Tuesday 22 December 2020

Boat race people and MIQ

A few months ago, I was curious about how many scarce spaces in MIQ were being taken up by people coming in for the boat race. So I made an OIA request. 

Now, months later, it looks like the answer is that MBIE officially has no clue how many boat race people from the boat race overseen by MBIE were put by MBIE into the MIQ facilities overseen by MBIE.

Here's the trail so far. 

From: Eric Crampton <eric.crampton@nzinitiative.org.nz>
Sent: Tuesday, 29 September 2020 12:05 PM
To: *OIA <OIA@mbie.govt.nz>
Subject: [RELEASED FROM QUARANTINE][SUSPECT SPAM]America's Cup managed isolation

Dear MBIE,

I’ve a short OIA request.

I’d like to know how many people have sought border exceptions for accommodation in the MIQ system in relation to the America’s Cup, how many have been granted those exceptions, and how many more are expected.

Many thanks!

Eric Crampton

It was funny because they had to pull it from their spam filter and called that process "release from quarantine"

They replied a week later asking clarification. They wanted to know whether I wanted the number of requests to not have to go through MIQ at all [exemptions from MIQ], or border exemptions to be allowed into the country despite the current border closures, and from there into MIQ. I replied, four minutes later, to clarify that I wanted to know how many came into MIQ.  

From: MIQ Ministerial Servicing <miqministerialservicing@mbie.govt.nz

Sent: Tuesday, 6 October 2020 3:26 PM
To: Eric Crampton <eric.crampton@nzinitiative.org.nz>
Subject: RE: America's Cup managed isolation [UNCLASSIFIED]

Good afternoon Mr Crampton

I refer to your OIA request below. I need to clarify a few points to determine how best to respond to your request.

Border exceptions is a separate process to the Managed Isolation and Quarantine accommodation system.

At current, everyone entering NZ is required to stay in managed isolation or quarantine for at least 14 days and return a negative COVID-19 test before they can go into the community, unless an exemption has been granted.

Exemptions to managed isolation are rare and will only be issued in very limited circumstances and where the health risk is low and can be managed.

Border exceptions relate to who are allowed to enter New Zealand currently under the border closures.

Are you after the number of people entering New Zealand for the America’s Cup who have sought exemptions to MIQ or are you after the number of people who have asked to be allowed into NZ in order to participate in the America’s Cup? 

From: Eric Crampton <eric.crampton@nzinitiative.org.nz>
Sent: Tuesday, 6 October 2020 3:30 pm
To: MIQ Ministerial Servicing <miqministerialservicing@mbie.govt.nz>
Subject: RE: America's Cup managed isolation [UNCLASSIFIED]

The number who have been allowed into MIQ please! Many thanks!


On 28 October they extended their deadline to 25 November.

Yesterday, 21 December, I received MBIE's answer, such as it is: 

Dear Eric Crampton

Thank you for your email of 29 September 2020 to the Ministry of Business, Innovation and Employment (MBIE) requesting, under the Official Information Act 1982 (the Act), the following information:

I’d like to know how many people have sought border exceptions for accommodation in the MIQ system in relation to the America’s Cup, how many have been granted those exceptions, and how many more are expected.

The scope of your information request was clarified with you on 22 October 2020 [Note - they later corrected this error - the correct date was 6 October] to be the number of America’s Cup participants and personnel who have gone into Managed Isolation and Quarantine (MIQ) facilities and how many have sought and been granted exemptions to staying in MIQ.

As you will be aware, mandatory MIQ came into effect after 11.59 pm on 9 April 2020. Since then, every person entering New Zealand is required to stay in a MIQ facility for at least 14 days and return a negative COVID-19 test before they can go into the community, unless an exemption is granted.

Since mandatory isolation is required of every individual who enters New Zealand, unless an exemption is granted, detailed information regarding visa, residence, or citizenship status is not collected by MIQ officials. I am unable to answer your question as data on the individuals who have entered New Zealand for the America’s Cup has not been collected by MIQ officials. I am therefore refusing your request under section 18(f) of the Act, as the information requested cannot be made available without substantial collation or research.

MBIE regularly publishes data on MIQ occupancy, including the total number of people that have gone through MIQ. This information can be found at the following website: www.mbie.govt.nz/business-and-employment/economic-development/covid-19-data-resources/managed-isolation-and-quarantine-data/.

