Choices that matter are often hard. That is one of the messages of Matthew Hooton’s lengthy column in the Herald this morning, which people really should read if you possibly can. It isn’t that Hooton is saying anything particularly new, but he is putting it firmly in a contemporary New Zealand context. He poses the choices around handling the coronavirus pandemic as primarily those for the Prime Minister (and Cabinet), but really we should think of them as choices for New Zealanders as a whole, for which elected leaders – none of whom here was seriously chosen for their ability to confront the gravest crisis in many many decades – really should primarily be there to facilitate and articulate, but perhaps help shape too, our collective view; the choices we wish to make on matters that affect life and death – perhaps for many – and the functioning of our society and our economy.
As it is, the government has already failed us. What other conclusion can we reach when much of the country is in lockdown, officials and ministers are deciding by the hour whose businesses will and won’t survive, with no apparent exit strategy? There appear to have been alternatives (see Taiwan and South Korea). It isn’t as if this virus became an issue in New Zealand with no notice – Taiwan drew it to the attention of the WHO in December, Wuhan was locked down two months before our own lockdown, and so on. All the evidence is that the government (political and official) simply did not take the threat very seriously at all for far too long (whether reflected in complacent commments from the PM, minimising tweets from the Ministry of Health, the casual approach of the Reserve Bank (with the Treasury Secretary sitting on the key committee). And even if they would like to claim they did take the threat seriously – if so, perhaps they could produce the draft detailed lockdown plan from even, say, three weeks ago – they certainly did not level with the public, did nothing (as basic as, for example) to alert supermarkets that the public might soon be wanting more and different stuff (eg basics like bags of flour to bake our daily bread).
Worse, they still aren’t levelling with the public. We finally had the Ministry of Health release earlier this week various background modelling exercises done for them on contract by academic researchers – including one dated 27 February (itself labelled a “revised preliminary report” so presumably the government had the guts of it earlier. That report notes
We estimate likely deaths to be between 12,600 and 33,600 people in our “plan for” scenario
Did the public see or hear any of this from the Prime Minister, the Minister of Health, or the Director-General at the time? There was no hint of any of it – let alone any greatly accelerated planning – in thePM’s press conference a few days later. And at the time the Ministry was still playing down not only the risk of asymptomatic transmission, but of any sort of community outbreak more generally. If they were taking it all very seriously, they chose to treat us like children and keep us in the dark. More likely, most of them weren’t very serious, and of course that was reflected in the way they were then setting about designing their (backward looking China focused) support package (before events began to overwhelm them). Since the government and officials never acknowledge any of this, and still refuse any semblance of pro-active transparency, it is hard to trust a word they say any longer – no doubt, some of what they is useful, but who can tell the difference? Who knows whether they won’t lurch again – as they’ve done several times already.
This was the government that some time ago committed itself to much greater transparency around the release of Cabinet papers. It was a pretty good initiative at hte time. But as far I’m aware we have not seen a single Cabinet paper or any of the key officials papers on any aspect of the unfolding crisis, whether health or economic.
And in particular we’ve seen nothing that sets out any sort of cost-benefit framework that is influencing the government’s decisions (thus the Otago health modelling is useful in its way, but in isolation it adds not much to our ability as citizens to either evaluate the choices/processes the government is using, or to reach a view on the best way forward). We just get the latest lurch. A few weeks ago it became apparent that the government had adopted a mitigation approach – the PM was on a stage waving around a “flattening the curve” graphic. But we’ve seen no serious analysis of what led them to that option. Now a senior official – not even the PM or an elected Minister – tells the select committee that the government is set on an elimination approach. But we’ve seen no serious analysis of the costs and benefits, risks and potential mitigants, of that either. And then yesterday, the Director General of Health – again not even the PM – appears to double down, telling us that there is no Plan B, and that suppression will simply be maintained however long it takes. But again, no papers, no analysis, no nothing, just rhetoric. Not even a hint of what considerations our politicial masters took into account, what weight they put on them or of any fallbacks or contigency plans. It isn’t like a real war – the enemy isn’t listening. And we are supposed to be citizens, not children. It is our country, economy, society, and lives, not those of the politicians and senior officials?
I don’t have a particularly strong view on the appropriate policy at this point, given where the government complacency and lack of planning got us to. It is the process, the total lack of transparency, lack of engagement, and – frankly – lack of any evidence of a robust disciplined policy assessment (yes, even under quite some time pressure) that really bothers me right now. No one made any of these officials and politicians take their current positions: they sought them and accepted them, and they simply do not seem to be doing even an adequate job, let alone displaying the sort of excellence one would hope for in a crisis. It is revealing about the degradation of our political and official systems and agencies in recent years, but confirming worst fears is no consolation. People can rise sometimes rise above themselves in a crisis, but there is no visible evidence of that from any of the key political or official players so far.
From an economist’s perspective there is no sign of any attempt at a serious cost-benefit analysis of possible alternative strategies. Did Treasury not insist on one, or did Ministers refuse to have any such work done? Or is there such a document lurking, hidden from citizens? Whatever the answer, the Prime Minister has offered us nothing, just flat assertions and – presumably on her behalf – “there is no alternative” rhetoric. There are always alternatives and choices. Even in wars that pose near-existential threats, surrenders eventually happen, when things go badly enough different from plan.
All we’ve been offered so far – and even that not released for days after the Prime Minister claimed to be relying on it – was some modelling by researchers at Otago University. This is where the central estimate of the “worst case” of 27600 lives lost comes from. Of itself, this number doesn’t seem terribly enlightening – it involves a similar share of the population getting infected, and the proportion of the infected dying, – that people were talking about at least a month earlier. Intelligent readers of the ongoing debate would have got to numbers in a similar ballpark. But it makes good headlines, which seems to be the main use the report has been put to.
