australia’s. So hundreds of people have been denied a funeral in New Zealand because of our inflexible inhumane approach.

Stuff reports:

The Government’s flagship infrastructure project has been put “on hold” while it fights the Covid-19 pandemic, but there are some doubts it will ever get going again.

Transport Minister Phil Twyford said decisions on Auckland’s light rail project “are on hold while the Government’s full focus is on fighting Covid-19”.

During the election campaign, Labour had promised to have the first stage of the Auckland light rail scheme built by 2021.

But after a long and protracted process, the Government has yet to decide who will build the scheme, let alone begin construction.

It’s worse than that. They haven’t even decided a route.

We’ve well over halfway to their promise of having built 13 kms by December 2021 and they have failed to progress it at all.

A brutal column by Stuff Political Editor Luke Malpass on NZME’s clumsy attempt to force Nine to sell Stuff to them cheap. Extracts:

Let’s recap: after years of on-again off-again negotiations, Nine terminated talks with NZME last week over the price it was prepared to pay for Stuff (publisher of this website), and the approach to the political and regulatory battle that would have to be fought for the merger to go ahead.

NZME then inexplicably announced to the NZX on Monday morning that it was indeed buying Stuff for $1 and wanted an expedited Commerce Commission process — and a law change by the Government — to force the sale through by May 31. This took Nine, Stuff and the Government by surprise. NZME, like a desperate ex, appeared not to understand, or accept, that it had been broken up with.

Ouch.

Everyone has their price, but as a result of Monday’s amateurish shenanigans it is understood that Nine’s attitude is now that it will sell its Kiwi arm to anyone but NZME.

Double ouch.

NZME’s strategy, in turn, appears to have been to talk down Stuff and create enough uncertainty around the company’s future to bid down its value and create the impression in the minds of the public, advertisers and within the Government that the country’s most read news website is somehow circling the drain.

No wonder Nine is pissed. It is almost an act of commercial vandalism to announce you are buying Stuff for $1, as that is saying basically it is of no value and no one should buy it.

In the meantime, Stuff will troop onwards, Nine will try to wrap up a sale as soon as possible, and NZME will likely remain desperate and dateless in the chill winds of the NZX.

Triple ouch.

Radio NZ also reports that NZME is now taking Nine to court.

Media company NZME has applied to the High Court for an interim injunction against Nine Entertainment in Australia  – the owner of NZME’s main market rival Stuff. 

It is seeking to enforce an exclusivity arrangement and prevent Nine from negotiating with any other possible buyer. 

Are they deluded? What part of willing seller, willing buyer do they not understand? Do they think this will make it more likely they will get to buy Stuff?

Ben Thomas sums it up well.

Stuff reports:

A young butcher has died suddenly, less than a week after his shop went into liquidation.

Roy Green, 38, and his wife Amanda had owned Pukekohe Mad Butcher, in south Auckland, for five years.

Green was well-known in the Franklin community and supported various sporting and charitable organisations.

He and his staff had featured in several Stuff stories, most recently for their support in donating meat for the Franklin County News Smiles for Christmas appeal.

Sounds like a great guy whose death is a real loss. 38 is so very young, and especially sad for his kid or kids.

In a video with TVNZ during alert level 4, Green said many stores like his were struggling.

“We’re just struggling big time, we need to sell meat to actually make any money,” Green said.

“And at the moment we’re not selling meat, so we’re not making any money.

“The money I do have in the bank is all going to outgoings at the moment, it’s just a tough struggle.

The shop had been turning over $92,000 per week prior to the lockdown but was making no money in level 4, TVNZ reported.

“The stress at the moment we’re under trying to pay everyone is ridiculous.

“I’ve spent nights awake in bed.

“Some nights I’ve sat there crying, wondering what I’m going to do next. It’s just not fair.”

We need to be careful not to jump to conclusions. If people kill themselves (as appears to have happened here) there is rarely one binary factor. There are normally multiple factors. That is why it is so hard to predict and prevent.

Also the liquidation of the business may not be purely due to Covid-19, even though obviously it was at a minimum a contributing factor.

But what we can take from this is a reminder that losing your business, losing your job etc does take a real toll, well beyond the financial.

