New Zealand's economic problems are not confined to Government-related entities. Photo / Getty Images
OPINION:
I recently went with my grandson to an impressive orientation evening at Westlake Boys High. The headmaster acknowledged Covid had made it tough for the school over the past couple of years. But he had told the boys “Don’t you ever try and use Covid as an excuse for not reaching the required academic standard”.
Wow! Covid notwithstanding, a state school that continues to drive high standards! How badly does NZ need political, business, health, education, and other sector leaders with a similar attitude? Just about every part of NZ seems to be underperforming right now.
Covid is a multi-faceted virus which in a small percentage of cases leaves people struggling medically for months with long Covid. What is only just becoming apparent: Covid also leaves behind prolonged economic and administrative problems. Let’s call these effects “economic long Covid”.
The disturbing fact- medical long Covid strikes only a small percentage of people who contract the virus. But economic long Covid seems to impact most sectors of society.
In theory, it should be simple. The lockdowns end: the pandemic recedes; and hospitals, schools, businesses, and society generally switches back on. NZ should quickly return to where we had been before Covid struck - like starting up the country again after a Christmas shutdown. Normal activity in all facets of society should quickly return once the pandemic recedes.
The reality has proved quite the opposite. Media reports daily chronicle the dramatic level of underperformance in New Zealand now, compared with levels of performance observed before the pandemic.
We constantly hear about hospitals and health system which can’t see people in emergency departments within a reasonable time; has fallen miles behind with elective surgery; cannot keep up with cancer diagnoses.
We hear about schools, where alarming numbers of pupils have dropped out; where frightening percentages of pupils can’t read or do simple maths, let alone write. We see courts making people wait a year longer than pre-Covid, to have their cases heard. Air NZ struggles to take its planes out of storage and get them back into service.
The problems are not confined to government-related entities. My wife and I have just completed a road trip and saw tourism facilities first-hand. We stayed in two iconic North Island hotels. Both lacked maintenance, offered limited service, and were partially shut down.
A third former hotel at Waitomo is totally shut down. Rotorua, the premier North Island tourist centre, is under a serious cloud, because of homeless people housed in empty motels there during the pandemic. And yet we also experienced well-maintained motels offering full service.
Parts of tourism have kept their standards up and deserve credit for reopening at the same (or even higher) level than they achieved pre-Covid. But parts of the tourism industry are not back to these standards.
Economic Long-Covid appears in many sectors of the economy - tourism being just one example. The country never saw coming the prolonged economic and administrative disruption that would remain after the Covid pandemic receded. This disruption is everywhere and is serious.
New Zealand is materially underperforming right now. We have a significant case of economic long Covid, which is not going away soon.
Why is it NZ has not quickly re-opened at its former standards? Why has economic long Covid impacted right through society? It seems many factors are in play.
First, to be fair, many other parts of the world are seeing similar effects. World supply chains seized up, making it very difficult to import (and to export). Overseas businesses have also struggled to operate at pre-Covid capacity. NZ businesses waiting to import stock, parts and new equipment have faced major delay. So, we have partly imported economic long Covid from overseas.
Second, labour shortages have been a major impediment to New Zealand successfully reopening again. Restrictive Government immigration policies have significantly exacerbated the problem. But labour shortages are also apparent in many overseas countries. Demographics is also contributing, as the baby-boomer bump in the workforce reaches retirement age.
Then, modern economies are much more interdependent than in the past. Meaning that if one company is not performing well, this sub-par impact spreads to other businesses they deal with. economic long Covid is contagious, and readily spreads through the economy and society.
Another factor: the Government is struggling to drive performance and to deliver outcomes. Quickly reappointing the Reserve Bank Governor, notwithstanding the bank’s disappointing performance, is a recent example.
By comparison, Singapore planned, prepared, and reopened early - and is now doing well. Our Government was not so forward-thinking. This lack of drive and planning is now showing in NZ’s public services such as health, education and justice - and in the wider economy.
Large NZ government-planned centralisations in health, water, broadcasting, and even education, are not bedded in, and are surely further contributing to underperformance in those areas.
And finally - something NZ can do something about- attitude. No one likes coming back to work after a break and facing a backlog- especially with staff and supply shortages making things harder. That is the position NZ is currently in. The best way to get on top of that backlog- redouble efforts until it is cleared and overcome.
And finally - something NZ can do something about - attitude. No one likes coming back to work after a break and facing a backlog - especially with staff and supply shortages making things harder. That is the position NZ is currently in. The best way to get on top of that backlog - redouble efforts until it is cleared and overcome.
Curing NZ’s economic long Covid, involves adopting the approach of the Westlake headmaster, and not letting Covid be an excuse for underperformance in any sectors of our economy or society. It is time for plenty more sector leaders, especially in the public sector, to adopt a similar approach, and to drive a lift in performance throughout the country.
- David Schnauer is an economist, retired lawyer and the author of Covid, Catalyst for Change.
Around 18,500 public servants received a pay rise in the quarter.