The biggest problem with the report, from a disciplined policymaking perspective, is that it offers precisely no marginal analysis. That probably isn’t a criticism of the report, since most likely that sort of analysis wasn’t asked for by the Ministry of Health. But it matters quite a lot in evaluating current policy choices. Thus, we have no analysis at all – or so it appears – of the likely death toll if (for example) the over-70s put themselves into isolation for six months. No analysis, that I can see, of the likely death toll if the public were seriously alarmed about the risk and chose extensive physical distancing themselves. No analysis, I can see, for what difference the actual partial lockdown might make relative to variants on it (tighter and looser). No analysis of what difference a very aggressive test, trace and isolate strategy might make, perhaps in the context of a less severe lockdown. Nothing. It is almost all framed in an “all or nothing” way.
And then there is just nothing anywhere about the economic and social costs. Again, doing so isn’t easy. As I noted to someone who emailed me yesterday, it is easy enough to produce huge numbers for the economic cost – GDP could easily be $75 billion lower this year than last (roughly 25 per cent), with further losses (but smaller) next year and beyond. It is really easy to get to a $100 billion figure.
Some sceptics of the government’s substantive approach will then compare $100 billion to the value of the lives saved. Suppose we could save all 27000 people in the Otago modelling only by the approach we are adopting. For general government cost-benefit analysis we know that the assumed value of a life saved is around $5 million dollar, but if that is – in principle – roughly the price we’d pay to save someone of median age, we know that the very elderly are most at risk of dying from this virus. If we halved the value of the statistical life of those most at risk – using say $2.5 million per person (which would probably be generous) one could tot up expected savings of $67.5 billion and conclude the strategy just does not make sense.
But that would also be all or nothing thinking, not focusing on the bits of the equation the New Zealand government choices actually affect. The case for any particular intervention by the New Zealand government can really only sensibly be evaluated looking at the marginal benefits (lives saved, mostly in this case) and the marginal costs. To illustrate, consider the economic side. If our government were to lift all domestic and border restrictions tomorrow (an absurd proposition, but this is for illustrative purposes only) it isn’t as if those $100 billion economic costs would just evaporate. There would be hardly any foreign tourists (apart from anything else, most governments are strongly advising their citizens not to travel abroad, if there are even flights), and probably not many new foreign students. And what of New Zealanders? The risk of the disease wouldn’t go away – in fact, it would probably be greater than it is right now – and plenty of people would choose to be extremely cautious – whether about work, schools, social occasions, air travel or whatever. Oh, and the uncertainty around future policy – and global economic activity – wouldn’t change one iota, and extreme uncertainty is the great enemy of most spending and investment. We would still have a very serious recession on our hands. Those losses simply aren’t relevant to the case for the lockdown (present or possibility of extensions, perhaps without foreseeable limit).
Quite how then one puts a number on the marginal cost of the lockdown, or variants to it, is a challenge. It is clear that if it were removed tomorrow, some firms would spring back into operation, but how many? How many would have many customers? I don’t know the answer, but it isn’t clear that the government – with all its resources – has made any effort to either. And that is pretty inexcusable.
And, as noted, there is no analysis of the lives saved at the margins either. And absolutely nothing on what it means for a society to be simply shutdown by order of the state – individuals (many live alone) consigned to, in effect, solitary confinement home detention for an indeterminate horizon, funerals/committals totally banned (for all intents and purposes), people dying alone with spouses or children simply banned from making their own choice to be at the bedside, and so on through the less dramatic implications. If the Director General really speaks for the Prime Minister in his “no Plan B” rhetoric, are they open to Christmas – community, society, festivity – being scratched this year, even though it is still almost nine months away.
It is as if the government is afraid of confronting and dealing with real hard choices – and being honest on what they value, what they don’t – and just prefers now to deal in simplistic rhetorical absolutes, when not much is very absolute at all. We deserve a great deal better from our Prime Minister, her Cabinet, and the phalanxes of highly-paid officials and agencies who surround them. In the end, these are our choices – our lives, societies, economies – and the government system is supposed to be our servants not our masters. When, with all the resources at their command, they simply don’t do the analysis, and aren’t open with us – radically so, given the gravity of the crisis – they betray our trust. That is something governments can ill-afford in times like these.
croaking cassandra 
This is the thing that is really galling; there is no indication of a plan.
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So far with 900 infections and only 2 in ICU with 1 death. Those empty ICU beds must look rather lonely. It must be fairly obvious that this dramatic 2 day notice to go into a level 4 emergency lockdown is looking more and more embarrassing to Jacinda Ardern. Clearly her intentional avoidance of public briefings paves the way for her to say it was not her call but left to the heath professionals to blame later for this fiasco.
This ridiculous level 4 lockdown will cost at least $50 billion plus countless business losses and there is no plan B plus we have used all our bullets. It is feeling like a General that calls for an all assault, firing all cannons and guns and runs into an empty field because the enemy is still marching forward in another continent too far away to even hear the cannons and gunfire
We have moved too early. This is like a flu virus. It does not disappear even with vaccines. It comes back again and again each year and at the moment our weather is too warm for this virus to activate to full strength.
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There were hard choices to be made in the past and there will be further hard choices in the future. Where I disagree with you is not on the choices and the quality of the decision making but how a govt should communicate with the public. Keeping it a simple message is important.