A guest post by Jacob Lerner:

In 1975, a young civil servant, Paul Fitzgerald, sued the incoming Prime Minister, Robert Muldoon. The case, Fitzgerald v Muldoon, was a signal moment for administrative law in New Zealand. It held that a centuries-old English law – section 1 of the Bill of Rights 1688 – meant that Muldoon’s purported unilateral direction, that payments to the New Zealand Superannuation Corporation (NZSC) by employers should cease, was illegal. Chief Justice Wild held that Muldoon’s direction effectively attempted to suspend the Act of Parliament governing contributions to NZSC, a power which no member of the executive branch of government has. The case has ongoing relevance in its restrictions on executive overreach in NZ, and in underlining the power of judicial action when such overreach does occur.

Unfortunately, we now find ourselves in disconcertingly similar times. The Prime Minister and Cabinet told all NZers that from 11:59pm on Wednesday, 25 March 2020, they legally had to “stay home to save lives”. We were in a Level 4 lockdown, a previously non-existent concept that suddenly entered our national consciousness.  We have been instructed about staying in our bubbles, and about not venturing out except for essential reasons. In short, we have been, for nearly all intents and purposes, confined to our homes.

That is all well and good. I, like many other NZers, understood the merits of Alert Level 4, or at least trusted our public health officials enough to accept that it was a good idea. And it has been a policy triumph in response to an enormous problem; in that respect, we are the envy of the world. However, much like Robert Muldoon demanding that super payments should cease, the Prime Minister appears to have lacked the legal basis to have demanded that NZers conform with Alert Level 4. Equally, other means of ensuring a valid legal basis for Alert Level 4 were not used. That abrogation of the Rule of Law should concern everyone.

Insufficiency and legality

The legal issues are quite clear. The first order – made by Dr Ashley Bloomfield under s 70(1)(m) of the Health Act 1956 on the day Level 4 took effect – closed all premises and forbade “congrega[tion] in outdoor places of amusement or recreation”. Assuming that order itself is legal (and that is very questionable, as Professors Andrew Geddis and Claudia Geiringer have eruditely noted), it still did not empower the Prime Minister to make the directions to New Zealanders that she did. The order did not mention “bubbles”, receiving visitors, or even what were acceptable reasons to leave home. In short, it did not provide the necessary legal framework for the Prime Minister’s demand of New Zealanders to “stay home, save lives”.

This gap was later rectified on 3 April, with another order from Dr Bloomfield, this time under s 70(1)(f) of the Health Act 1956. This order does require New Zealanders to stay at home, but there are very real questions about whether it was within the scope of the Health Act, at all. The Director-General of Health’s powers are not unfettered – they are defined by the Health Act – and he cannot make orders that go beyond the scope of his powers. Such orders are unenforceable (and are what is known as ultra vires, literally “beyond the powers”). I will not canvas those issues here, but the article by Profs Geddis and Geiringer clearly sets out the flaws in the two orders.

A missed opportunity

What is arguably more concerning, however, is that the Cabinet had the opportunity to conform more closely with the Rule of Law while still protecting public health, but did not. There are extraordinary powers granted under sections 14 and 15 of the Epidemic Preparedness Act 2006, which allow for the amendment of any enactment (an Act or regulations) in New Zealand, while an epidemic notice is in force, without the consent of Parliament. Specifically, section 14 sets out a process for the Minister and Director-General of Health to amend any enactment, administered by the Ministry of Health (as the Health Act is) “necessary to enable the effective management of the … disease”. Indeed, similar powers were used with regard to other matters, such as allowing remote witnessing of documents (under section 15, which governs non-health related matters).

These powers are known as “Henry VIII powers”, as they allow members of the Executive Branch to override the Legislature, and as such tend to be used sparingly, and are often regarded with suspicion. However, this is one instance where the use of such powers – at least to ensure that the Director-General’s orders were legal – could have been warranted. The fact that they were not used, in spite of obvious legal uncertainty as to the very validity of unprecedently restrictive orders, demonstrates an apathy for the Rule of Law which is ill-suited to the highest levels of government. There is, simply, no excuse for this kind of administrative inaction.

Crown Law Advice

Moreover, the Attorney-General’s refusal to release the legal advice he (and others) received relating to the legality of the orders is similarly concerning. He does so on the basis of a claim of legal professional privilege. This claim is dubious at best. Instead, it is likely the Attorney-General has impliedly waived this privilege. The Cabinet Manual, at 4.68(b), notes that “Partial disclosure of the actual legal advice received, or reference to the content of the legal advice, however, may result in waiver of privilege.” The Cabinet Manual goes on to suggest that even acknowledging that advice has been received and acted on may constitute an implied waiver of privilege.

