The government has all but closed the border. Shortly it will announce planss for preventing the coronavirus from devastating the national economy. We can only hope it will be bold enough to go big.
As a conservative, I must admit that calling for drastic government intervention is not something that comes naturally. But this is why we have government. Without a central authority capable of acting decisively to counter system-wide threats, we simply lack the means of self-preservation.
Small government is an ideal, not a suicide pact. In fact, if the government is justified in interfering with commerce to fight the disease it is also justified in mitigating the fallout of its interference. It is and it is.
With that in mind, here are a few of the things I would want to see.
Unconditional cash payments
Government intervention to save the economy must be consistent with our primary aim of halting the virus. Limiting support to those who have already started to show symptoms, for example, doesn’t make a lot of sense given that it will only delay people taking preventive measures until the damage is done.
This is also not the time to get prissy about support going to those who might not need it. Putting things through the meat grinder of the state’s welfare apparatus will severely limit the effectiveness of the government response. This is an emergency, not a redistribution opportunity.
Get cash to every man, woman and child in New Zealand.
Slash interest rates - by legislation if necessary
Successive interest rate cuts by the Reserve Bank mean we don’t have a whole lot left in the tank here. But we’re not running on fumes yet. Whether previous innovations have been wise or not, there’s going to be a great demand for credit coming up. The government needs to intervene to remove barriers to obtaining it.
Force innovation on the finance, legal and government sectors
Speaking of which, the law has permitted electronic signatures for legal documents for almost twenty years. And yet, for several reasons, lawyers, banks and various governments reject electronically signed documents. So for a business to get an overdraft in place for the coming months, they’re going to have to go into a law office.
Many legal documents need to be witnessed. For some time, there have been discussions around the validity of the remote witnessing of documents through media like Skype. Again, however, there isn’t enough certainty and this has led to conservatism by those relying on the documents.
Rapidly amend the law so that appropriately secure electronic signatures must be accepted – and instituting a statutory framework for remote witnessing. This seems like a small thing but, as above, frictionless credit is going to be crucial here. This would make a real impact at times when people are going to be hesitant about in person appointments..
Save motels and put them to use
Border restrictions are going to hammer accommodation providers. The government should offer motelliers a guaranteed minimum income per self-contained unit. In exchange, motels would need to agree to make rooms available as the government directs. That will, at least, give the government some flexibility over accomodating health workers and officials who need to isolate themselves from their own families. Turn some of them into quarantine centres.
Paying for it all
In the parable of the grasshopper and the ant, the latter survives the winter by studiously toiling away during the other seasons. Well, guess what boys and girls, winter is here. And while the last few New Zealand governments have hardly been libertarian paragons, the country has worked hard to keep the books in order and preserve our good credit.
Now we need to see the benefit of that.
There will be time for lessons later on. Maybe even recriminations. Next time there will be fewer excuses for being ill-prepared.
But as long as the government’s response addresses the underlying emergency without adding to the baseline of spending that must be continued when the sun is shining again, no sensible centre-rightist should be too faint-hearted about the price tag of what we do now.
After all, who wants to be the richest man in the graveyard?