Your call for a future royal commission not to find scapegoats but to help us plan for the next crisis is rational but having the public dissect past decisions today will do no good and may cause trouble. Churchill didn’t say “We will fight them on the beaches and if we lose we will negotiate a surrender” and Richie McCaw didn’t say “We will get the ball to our right wing were we have an advantage and if that doesn’t work we will kick it long and if that doesn’t work ….”.
The place for a discussion of future choices is in informed blogsites such as this not by making all the govt’s discussion papers available publically today. So the govt shouldn’t bother me with possible criteria for re-opening schools; potential regional differences in alert level; etc until it has made the decision and that is the time for it to publish the advice that supports the choice taken.
The govt has been more competent than most OECD countries when communicating a clear message and announcing a decision. I expect you are quite correct in blaming them for a slow and poor response to the threat; the nature of our govt is to trust UN organisations and with hindsight WHO was not trustworthy.
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Not to debate at length, but I guess i see a place for both: yes, simple messages for gen audiences, but also yes, radical transparency, accountability and contrition when (as is inevitable along the way) mistakes are made.
Re the Churchill parallel, dreadful as the virus is it isn’t the existential threat Britain faced in 1940.
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Contrition in politics! Will have to wait for Katherine’s Ethics party to gain power.
Seriously I think admitting of mistakes made would actually strengthen respect for the Govt.
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Yes, your final sentence is my point. My respect for them would certainly rise.
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Perhaps a comparison that is more relevant is the incoming Lange/Douglas government response to the currency crisis they faced, and the subsequent “there is no alternative” measures they took. Similarly, there was no public consultation, no cost/benefit analyses, no economic anlsyses on what the future New Zealand would look like coming out of the crisis. They managed a tight ship even within their own government. Transparency wasn’t expected and there was no plan for small business and/or agricultural sector failures. No one analysed what the private owners could or would do with sold businesses once acquired. And so on and so forth.
Where you in government at the time, Michael – as I suspect if so, you’ll know exactly how that played out.
Perhaps times are different now in terms of our expectations of in-depth analyses prior to decision-making. But, much of the world is in crisis mode and frankly, I rather be in New Zealand than anywhere else at this stage. And whatever the future, I’d still rather be in New Zealand. By and large we look to be one of the most on top of it, well prepared (and luckiest so far) nations on earth.
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You make some fair points Katharine, altho even that 80s process were much slower and more open than this, and the decisions (important as they were) less far-reaching. Many of the reforms went thru select committee processes.
I don’t share your optimism about our govt/officialdom. Mostly, to now, we seem to have been v lucky (for which we should be grateful). Looking ahead our public service (and eg wider academic community) are v weak in shaping serious options for the way ahead, beyond the immediate crisis.
And then there are some of the almost barbaric dimensions of the specific ways the lockdown is being done. In a number of areas, they have consistently prioritised trade over humanity, govt over civil society.
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Katharine. You are right. When Lange Douglas took power there were two problems. One was the Muldoon Crisis, two was the Douglas manifesto. In the run up to the election, Lange and Douglas remained silent. They didn’t have campaign. Muldoon single-handedly lost the election by ritual suicide. Lange-Douglas didn’t have to do a thing. From the day after they gained office, Douglas set about unleashing his reforms. A new one every week. No consultation. No warning. Fait-accompli. Done and dusted. The populace were sent reeling at the magnitude of the reforms. By the time they had digested 1 reform the next one was released. The populace were in a state of bewilderment and punch-drunk for 6 months. The success of it all was Douglas’s ability to explain, to thee nation, in simple terms the purpose of each reform, on television. He was spellbinding. He was unbeatable. His most memorable statement was “no man can have two masters”.
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Michael, you said, “.. the decisions (important as they were) less far-reaching.” Do you mean the decisions taken by Lange/Douglas were less far reaching than those being taken in terms of this lockdown?
Surely you jest.
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Yes, that was what I meant. I wasn’t really intending to be provocative or controversial; just noting the potential death toll, the stunning collapse in economic activity and the unprecedented fast shift in the fiscal position. I’m not minimising the late 80s/early 90s, but they seem like v different events. Of course we don’t know what the longer term ramifications of this episode will be, but personally I doubt they will be small.
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“..just noting the potential death toll..”
Do you mean given we haven’t seen the same sort of death tolls as per NYC or Wuhan or Paris… that we should be relaxing our restrictions until such time as we actually are in an unmanageable health/epidemic crisis? I’ve got so many friends and relatives in the hospital sector that I’m praying with that they never have to face that situation here.
“.. the stunning collapse in economic activity..”
Yes, seen the world over. And for good reason!
“.. and the unprecedented fast shift in the fiscal position.”
Yes, again, as seen the world over – and thankfully NZ was in a better fiscal position to take on such an unprecedented shift in fiscal position.
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You seem to have read me as supporting a less restrictive regime. Except perhaps at the margins – around funerals, ability to be a death beds etc- that is not my position at all. My whole point is about transparency, accountability, openness around documents that exist etc.
As I said in the post, something like the 27000 worst case death toll was pretty straightforward to arrive at (and I didn’t think terribly controversial) – for what it was worth I was mentioning those sorts of possible orders of magnitudes back here in Feb. My comment is simply to say there are huge implications here, including potentially around 27000 lives (to which there was nothing similar in the 80s/90s).
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Katherine, a comparison with Lange/Douglas is just so wrong. That was a real emergency that required an immediate response. They made the right call with Roger Douglas at the helm with a depth of onowledge and experience. In this decision, Jacinda Ardern has pulled the trigger far too early. I agree a level 2 alert was necessary as it was clear that problems were brewing overseas. Therefore the right thing would have been to close our borders. The next step would have to be gathering data as to what extent there has been community spread which means large scale testing. So far covid19 in NZ looks factually mild. We either have moved too quickly ie weather is still too warm and UV levels too high which means the virus may die out by itself without the pain of a level 4 lockdown.
