Covid 19 coronavirus Delta outbreak: Bill Ralston – cleaning up the economic mess will be an even harder fight than Covid


With nearly three-quarters of us awaiting a second jab of the Pfizer vaccine sometime before Christmas and currently twiddling our thumbs in lockdown, it might be worthwhile considering what the hell has happened to the economy over the past year?

After decades of “steady as she goes” from such finance ministers as Michael Cullen and Bill English, the country has suddenly crashed into massive debt. A year ago, public debt was 19 per cent of gross domestic product (GDP), but the Government is now forecasting that figure will explode to 54 per cent by 2023. Gulp.

At the same time, the Government is forecasting a 4.2 per cent decline in economic activity this year, but says it will rebound by more than 8 per cent in 2022. That is far too hopeful, I fear. I’ve seen too many Treasury forecasts over the years that fail to hit the mark.

Enough with the figures, the point is this country is rapidly sliding down the rankings compared with others in the OECD. We have printed $53 billion in cash to try to keep the economy ticking over and, to be honest, it seems to have worked in the short-term. Except we are about to pay for that by the return of our old enemy, inflation.

It is sufficiently depressing being in Level 2 or 4 lockdown without fretting about how we are supposed to be financially heading for hell in a handcart. In fact, most of us are getting tetchier as a result. You can see it in the commentary parts of the media, as some columnists appear to have opted out of the “team of five million” to become increasingly critical of Government mistakes in its Covid response.

Reacting to that, other more Government-aligned columns have pushed back hard, one of them spectacularly calling critics “Covid cowards”. None of it is helpful.

Having watched various governments at relatively close quarters for nearly 50 years, I would rate Labour a solid B+ in its handling of Covid-19 so far. Of course, there have been blunders and the Government could try being a little more honest with us when dealing with them.

The current situation where soon we may not have enough vaccines to cope with the number of folk wanting a shot is not, as Prime Minister Jacinda Ardern says, somewhat inanely, a case of demand exceeding supply. It is a case of poor old Covid-19 Response Minister Chris Hipkins underestimating the likely demand and slowing the deliveries from Pfizer in case we ended up with surplus vaccines sitting on the shelf beyond their expiry date. It was a human mistake in a confused situation where, at times, governments are groping in the dark trying to work out what to do next.

Labour runs a superb Beehive communications operation, but I think, given the pressure of being constantly pecked at by critics such as Act’s David Seymour, it has become a little paranoid – to the point that it keeps a tight grip on all but a few parts of the information flow about Covid-19. That serves to make the media and the public grumpy.

As frustrating as the lockdowns are, we need to remember that, by the end of the year, everyone who wants to be vaccinated will be. This will significantly reduce the risk of severe illness or death from Delta. Then we can start to try to clean up the economic mess of the past 12 months. Chances are that will be an even harder fight than the one we have had against the pandemic.

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