As you also may be aware, the process of transitioning oversight of MIQ from the All-of-Government (AoG) Response Group to MBIE began on 13 July 2020. This included the transitioning of the Exemptions function from the Ministry of Health (MoH) to MBIE. Between 13 July 2020 and 22 October 2020, the Exemptions team within MBIE received 2,439 MIQ exemptions applications.

None of these applications indicate that they were related to the America’s Cup or America’s Cup personnel.

MBIE is unable to provide you with information on how many more exemptions applications are expected with any meaningful accuracy as information is only collected once an application has been made.

In short, MBIE claims it does not know how many people in MIQ are there for boat-race purposes.

MBIE is the responsible Ministry for the whole boat-race thing. Every bit of correspondence on boat race things will go to them.

MBIE is the responsible Ministry for deciding who gets classed as an essential worker - the prelude to being allowed into MIQ as a non-citizen or non-resident.

MBIE also is responsible for allocating the scarce spaces in MIQ - deciding who among the many many claimants will win the scarce spaces.

It would be remarkable if there were not volumes of correspondence from boat-race types about when they'd be staying at MIQ, when they'd be arriving, what the arrangements would be like, whether the facilities were to their liking - basically all of the hassle that anyone who has ever had to deal with in trying to organise events has had to go through. Like - organise a conference where you're putting on the accommodation, and you'll be dealing with endless back and forth about who is staying at which times and where the taxi stand is and whether there is wifi and whether their very particular dietary needs might be handled at the hotel buffet. MBIE would have been on the receiving end of so much of that. 

But MBIE claims not to know how many boat race people it has put into MIQ. 

So I replied, ccing the Ombudsman:

I’m a bit surprised on this one.

You’ve refused my request on the basis that it would be too hard to compile the data on the number of persons granted exemptions as critical workers into MIQ for the America’s Cup.

After I made the request, around the time you extended the deadline, journalist Andrew Voerman noted that some of the figures were available in a proactive release. The MBIE Briefing note “Covid-19: Request for exemptions to border restrictions for essential workers in two 36th America’s Cup syndicate teams”, dated 9 June 2020, sought that Minister Twyford designate America’s Cup syndicate teams be considered “other essential workers” for the purpose of exceptions to border restrictions, and tallied 102 American Magic workers, 104 associated family members, 86 INEOS Team UK workers, 128 associated family members, and 1 nanny, for such consideration.

I have attached the relevant Briefing Note.

Surely it would not be difficult to tell whether that requested number of exemptions was granted, or whether the final number varied. It stemmed from a briefing note request to the Minister from your Ministry.

Ombudsman’s Office: please note that MBIE’s extension of 28 October promised a response no later than 25 November. It’s now 21 December, and they have failed even to disclose the existence of the Briefing Note listed above. I would not have known about that Note but for a helpful pointer from Andrew Voerman.


Eric Crampton

MBIE replies:

As per the attached email, the scope of your original request was clarified with you on 6 October 2020.

The original wording of your request ‘I’d like to know how many people have sought border exceptions for accommodation in the MIQ system in relation to the America’s Cup, how many have been granted those exceptions, and how many more are expected’ is confusing as border exceptions and the Managed Isolation and Quarantine process are two separate processes.

As previously explained, everyone entering NZ currently is required to stay in managed isolation for at least 14 days and return a negative COVID-19 test before they can go into the community, unless an exemption has been granted.

Exemptions to managed isolation are rare and will only be issued in very limited circumstances and where the health risk is low and can be managed.

While border exceptions relate to those who are allowed to enter New Zealand currently under the border closures. America’s Cup personnel have been granted entry into New Zealand as critical workers. This decision sits with Immigration New Zealand and is unrelated to Managed Isolation and Quarantine and the MIQ exemptions process.

The briefing you are referring to is in relation to the border exceptions, not MIQ. You have clarified that you are after MIQ information so your request was responded to in that regard.

As explained in your response, MIQ cannot answer your question as to how many America’s Cup personnel have stayed in MIQ as MIQ does not collate detailed visa information. This is because everyone who has entered New Zealand is required to stay in MIQ regardless of whether they are a resident, citizen, or are entering the country as a critical worker.

Please advise if you would like to request additional information in relation to border exceptions rather than the MIQ exemptions process. 

They're here, in my view, playing jargon games. If you're not a returning Kiwi, you need an exemption to get into the country, then you need to go into MIQ. I've clearly asked how many boat-race-associated people have gone through that. They tell me it's impossible to know how many has because MIQ doesn't track it. 