Instead Jacinda Ardern panics and a rush to level 4 alert without any reliable data. This is just stupidity and negligence.
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As a simple soul I would think that the Plan B for today has to be based on what is known right now.
In this quickly moving situation Plan B could be absolutely different in a month or two..
What is known is that this ‘war’ does have termination point which will play out.
If there can be any advantage of witnessing it, the world may start to think about the even greater threat of climate change and a monetary system that currently is not fit for purpose.
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But first there has to be a plan…
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What is known right now is 900 infections. 2 in ICU and 1 death. In NZ this Covid19 looks factually mild. Last year we have 500 deaths from 500,000 infections in the normal flu. So either this covid 19 does not transmit easily or most people already have this and are basically not sick. The facts do not justify a Level 4 alert emergency lockdown.
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Without community testing as part of a continuous epidemiological study to inform our decision-making we are floundering around in the dark. Without requiring every new arrival to enter quarantine, as Australia is doing using the Police and the Army, we have left the door open to continuing infection from abroad. We have failed to act in a timely and effective manner at every turn, despite the urging of many commentators and private citizens who have been warning Ministers of the danger as far back as late January, and we continue to fail to address these glaring loopholes. It beggars belief. Now we face the imminent prospect of driving many businesses to the wall. That would be a disaster. A way must be found to begin a graduated reopening of businesses while taking steps to ensure that the most vulnerable are protected as far as humanly possible and that our medical resources are strengthened and well targeted using up to date and accurate information on the pandemic’s reach within the community. Finally Michael you must keep publishing your blog, you and other independent commentators are needed now more than ever.
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Couldn’t do two likes, so +1
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1) “Without requiring every new arrival to enter quarantine, as Australia is doing using the Police and the Army, we have left the door open to continuing infection from abroad. ”
+1 the system is only as good as the weakest link.
Having economically locked down the country we have to see it out, otherwise the lockdown is pointless. The NZ border has to be full 14 day quarantine.
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I finally bit the bullet and paid the Herald for access to Hooton’s article (promptly called the 0800 number to cancel so I don’t get tricked into paying $35 a month for the next year. They do make it hard to unsubscribe…)
I agree that it’s a good article, and neutrally framed as well. In one of my comments to a post you made earlier in the outbreak I asserted there would be someone in Treasury making those black hat analyses. Now I’m wavering, but not for any good reason other than the Government spinning everything for all they’re worth, as you point out. The fact is that there are few people working in Government at the moment (as a proportion of analysts) who are CBA specialists. The ones that are around are contractors, who take their expertise out with them when they leave, or the specialists sit within a team and don’t share their expertise because their day job takes over. And don’t get me started on the joke that is CBAX (Bob, look at https://treasury.govt.nz/sites/default/files/2019-09/cbax-model-sep19.xlsx), which although is better than nothing isn’t a subsitute for a proper analysis.
I want the special Select Committee to meet Monday-Friday, for longer than 3 hours – 3 days a week isn’t enough for an event of this magnitude, especially if Parliament isn’t meeting and our leaders are in the position to destroy the futures of an entire generation by accident.
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I am surprised you cancelled. There is a pleasure in walking up my ROW before breakfast to collect a print copy of the NZ Herald from my letterbox. That joy is worth the subscription before it is opened. There is something different about reading actual paper rather than looking at a screen. I took out a subscription when I retired – just about my only indulgence. The content and opinions are a different matter – for example it is quite surprising that there is not a daily front page report on every movement and word uttered by our remarkable shadow Minister of Statistics; if I was editor he would be treated like the royal family – a paparazzi hotspot. I waste hours doing the sudoku puzzles. Subscribe to a print copy newspaper and you never have to worry about running out of toilet paper.
Thank you for the link to CBA – that should keep me busy and out of the garden. My memory of the move to level three and four announced a week last Monday was that it was precipitated by loud demands from the heads of the Doctors and Nurses organisations (lets call them trade unions). It would have been political suicide to ingnore them (unlike say ignoring trade union officials for the port or transport workers). So I put it down as a simple political decision not a purely rational cost benefit analysis.
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It took me 10 months after i had finished with it to cancel my Consumer subscription. That’s $120 I’ll never see again. (And the irony of Consumer using that model is not lost on me). Rule: subscribing for 1 article, cancel straight away.
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Reblogged this on Utopia, you are standing in it!.
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I find this article extraordinary.
Firstly the nations mentioned had a very strong experience of Sars. both the government and public knew what was coming.
your government has been little different to any western government except it went hard earlier as I see it.
There has been a quite strong debate in medical circles on whether to go hard and go early or do it in stages. The epidemiologists seem to be in the former group.
As for choices there are none. I believe Our Justin Wolfers made this very point. you have to fight the virus first.
As for government;s choosing which business survive and which don’t. That is absurd. They are not allowing businesses where people congregate to open tos pread the virus.
doing nothing means many lives directly are over and then indirectly as ICUs are overwhelmed.
Until a vaccine arrives all there is is social distancing. That has been the constant message from any country and their experts. This is the only subject on TV.
This is not like the GFC where various people were offering different solutions. Only one worked. Those who opted for austerity got a depression. most , like your country , were slow to act and thus got a recession.
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WIthout engaging on the more substantive issue (or relitigating 08/09, which we’ve debated before), just to note that indeed govt officials are deciding each day whether firms live or die. The test here is not whether an activity is “safe” – ie physical distancing can be maintained – but whether it is “essential”. There are all sorts of anomalies and room for discretion thrown up in the process.
