Don Brash was Reserve Bank Governor from 1988 to 2002, and National Party Leader from 2003 to 2006


The following article was first published in elocal October 16, 2021.

By the time this column sees the light of day, the Labour Government – now freed of the constraint of New Zealand First – will have been in office almost exactly a year. And to look at the opinion polls, they are doing a fine job – or at least the Prime Minister is.

But the reality is very different.

The Government has made absolutely no progress in key areas like replacing the RMA with workable rules to protect the environment while making more land available for housing. (Indeed, the legislation proposed to replace the RMA would make matters much worse.) It has made no progress on controlling gun crime, despite their draconian law to take guns off law-abiding citizens. It has proposed dopey projects like enormously expensive cycle bridges over Auckland harbor while scrapping much needed roads in south Auckland. It has drastically reduced the number of RSE workers who can come from Covid-free Pacific islands, with devastating impact on horticulture. It has created a total shambles of immigration policy, so that desperately needed doctors and nurses can’t get into the country and high-tech workers on temporary visas are leaving. It is nearly impossible for New Zealanders stranded overseas to get back home again because of the total shambles in the MIQ system. It has imposed a tax on petrol- or diesel-fueled vehicles, even where no feasible alternatives exist. It has spent tens of millions of dollars upgrading the rail line between Hamilton and Auckland, despite the fact that almost nobody wants to ride on it. The Government proposes to introduce ill-defined “hate speech”, threatening one of our most fundamental freedoms.

But surely the Government must get high marks for their handling of the pandemic? If judged by the number of Covid-related deaths, absolutely. The number of people who have died of Covid-19 in New Zealand is minuscule compared with the experience of almost every other country in the world: and almost all of those who have died have been elderly and/or suffering from other illnesses. But this has been achieved at a terrible cost.

Because New Zealand was the very slowest developed country in the world to ensure people were vaccinated, with several developing countries achieving a much faster vaccination roll-out than we’ve managed, we’ve achieved our low death rate from Covid by imposing some of the most draconian lockdowns of any country in the world. Despite having assured the country that New Zealand would be near the front of the queue in terms of getting access to vaccines, we were near the back, and hundreds of thousands of New Zealanders have paid the price, not in terms of disease but in terms of loss of income, destruction of small businesses, increased domestic violence, inability to get into the country without massive delays and enormous stress, and yes, almost certainly in terms of overall loss of life.

Loss of life? How can that be when we had so few people die of Covid-19? Professor John Gibson, professor of Economics at Waikato University, has argued persuasively that the loss of income caused by the lockdown policy has reduced national income as compared with a less brutal policy, and that this loss of income has almost certainly reduced average life expectancy across the whole population.

After noting that according to the Bulletin of the World Health Organisation the estimated Infection-Fatality Rate of Covid is just 0.23%, and that the Delta variant, while more infectious is actually much less lethal than the original Alpha variant, he points out that:

A 10% fall in real GDP, in the long-run, reduces NZ life expectancy 1.8% below what it otherwise would be.

Real GDP in 2020 was 5.2% below expectation (using the last 2019 fiscal update). Part of this fall was outside our control but much was from a ‘go hard’ approach… The $14 billion of output not produced in 2020 is not shifted through time. It is a permanent loss. The same will be true for the 2021 lockdown. A share of future output also has to go on debt-servicing, as NZ tried to borrow her way out of this pandemic, and so is not available to fund improvements in life expectancy…

If real GDP ultimately falls 10% below what was expected pre-Covid (e.g. if Level 4 lasts as long [in 2021] as in 2020), and if we apportion half of this to the unusually harsh NZ response (rather than to overseas factors), then our politicians and health bureaucrats will have presided over a fall in life expectancy where there are two million fewer life years than would otherwise be expected. If this loss was fully concentrated on a select group, it is equivalent to 46,000 deaths.

In case one doubts these calculations, note that the Treasury long-term fiscal forecasts released recently show future life expectancy is almost two years below what they had previously forecast in 2016.

Thus the apparent kindness of lockdown to limit Covid-19 deaths will, instead, be killing more people by making us poorer… Lockdowns are one of our greatest peacetime policy failures.

A good performance by the Government? No, a lousy performance.

Another lousy performance has been on improving housing affordability, one of the issues which the Government has claimed as a high priority but a policy area which has been a disastrous failure, with what can only be described as truly awful consequences for very large number of citizens.