I have added a request for the tally on border exceptions, which I guess would form an upper bound on how many MIQ spaces the boat race people have snaffled. It could be that some are travelling as couples, and so would only use one room. But you can't tell - if they arrive at different times, they'd have different rooms. 

Meanwhile, here's a petition encouraging MBIE to consider veterinarians as essential workers so that they might be allowed into the country to deal with some rather pressing shortages

Everything at MIQ is run on the Aristocracy of Pull. 

The Boat Race People have pull, and the government would, by all appearances, very strongly prefer that nobody might ever know how many scarce MIQ spaces have been taken up by the boat race people. 

Veterinarians, at present, do not have pull. But enough signatures and they might. Which might displace someone else whose visit might be even more pressing. It's not a great way to allocate resource the shadow value of which, at the current margin, must easily be in the hundreds of thousands of dollars per stay.

Friday 18 December 2020

Improved Covid-leave

The government has announced a strengthening of the Covid-leave scheme. From early 2021, presumably once they have the mechanics worked out, businesses will be eligible for support if workers need to self-isolate after a Covid test, while waiting on a result, and are unable to work from home.

From the Beehive's release:

A new Short-Term Absence Payment will be available to eligible employers to support eligible workers who cannot work from home to follow public health guidance and stay home while waiting for a COVID-19 test result. It is also available to eligible self-employed workers, and to parents or caregivers of dependents who are required to stay at home awaiting a test result where they need support to do so. 

This will help businesses to continue to pay people who can’t work from home while waiting for a test result to protect others from possible COVID-19 transmission. The payment will be a one-off flat-rate payment of $350 for each worker who meets the eligibility criteria and will be available from early 2021. 

Employers or the self-employed will be able to apply for the STAP once in any thirty-day period per eligible worker (unless a health official or medical practitioner advises or requires the worker to re-test). If a worker needs to self-isolate following a positive test result they then may also be eligible for the existing two week Leave Support Scheme. The Leave Support Scheme remains available at all levels. 

I'd worried that absence of this kind of payment discouraged people from going for testing. 

My column from the Dom back in November

Every sick day kept in the bank is valuable. You might get sick later in the year and be caught short. You might need to stay home to tend to a sick kid. Unless this day is likely to be one of the five worst days of the year, workers aren’t likely to stay home.

On the other side, and especially for smaller employers, scrambling to fill an unexpected vacancy can be costly. If you have a hundred people on deck, you’d expect one or two to be absent and have enough staff to cover. Sorting out that coverage can be much harder for a small firm. If every worker stayed home with every mild cold, your sick leave budget would blow out.

During a pandemic, it is incredibly risky if neither the worker nor the employer really want a worker to wait on a test result. But measures like doubling the number of available sick days are both too blunt and too costly.

They are too blunt because, for mild symptoms, the calculus doesn’t change much: Unless the day is likely to be in your 10 worst of the year, you’ll prefer to go in. And when accommodating sick leave is costly, it is very easy to start wondering whether an employee is taking the mickey

The costs of having each worker out for an additional five days per year, if it’s all used up, do add up.

How to square the circle? On January 29, Singapore implemented its Quarantine Order Allowance Scheme. The self-employed or employers of workers falling under a Quarantine Order could claim $100 per day. Employers needed to show proof that they continued to pay the quarantined workers, and employees were required not to break the quarantine order.

That scheme solves the incentive problem. The employer cannot access the funding unless the worker maintains quarantine. And the worker must not break the order. Both have a reason for the worker to stay home.

New Zealand’s Covid-19 Leave Support Scheme took a page from Singapore’s book, but needs a few tweaks to really be effective. The scheme compensates employers, including the self-employed, if they need to self-isolate and cannot work from home.

It provides excellent coverage for workers who have been required to self-isolate because they have Covid or because they have been told to self-isolate as a close contact of a case.

It covers you if your child has been told to self-isolate and you need to provide support.

And, for a few workers in a few critical health sectors, it also provides coverage while waiting on a test result.

All of that is laudable.

But if you’re a hospitality worker, or a retail clerk, or a bus driver, you will not be eligible if you’ve developed symptoms, gone to a mobile testing station, and are waiting on results. The pernicious calculus remains. Are your symptoms really that bad? How many sick days do you have left? How annoyed is the manager going to be if you need to stay home for a couple of days?

