Hopeless and complacent

Michael Reddell pandemic, Reserve Bank

I guess debate will rage for a long time about how well prepared and aggressive, or otherwise, governments around the world were when it became clear that the new and quite contagious coronavirus was becoming a large scale issue.  When all this is over there must a Royal Commission to investigate all aspects of the response (and lack of it).

But quite a lot about the New Zealand story (which may be little better or worse than most other advanced countries) is already clear to anyone who has kept their eyes and ears open as the situation has engulfed us.

On 23 January, the People’s Republic of China authorities locked down Wuhan, a huge city.  On 24 January our Ministry of Health issued a rather anodyne press release.  In that release, the Ministry claimed to be taking the outbreak “very seriously” (there appears to have been another statement two days earlier, but the link didn’t seem to be working this afternoon).   There was a further press release on the 27th where the words were upgraded to “extremely seriously”, but the fateful routinely-repeated line that

the likelihood of a sustained outbreak in New Zealand remains low. 

was first given to the public.   I wonder if they now regret that line, still being repeated more or less as late as last week, as the entire country is in lockdown, civil liberties shredded and economic activity slashed further.  I wonder at what point they really concluded that the risk was no longer “low”.  Just last weekend perhaps?  Or when?

It still isn’t clear quite what ‘extremely seriously’ actually meant in practice in late January. After all, there was no sign of them urging ministers to dramatically scale up either stocks of relevant equipment (in some cases, not even count how much equipment they had), add ICU beds, and their public tone remained emollient almost to the end.  Why is it that news reports only today tell us the Ministry is still trying to get its line and numbers straight?  It was, after all, just three weeks ago that the official Ministry of Health Twitter account was repeating a line that the world had more to fear from rumours, stigma etc than from the virus itself.  How anyone could have uttered, and repeated such lines, and still hold high public office, having uttered not a word of contrition, is really beyond me.  I presume that in some narrow technical sense they must have taken it seriously, perhaps even “extremely seriously”, but to what end?

Because whatever the Ministry of Health did, it clearly wasn’t adequate.   And more importantly, as the channellers of expert professional expertise on the health issues, there is no sign at all that they ever convinced either the Prime Minister and Cabinet or the heads of other major government departments to take the threat as one of utmost seriousness and urgency.  Is there on file somewhere, well hidden from the public, what I’ve described elsewhere as a “Whoop, whoop, pull up” memorandum, whether to Cabinet or other key departments heads, dated late January?  I’m pretty confident there isn’t, because nothing about the subsequent words or actions of ministers, the Prime Minister, or key government agencies suggested any such sense of urgency, a recognition of this as a major imminent threat to New Zealand, which demanded urgent action and urgent contingency plans then and there.      Were 100 of the ablest senior policy and operational people from across the public sector immediately dedicated to fulltime substantive contingency planning?  I’m pretty confident that they weren’t.

I’ve noted previously the sense of complacency, and China focus, in the transcripts of the Prime Minister’s press conferences since the start of the year (the first just after those Ministry of Health “extremely seriously” comments, and her comments don’t appear to have been out of line with those of the Minister of Health or the Director General.   And that same complacency, and China focus, was on public display in the way the economic package, announced early last week, came together.  For several weeks it appeared to be all about the specific industries hit by the China’s responses to the coronavirus, with a sense that it might take a few months or even quarters for those markets to get back to normal.  By the time they finally announced the package, reality was beginning to break over them, but even then in a barely serious way.   Faced with extreme and imminent threat, whether directly in New Zealand or, as some still hoped, in the rest of the world seriously affecting New Zealand’s economy, they used much of their bulked-up package not for temporary crisis responses but for permanently worsening the underlying fiscal position, on things that had nothing to do with the coronavirus situation (whether permanent benefit increases, or permanent business tax cuts) just as the biggest shock in at least 90 years was about to break over us.  It was breathtakingly complacent, politicised, and just did not address most of the main issues.  And that was barely 10 days ago (my contemporary comments here).

All of that could be clear up with a programme of radical transparency, pro-actively all major relevant papers from all government agencies. But I guess the government would prefer to keep us guessing; in fact going by their continuing communications approach they’d prefer to treat us, and hope we acted, as children.

But, as it happens, we already have some specifics about one particular agency that, for all its faults, puts more material in the public domain than most.  The Reserve Bank.

We first heard from them, almost in passing, on 29 January.  The Ministry of Health was, so they told us, already taking the coronavirus “extremely seriously”.  One of the Bank’s deputy chief executives gave a speech on the 29th observing –  probably added at the last minute

In recent months, coronavirus is a human tragedy that has emerged that we will need to monitor, through all three channels.  The SARS virus in the 2000s provides some potential parallels, particularly through the effects on travel and confidence.