In this case, on 8 May, the Attorney-General said: “Crown Law’s advice was, and is, there is no gap in enforcement power”. On that basis, he appears to have waived privilege and ought to release the legal advice forthwith. His insistence that he does not have to do so – indeed, going so far as to refer Simon Bridges to the Privileges Committee of Parliament for attempting to force the release of the advice – is misconceived and damaging to the vital process of parliamentary scrutiny.

Back to Muldoon

Not so long ago, a claim that the Muldoon and Ardern governments acted similarly in their disdain for the Rule of Law might have seemed unjustified. Unfortunately, such a claim seems to be far more apt now. The Ardern government has been no defender of the Rule of Law recently, and it is vital that the matters addressed above – the insufficiency of the first order, the questionable legality of both orders, the lack of attempt to rectify the situation and the refusal to release Crown Law’s advice – be thoroughly scrutinised, both in the judiciary and in parliament. Whatever your stance on the Ardern government, or on lockdowns, the Rule of Law is simply too important to put to one side.

Tim Hazledine writes:

Those numbers, multiplied by one thousand, are in fact the cost and benefit numbers of Auckland’s railway tunnel project – the City Rail Link (CRL) – which will give ten thousand commuters to the city’s central business district a somewhat faster journey to work.

Those faster journeys were estimated to be worth (on a present value basis) about $2 billion, and the construction cost was originally estimated (guessed, really) to be about $2 billion. Then, last April, with $700 million spent and not a lot to show for it, the cost envelope was revised to $4.4 billion, with no guaranteed finish date. And there was no outcry. People, especially politicians, seem to suffer from what I call ‘Big Number Blankness’: they lose their critical facilities when confronted with figures so far from their personal experience.

Last week, CRL management warned us that, because of Covid-19, costs would indeed rise, with no numbers given, but the promise – or threat – that a “red pencil” will be drawn around the budget at the end of this year. No mention of the possibility that Covid-19 will reduce the benefits of the rail link, through more people continuing to work at home rather than commute.

Adding in some substantial costs missing from the official calculations, the costs of disruption to business and citizens during the build, and the cost of the huge subsidy on the price of rail tickets, it seems sadly reasonable to predict that we now have a $5 billion+ monster on our hands. Even with more sunk costs incurred since last year, we are looking, in the best scenario, at having to fork out another $4 billion to finish a possibly $2 billion value project. How dumb is that!

The $2 billion of benefits are probably now also suspect as public transport use will be down for many years to come.

The costs of the rail tunnel are supposed to be shared 50:50 between Auckland ratepayers and NZ taxpayers. I have calculated that a person in my financial situation – for example, me – will have to cough up much more than $10,000 in rates and taxes to meet my share of the bill. I can think of heaps of better uses for my money.

This is why I think generally we should only fund projects with a BCR well in excess of 1. Because costs always end up more than originally estimated.

What I would do for transport projects is:

• BCR of 2 or higher – NZTA can automatically fund with no approval from Ministers
• BCR of 1.5 – 2 – NZTA can fund if Ministers approve
• BCR of under 1.5: Cabinet has to find wider reasons to fund such as resilience for a natural disaster

The Taxpayers’ Union’s Consulting Economist Joe Ascroft, and former Treasury (now Taxpayers’ Union) Analyst Neil Miller, sits down with Jordan Williams to discuss Budget 2020, the economic and political risks, and what it says about the Government’s election strategy.

You can subscribe to Taxpayer Talk via Apple Podcasts, Spotify, Google Podcasts, iHeartRadio and all good podcast apps.

1. Don’t cut spending in a recession – spending has increased from $87 billion to $114 billion so tick for that but the increase is too large.
2. Don’t increase taxes in a recession – no tax hikes sighted at this stage
3. Run a deficit in short to medium term – Deficits forecast for at least seven years which is more medium to long term
4. Debt should increase – it is increasing from $58 billion to 200 billion which is over $50,000 per household. That is far too big an increase.
5. There must be a path back to surplus – well in theory in eight years which is too long
6. Extra spending should be temporary not permanent – total fail here. Spending was $87 billion last year and will be over $113 billion not just this year but for the next five years. We will drown in debt
7. Capital Expenditure generally preferred over Operational Expenditure. Vast majority of the increase is operational.
8. Expenditure must make economic sense. A bit too early to judge but not promising. Seems like a random collection of projects to mollify key Labour constituencies
9. Capital expenditure should be on projects that can commence soon. Do you recall the 100,000 Kiwibuild houses and Light Rail by 2021? Expect more of the same – rhetoric rather than action.
10. Low quality spending must be ruthlessly reprioritised. Total fail at this stage as not a single pet project appears to have been axed
11. Don’t try and pick out some sectors as winners. Sigh, should have known better from politicians. Another handout to media has been flagged.
12. Costs on businesses must be decreased, not increased. The only initiative I can see is extending the wage subsidy scheme until after advance voting starts. Basically they want to delay the huge rise in unemployment until after the election. Nothing in the Budget about permanently decreasing costs on businesses.
13. We need economic growth. No real initiatives to boost the economy.