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Exactly. Essential is not a proxy for safe. It may have been justified as an emergency intervention to allow safe mechanisms to be developed by bureaucracies, businesses and individuals but there is no indication of any rational movement in that direction at all – merely making concessions to the most powerful voices.
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“Live or die” – being overly melodramatic is not your usual approach.
It’s like you are not following the daily briefings, Michael. Today, Grant Robertson announced changes to insolvency law to be made retrospective as at today, once the legislation is passed through Parliament.
Every day they announce new, innovative and imminently sensible initiatives to assist businesses to stay in business; to retain their staff;and to weather the shutdown.
They have appointed Rob Fife to spearhead the private sector liaison. Perhaps you are not close enough to enough businesses to be getting a first hand account.
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I wasn’t seeking to be melodramatic. Officials and ministers are making decisions almost on the fly around the boundaries of “essential” determining whether indiv firms live or die.
Interesting re the insolvency announcement you mention. Perhaps reason to regret having adjourned Parliament in the middle of a crisis.
As per my post yesterday, whatever the right or wrongness of the lockdown (I suspect it is probably roughly right) the economic policy approach is quite shockingly poor, and has been from the start (from both RB and govt).
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yes they are doing what every other government is dong and must do. Obviously you cannot shut down every business.
how is NZ different to any other country.
Yep anomalies and discretion in ones eyes or flexibility in another.
I admit it I hate it however it must be done.
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As I’ve noted in other posts, I’m not suggesting our govt has been worse than the median western govt, but that is slim/no consolation for any of us as voters/citizens.
As I’ve also noted here, most of the econ cost is not under the control of any indiv govt (ie inevitable regardless of how far-reaching lockdowns are). It will be fascinating to see how the Australian experience unfolds, with – still for now – a less severe official clampdown than in NZ.
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Until a vaccine arrives all there is is social distancing.
————-
What if vaccine does not arrive? “Social distancing” forever?
Is there a successful vaccine for any type of coronavirus?
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We have vaccines for the flu but every year with a peak in winter without fail 500 people die and 500,000 gets infected. We will be social distancing forever.
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Nottrampis, you got it completely wrong. In 2009 NZ was already in recession because the NZ economy was booming with inflation climbing rapidly by 2008. The NZ recession had nothing to do with the GFC. It was engineered by the RBNZ. When the RBNZ dropped interest rates due to the GFC it fell too fast because they had signalled higher interest rates. Most borrowers had already fixed long term as the interest yield curve was negative ie cheaper longer term. Break fees was massively too high as interest rates fell too fast which dragged out the recession longer.
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Michael, I had a similar sense of foreboding today. I checked the MoH for mortality rates and their most up to date data is 2017 (last updated Dec 2019 – no surprises there for a Ministry that seems awfully flatfooted). It shows the average mortality is 91 per day and the usual causes are cancer, ischaemic heart diseases, cerebrovascular disease.
Each day, every day 91 people die.
The PM goes on national TV to say she is devastated that 1 person has died on the West Coast (no mention for 90 colleagues in the morgue that day). It is tragedy for the family – it is a far bigger tragedy for the nation that trying (probably badly) to avoid this death is the basis for destroying an economy.
The clear implication that the poor soul who died was as a result of CV-19 – yet she apparently had life threatening lung disease (COPD) and she may well have died WITH CV-19 but we do not know. Simplistically the PM has set fire to the economy for 1 / 91 deaths and, worse, as you note, avoided earlier action and responses to prepare for a pandemic through February and put proper testing and quarantine controls at the border to divert the new vectors to proper care and away from the general community.
My suspicion is that we have seen the hump for now – averaging recent infection levels show a slowdown – without knowledge of the real level of infection in the community and no plan to figure it out there is no way to decide when we can stay on our island with the drawbridge up associating amongst ourselves.
The lack of a plan or planning is abject.
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We all hope you are right about seeing the hump now. Your 1 / 91 deaths should be compared to Switzerland where they have had over 400 deaths from Mar 24th to April 2nd. Switzerland is roughly comparable to NZ with double the population and considerably more wealth. I’m assuming they have various preventative measures in place. If we had done much less than our level 4 alert it is reasonable to assume we would have ended up like Switzerland but with over 200 dead in the next couple of weeks. Not solved in Switzerland – 48 deaths yesterday.
None of which says our Govt shouldn’t have treated it to the same sort of cost analysis that is made whenever they approve new infrastructure or rewrite the earthquake protection regulations.
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The mortality rate in Switzerland is actually higher than in NZ. Corresponding values for 2019 are 8.0/1000 and 7.0/1000.
The number of “48 deaths yesterday” is meaningless when taken out of context. There’re 184 deaths/day in Switzerland on any given day.
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Bob, you are making wild guesses like our Health department. The facts are very clear. We have 900 infections with only 2 in ICU and 1 death. Covid19 is mild in NZ. We will burn $50 billion with countless business losses without any plan B. Plan A is basically a sledge hammer to kill a mosquito bringing the house down in the process.
Personally I think this covid19 is still dormant in NZ. Like the flu virus it activates in winter which means we have gone to level 4 alert lockdown too early and without enough testing we do not know how many in NZ is already infected, laying dormant and waiting for winter.
The transmission rate is likely already low currently due to our warmer and higher UV weather. Our flu cycle is peak in winter and dormant in Summer. It lies dormant, not dead. If it is just dormant then a level 4 isolation does not help. The horse has already bolted.
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“the government is afraid of confronting and dealing with real hard choices”
That’s the main problem; a complete lack of courage.
