We need to move on from our Covid myopia

Last year’s Year of the Vaccine rolls into 2022, this time because of Omicron and extending vaccines to the young as well as necessary boosters for the rest of us. A first principle from the get-go of the plague was that the best health response was also the de facto best economic response. That base premise was accepted by New Zealanders.

Now, as we are about to enter a third year of disruption, does that first principle still hold? Or have health and economic dimensions decoupled to an extent where the

Government’s strategic emphasis also needs to shift?

Conceptually, the health-economy scales must have tilted since March 2020 because some economic risks cannot be endlessly absorbed. For instance, we’re not rich enough as a country for the Government to long sustain underwriting domestic economic activity through stimulatory monetary and fiscal policy. In other words, the equation is never static.

And that’s a concern. Surfing the virus one wave behind everyone else offers insights into different tactical public health responses, which helps inform a Government health strategy that has minimising Covid-related deaths as its primary measure of success.

The risk in 2022 is that surfing the Omicron wave behind the rest of the world exposes New Zealand’s economic vulnerabilities, causing wider negative health and economic outcomes over the longer term.

In year three of the plague, the much wider dimensions of New Zealand social and economic life, and Government policy, will require more focus than another year of Covid-myopia. The signs are not so far looking promising.

The Government’s strategic goal for 2022 must be reopening New Zealand to the rest of the world, and in both directions. The strategic question then shifts to how to get out of reactive mode by April 30, the current target date for reopening. The proposed date for reopening should be inviolate, but it is complicated by Omicron. Real urgency is needed to ensure reopening is not compromised by lacklustre booster uptake. Three years working in foreign policy reinforced for me why we have a highly active diplomacy. We must because otherwise, as a small and geographically isolated set of islands, we are easily forgotten. We have to make the case, continually, when and wheresoever we can.

The same imperative exists for the productive sector. Exporters and importers have to be out there making their case, creating and building enduring supplier and customer relationships, seeing and exchanging new ideas, talking up our natural advantages.

They also need to be able to bring expertise and skills in, host prospective clients, and sell their businesses and New Zealand’s value proposition. One cost of our seeming health advantage is the competitive disadvantage faced by New Zealand businesses.

With several large markets already on the backside of their Omicron waves, that cost will grow over time.

Second, Kiwis have for two years ceded extraordinary powers to their Government. This year must also be the year the Government returns much of that power back where it belongs. The border is the key and reopening it should be embraced, because it’s a sign to a highly vaccinated public that their new normal is for them to fashion as they, and not the Government, see fit.

Besides, we’re not short of other crises for Government to fix. Scanning two news cycles, I heard Covid, housing, skills, climate, mental health, vaping, the cost of living, the supply chain and debt described as being in states of crisis.

One wonders how we function at all, simultaneously a world-leading and smugly self-satisfied Covid-beater, performing well economically according to headline data, yet facing more horsemen than prophesised for the End of Days.

Surfing one Covid wave behind is an economic risk, whether one supports it as a health policy or not. The question of whether the short-term Covid health benefits outweigh other health, social and economic costs is going to become more urgent.

Tough choices then. The economy is going to elbow its way into political discourse irrespective of what happens with Covid. NZ Council of Trade Unions president Richard Wagstaff and Business New Zealand chief executive Kirk Hope have laid out their challenges to the Government already this month. Diverging expectations of the Government exist, so how well they mediate these will prove a political test for Labour.

Amidst a backdrop of inflation and ongoing skill and supply chain constraints, a looming wall of government regulation will further strain business confidence in our economic direction.

In 2022 the Government will be challenged far more intensely on its economic as well as Covid management. The prime minister’s scene-setter this week was all down in the weeds of Omicron and, even then, could offer no certainty on the border reopening. Not a good start and more of the same, I’d suggest, is going to prove increasingly difficult political space to defend.

The prime minister’s scene-setter this week was all down in the weeds of Omicron and, even then, could offer no certainty on the border reopening. Not a good start . . .