Wiggles, niggles could add up
If there was one reminder about the mundane privations of Covid-19 this week, it was brought about by the Wiggles. On Thursday, it turned out that the children’s entertainers, along with Captain Feathersword and Wags the Dog, who have been approved to enter New Zealand for a tour, had not managed to secure a space in the Government’s managed isolation and quarantine (MIQ) facilities. All the current vouchers released by the Government have already been snapped up.
This was clearly a problem. So the promoter approached MPs whose electorates would be hosting concerts. National MP Simon Bridges wrote a generic letter in support of the band. He then tweeted about it, pointing out that more than 40,000 tickets have been sold.
Bridges then disclosed he had a conflict because his children loved the Wiggles and he would likely to go the concert.*
The story clearly struck a nerve with the public. Stuff received emails from parents worried the Wiggles might not be coming and wondering what was going on.
The case highlights two separate political conundrums with the MIQ waiting list. First, if there are allowances made for folks such as the Wiggles at the expense of other Kiwis desperate to come home, that seems unfair.
On the other hand, what is the point of having what the Government told us last year was the comparative advantage of Covidfree status if, among other things, you can’t get overseas bands and entertainment in? Man cannot live on Shihad alone.
The Wiggles issue is not a massive deal and, up until just before Christmas, it looked like the border with Australia would be open again by the time they were due to come over in mid-March.
There is still a good chance the border may be open around then but, given the increase of Covid cases in New South Wales, you would not bet on it.
Nevertheless, it is a taster of the niggly difficulties that will continue for the Government until a vaccine is rolled out, which Prime Minister Jacinda Ardern reiterated this week will not realistically be until the end of the year. If the border with Australia opens, that will take a lot of pressure off MIQ.
Most polling and focus groups last year suggested a majority of Kiwis were quite happy with tough border restrictions being maintained, if not toughened.
But it is hard to imagine that level of support remaining: people are people and long-term restrictions will start to grate with time.
While batting off questions about the Wiggles – Ardern chided the promoters for scheduling a tour without getting the necessary permits – the PM outlined the Government’s timetable for making more housing announcements.
Those will start in February, when the Government will announce what demand-side changes it will make and how it will respond to the Reserve Bank on tools to slow runaway house prices.
To give some context, by late February, if house price inflation is the same as it was last year, prices will be up another 5 per cent – or an extra $35,000 on a $700,000 house – in the three months since Finance Minister Grant Robertson first wrote to bank governor Adrian Orr.
When broken down like that, the size of the increase becomes apparent: that is money someone has to find or borrow.
Add into the mix that inflation figures out yesterday showed inflation rising more quickly than expected. This adds to a now global debate about whether inflation could increase again this year. With the spectre of Covid looming above everything, the likelihood of interest rates being jacked up is low.
But, despite all the chatter about house prices, keeping inflation under control is the Reserve Bank governor’s actual job. If inflation starts to rise more appreciably, the bank will have to consider interest rate rises.
People have short memories and a lot of first-time home buyers will not remember a time when interest rates were nearly 9 per cent (in 2007 pre-global financial crisis), let alone when they hovered around 20 per cent in the 1980s.
It is nothing to panic about, and this quarter may well turn out to be a blip, but it is worth keeping an eye on: the assumption of low interest rates for a long time to come undergirds most current business, economic and political decisions.
The point is not that rates will rise but that they could. Just as with Covid, the March 15 shootings, and even the relatively strong postlockdown economy, it is the unexpected events that can really drive politics.
The Government has a huge year ahead: tax time in April will start to reveal just how tough Covid has been on small businesses.
The international tourism sector will still be all but dead.
The Government has a big infrastructure response to Covid but how much will get started this year?
It also has a regulatory response to the Resource Management Act planned – we shall see a draft in May. The Simpson Review, proposing to slash district health boards and centralise the health system, will need to be responded to and acted on.
And then there is running a closed border and rolling out the biggest, fastest vaccination programme in New Zealand history.
Plus there are now clearly starting to be some Covid-created shortages of larger imported consumer goods.
Getting a sense of momentum, direction and purpose from this Government will be politically important. It will have to move briskly on what it has promised and competently roll out vaccines. Otherwise, the little niggles of Covid normality could start to add up.
Happy New Year.