The Covid-19 leave scheme should be updated to avoid those kinds of problems. Really, it should never have had those holes in coverage in the first place.

In the week to November 13, 24,574 people not linked to the border were tested for Covid-19. If each spent two days at home while waiting on a test result, that’s about 50,000 days of Covid-leave. The median weekly wage is about $1000. If every person staying home were compensated, it would cost about $10 million per week.

A week of Auckland being at alert level 3 costs, by one estimate, $440m per week. If a nationwide Covid-leave policy reduced the chances of a four-week Auckland lockdown by only a single percentage point in each week it was in place, it would have paid for itself almost twice over.

And we could, like Singapore, couple the scheme with rather substantial penalties for firms telling workers to show up while waiting on test results.

The 2020 Budget was meant to have allocated enough funding to cover the Covid Response. But actual public health measures, like proper Covid-leave to encourage people to stay home when they may be infectious, have been nickel-and-dimed. Meanwhile, the budget included over $70m in support for horse racing – enough to cover about seven weeks of proper Covid-leave.

Rather glad that the government is moving to fix this one! 

Who would you have picked to run the Productivity Commission?

The National Business Review ($) has a roundup of reactions to Ganesh Nana's appointment as head of the Productivity Commission. It includes some minor comment from me, and you can probably guess what I think about it.

But it also includes this somewhat intriguing bit from Sam Warburton:

Former Treasury Economist Sam Warburton said he could not name an economist in the public realm that would be suitable for the commissioner role at the moment - a comment that spoke to the credibility of the profession, which he said had not been high for the past few years.

Imagine that you're the recruiter tasked by Grant Robertson with finding the right candidate. You want a Commissioner who is a credible economist, who is respected by the profession, who has some profile beyond other economists, who is able to communicate to a broader audience, and who has public sector nous. 

It's a somewhat difficult Venn diagram to construct, and especially if you layer on the obvious political constraint that you can't select someone who's relatively 'dry' on economic issues. 

But it's still hardly an empty set, even if we restrict ourselves to people currently in the country. 

I would have hoped that Arthur Grimes and John McDermott would have been on that list. I don't know whether Arthur would have left Vic for it, or John would have left Motu, but you'd think a recruiter would have called them up to check. Norm Gemmell would have been a great pick, but I'm not sure whether Robertson would have seen him as too dry? 

There are Motu-affiliated folks who've done interesting work in the productivity space. Dave MarĂ© and Richard Fabling in particular. But they haven't done as much public-facing work, so would likely be ruled out on those grounds. 

Tim Maloney at AUT should also have been on any reasonable short-list. He's not just done interesting work on labour markets, he's also served as Chief Economist at the Ministry for Social Development. Rhema Vaithianathan at AUT could also reasonably have made the list, though perhaps a bit further down only because her work is further from core productivity issues. 

Who do you think should have been ahead on the list? Leave out anyone who'd be ruled out as being too dry. Imagine yourself as an honest recruiter for Robertson for the position, knowing full well that folks like my excellent colleague Bryce Wilkinson would never be considered. 

Who would you have called? 

Update: A few additions to the shortlist, via Twitter, and others that have come to mind:

  • Gail Pacheco (via Tony Burton; I'd not considered those currently in at the Commission)
  • Bill Rosenberg (via Mike Reddell; I'd not considered on same basis as Gail)
  • Alan Bollard (via Fran O'Sullivan)
  • Tim Hazeldine
  • Bob Buckle 

Thursday 17 December 2020

No room at the MIQ

Stephen Joyce canvasses the usual excuses for delays in getting normal travel arrangements with Australia

He finds them wanting, as I have as well.
The Prime Minister's reasons for further delay, as reported in the Herald yesterday, are ridiculously weak. There were basically three of them. Let's take them in turn.

The PM is reportedly concerned that Australia could have a looser definition of a Covid flare-up than New Zealand. It seems like there is an easy solution to this. New Zealand retains sovereign control over its borders and the Government could reinstate a quarantine requirement at any time. Having a bubble doesn't mean always agreeing with Australia's definition of risk.

The second problem is apparently that having fewer Australians in quarantine facilities would allow more people from other countries at greater risk to come into our quarantine facilities. This would increase the numbers of people in quarantine that could have Covid.

Let's think about that for a second. Are we really keeping people arriving from Australia in isolation, even though it's not necessary, in order to reduce the number of people from other countries in quarantine who could have Covid? Seriously?