Now I don’t really hold Christian Hawkesby to blame for not then being more concerned.  And The Treasury was making similar comments at the same time.  Neither outfits are experts in infectious diseases.  But the early comments of neither organisation betrayed any sense that the Ministry of Health was alerting any one that mattered –  public and private – to the nature of the threat, the real risk of wider spread, and the sheer scale of the disruption China was putting itself through to try to get control (although that latter point might have been something the economists would have noticed, and worried about).

There was a couple of weeks until we again heard from the Reserve Bank, in the Monetary Policy Statement on 12 February.  I won’t go through it all in detail again, but here was our central bank –  Governor and statutory Monetary Policy Committee –  in distinctly upbeat mood.  Sure, there was a small negative GDP effect immediately on account of the China closures and the New Zealand travel ban, but it would all soon be behind us. The Bank actually moved on this occasion to a more optimistic medium-term stance, actually adopting a tightening bias for the next OCR move.   Do note that the Secretary to the Treasury is a non-voting participant in the deliberations of the Monetary Policy Committee, and there is no sign in the minutes that she –  or any of the rest of them –  had been alerted to the imminent huge threat and already had in mind serious contingency planning .  It was really all backward-looking (just waiting for the China effects to pass).  If The Treasury displayed no sense of urgency, the Prime Minister displayed no sense of urgency, the Minister of Health displayed no sense of urgency or serious imminent threat, I think we can conclude none of them just missed the message.  That message was never sent.

Another two weeks on –  by now 25 February, really only a month ago, and  by then already serious epidemiologist types abroad were talking of that virus as something that would potentially affect 50 per cent of the world’s population – we heard from the Reserve Bank again.  This one was unusual, and frankly a bit puzzling.   I wrote about it here.   You see, the Bank had never really used Twitter for monetary policy messaging, and (as I noted at the time) it wasn’t really appropriate to be dropping random comments into the ether with no notice (not how serious central banks do things).  But this was the core of their tweet that day.

One of our jobs at the Bank is to forecast where we think the economy is heading. While there is still things that could trip up our prediction, we expect activity will pick up later this year, meaning more investment, more jobs & higher wages.

I saw it on my way into a meeting and expostulated along the lines of “what planet are they on?”, but later in the day offered a possible more charitable interpretation

My guess is that the tweet wasn’t really intended as monetary policy and related economic commentary at all.  My guess is the MPC wasn’t aware of it, and quite possibly the Governor was not either.   Perhaps someone down the organisation running the Twitter account just thought it would be a good idea to tell us a bit more about the Bank (“we do forecasts”).    But official communications need to be managed better than that –  an excellent central bank, best in the world, would certainly do so.

Sadly, what I’m very slowly learning is that when you think of a charitable and moderate interpretation of the Bank it is usually wrong.   I lodged an Official Information Act request asking for all material relevant to this tweet, including any reaction to it.  And the response arrived yesterday afternoon (you might think handling OIA requests is a bit of a distraction at present, but I had already indicated to them that in the circumstances I wouldn’t be bothered by any reasonable delays in replying).   They haven’t yet put the response on their website, and their response was not very complete (probably in breach of the law), but it makes clear that the absurd tweet, talking of the expected upswing in economic activity this year, was not only authorised by the Bank’s Chief Economist (a statutory appointee to the Monetary Policy Committee) personally, but that it was intended as part of a multi-week Twittter campaign advancing monetary policy messages.  It was planned that by mid-March this would be their message

We are picking the economy will get better in coming years, creating
more work and wealth for New Zealanders. But low interest rates will be
needed to support that growth for a little while yet.

Now, I need to be clear that the decision to authorise these tweets was made on 19 February, but there is no sign at all –  or else they would have to have released it –  of any rethink or revision before it went out on 25 February.

There was simply no sign of one of our major economic institutions –  these days often very well aligned with the government’s messaging –  displaying any urgency or awareness of the gathering threat whatsover.  It was just like everything we saw from the rest of government –  complacent and backward (China) focused.

And so it went on.  There was that strange speech (and questions and answers) of the Governor’s just over two weeks ago now.   We were assured we were nowhere near the need for any special monetary policy action.  That was followed quickly by further highly complacent interviews with other Bank senior managers – best characterised, as I did at the time, as almost unbelievable.   They finally buckled last Monday and cut the OCR, but still there was no hint in their statement even then, or the minutes (and recall the Secretary to the Treasury was part of that), of any serious awareness of what was about to break, of any serious pre-emptive policy, or of any serious practical contingency planning.