A special report from Kiwiblog analyst Neil Miller:

Today I attended my first ever Budget Lockup in the Beehive’s awkwardly shaped Banquet Hall. I could see the screens and the speaker’s podium which is good sign. Famously, if you are seated somewhere where you cannot it is a clear message you are not considered important.

In a normal year, I would probably be in one of those seats of shame. However, this year’s lockup was different. For starters it was the smallest in modern times with only Parliamentary Press Gallery and 25 independent analysts allowed in. The analysts were only allowed in at the last minute and only if the country dropped to level 2 COVID-19 alert. It did so 10 hours and 47 minutes ago and here I am, the only member of the briefing wearing sneakers.

Social distancing is not very social in real life. Having been confined to home or the supermarket for six weeks, it was unusual and honestly unnerving to be out and about with other people. It was interesting to watch journalists, economists and commentators waiting to get in trying to power mingle on the Beehive’s semi-circular balcony while maintaining correct social distancing.

At 11am the lock down starts as the first document is distributed and the race is on. The first impression is that is a lot of information – media releases, Wellbeing Budget report, and additional information on a USB stick. In addition, you can ask a Treasury officer to see three more documents with long technical names, or beg for another USB stick (if numbers permit).

All Governments release a lot of information in the lockup – it is a long-standing political strategy to control the message as much as possible. Governments want media and analysts to use their language and their numbers. They have branded it the “Wellbeing Budget 2020: Rebuilding Together” but others here will be searching for other, possibly less kind, names. Accordingly, the official messages are nicely packaged up into press releases which can be cut and pasted. Of course, those in the lockup want to find the real message, their own angle, test the maths and consider the actual impact on the economy or their industry.

Unlike many of the trade organisations here, Kiwiblog covers the entire gambit of politics, economics, and trolling. This of course means I cannot just go to the section on my sector. Having read and analysed budgets for many years, I can confirm that being able to do that makes it a lot more manageable. Here, I will take a broad view and note my views do not represent Kiwiblog.

However, the document distributors are hovering, and my three hours are about to begin.

The Government is promising 8000 more public houses to be delivered. We have heard plenty of promises about building houses and planting trees before. This time, Hon Megan Wood gets a chance to address the Government’s poor record on delivery.

It is a big-spending budget as was to be expected. There is a $50b COVID-19 package though much of the money has already been spent. Health also receives a substantial boost as was to be expected in the situation. There are no new taxes so the funding will be covered by debt which has to be repaid sometime.

One of the hardest things about reading a Budget is that the same money can be counted multiple times. For example, there is a press release on $900m to support Maori. There is a $911m Maori package, but it is spread across nine portfolios and is announced and counted in other releases many times. For example, $136m extra for Whanau Ora is announced and counted under social support as well..

Defence gets $1.77b which may surprise many. Most of that (898m) is contingent capital funding for C-130J Super Hercules airplanes – but Cabinet is yet to approve a business case. Ron Mark said “progressing the procurement of the C-130J Super Hercules continues to be my highest priority as Minister of Defence.”

Grant Robertson said “This strong fiscal position, built on the work of Bill English and Michael Cullen, now means we are much better placed than many other countries.” We certainly did not hear this praise of Mr English’s financial management on the campaign trail or in the House before COVID-19.

If you want to play a Budget Day drinking game (responsibly) at home, drink every time a speech or press release  today mentions New Zealand going hard and early”, “a team of five million” or “cushioning the blow”. You may be surprised at the results!

For the record there was nothing to drink at the Budget lockup, not even water. I really could have done with a cold beer by 2pm… However, the biggest tragedy of the lockup was the food. In the sense that there was not any. My whole life had been building towards trying one of the famous Budget sausage rolls, and this was the first year they did not appear. I now hate COVID-19 even more than before. Disclaimer: I really like sausage rolls. The Minister of Finance went out of his way to stress the decision was made the Speaker, not him.