It is no secret that house prices were grossly excessive when the Labour-New Zealand First Government came into office in 2017, with a strong commitment to improve the situation. And the result? The situation has become markedly worse, with an increase in the national average house price of 4.9% in just the last three months, and of 27% since September 2020. According to OneRoof and its data partner Valocity, the average price of a house increased by more than 30% in the last 12 months in Gisborne, Manawatu-Whanganui, Wellington, Hawke’s Bay and the Bay of Plenty, while in Auckland the average house price has reached $1.415 million, up 24% on last year.

And these increases are despite an almost total absence of net immigration and the desperate attempts of the Government to slow down the increases by such distortionary measures as removing the deductibility of interest on investment properties. The fact is that the Prime Minister and the Minister of Finance are on record as wanting house prices to continue rising “but more slowly”, and they have now quite explicitly ruled out policies which would actually make a material difference to house prices, in particular by freeing up the supply of residential land. We still see the occasional letter to the editor blaming the “market” for this appalling situation: no, it’s not the market. It is the direct result of interfering with the market, by both central and local government, which has caused this problem.

I recently saw an ad for a two-bedroom, two-bathroom, 90 square metre apartment in West Palm Beach, Florida, at an advertised price of NZ$170,000, about a third the price of much smaller apartments in Auckland.

Finally, let me touch on He Puapua. As many readers will know, this document, produced at the request of the Government in 2019, completed later that year but withheld from the public – and, apparently, from Labour’s coalition partner, New Zealand First – until after last year’s election, is arguably the most explosive document ever produced by a New Zealand Government.

He Puapua lays out a plan under which, by the bicentenary of the Treaty of Waitangi in 2040, New Zealand would have two governments under a tribal monitoring committee, one by Maori for Maori, and the other, a fully bicultural version of the existing government.

Maori New Zealanders would have their own health department, their own education ministry and schools, their own welfare system, and in principle their own Parliament.

The Prime Minister claims, more than slightly implausibly, that she had not seen the document prior to its public release after the election. She has accused Judith Collins of racism for raising the matter in Parliament and in speeches to the National Party faithful. But she and her Ministers are actively consulting with Maori on the report and in important policy areas the Government is already implementing the recommendations of the report.

Earlier this year, the Government passed legislation under urgency to amend legislation in order to ban ratepayers from having a say on the creation of separate race-based Maori wards in local government.

Soon afterwards, the Government announced that a totally separate Maori Health Authority would be created which would not only be exclusively focused on Maori health, but which would also have a power of veto on what the “mainstream” health authority does.

We have seen the Government mandate that an egregiously lop-sided History curriculum be taught in all schools, emphasizing the wonderfulness of all things Maori and the evil brought to New Zealand by the early colonists – making no obvious mention of the many positive things that the colonists brought with them, like the rule of law, a written language, metal tools, new forms of protein, ocean-going ships, and the abolition of both slavery and cannibalism. The Government is encouraging schools to provide all children with at least a smattering of the Maori language, despite that language being of absolutely no practical value to any New Zealand children and our children gradually falling back compared with other countries in such vitally important subjects as English, Maths and Science.

All over the public sector, Maori advisers are being hired at exorbitant salaries – the last one I noticed was for a Maori Capability Advisor for the Security Intelligence Service at a salary range of between $156,000 and $234,000. The Reserve Bank too has recently hired a Maori cultural adviser at a substantial six-figure salary, as if monetary policy or the regulation of financial institutions somehow has a racial dimension.

Public sector agencies have been directed to ensure that at least 5% of their purchases are sourced from businesses which are at least 50% owned by Maori, though with predictable vagueness about how a Maori is defined for this purpose.

And currently, local authorities all over the country have been told that the Government wants to amalgamate all of the so-called Three Waters infrastructure – covering drinking water, storm water, and sewage – into four very large regions, drawn along tribal boundaries (so that, for example, a small part of the South Island is grouped together with Wellington and the East Cost of the North Island as far as Gisborne). That probably makes no financial or economic sense, but what is relevant for this discussion is that it is the Government’s intention that the boards controlling these four entities must be made up of 50% tribal appointees. Why? Because “the Government has stated that a key outcome of water reform will be co-governance with iwi/Maori, as required by the Treaty of Waitangi”.

And that goes to the heart of the matter: the Government has swallowed the nonsense that the Treaty created a partnership between Maori and the Crown, despite there being not the slightest hint of a partnership in the document, in either the Maori or the English version of the Treaty. And in so doing, they are creating a racially divided society, the very reverse of what was promised in Article III of the Treaty.

To top it all off, the Government has bought the media’s support for this nonsense by offering $55 million to support those media outlets, and only those media outlets, which agree to further the myth about the “Treaty partnership”.

One year into the Government’s current term of office, the damage they have done and continue to do is huge.

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What a Mess We’re In
Reproduced with permission

Reproduced with permission

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