Perhaps by then the Reserve Bank was even worse than some parts of government.  Perhaps people near the top of the Ministry of Health, or the Minister of Finance/Prime Minister, implored Orr and his colleagues to open their eyes and get real.  But there is little or no sign of it.  After all, at the time Health was still spouting pretty upbeat lines about the risks here.

Orr went on that week to record an interview in which he described himself as really not overly worried, dismissing any possible comparisons to the depth of the Great Depression or the associated policy challenges.  That was barely 10 days ago.

And so it has still gone on.  Not just the Bank but the wider government has failed to adequately address the huge challenges facing the economy right now.  It is clear that there was no detailed planning undertaken in advance – if there had been, not only would we have seen more serious policy, actually addressing core issues, but even what has been announced –  mortgage holidays, business loan guarantees, and associated bank capital implications –  would actually have some details, not still be little more than statements of good intentions, even as they seem overwhelmed by what has hit them.

There are people around who want to believe in the notion of detailed and extensive advance planning.  People (very young ones) apparently believe in the tooth fairy too.  But all the evidence is to the contrary: they were backward looking, playing things down, perhaps simply unable to comprehend that something like this could hit – even with a full two months notice from Wuhan.  Whatever the explanation it is no excuse.   Would it have been hard to do something well?  Quite possibly, but this is the sort of stuff we really count on governments for –  they have the resources, the people, the intelligence networks etc etc, in a way that no one else does.  They could have done much more –  it is not as if no one out in the wider world was alerting us to the risks and threatss.  It would never have been enough, and wouldn’t have been perfectly fitted to the situation.  Instead, almost none of them even seemed to try.   They did nothing to front the situation with the public, indeed actively played down public concerns and presentations, and since I really don’t believe any of them consciously lied to the New Zealand public one can then only conclude that they didn’t believe it themselves, from the Prime Minister on down.    The Reserve Bank’s complacency –  nearer to the theme of this blog, and perhaps just a little better documented –  only became more egregious as time went on.

It is a simply huge failing.  Much of the stuff governments and their agencies do really doesn’t matter that much in the scheme of things.  The crisis that currently sweeps over us, sweeping away civil liberties, even Parliament, casting hundreds of thousands onto the welfare rolls and probably slashing GDP by a third or more, destroying countless businesses really does.  Our government – and probably most of their overseas peers – failed us badly, simply wasting very scarce time, whistling as they kept their spirits high, even as the boat was about to go under.  Could they have stopped it?   Who really knows now?  But they –  all of them –  Health, Treasury, Reserve Bank, ministers, and countless other agencies could, and should, have been a great deal better prepared and ready to act firmly.  They owed that to New Zealanders.  They let us down.

 

51 thoughts on “Hopeless and complacent”

  1. i recall hearing in my contacts – from the likes of Bill Bishop – that something was going wrong in Wuhan way back in early January. At first it was whispers but the whispers grew louder very rapidly and by Chinese New Year it was clear that a disaster was emerging.

    To me, the key fault lies in our overseas representatives; MFAT.

    I went to Singapore and then Hong Kong arriving in Singapore on Waitangi Day and already they were at Code Orange alert. The signs of impending doom were very evident both in Singapore and Hong Kong. Flying on SQ to Hong Kong, the plane was perhaps 10-12% occupied and Changi Airport deserted. The Island Shangri-La had maybe 10-12 guests in the entire hotel. It was a truely surreal experience.

    The people we should be asking questions of are at MFAT. What advice were they giving the Government? Was that advice being passed to the Ministry of Health? The Treasury? The Reserve Bank?

    These people are our eyes and ears. To me as an economist – admittedly with a lot of experience in Asia – it was bloody obvious a shit storm was heading our way… and I relayed that to the Bank.

    But I’m not sure our appointed and paid representatives did a darn thing…

    MFAT needs to come clean. What, if any, warning did they provide?

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    • According to the latest data of the Italian National Health Institute ISS, the average age of the positively-tested deceased in Italy is currently about 81 years. 10% of the deceased are over 90 years old. 90% of the deceased are over 70 years old.

      Former Israeli Health Minister, Professor Yoram Lass, says that the new coronavirus is „less dangerous than the flu“ and lockdown measures „will kill more people than the virus“. He adds that „the numbers do not match the panic“ and „psychology is prevailing over science“. He also notes that „Italy is known for its enormous morbidity in respiratory problems, more than three times any other European country.“

      Pietro Vernazza, a Swiss infectious disease specialist, argues that many of the imposed measures are not based on science and should be reversed. According to Vernazza, mass testing makes no sense because 90% of the population will see no symptoms, and lockdowns and closing schools are even „counterproductive“. He recommends protecting only risk groups while keeping the economy and society at large undisturbed.