Neil Miller is a former National Party staffer, now a policy analyst, writer and radio commentator. He has known and worked with Mr David Farrar for a long time. How long? At their first meeting Mr Farrar was sporting a fine mullet (“the calm before the storm”) but it sadly did not last long and tragically was in the days before Facebook. He is currently eating a sausage roll.

• Unemployment to hit 9.6% forecasted
• Economy to stay in recession for over two years until June 2022
• Net debt to increase by $140 billion (that is around $70,000 per household) from 19% of GDP to 54%

Newsroom reports:

Labour MP Louisa Wall is preparing to take legal action against her own party over a bid to oust her from her Manurewa electorate, Newsroom understands.

The threat of a court case played out in the public eye stems from the party’s decision to accept a late nomination from lawyer and recently-appointed Waitematā DHB board member Arena Williams, seen as a viable threat to oust the incumbent.

A supporter of Wall said some in the party were upset by how the MP had been treated during the selection process, given her experience and advocacy on LGBT issues.

There was a feeling that Labour’s national headquarters was overreaching into the local selection process to push out candidates who senior MPs did not like, or who were not fully compliant with the messaging from the top of the party.

Newsroom understands Wall’s partner, lawyer Prue Kapua, contacted Labour’s governing body, the New Zealand Council, threatening legal action if Williams’ application was not declined.

After taking advice from a QC over the weekend, the party’s executive has formed the view that its position is defensible, leading to the prospect of a showdown in the High Court.

Parties set a deadline for nominations. It is a specific date and time. If you get it in one minute before you are fine. One minute late and you miss out. That is the nature of deadlines. The Electoral Commission doesn’t accept a nomination for example if you are half an hour late with it.

Arena Williams did not get her nomination in by the required time. So it should be an open and shut case.

But Arena is very close to senior Ministers such as Grant Robertson (who got her appointed to a District Health Board) and someone pressured Party HQ to accept her late nomination.

That reeks of the party hierarchy ignoring their own rules to favour a hand chosen candidate over a sitting MP.

The obvious solution is to move forward with a selection between the two valid nominations of Ian Dunwoodie and Louisa Wall. Williams will no doubt get parachuted into another seat at some stage and will learn the value of getting your nomination in on time.

Of course if Labour really are so desperate to get Williams in, they’ll let this go to court which to me seems like a lose lose for everyone.

A guest post by ACT Leader David Seymour:

This Budget week, we face a stark choice in how we respond to the economic fallout of Covid-19. There are two basic strategies.

The first involves the Government taking on significantly more debt, running the rebuild from inside the Beehive, and raising taxes to pay for it all. This approach nearly bankrupted us in the 1980s.

On the second path, we harness the energy of businesses, workers, innovators and investors with lower taxes and less red tape. The result is higher growth and wages and lower unemployment and debt.

Earlier this week, ACT released an Alternative Budget showing how we can unleash New Zealand’s potential and come out of Covid-19 as a richer country.

Our first priority is getting New Zealanders back to work. Businesses are hurting and will be cautious about entering new employment relationships. We would remove barriers to hiring by allowing businesses to employ workers on 12-month trial periods, returning the minimum wage to its 2019 level, and placing a three-year moratorium on minimum wage increases.

Second, we would refocus government on its core job of protecting New Zealanders. For years, politicians spent billions on buying votes while at the same time leaving us unprepared for a pandemic.

Our Budget reduces spending on corporate and middle-class welfare. We can no longer justify nice-to-have spending that was affordable in good economic times. It is irresponsible to further indebt future generations without asking what savings we can make today.

We would invest $816 million over the next three years in fighting the next pandemic with stronger border measures, better research, and more protective personal equipment.

ACT would restart the economy, not with low-value handouts and Phil Twyford-run public works, but by cutting taxes and red tape.

Our Budget temporarily cuts GST to 10 percent until June 2021 to spur consumption. We permanently cut the 30 percent individual tax rate to 17.5 percent, delivering a $1,300 tax cut to workers on the median wage, and encouraging New Zealanders back to work.

These fiscal changes would get us back to surplus by 2024. We would take on $13 billion less debt that the Government.

ACT also proposes an ambitious programme of pro-growth reforms by cutting red tape in housing, primary industries, energy, transport and infrastructure, and overseas investment.

We would create a construction boom and reduce housing costs by replacing the Resource Management Act and amending the Building Act.