We had a smouldering ember, a handful of cases, but the border was left open. No tests and quarantine for arrivals when it was apparent to blind Freddie and his dog that would be and is the problem. Now we have almost the entire country under quarantine and our smouldering ember is a raging forest fire. Thanks Cindy!
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Michael – it seems that quite independently our thought processes are highly aligned. In desperation I sent this email to David Seymour earlier today – to summarise, on current statistics (full transmission of COVID through New Zealand) the number of deaths would now only appear to be ~4,400. As you mentioned, mitigation strategies employed at an individual’s level are likely to mean a lower level of transmission and lower deaths…
“Hi David,
I find myself unable to express a concern for the ongoing appropriateness of the lockdown given updated statistics on the actual (vs perceived) level of severity of COVID-19, hence this email to you.
Whilst I originally was supportive of the measures taken, this was at a time when the perceived levels of hospitalisation were > 10%, and mortality rates looked likely to be 1% or greater. Reality, it would seem is materially different…
The Ministry of Health modelling reports (https://www.health.govt.nz/publication/covid-19-modelling-reports) used to support the lockdown decision, referenced a publicly available model http://covidsim.eu/. At the time of publishing those reports (20-24 March) version 1.0 of the model was being used. The current version is v1.1 which shows lower levels of severity in cases.
Using the current version, and assuming an unmitigated spread of the virus, NZ would experience 3.7m cases of COVID and about 11,000 deaths (0.3% mortality assumption). Also of relevance are the assumptions that hospitalisations would peak at ~4,500 (my understanding is that with ~14,000 beds nationwide this peak could be accommodated), and ICU bed requirements at 2,200.
Our current mortality rate is 0.12% on reported statistics, and is likely lower than this given unreported cases. This aligns with overseas research on Wuhan estimating an actual mortality rate of 0.04% to 0.12% (https://www.medrxiv.org/content/10.1101/2020.02.12.20022434v2). Updating the model for the lower mortality rate of 0.12% would result in 4,400 deaths in an unmitigated scenario. Our ICU requirement would also appear to be significantly lower than that suggested in the modelling (with between 1 or 2 people in ICU and generally 12-13 people in hospital since these statistics have been reported).
Whilst some measures to restrict the transmission of the virus remain appropriate (i.e. lvl 2 / lvl 3), does level 4 lockdown at its gargantuan weekly economic cost (not to mention other costs) continue to be worth it? I, together with every single one of my clients, have been impacted by the current restrictions (some severely impacted). The implications of this decision which will have far-reaching consequences some of which will continue for years. With the seasonal flu regarded as having a mortality rate of 0.1% the lockdown response now seems disproportionate in its certain costs vs uncertain benefits.”
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The answer is in the difference between People-orientation leadership and Task-orientation leadership and decision making skills
People-oriented leaders build relationships and community. CEO’s of a business that is bubbling along and meeting its objectives without any business problems will be chosen for their people-orientation
When a business is in trouble the task-oriented leader will be sidelined and a trouble-shooting head-kicker installed
Task-oriented leaders get things done. CEO’s of businesses that need to re-engineer their business will be chosen for their decision making skills and task-orientation. Company turn-around specialists have these attributes. Usually, after the turn-around task has been accomplished the CEO will either move on or be moved on and replaced by a people-oriented CEO who will hold the situation in a rolling along state.
Ardern is a people-relationship-wellbeing leader as seen in her setting up 125 Working Groups. The best thing for the Nation would be for her to step aside and let some-one else take over the leader-ship role
Believe it or not, the only person (seemingly) capable of stepping into that role is Shane Jones
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correction 3rd paragraph
When a business is in trouble the people-oriented leader will be sidelined and a trouble-shooting head-kicker installed
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I like Shane Jones but the average person doesn’t “get” him terribly well. He’s a bit of a prankster and you have to mesh with his sense of humour. But, yes, he’s decisive and unafraid to let his dictatorial qualities (my way or the highway) shine through.
What has surprised me about Ardern’s management of this is how ‘on message’ she’s kept the very tight knit team who are fronting this effort. They all seemed to be in sync. When The Warehouse and Dominos tried to pull a swifty they got stamped on real quick.
The advertising team in behind the COVID campaign have also been amazing. Simple, serious, coherent and extremely well branded messaging. The degree of national solidarity in response to the Level 4 lock down has been amazing – simply based on the observed compliance.
Everyone I’m talking to is talking about their ‘bubble’ and they take sticking to it seriously. It’s a simple concept that I haven’t seen used anywhere else in the world. And the government seems to be responding directly on a daily basis to media reports of non-compliance – e.g., they addressed Lance O’Sullivan’s specific points raised by sending more front line officers up to Kaitaia the day after.
There had to be an overwhelming amount of goodwill toward the PM throughout the general population for such an emergency response to have been so effective.
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Won’t last. Where is the exit?
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Yes, how long will that goodwill last … and it is interesting that so many are asking where the exit is, given we’re only one week into the shutdown.
I think businesses that are the most disgruntled and are unlikely to survive are those previously doing a slippery form of IRD reporting/accounting (e.g., cashies, income-minimization, tax minimization, etc.).
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“unlikely to survive are those previously doing a slippery”
I’d be very interested to see how you came to that conclusion Katherine.
Let me tell you about my daughter and her husband.
They run a small panel & paint business in Kaikohe, they’ve two young children as well as the usual expenses, house mortgage, business loan obligations and a meaty bill due in a few days for last months utilities, parts and materials. There’s no money coming in.
It’s hard work at the best of times but they’ve trained a couple of apprentices in the relatively short time they’ve been operating. They’re active participants and supporters of the school and the broader community.