      The President of the World Doctors Federation, Frank Ulrich Montgomery, argues thatlockdown measures as in Italy are „unreasonable“ and „counterproductive“ and should be reversed.

      Switzerland: Despite media panic, excess mortality still at or near zero: the latest testpositive „victims“ were a 96yo in palliative care and a 97yo with pre-existing conditions.

      https://www.globalresearch.ca/swiss-doctor-covid-19/5707642?utm_campaign=magnet&utm_source=article_page&utm_medium=related_articles

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  3. Way too late dealing with flights coming in.
    No openeness (remember this ewas going to be the most open geovernment in history)
    And even now no real data quality – no differentiation on what are cases attributable to travel, what are not
    Alos still no real measure on levels – just a judgmenet call on which we are all ignorant

    So we sit for at least 4 weeks (and the real possibility it is more) thanks to government incompetence and very hard to find anyone in the media holding them to account

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    • The media’s position is “We must get behind Jacinda!” It’s an appalling dereliction of their duty.
      It’s obvious throughout she has only reacted (belatedly) to pressure.
      She should have been put under intense pressure to quarantine all incoming travellers weeks ago… It has been a catastrophic mistake to let people wander through Customs with the advice to “self-isolate”… and we will pay a heavy price.

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      • We are one of 7 countries with the level of restriction we have.

        No countries have higher restrictions.

        The other countries are China, Italy, Poland, UK, France and India. All have a much higher per capita infection rate.

        You may well think we moved too late, but we moved earlier in the cycle than any other country – FACT.

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      • You are responding to a point I’m not making. I am very critical of specific decisions – and lack of them – on the economic side. On the virus side, I’m not (partly because it is impossible to know quite what the best options were) other than on details. I’ve been more concerned about official complacency, lurches into unplanned policy, and the lack of a well-articulated strategy from here to a couple of years hence.

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    • The media have also been asleep at the wheel over the past few months, their main concern being “don’t be mean to the Chinese” if the columns by their fleet of wet wokelets I saw are any indication. Has anyone seen any forceful calls to action/prevention/ preparedness from our media in January/February?
      Without any pressure from that quarter, or the responsible ministries, Jacinda was very late to act, even right up to 14th of March, only two weeks ago, she seemed more concerned with getting her hijab out for the Christchurch hug-fest.

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  4. Probably the senior politicans and civil servants are as ignorant of China as I am. I’ve just compared the lists of cities with over 1 million inhabitants for China (65) and the USA (10) and I’ve never heard of most of the Chinese cities but had heard of the first 34 US cities. [In the past you have pointed out that many American cities have artificially low populations since many inhabitants prefer to live in suburbs beyond the city boundaries – but that is for one of your posts on house prices.] Wuhan has 7.9 million inhabitants. Only New York is bigger.
    If any of the top 100 cities in the USA or in Europe had been closed down on 23rd of January then our govt would have not been complacent – we would have been stockpiling medical supplies, recruiting foreign medical staff, implementing supervised isolation and issuing serious warnings to the public well before the end of January.
    Ignorance of China is mainly a matter of age; only 30 years ago they were insignificant and our basic knowledge of countries is mainly from school geography lessons. However ignorance by our well paid govt not forgiveable. Have we been let down because the majority of their knowledge of China is filtered through the PRC’s United Front organisation? I would be really interested in knowing what Raymond Huo was saying to his colleagues.

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  5. And it seems testing, tracking and isolating should be at the centre of a future beyond lockdown but whatever the ‘next steps’ are, I hope the plan will be outlined in a transparent manner…

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  6. One other dimension to the lack of care about Covid is the difficulty getting information about it via DuckDuckGo or Google. As I have said before the only link I could find which addressed my worries about this issue 2-3 weeks ago was this forum. And I was looking for information on medical preparedness. Effectively we have censorship of information, not just censorship of extreme opinion.

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  7. Hopeless and complacent +1

    Hindsight is always perfect, but:

    27 Dec 2019 – first logged Chinese data with 27 cases
    https://ourworldindata.org/coronavirus-source-data

    24 Jan 2020 – Pandemics and the economy
    https://croakingcassandra.com/2020/01/24/pandemics-and-the-economy/

    19 Feb 2020 – What if COVID-19 things get really bad?
    https://croakingcassandra.com/2020/02/19/what-if-covid-19-things-get-really-bad/

    NZ didn’t have a confirmed case until 28/29 Feb.