ACT proposes to replace the Zero Carbon Act with a simpler, cheaper alternative that ties our emissions price to the efforts of our trading partners, and we would repeal the bans on offshore oil and gas exploration and genetic engineering.

We would replace fuel taxes with smart road pricing and take infrastructure decisions away from politicians and give them to a new, independent Infrastructure Corporation.

We would also remove barriers to investment from friendly OECD countries to boost productivity, wages and jobs.

And that’s just the start.

New Zealand can respond to the current crisis, as we did in the 1970s, with protectionism and bigger government – that is, more debt, higher taxes, politicians picking winners with taxpayer money, and more barriers to employment, trade and investment.

This would mask the economic pain temporarily, but it will leave us behind in the global economic recovery. Fortress New Zealand took us from being the third richest country in the world to 21^st. Think Big proved to be an economic and financial disaster.

Instead, we can unleash New Zealand’s potential with lower taxes and regulatory barriers. We can have a job-rich economic boom in the wake of Covid-19 for the benefit of the next generation.

Government can create the environment for growth, but it must be the innovators, investors, businesses and workers who drive our response through a bottom-up recovery. History shows that an economic recovery is much stronger when it is led by people on the ground, rather than politicians and bureaucrats.

We need to put our trust in the people. Our economic recovery will come not from the Beehive, but through millions of New Zealanders making a difference in their own lives.

Graham Adams writes:

In fact, we are living in such unusual times that the adage “a week is a long time in politics” seems overly cautious, and Lenin’s observation “There are decades where nothing happens and there are weeks where decades happen” is more appropriate.

While Simon Bridges is very unlikely to ever come close to matching Ardern’s popularity, he still has time to revive National’s prospects — which, it should be remembered, were rosy enough on February 13 for a Colmar Brunton poll to predict National could form a government with Act.

And while the government’s response to Covid-19 has catapulted Ardern into the political stratosphere, it has also brutally exposed the lack of depth in Labour’s line-up. It’s extraordinary that in a pandemic that has paralysed the economy, and the tourist industry in particular, the government appears not to have a capable Minister of Health or Minister of Tourism.

In fact, David Clark had disappeared from public view even before he broke lockdown rules to visit his holiday home, while Kelvin Davis — who is also the party’s deputy leader — has been mostly AWOL in the heat of battle. And you’d have to say his rare media appearance on Paul Henry’s show Rebuilding Paradise last week did little to inspire confidence that the future of what was our biggest export earner is in safe hands.

National may not have an international star as a leader but it does have a clutch of experienced former ministers within its ranks who know how to get things done. The government has earned itself a well-deserved reputation for failing on logistics — from KiwiBuild to Auckland’s light rail proposal. The fact it may also have failed to ensure that the severe lockdown it imposed was lawful will come as little surprise to many.

Can anyone name a major infrastructure project that has gone well under this Government?

Whether the virus is quelled or not, in four months’ time the wreckage of New Zealand’s economy will be visible from space. Last week, leaked documents showed the Ministry of Social Development is preparing for an extra 300,000 benefit applications in response to mass unemployment generated by the pandemic.

You don’t have to be a seer to guess that material concerns and a desire for economic and logistical competence will likely trump all other considerations — including abstract notions of “wellbeing” and admonitions to “be kind” — in choosing the next government.

People will want jobs rather than handouts — and quickly. Like Scott Morrison in last year’s Australian election (which he won against nearly all predictions), Bridges will be able to fuel his election campaign with a cry of “Jobs and growth!”

In fact, National may have already found its election mantra with its slogan currently circulating on social media: “We’ll get New Zealand working again.”

While Labour seems intent on continuing with policies that make it harder and more expensive to hire people.

Tomorrow we will see the Budget. I’m won’t be in the lockup myself, but a colleague Neil Miller will be in there and will do a post for Kiwiblog on what is in the Budget, appearing just after 2 pm.

What I thought would be useful is to elaborate some principles for how we should recover from what is probably the worst economic shock since the Great Depression.

1 – We shouldn’t cut spending

For at least the period we are in recession we should increase government spending to cushion the impact of the recession, just as happened under Key and English during the GFC. Cutting spending in the midst of a recession will probably just deepen it.

2 – We shouldn’t increase taxes

Increasing taxes during a recession will also deepen the recession. We want households and businesses to have more money, not less. Many households and businesses will be struggling and the last thing they need is more taxes.