An alternative view is that freeing up nearly half of the quarantine facilities currently taken up by travellers from Australia would allow faster processing of critical workers and Kiwis from elsewhere who are currently queuing on the other side of the border. Which would surely be a good thing.

The third problem identified is what happens to Kiwis already in Australia if we have to close the bubble again. Well, I'm thinking they would then have to use quarantine to come back. Which seems a no-brainer. And if this is an argument for not opening a bubble we will never open one.

That's pretty much it. The Prime Minister is suggesting that we need to postpone our end of a transtasman bubble till at least February to deal with these supposedly intractable issues, which a competent set of people could solve in roughly five minutes.

I think underlying some of this is a worry about political pressure if a pile of Kiwis wound up stranded in Oz if we had to re-impose border controls. So you'd have to have a very strong caveat emptor around airfares and warnings that people needed to be ready to hang around on the other side of the Tasman if controls were re-imposed. They can't just use quarantine to come back - there would be too many of them. 

But there seems no willingness to think through solutions. 

If the actual binding constraint on getting more people through MIQ is that even a perfect system can handle only so many positive cases because of constraints in the health system, then we need ways to make it less likely that infected people travel here. A starter for 10: put an MIQ facility on the West Coast of the US close to an underused airport that could handle AirNZ planes. If someone turns up positive, keep them from getting here in the first place. It can't be that hard. 

If that's the binding constraint. But there always seems to be some other underlying constraint such that solutions to whatever excuse has most recently been offered doesn't solve whatever the real constraint is. It's always jam-tomorrow when it comes to normal travel arrangements with places that do not have Covid. 

Meanwhile, the costs of closed borders and bureaucratic cruddy decision processes for allocating scarce MIQ spaces keep adding up. 

Here's an open letter from a veterinary recruiter who's been desperate to get vets in from overseas. There are long term skills shortages for vets. But they haven't made the cut for whoever at MBIE is the decider. They don't have the pull. Film crews and boat race people have the pull. And pull decides.

Prime Minister, I would like to invite you to join me in visiting a couple of veterinary hospitals so that you can hear first-hand what it’s like for the amazing, dedicated, hard working and totally stressed out professionals working on the front line.

I would like you to hear first-hand how they’re not sleeping at night. How they’re so totally stressed out that sometimes they can’t even form coherent sentences. How their spouses and families are concerned for their physical and mental health. Prime Minister, these professionals need a break.

Sorry, no room in MIQ.  

Wednesday 16 December 2020

For a carbon dividend

My Dom Post column this week makes the case for a carbon dividend. Canada imposes a carbon tax on provinces that haven't their own carbon pricing regime, and is set to substantially hike the tax to $170/tonne. 

How is it politically feasible? Money collected in each province is sent back as a grant to residents in each province. Carbon prices maintain incentives at the margin to change behaviour; redistributing the revenues in lump-sum manner preserves those incentives while addressing equity concerns and making the thing politically possible. 

Here, the Climate Commission and government are behaving as though higher explicit carbon prices are impossible. There is no defensible explanation for carbon measures that would cost over ten times as much per tonne abated. If you want to do the most good possible, you have to buy all the cheapest ways of abating carbon first. The only half-way defensible explanation is that they view themselves as heavily politically constrained - that it's impossible to use transparent carbon prices through the ETS if those prices rise to levels that would cause political backlash. 

But that's just stupid too. We teach every darned intermediate micro student that the first welfare theorem tells us to use prices, and the second welfare theorem says to deal with any resulting equity difficulties with lump-sum transfers. This is stuff that any decent undergrad should be able to think through. 

So apply it here. 

Too hard to get an industry like agriculture into the ETS? Provide bundles of annual ETS credits, on a declining schedule over time, to industry to bring them in, and set the allocations based on average output rather than a farm's specific output so you wind up rewarding rather than punishing farms that moved earlier to abate emissions. 

Too hard to bring the cap down more quickly over time because ETS prices would make fuel prices too high and be hard for poorer households that might rely on less fuel efficient vehicles? Take the money raised by government sales of ETS credits into the market and give it back to people in lump-sum fashion. Still think that doesn't do enough to address equity? Boost the payments for those with Community Services Cards. 

This stuff is absolutely not hard in principle. There's stuff to be worked out in implementation, but the base principles are easy. But it's hard to see evidence that anyone's working on it. Instead, they're working on ludicrous schemes that will wind up costing hundreds or thousands of dollars per tonne abated, because they're scared of letting ETS prices rise. 