    We had plenty of time before 28/29.

    Now NZ is in lockdown, it must not/cannot be wasted.

    Extend the lockdown until 14 days after there are no new cases.

    The open up again with social distancing & no groups bigger than 2 people initially.

    The international borders to be opened but only with mandatory 14 day quarantine on absolutely everyone entering.

    Suburb, city, regional, Island lockdowns if the virus appears again with 14 day mobile quarantines on the lockdown borders.

    The defense force can assist police with quarantine areas at the airports & mobile quarantine borders.
    There will be plenty of unemployed that can be trained to assist.

    It has to be this strict if NZ wants to be able to open up the economy again.

    Otherwise its 18 months of waves of suppression & economic doom until there is a vaccine.

    We are at war – treat it like one.

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    • “NZ didn’t have a confirmed case until 28/29 Feb.”

      The key thing being the word confirmed. I think we will find it was widespread for some time before this. All the actions being taken are futile if the genie was well and truly out of the bottle.

      The truth is very likely that this virus is far less dangerous than claims, or is far less transmittable. It cannot be both deadly and highly transmittable given it was out in the wild from at least mid November.

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  8. The Public Health Services,not Hospitals or Clinics, have been decimated over the years by successive National governments .Our capacity in the Ministry of Health is very poor to failing and it appears the leaders and experts in this field are now in our Universities or other institutions.Ashley Bloomfields experience is in non communicable diseases, hardly the right person to be leading this epidemic.
    Please read this book to gain an understanding how we got to this level of bad governance.
    ‘The Health of the People’ by David Skegg,(2019) one of NZ’s highly regarded Epidemiologists.

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    • I think the current government could have done a lot to rebuild the health sector and has chosen not to. Just as it ignored the imminent pandemic. It’s not a party political issue, it’s a western world wide belief that nothing is as important as getting personally richer.

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  9. NZ does not really pay attention to what is happening in Asia, it was an Asian problem—something to keep an eye on but not that could really be a major problem here. It wasn’t until large numbers of people started dying in Italy, a Western country, that SARS 2 was given the attention it deserved here.

    This is not a problem unique to NZ but to all culturally Western countries.

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  10. NZ Border closure was not effective till about 25March. Before that date any arrivals from overseas could get off the plane and go on internal flights to their designated “self-isolation”. The official Ministry of Health web site stated this. The web site is now changed.
    No wonder NZ has a spread of the virus.
    Criminal negligence by the authorities.

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  11. It’s a fundamental problem with western bureaucracies. Intensely conservative institutional responses to everything.and little to no comprehension of risk management. Traders and others who deal in risk management on a day to day basis started prepping in January. Bureaucrats (advising politicians) sat around waiting for someone to tell them what to do until it hit them in the face a week ago.

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  12. Well done on TV tonight Michael. You made your points very well.

    Croaking Cassandra is an apt name for your blog (but not too apt I hope). The warning signs have been there for months, but the important people weren’t paying attention. My brother (a health professional) wrote to the PM late January imploring her to effectively close the border. It may have seemed preposterous, but even then there was ample evidence to demand serious consideration. People say hindsight is a wonderful thing, but perhaps foresight is even more wonderful.

    In the current circumstances it’s easy to envisage a requirement that we are all easily traceable (as Bob has recently suggested). Other countries are already using cell phone GPS logs to contract trace. Further erosion of liberties is a prospect we should be expecting.

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  13. “South Korea is a democratic republic, we feel a lockdown is not a reasonable choice,” says Kim Woo-Joo, an infectious disease specialist at Korea University.

    Guess we lucked out with a constitutional monarchy. Civil liberties gone and economy down the gurgler……welcome to Jacindazuela

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    • Credit to the South Koreans. Perhaps having a living memory of boots on their necks gives them a better understanding of the risks of allowing experts to take control.

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  14. The media is a huge part of the problem – there is simply no critical analysis of government policy, just a repetition the public announcements in this patronising, folksy voice they seem to love (at least on broadcast media). They tolerate and support a creepy personality cult around Ardern, that somehow she is unique in the world in handling this so well (“with compassion!”), in contrast to all the stupid bumbling PMs of US, Australia and UK. There’s no deep analysis of other countries policies – it’s assumed they are terrible. There is this cringeworthy old narrative of great little NZ leading the world, even though we are tracking their performance a week or behind.

    With no parliament sitting, the media is the last line of defence, and they are worse than absent. Xi Jingping would find all this adulation a bit much I think.