3 – We should run a deficit in the short to medium term

The aim should be to be in surplus over an extended period of time, but that doesn’t mean you have to to run a surplus every single year. During a recession it is almost impossible to run a surplus as you have both tax revenue drop and non discretionary spending (welfare benefits and interest on debt) increase.

4 – Debt should increase

As a consequence of running a deficit, debt should and will increase. We are able to do this because despite howls of austerity and false claims of health spending cuts from Labour, the last National Government managed to impose enough fiscal discipline to get back into surplus within five years of the GFC and start reducing debt again. They inherited a projected decade or more of deficits.

5 – There must be a path back to surplus

While most of us accept there must be deficits and growing debt for a while, there must be a path back to surplus and reducing debt. In 2008 National inherited no path to surplus – it was a structural permanent deficit.

It may take five to six years again, but it is vital that decisions in this Budget do not make it impossible to get back into surplus again.

The reason we need to get eventually back into surplus and repaying debt is there will be another global economic downturn again at some stage – generally every 10 – 12 years. The history is:

• 1973 – oil shocks
• 1987 – Black Friday sharemarkets (14 years)
• 1998 – Asian Crisis (11 years)
• 2008 – GFC (10 years)
• 2020 – Covid-19 (12 years)

6 – Extra spending should not be permanent where possible

If we want a chance of getting back into surplus one day, then the vast majority of extra spending during the recession should not be permanent. The decision to permanently hike welfare benefits was a reckless one as it imposes a permanent cost increase we don’t have revenue for. The additional winter energy payment for one year was a more sensible response.

Basically the only areas that should get significant additional permanent funding is those related to Covid-19 such as Vote Health, Vote Civil Defence etc.

7 – Capital Expenditure generally preferred over Operational Expenditure

Capital Expenditure tends to be on infrastructure that provides longer lasting benefits to the country. A great example is National’s spend on fibre to the home -it has given us a broadband network that has made a real difference.

Likewise enhanced transport routes, more modern hospitals and schools etc can all be valuable investments.

8 – Expenditure must make economic sense

Any idiot can spend money on infrastructure projects. The test needs to be projects that produce benefits in excess of the costs of building them. Now is not the time for spending on low quality projects.

9 – Capital expenditure should be on projects that can commence soon

The reason we want to spend more on capital expenditure on infrastucture is to generate more economic activity while we are in recession, to soften it, create or maintain jobs etc. Projects that won’t actually commence until 2023 or 2024 etc will not meet that criteria. Claiming that building a rail line between 2024 and 2029 is a solution to a recession in 2020 is nuts.

10 – Low quality spending must be ruthlessly reprioritised

We want to eventually get back into surplus but also increase spending in areas such as Vote Health and on infrastructure projects. That will require a formidable level of fiscal discipline. Low quality high cost spending such as free tertiary fees and the provincial slush fund should be redirected to areas of more need.

If you are unable to do this, then you will not be able to get back into surplus one day.

11 – Don’t try and pick some sectors to be winners

Some politicians are saying we need to reshape our economy as we can no longer be reliant on tourism. It is true that tourism revenues are likely to be lower for years to come.

But the idea that three or four Cabinet Ministers will make the best decisions about where our future earnings will come from is fanciful. The reality is the future is uncertain.

The Government should resist doing specific corporate welfare packages for handpicked sectors such as racing or the media. Any support for businesses should be across the entire economy, rather than those who make the most noise or donate the most.

12 – Costs on businesses must be decreased, not increased

When times were good, government could increase costs on businesses with more modest impacts. But when times are bad those extra costs will mean businesses will close, shed more jobs, new businesses won’t start up etc.

The Government needs to seriously focus on reducing costs for businesses. That could mean a 12 – 24 month freeze on new regulations, no further minimum wage hikes until unemployment gets below a certain level, reducing compliance costs, freezing rates etc.

13 – We need economic growth

Over the next year we are going to have a huge deficit – well over $30 billion and the following year will probably be well over $10 billion. This is almost unavoidable due to lower tax revenue, increased welfare payments, temporarily higher spending, and increased interest on debt.

The way you get back to surplus is to have substantive economic growth which will allow businesses to grow, exports to grow etc. This will increase company tax revenue. It will increase GST. It will lead to more jobs and increase income tax and reduce welfare payments.

You can’t spend your way back to surplus. You can’t tax your back to surplus (without decreasing economic growth). You need to grow your way back to surplus.