They’ve heroically been paying the staff 80% of their wages, thousands a week beyond the subsidy and are willing to go deeper into debt for the sake of their staff. The bank said no. I suspect the bank has a pretty good idea of who is going to fail; failures that will have devastating consequences for folk like my daughter, their families, their staff and their communities. She was near tears and sick with worry.
During the Great Depression there was considerable resentment towards the cosseted and protected, not least for their blindness towards the folk battling it out in the real world. I can now understand why.
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Why is it interesting that people want to know how they are going to resume their life to give them some idea of when that might happen? And are concerned that if the Government has any plan they are concealing it? And are more concerned there is no plan? Heck, they may even be concerned that the only survivors will be the big corps in the Government’s ear and pockets and an ever-expanding public and welfare sector. The Warehouse slap-down didn’t last long, did it? Or they might be wondering how long they will have to stand in the queues for Pak&Save and when they can visit their families or how they can satisfy their visa and immigration requirements. None of those things matter to some people but for many they do.
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David, I hope all the bank said no to was the topping up the staff wages to 80%. The staff will appreciate the government subsidy in the meantime, as it far exceeds the rate of the unemployment benefit. So keeping the business in business is the best thing for everyone.
In that regard, harsh as it may sound, I think the bank is wise to say no to your daughter and son to taking on further debt to top up pay for the apprentices to 80% of their previous wage. Any additional borrowing should be to pay their small business creditors (the ones in the same situation as they are). For example, ring the power company and tell them you can’t meet that payment – those corporate businesses have many other options to them to weather this disruption.
I can imagine the stress for small business owners – understanding that and their importance to the economy, they were the first sector that the government targeted assistance to. I’m sure they are already aware of those initiatives, but this page gets updated daily;
https://covid19.govt.nz/government-actions/financial-support/
And in terms of their home mortgage, the debt repayment holiday should take that worry off their minds.
The whole nation is hoping small businesses get through this – and so am I. I’ve been a small business owner before; I was one in 1987 … and as you say many SMEs struggle even at the best of times. Your children should take advantage of every bit of help available to them. There was none in 1987, so this time, I hope it is different. I wish them the best.
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Thank you for the tips Katherine.
They have decided to pay the staff (five including one apprentice) the subsidy only from next week so that will help. There’s no point in driving the business into the ground as you say; I think the guys will appreciate that, there’s a lot of goodwill. The bank loan was to meet total commitments, they were offered a suspension of repayments, interest only but that would only be of very limited help.
I’m reasonably confident they’ll make it if this doesn’t drag on too long. We’ve been able to chip in a bit and they’re young, bright, hard working, committed and careful with money.
There are a large number of businesses facing closure, many are only marginally viable at the best of times; in particular the tens of thousands connected with tourism. They’ll will be adversely affected for years; many are deciding to jack it in now.
Thank you for your concern..
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The wage subsidy looks low at $585 per week per person but is actually in reality $7,000 per person. The government has paid out $7,000 per person upfront. Within businesses dropping wages to 80% and picking up the $7,000, this wage subsidy pretty much covers employees and some fixed overheads for 4 weeks. That is why so far there has been no panic as yet.
Beyond 4 weeks is the concern. That wage subsidy is gone within 4 weeks. There is no money in businesses beyond 4 weeks.
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I have run the otago med school model-( its not theirs -its in the public domain) – using what I regard as more plausible assumptions.
It is reasonable to get deaths of 500-1000. or less with the current shock closedown and reasonably robust testing and case isolation.
at the margin we probably not getting good value for some parts of the work close down and we should reopening much of the construction industry soon –subject of course to reasonable social isolation requirements.
BYW I understand that this was treasury’s advice but the health shock therapy proponents won out.
i will write this stuff p and get it out in a few days
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Will look forward to your write-up
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Ian, I had a look at your website – a treasure trove of subjects I’m interested in! Thanks!
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Where do we access your write up/work, Ian?
Agree on the construction sector being the next to hopefully be re-opened. There are some advantages/opportunities in that regard given the roads are virtually traffic free. Easier movement of heavy machinery and goods, as well as a great opportunity to get at some of the desperately needed below ground infrastructure upgrades done.
I’ve got friends in that sector so looking forward to getting back to work under the rest of us being in lock down conditions.
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Katherine I will send you an early copy and Michael will probably reproduce some of it on his blog
my website is tailrisk.co.nz – other interesting stuff is there.
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Yes I will certainly link to it here.
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I hope so too. I was due to get my shower fixed on the first day of the lockdown, 50% deposit id rather not lose. Lucky we have a bath…
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I hope that we acted earlier than everyone else and that Kiwis are more reasonable and patriotic and will do what they have been asked to do and the result will be less than your 500 deaths. And there may even be new tests and treatments in use by mid-month.
But we simply do not know at this time; it could get worse, maybe a mutation will start killing young people.
Either way we should be producing a plan for moving out of level 4. You mention construction but what about schools, non food retail, take-away food retail? Do we open schools but keep self-isolation for over 60 year olds in which case some schools lose many teachers? How should we handle commuter public transport? What rules will we have for international visitors and will they apply to other countries such as the Cook Islands that have no Covid-19 cases? Having established a series of steps how do we identify when to apply them? If tomorrow there are no new cases and no deaths how many days do we wait? Or if all new cases are restricted to one small restricted area? If South Island was free of Covid-19 and North Island still suffering how would it be handled – introduce a quarantine after crossing the Cook Strait?
That only mentions attributes of a plan for handling our epidemic. There needs to be a published plan for how we deal with issues related to a changed world: no tourists, few foreign students, reduced demand for luxury food items, no fruit pickers, etc. The plan may be to let Airlines, tourist hotels and our universities go to the wall with no govt assistance but it should be stated as soon as possible.