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    • Practically all my wider friend/family group, here & overseas, go alng with this narrative. The nice PM is their cheerleader, so relateable, and they believe we are lucky with knobs on to be so ably led. Youre right…it’s cult-like.

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  15. On a slightly positive note MSD was able to pay out the (one at least) wage subsidy within 4 days of application. Suggest some degree of preparation

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    • $2.7 bn of wage subsidy paid out by Thursday. That is impressive. Presumably that architecture was put in place for the original package early last week (which they had a couple of weeks to design/implement). But I have heard some stories of just phenomenal turnaround and implementation times for system changes and new policies.

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      • On the radio. A disability welfare recipient described his visit to WINZ on Tuesday the day before the lock-down. He arrived at the office at 2:00 pm. The doors were locked. A security guard sat on a chair inside the locked doors ignored his knocks. Left the office, walked down a side street and behind the offices. A WINZ employee was standing outside the back door having a smoke. Asked what was going on she said the place shut down at midday for the duration. All contact was to be by phone or by using the contact form on their web-site. On arriving home he tried ringing on the 0800 number without success. Overloaded. Gave up and tried the enquiry form on the web-site. It was unreachable, constantly crashing. Gave up.

        That’s systems planning.

        Might not be true of course

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  16. Question: is this a good time to buy up cheap shares? The NZ government is subsidising companies to save them. Using the idea of “socialise the cost, privatise the profit” then it is only the timing of buying up distressed businesses (at minimal cost) that is problematic. Will this government prohibit predatory buying up of NZ businesses that have been saved by the taxpayers? Especially by foreign corporations / Chinese government owned entities ? Serious political pressure is needed to prevent this.

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    • Personally i don’t yet favour govt buying up companies. My option for now remains the 80% net income guarantee for the coming year, which buys time – for firms, households and govts. If things keep going v badly these are effectively grants, or payouts on a national self-insurance policy, ACC for the whole economy (for a year).

      But otherwise, I’d have sympathy with you perspective, esp re the PRC issues.

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    • “Using the idea of “socialise the cost, privatise the profit” then it is only the timing of buying up distressed businesses (at minimal cost) that is problematic.”

      All profits are socialised. That is the purpose of profits.

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  17. Hopeless & Complacent? There certainly appears to have been complacency and how extensively should be judged by a royal commission (and not one of those commissions that sit forever deferring criticism) and my judgement will be based on the dates more facemasks, ventilators, virus testkits, etc were ordered and the quantities involved.

    Hopeless is strong language and the general public are unlikely to be convinced. Once the govt acted it has done so with a clear message. Jacinda has been good at selling the story (my intelligent wife believes she has been excellent); it is difficult to communicate to the entire population in one speech because what is compelling for one part of the population is unconvincing to another but the entire policy depends on getting everyone to act as one. For myself I’d rate Jacinda as a slightly better than average performance but I have been impressed by Dr Ashley Bloomfield; he is not employed for his public speaking skills but he cerrtainly has them and he is showing up the other heads of govt departments attending the daily briefings.

    NZ has had an advantage over most other developed countries; we are lagging a week or two behind so are learning from them. Note that it is not our govt learning so much as the public; Australian and other commentators are praising Jacinda’s decision to impose this level 4 shutdown but seriously she had no choice once the doctors and nurses were loudly and publically demanding it.

    My comments relate to the medical aspects. I have little idea how we are managing the financial implications; that is one reason for reading this blog. Five years from now we may discover the financial mistakes made today will cause more lives to be lost than the Covid-19 epidemic – for example the costs to a govt of prescribing Keytruda and other drugs, making our infrastructure safer, preparation for natural disasters, etc maybe beyond the capacity of an indebted govt of a country with a smaller GDP but ever expanding population.

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    • The “hopeless” was really meant to be about the RB, but I could usefully have been clearer on that.

      You are quite right about different comms styles working with different people. I really hate being talked down to and treated like a child, or someone to be jollied along, by the PM and senior officials (even more I hate the nannyish detailed lectures on “Be kind”, as if senior govt figures had some superior insight or experience in treating those close to them well – only reinforced by objectionable aspects of the detail of the policy, notably the “no funerals, no presence at the graveside” absolute ban. In our situation no “kind” or humane angle could possibly justify those.)

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      • The lockdown has many aspects; funerals is only one of them. It should be possible to persuade a compassionate govt to do a little fine tuning.

        I’m interested in what will happen when Auckland still has multiple active cases and some other NZ cities have been free of active cases for several weeks. Unlike Britain where cities roll into one another NZ has many towns and cities that have only two or three access roads. I’m expecting partial lockdowns with Auckland in full shut down mode while church services and rugby are active in other centres.