So most important of all we need policies that will not just get us through the recession but lead to a strong growing economy for the decade that follows.

So that’s my 13 principles for sensible economic management. We’ll see tomorrow what the Government does.

While I still manage to author five or so posts a day on Kiwiblog, relatively few of them are the longer analytical posts I used to do more frequently.

Part of the reason for this is simply competing demands on my time – a six month old, a three year old and also my polling company.

I’d like to be able to do more of the longer posts I used to, but the opportunity cost of taking the time to write them is a factor.

The current gross income from advertising for Kiwiblog is around $16,000 a year which is around $12,000 net income. I currently spend around three hours a day managing Kiwiblog and writing posts.

If this was an hourly rate I’d be earning $11 an hour which is almost half the minimum wage. So obviously I am not in this for the money – I enjoy writing and the feedback from readers. In 17 years of operating Kiwiblog I’ve never sought donations or money from readers.

What I am interested in exploring is if there is a market for additional content, which would not be free. If I have paid subscribers for something, then I’ll make sure I have the time to produce it.

Now I’m not at all sure if I want to do this, and if I do it will not impact current content on Kiwiblog being free. It is about additional content, that might not even be on Kiwiblog.

The potential content ideas include:

• Weekly article on the political week, assessing each party’s performance and scoring them out of 10
• Exclusive polling results on topical issues
• Analysis of upcoming bills
• A regular summary of interesting polls in NZ and abroad
• Regular data posts examining how well NZ is doing compared to other countries
• Interviews with MPs and other people in politics

Potential ways I could seek revenue are:

• Have additional content on a subscription site such as Patreon with a low monthly sub
• Have the content on Kiwiblog behind a paywall
• Have a micropayments system on Kiwiblog where people could opt to pay say 1c/post they read
• Just have a donate facility with no actual paywall or subscriptions

Anyway I have a survey on this which I’d like readers to take 30 seconds to complete. Even if your feedback is you have no interest at all in paying for content, that is very useful to know.

I’ll share the results of the survey and any further thoughts going forward.

Stuff reports:

A Cambridge widower is calling on the Government to show compassion and increase the number of people it allows at funerals under level 2 alert.

Mark, who does not want his full name to be used, lost his wife Kim to bowel cancer during the level 3 lockdown.

He said the cap of 10 people at funerals was a “kick in the guts,” especially after the Government said last week that up to 100 people could attend.

A lifelong member of his local rugby club, Mark said that he couldn’t understand why funerals could only have 10 people in attendance, when contact sports like Rugby were allowed.

The cap of 10 people at a funeral is poorly thought out.

We may be at Level 2 for 18 months until there is a vaccine. There will be 50,000 deaths in that time. That would be 50,000 families who can’t properly mourn.

If you can have 100 people in a bar, why can’t you have 20 people at a funeral? All you need to do is make sure there is social distancing and caution against hugging etc.

National and ACT are voting against the Level 2 law because of the inflexibility on this and other issues. Wouldn’t it be better if the Government compromised so the law can be unanimously supported?

They should also compromise on the proposed power to allow Police or others to enter your house without a warrant.

Ardern said she knew the rules were causing pain, but they were necessary.

“That’s the risky behaviour. Look back again in the areas where New Zealand has had trouble with Covid. It’s been weddings, it’s been bars, it’s been social gatherings so that’s where we’ve put the limits in place,” she said.

Yet the PM is allowing 100 people at a time into a bar or cafe.

Mark is now calling on the Government to drop the rule, and lift the cap to 100 people to make the rule consistent with the caps applied to restaurants and cinemas. 

I hope he succeeds.

If I die I know far more than 10 people will want to attend my funeral. I expect at least 500 there, evenly divided between mourners and those checking I’m actually dead!

Tracy Watkins writes:

Finance Minister Grant Robertson’s budget this week will loom over generations to come; it’s no exaggeration to say it’s the most important budget in decades.

There will be intense debate about whether he has got it right; so it’s unfortunate that as we head into budget week the government is exhibiting premature signs of the affliction known as third-termitis.

That was most evident in the emergence of a leaked memo this week in which ministers’ offices were advised not to waste any time defending themselves to the media – not because they had anything much to hide but because (to paraphrase) people love us anyway, so why bother?

It’s the assumption behind that advice that is so alarming; it speaks of supreme confidence at the moment that this government can do no wrong in the eyes of the public.

It was very telling that the PMs Office was saying let’s just dismiss criticism rather than debate it.