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Insights 9: 20 March 2020
Eric Crampton says in Newsroom that New Zealand needs a process to identify and do away with outdated regulations
Eric Crampton comments on the Government's Covid-19 rescue package in The Dominion Post
2019 Annual Report

Emergency finance
Dr Eric Crampton | Chief Economist |
Fiscal responsibility matters. Being careful guardians of the public purse during good times provides flexibility for dealing with nightmare scenarios. One such scenario is now unfolding, so it is worth going through the basic principles that guide us through.

Gearing up for this pandemic will be expensive. Without greater capacity in our hospitals to deal with a surge of new virus cases, people will be left to die untreated for want of beds, ventilators, oxygen, heart-lung machines, or and the staff capable of operating those machines. Quickly getting more capacity in place matters.

The economic consequences of the pandemic will also be severe, even if New Zealand is somehow able to avoid the pandemic taking a serious foothold. A brief and sharp recession seems a best-case.

Dealing with all this will be expensive for the Government, businesses and households alike. So, how should the Government fund its part of the burden?

Start by separating pandemic policy from everything else. If you have a wish-list of tax or spending initiatives from before this mess, this crisis is not the time for pushing those barrows.

The Government should spend some effort identifying programmes it can easily put on hiatus to free up resources for the Covid-19 response. This does not mean it should slash spending on a badly timed push for fiscal austerity. Rather, it means the best mix of government spending programmes has changed substantially so spending money on international tourism promotion, for example, no longer makes much sense. That money can be put to better use.

Fiscal discipline should be maintained on everything unrelated to Covid-19 and its consequences. If the Government does things like hike benefits permanently, it needs to be sure that that is within the envelope for long-term fiscal responsibility.

The substantial, but temporary, spending increases necessary for Covid-19 should be funded primarily through debt – and as much as it takes to get the job done. The health system should allocate as much as is necessary on anything passing cost-benefit assessment.

But this will require discipline over the normal spending items in the budget. Paying off debt we now must take on is much harder if the Government locks in new permanent spending which is hard to reverse.

The ability to restore headroom matters a lot – unless earthquakes and other natural disasters are also on self-isolation for the next few years.

Difficult conversation needed over knowledge
Briar Lipson | Research Fellow |
New Zealand’s ‘upset-no-one’, content-free National Curriculum is hurting our children’s education.

To identify what knowledge should be every child’s entitlement, the Ministry of Education must be willing to have some difficult conversations. Instead, it dodges them, lowering standards and crippling educational equity.

When the OCED began testing the performance of 15-year-olds two decades ago, New Zealand proudly ranked with the highest performing nations worldwide.

Ever since, our performance has declined. For example, average mathematics scores have dropped by the equivalent of about a year and a half’s worth of schooling.

The present review of NCEA could be addressing our curriculum problem. By writing assessment standards that prescribe basic content, it could re-establish the essential role of subject knowledge.  Instead, the ministry has written assessment standards even more vacuous than the ones they replace.

Their published excuse is that it’s impractical to specify content through NCEA standards.

It is not.

It would be perfectly possible for new standards in, say, Visual Arts, to ensure children understood representation, abstraction and expressionism. In Science, that children studied energy, evolution and oxidation. And in English that children learned about literary genres, grammar and styles of writing.

However, in Visual Arts only three of the seven ‘Big Ideas’ would be recognisable by art educators internationally (and even these are knowledge-neutral). The other four focus on biculturalism, te reo Māori (language), social change and Māori cultural identity.

The science standards focus on investigative techniques, some ‘real-world’ issues and possible actions, how to interpret science in media and the ‘attributes of science’ (whatever that means). In English, the building-blocks of the subject are ignored in favour of building identity, enjoyment and meaning.

Aside from the lack of a ministerial mandate, one of the main reasons the ministry does not re-establish knowledge at the heart of schooling is that it cannot imagine how a bicultural New Zealand could ever unite around a common core of knowledge.

The mandate problem could be easily solved. After all, the present Government said it would create a national history curriculum soon after coming to power! And if we can agree on what history all Kiwis should learn, we can definitely agree on the core lessons of physics and English.

Deciding what knowledge makes the cut will always be challenging. Yet until we do, both standards and educational equity will continue declining: New Zealand will allow its children’s futures to be the permanent casualty of its past.

What I won’t miss while on quarantine
Leonard Hong | Research Assistant |
The gloomy headlines say New Zealand just flagged its 28th case of coronavirus. Great.

But as Twitter inevitably explodes again about nation-wide self-isolation policies, I’m starting to think the outdoors isn’t all it’s cracked up to be.

Most of us will miss seeing friends over a weekly Starbucks coffee, walks on the beach, being in the sun and – my personal favourite – golfing. But as the outside temperature drops and the normal flu season kicks in (yes, other types of flu still exist), to be honest, it’s hard to think of anything good about sweaty gyms and crowded coffee shops.

Besides, winter means more rain. I hate the rain. The upside of working from home is that it’s cosy, dry and it’s always the perfect time for hot chocolate. What’s not to like?

Walking to work is also literally a pain in the backside. I certainly won’t miss travelling to and from the city every day, up and down hilly streets with a sweaty back.

And if I’m not in the office, there’s no need to look ‘civilised’ in a suit. I can wear pyjamas from 9 to 5 and it’s not as if the cat will complain to HR. Besides, the best thing about casual clothing is the lack of ironing, giving me more time for Netflix in the evening.

But my advice is to keep a collared shirt and a blazer within arm’s reach if you can’t rule out surprise Skype calls. Just make sure to lock the door: the last thing you want is a toddler bursting in during a video chat with the CEO.

The home office is also way cheaper. No more unnecessary $4 morning coffees or expensive $15 Pad Thai for lunch. And the commute from couch to spare bedroom will cost pennies (depending on the size of the house, of course). Bonus: the lower emissions of trudging across the hallway will also be far cleaner for the environment. Again, depending on what was eaten for dinner last night…

I do expect a lack of vitamin D. But pulling my laptop closer to a north-facing window will probably solve that problem. Also, we humans are social animals and since no one will be walking the streets then not even a window will help fill that need. That could be an issue.

But it’s only for a few weeks. The outside world will still be there when I get out, right?
On The Record
All Things Considered
  • Graph of the week: A clock and calendar made of concentric rings.
  • A harrowing profile in the Wall Street Journal of the Covid-19 scenes in Bergamo, Italy.
  • Economist Tyler Cowen's best economic plan against the coronavirus.
  • Cambridge University Press is making all of its textbooks available free online in HTML, until the end of May.
  • Scientists are leading Notre Dame’s restoration—and probing mysteries laid bare by its devastating fire.
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