        In the longer term expect reduced enthusiasm for the small apartments that are under construction in Auckland; meanwhile time for some more gardening.

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  18. Mr Reddel,
    Thank you for addressing the management issues of this pandemic so well.Like you I would appreciate being treated as an adult .
    My concern is the future and I am not sure that print some more is the sensible way to fund anything.It seems the monetary system as hammered out over generations is no more certain now than our health.
    This was touched on in my comments earlier .
    Without secure trusted systems we ate all open to the wild Wild West.
    Rosecevans

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  20. One of the upshots of all this time at home is it is providing a good opportunity to catch up on all this commentary, analysis, and to give it some thought.

    Like many things in life numbers often tell much of the story.

    From my rudimentary analysis it would appear that in 2019/2020 New Zealand dedicated just over $365m for Biosecurity: Border and Domestic Biosecurity Risk Management. (https://treasury.govt.nz/sites/default/files/2019-05/est19-v9-agbiofifoo_1.pdf)

    I would suppose that over New Zealand’s history there have been a number of outbreaks of various diseases that have affected livestock and horticulture and the bureaucracy has deemed $365m an acceptable annual price to pay to help manage New Zealand’s biosecurity risks.

    A cursory glance of the 2019 appropriations for vote health finds 1 mention of ‘pandemic’ (related to reserve supplies and contractual arrangements) and 0 mentions of ‘epidemic’. That being said there are a number of allocations for emergency management. Although this appears it would be for all manner of emergencies that the New Zealand health system may need to navigate (earthquakes, volcanic eruptions etc.) and not necessarily anything specifically related to epidemics and pandemics.

    On reading through the health document (https://treasury.govt.nz/sites/default/files/2019-05/est19-v6-health.pdf) it doesn’t appear as though there is any hypothecated funding for planning for epidemics and pandemics within the MoH. Although I assume that these activities do occur, and will likely fall within general policy advice and planning and hence likely battle for attention among a whole suite of priorities.

    The annual expenditure on Biosecurity NZ does have the benefit of buying some research on forecast economic impacts of an outbreak. One of these was undertaken in 2014 where it was estimated that the cost of a widespread Foot and Mouth Disease outbreak in New Zealand would cause a -7.8% drop in economic activity for the June 2012 year.

    It is early days yet but it could well be that Covid-19 causes a bigger drop in annual economic activity than -7.8% of GDP on an annual basis.

    Upon taking a rather cursory look around the internet on what the estimated economic cost of a pandemic in New Zealand might be it appears as though there is one or two papers from treasury over the years (most recent appears to be 2006). There are also some estimates in academic journals and some more recent media reports relating to the Covid-19 response.

    Whilst the MoH looks to update its pandemic plan from time to time and conduct ‘wargaming exercises’ on how to combat one from time to time. It doesn’t appear to have ever commissioned (and I am not sure if it would have ever have been expected to – although MPI through Biosecurity NZ has set something of a precedent) an estimate of what the cost of a pandemic might be to New Zealand. Surely such analysis could have been used as a basis for policy advice to inform organisational design to ensure appropriate resources were available to respond in the worst case scenario as well as impress upon ministers and the public that an annual appropriation of millions would potentially save tens of billions.

    It will be interesting to find out what any inquiry (hopefully a Royal Commission with a wide scope and powers) uncovers in regard to systemic failures across the public sector in due course.

    It seems odd that managing external biosecurity risks for animals and plants in New Zealand has been given substantial resources for many years whereas managing external biosecurity risks for humans has had comparatively little allocated to it, despite the economic impact being likely much larger.

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    • Can’t comment on Biosecurity NZ (my wife is a top MPI official) altho do note that to a great extent it is funded from industry and related levies. Health is totally reliant on politicians seeing pandemic threats as real and directly funding accordingly.

      There was a huge cross govt pandemic planning exercise about 15 yrs ago when there was a real worry H5NI world begin to transmit efficiently human to human. I was v involved, esp in the economics side of that.

      As I noted in a post last week all that work was premised on something like 1918 and altho there was plenty of discussion of possible border closures I don’t ever recall that option of simply trying to lock down the whole country ever being under discussion. Using the tool, rightly or wrongly (I have no strong view on that) will greatly increase the v short term econ costs.

      My v first post on these issues touched on some of that earlier work and economic loss estimates.

      https://croakingcassandra.com/2020/01/24/

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      • Thanks for the additional details.

        If Biosecurity NZ is predominantly funded by industry levies and the like then it would reiterate the primary point that the New Zealand political system is not well equipped to adequately quantify and respond to risks of this type and it is those with their own hip-pocket on the line are most motivated to manage such risks.