Frustrating world when people seem determined to push for the 10th best when a 2nd or 1st best is entirely feasible. 

Anyway, here's the column. A snippet:

The federal government solved the problem in a rather ingenious way. It takes all of the carbon tax revenue raised from a province, puts it into a pot, and then gives it back to people in that province.

Provinces that produce more carbon emissions will pay more in carbon taxes. Households in those provinces then get a higher rebate payment back from the federal government. In Ontario, the first adult in a household receives an annual payment of $224. The second adult receives $112, and each child receives $56. The amount of the payment varies from province to province and will increase as the carbon tax rises.

This kind of rebate programme solves important equity problems. Richer households spend more money on everything, including on things that generate carbon emissions. A flat per-household payment funded by taxes disproportionately paid by richer households makes for a progressive transfer scheme.

And it also makes higher carbon prices politically possible. Most households will wind up receiving more back in carbon rebates than they will pay in carbon taxes. By 2030, the average family of four in Alberta will be receiving a carbon rebate amounting to about $3200 per year.

Work by University of Calgary economist Trevor Tombe demonstrates that the vast majority of lower income households will receive far more in carbon rebates than they will ever pay in carbon taxes.

Heatley on Covid

The Productivity Commission's Dave Heatley blogged on some of his work on Covid policy.

His conclusions?

  • Cross-country data does not support a health vs. the economy framing of responses to Covid. Nor does the data support a get health right and the economy will follow.
  • Achieving the lowest health costs over both the short and long term requires choosing policies that work in protecting citizens from Covid while minimising economic costs.
  • New Zealand should seek to improve its policies, finding those that work at lower economic cost. It is likely that we can learn much from Taiwan, South Korea and other high-performing countries.
Keeping Covid down seems necessary but not sufficient for economic recovery. That of course isn't an argument against keeping Covid down. 

There is a lot that New Zealand has gotten right. But we also have missed a lot of opportunities to do rather better.

Thursday 10 December 2020

Island logistics

I'm a bit curious about logistics over on the Islands now.

RNZ writes:

Ten containers of watermelons were scheduled to be shipped to New Zealand on 5 December.

However, the trucking companies assigned to transport the melons to the wharf in Tongatapu did not arrive to the growers' farms to pick up the produce, as RNZ Pacific Correspondent Kalafi Moala explained.

"The government, in particular the Ministry of Agriculture had organised for the trucks to come pick up the melons and so the fact that it didn't happen over the weekend, the responsibility falls back on them," he said.

Why is the Ministry of Agriculture responsible for organising freight logistics there?

If a grower contracts with a trucking company for critical deliveries like this, I'd have expected penalty clauses for failures. I have no clue what to expect when the Tongan government is intermediary.

Wednesday 2 December 2020


Last week, the government announced it would allow 2000 seasonal workers into New Zealand's Managed Isolation and Quarantine system on Recognised Seasonal Employment (RSE) scheme, with workers to arrive from January to March 2021. 

There's just so much that's backward in all of this. 

The RSE scheme is open to workers from the Federated States of Micronesia, Fiji, Kiribati, Nauru, Palau, Papua New Guinea, the Republic of the Marshall Islands, Samoa, the Solomon Islands, Tonga, Tuvalu, and Vanuatu.

The most recent World Health Organization COVID-19 situation report for the Western Pacific notes that the Federated States of Micronesia, Kiribati, Nauru, Palau, Samoa, Tonga and Tuvalu have not reported a case to date - as of 25 November. Since then, Samoa has had two positive cases caught at their border

Meanwhile, Papua New Guinea has large-scale community transmission - you wouldn't want to restart RSE entry from there. 

Does it make any kind of sense that scarce MIQ spaces are being taken up by people who come from places that do not have Covid-19? Why couldn't we just admit RSE workers as usual from places without Covid, on an understanding that the gate would be shut if their Covid-status changed?

Does it seem plausible that the most valuable uses of scarce spaces in MIQ is for people coming in for fruit-picking, if those workers are coming in from places where Covid is prevalent? If it were the outcome of an auction for spaces, I'd take that seriously - I could too easily be wrong

The policy simultaneously plausibly lets too many RSE workers into MIQ, and too few RSE workers into the country. It seems unlikely that the highest valued use of an MIQ space is for someone who would come in to pick fruit at $22/hour, but it also makes no sense at all that they be required to be there in the first place. 