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You might like to read what reral experts are saying.
As Emeritus of the Johannes-Gutenberg-University in Mainz and longtime director of the Institute for Medical Microbiology, I feel obliged to critically question the far-reaching restrictions on public life that we are currently taking on ourselves in order to reduce the spread of the COVID-19 virus.
It is expressly not my intention to play down the dangers of the virus or to spread a political message. However, I feel it is my duty to make a scientific contribution to putting the current data and facts into perspective – and, in addition, to ask questions that are in danger of being lost in the heated debate.
The reason for my concern lies above all in the truly unforeseeable socio-economic consequences of the drastic containment measures which are currently being applied in large parts of Europe and which are also already being practised on a large scale in Germany.
My wish is to discuss critically – and with the necessary foresight – the advantages and disadvantages of restricting public life and the resulting long-term effects.
And more.
https://www.zerohedge.com/health/german-infectologist-decimates-covid-19-doomsday-cult-open-letter-merkel?fbclid=IwAR15brFj9S-FmSAEQ6yIDDFre6iBFxyeyvr_vvho_R17K5vOwnQkVuz0QCY
Sweden seems to be on the right track. It’s going to arrive either now or later. The world map is beginning to show that Asia and Africa have low rates. countries that are always exposed to malaria. and we know that anti malarial drugs work.
Time to shut down this charade and get back to work.
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https://news.mit.edu/2020/pandemic-health-response-economic-recovery-0401
The data speak: Stronger pandemic response yields better economic recovery
Study of 1918 flu pandemic shows U.S. cities that responded more aggressively in health terms also had better economic rebounds.
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Yes, I’ve had a couple of these sorts of papers sitting on my desk. I hope to read them carefully, perhaps tomorrow, and see (a) how compelling the 1918 case is, b) why the results might or might not be applicable today.
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And also
https://www.economist.com/leaders/2020/04/01/covid-19-presents-stark-choices-between-life-death-and-the-economy
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This is another interesting one from them;
https://www.economist.com/graphic-detail/2020/04/03/covid-19s-death-toll-appears-higher-than-official-figures-suggest
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Seeing ive just turned 80 Ive got a 10 % chance of dying this year. My economic value to the country is minimal, Life expectancy at this age is about 9 years. So if I pop off a few years early I actually save the government money
By my calculation if 7 to 10 % of the olds in the 70 and over age group die with coronavirus as opposed to of coronavirus the Government will save about $3 billion a year ! And the kids will get their inheritance a few years earlier.
Studies have shown that almost all deaths have serious underlying issues. Coronavirus is just the last straw.
Eradication is not an option, a delusion in fact.
Herd immunity will build up over time to limit the effects. It is likely to become another of those seasonal risks we have.
Should we beggar the country for my sake. I dont think so.
There are already medications which limit the worst effects
Dr. Zenloko’s Successful Treatment of Covid in New York Treated 600 patients,
0 deaths, 0 hospitalizations, 0 intubations breathing restored in 3-4 hours
1 – Hydroxychloroquine 200 mg 1 pill 2x a day/5 days
2 – Azithromycin 500 mg 1 pill/day/5 days
3 – Zinc sulfate 220 mg 1 pill/day/5 days
Roughly 80 people a day die now in the over 65 age group . Coronavirus may increase the rate for a few months but have little effect otherwise.
2019 death statistics
death rate /1000 death rate /% pop/1000 pop deaths
0-4 Years 1.07 0.107 305.78 305780 327.18
5-9 Years 0.09 0.009 329.38 329380 29.64
10-14 Years 0.16 0.016 322.88 322880 51.66
15-19 Years 0.42 0.042 314.61 314610 132.14
20-24 Years 0.6 0.06 337.3 337300 202.38
25-29 Years 0.59 0.059 359.99 359990 212.39
30-34 Years 0.76 0.076 337.78 337780 256.71
35-39 Years 0.86 0.086 311.88 311880 268.22
40-44 Years 1.24 0.124 295.28 295280 366.15
45-49 Years 1.99 0.199 325.36 325360 647.47
50-54 Years 3.15 0.315 313.28 313280 986.83
55-59 Years 4.52 0.452 316.02 316020 1428.41
60-64 Years 6.52 0.652 278.78 278780 1817.65
65-69 Years 10.22 1.022 240.88 240880 2461.79
70-74 Years 16.5 1.65 204.35 204350 3371.78
75-79 Years 28.81 2.881 142.78 142780 4113.49
80-84 Years 52.64 5.264 92.72 92720 4880.78
85-89 Years 104.81 10.481 56.19 56190 5889.27
90 Years and Over 211.99 21.199 32.12 32120 6809.12
Total deaths 2019 = 34253.07
pop over 65 769040
deaths over 65 27526.23
percent 3.58
daily deaths tot 94
daily deaths over 65 80
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[…] Michael Reddell is more blunt in Choices […]
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Well I’ve written three OPs on No Minister recently dealing with the various aspects of the models being used to predict 80,000 dead in NZ or even 27,000 dead. I’m not impressed.
Supermodels, Dangerous Curves and Experts – Part 1
Supermodels, Dangerous Curves and Experts – Part 2
Supermodels, Dangerous Curves and Experts – Part 3
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Reblogged this on The Inquiring Mind and commented:
An excellent post from Michael Reddell with a most interesting thread. The post and thread offer some thoughts on the choices NZ faces. Unfortunately we do not hear anything meaningful from the government
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[…] Economist Michael Reddell follows up on his previous piece – Hopeless and Complacent, about the problems with our bureaucratic and politcal leadership – by looking at our choices and decisions which will be made by the same people. […]
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