        For instance the EQC review took approximately 7 years post the initial Canterbury earthquakes and resulted in a scheme that was fundamentally the same but with some minor tweaks. Which to this day because of the depletion of the National Disaster Fund really relies on the crown’s balance sheet and will do for several decades making the whole agency effectively redundant from that perspective. The EQC review ultimately papered over one of the main issues from the Canterbury earthquakes, the double handling of insurance claims, leaving how this would be dealt with in a future disaster vague and ambiguous.

        I appreciate that EQC is also levy funded but the point I am making is that the degradation of New Zealand’s civil service and political class ultimately results in these sub standard outcomes where risk always reverts to the crown (i.e. there appears very limited incentive to reduce these risks).

        A cursory glance at Singapore’s system (often held up as the exemplar) would indicate that they have a part of their health system dedicated to the management and control of pandemics and epidemics (The National Centre for Infectious Diseases), this agency also appears to have something of a key role in informing other parts of the Singaporean civil service on response under the ‘Disease Outbreak Response System’ (note that this looks very similar to the hastily developed 4-stage Covd-19 alert system here).

        The fact that there doesn’t appear to be an obvious line of funding within the New Zealand Ministry of Health for such planning and operations (instead it must just sit somewhere in the general ‘bucket’) is an indictment on the planning of our politicians and civil service and their capacity to manage and respond to risks.

        Also came across this document from the World Bank (curious it was published by them rather than the WHO) which has some interesting (albeit rather generic) takes on this issue of planning for pandemics: (http://documents.worldbank.org/curated/en/979591495652724770/pdf/115271-REVISED-FINAL-IWG-Report-3-5-18.pdf)

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  21. Michael,
    Thank you for such a well thought out article.

    Like many others, I am frustrated at the way our country is being destroyed through ignorance and complacency. The analysis of data and its use in making informed decisions was central to my prior professional career. I have been following the publication of the Ministry of Health’s Covid-19 current case details report on their website and unfortunately this tells me that our countries path forward looks to be as well managed as that which you have described in the lead up to this lockdown. We have very little hope of a good outcome.

    The NZ Covid-19 current case report originally included the details of each case. Unfortunately the phrase “Details to come” was already common by the time we had 100 cases. By the time we got to 200 cases around a third of the cases where lacking details. Shortly after that the “details” field was removed from the report rendering it useless. The collection and dissemination of this data should be at the highest level of priority in the government’s approach to this crises, but sadly, it looks like an afterthought. It astounds me that we have a cabinet willing to severely damage an economy and spend billions without the backup of good data and analysis.

    In my opinion the only way we will get on top of this epidemic is through the use of rapid, accurate and widely disseminated data. South Korea, I believe, have a phone app that is used to highlight where Covid-19 outbreaks are occurring, and this obviously implies some serious data acquisition, analysis and distribution methodologies. Nonetheless, something that we as a country could easily replicate.

    I am sure that in the days and weeks ahead we will be told that the increase in cases is due to people breaching the lockdown. This will of course be based on anecdotal and no doubt incorrect information.

    I have raised my concerns, via email, with a couple of members of the select committee, but I have little hope that this will achieve anything as to address this data issue would require focused and competent leadership to force the government onto a new path.

    As the average time between infection and symptoms is 5 days we should already be starting to see a steep decline in the number of new cases due to the lockdown. This, however, seems unlikely as we continue to import the disease. I wonder how long it will be before a significant portion of kiwis realise that this crises is not being managed and start to ignore the lockdown.

    Thank you for the opportunity to express my frustrations.

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    • Thanks Wayne. Just on your suggestion we should already be seeing a sharp drop in new cases, I don’t think that is quite right yet. The numbers released yesterday are those confirmed by 8am yesterday, only 4 days 8 hrs after the lockdown came into effect. And in addition to the lag to showing symptoms there is also the lags to (a) the person with symptoms being worried enough to seek a rest and (b) the time it takes to get the test and for the results to come back. But by this time next week we really shld have clear evidence of a sharp drop off.

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      • Hi Michael,
        I have done an analysis of what little uncensored data is available. I can’t include the graphs and details in this format, but the number of cases has been on a steep downward decline for the last 8 days and should hit zero on or before the 10th April. The data is now being confounded by cases that have been imported since the lockdown, and the Government’s bogus use of probable cases. The figures reported for the last 24 hours are also incorrect as they are often for 48 or even 72 hours due to data entry delays. There have been 16 recorded imported cases to date, but due to hopeless data completeness there could actually be 3 or 4 times that number.
        Wayne

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