There are very reasonable concerns about Covid getting back to the Islands from NZ if we had an outbreak. But there are very reasonable ways of mitigating that risk that do not involve banning safe people from travelling here. For example, RSE employers could be required to provide isolation for workers before they went back to the Islands, with those returnees tested before departure. 

Surely the odds of catching Covid are higher in a NZ MIQ facility, including in transport to those facilities with people who are coming in from far riskier places, than in the Covid-free Islands. 

Recall the stakes on the RSE programme. Here's John Gibson and David McKenzie on it.

Their abstract:

Seasonal migration programs are widely used around the world, and are increasingly seen as offering a potential “triple-win”- benefiting the migrant, sending country, and receiving country. Yet there is a dearth of rigorous evidence as to their development impact, and concerns about whether the time periods involved are too short to realize much in the way of benefits, and whether poorer, less skilled households actually get to participate in such programs. New Zealand's Recognised Seasonal Employer (RSE) program was launched in 2007 with an explicit focus on development in the Pacific alongside the aim of benefiting employers at home. We present the results of a multi-year prospective evaluation of the impact of participation in this program on households and communities in Tonga and Vanuatu. Using a matched difference-indifferences analysis based on detailed surveys fielded before, during, and after participation in the RSE, we find that the RSE has indeed had largely positive development impacts. It has increased income and consumption of households, allowed households to purchase more durable goods, increased subjective standard of living, and had additional benefits at the community level. It also increased child schooling in Tonga. This should rank it among the most effective development policies evaluated to date. The policy was designed as a best practice example based on lessons elsewhere, and now should serve as a model for other countries to follow.

Here are some of the gains:

The results show that the RSE has had large positive effects on sending households in Tonga and Vanuatu. We find per capita incomes of households participating in the RSE to have increased by over 30 percent relative to the comparison groups in both countries, with per-capita expenditure also increasing, although by less than income. Subjective economic welfare is estimated to have increased by almost half a standard deviation in both countries, and households have purchased more durable assets such as DVD players, radios, ovens, and in Vanuatu, boats. In Tonga RSE households also doubled the rate of home improvement, and in both countries, households became more likely to have a bank account, likely reflecting more formal savings. School attendance rates increased by 20 percentage points for 16 to 18 year olds in Tonga, and community-level effects were generally modest, but positive. Overall these results show that the seasonal worker program has been a powerful development intervention for the participating households, and that the RSE policy appears to have succeeded in its development objectives in the short run.

I've bolded the most important bits.

In order to prevent a trivial risk of Covid coming in from places that do not have Covid, the Labour Government is preventing the vast majority of RSE workers from coming in to do the seasonal work that they traditionally have done successfully. The consequence of that is, in all likelihood, a substantial decrease in incomes in affected households, declines in their subjective economic welfare, and reductions in schooling for those families' kids. 

I suspect, but cannot know, that the government is doing all of this deliberately, to kill the RSE programme. Sufficiently advanced incompetence is indistinguishable from malice. Are the relevant officials being purposefully obstinate when they refuse to see obvious safe ways of getting those workers here and preventing transmission back to the islands? It's hard to tell.

Tuesday 1 December 2020

Mattress Factories and broken council incentives

The Initiative's Exec Director, Oliver Hartwich, loves telling stories about German towns that did everything they could to encourage businesses to come to their area, as well as new housing, because their finances depended on having a successful local economy.

New Zealand's a bit different.

In last week's Politik newsletter, Richard Harman goes through how Environment Minister David Parker has had to signal readiness to get involved in a scrap between the Waikato District and Regional Councils. 

District Council wants to allow the Sleepyhead Mattress Company to build a new factory and village; the company figures they can't have a plant if there's nowhere for workers to live. 

Regional Council doesn't want to rezone land to let it happen. Why?

The Council’s submission said that by enabling an isolated, car-dependent urban settlement at Ohinewai with few community services, the proposed rezoning would be contrary to the Waikato Regional Policy Statement “and therefore, unlawful.”

But now the question becomes whether the foam factory can exist without the houses and if it cannot (which would seem probable) whether Parker will then use the fast track again to approve the houses.

In short, is Parker using the fast track for the factory as a prelude to fast-tracking the entire development.

Parker here is on the side of the angels, but it really shouldn't take Ministerial intervention for somebody to be able to put up a mattress factory and some housing. That isn't a model that scales well.