We can't bank too much hope on the vaccine, argues Richard Prebble. Photo / Getty Images
We can't bank too much hope on the vaccine, argues Richard Prebble. Photo / Getty Images
My first New Year prediction is that most pundits' forecasts will be wrong. No one, not even the World Health Organisation, predicted a worldwide pandemic in 2020.
With that consumer warning, most of my 2020 predictions were right. I said we are overdue for a recession, predicted Simon Bridges wouldnot lead National into the election and Act would do well. I forecast the Government would not solve child poverty or the housing crisis and almost nothing of its 145 inquiry report recommendations would be implemented.
2020 was such a momentous year it is hard to recall last January. We had a Government high on rhetoric and low on achievement. National led in the first poll.
The Covid pandemic was made for the coalition. How hard is it to close everything? What was needed was good PR. Jacinda is world-class. Who else could get away with asking us to be kind to one another and snitch on our neighbours?
Generals ask before going to war "what is the exit strategy?"
Labour's challenge in 2021 is to devise an exit strategy for our campaign against Covid. The plan appears to be to keep the borders closed and wait for the vaccines. Then what?
Do we wait until everyone has been vaccinated? Will every traveller have to have been vaccinated?
New Zealand will not be cashing in on our Covid-free status. Taiwan in contrast has turned its Covid-free status into a significant economic advantage.
A Kiwi broke Taiwan's Covid rules and introduced their first community case in eight months. What has not been reported is Taiwan's tracking and tracing is so good that they have stamped out the community outbreak without a lockdown.
We still cannot quickly track and trace. New Zealand is forced to rely on one size fits all 14-day quarantine. The Government Covid app does not work. I predict it will never work. If the Government had closed the borders in March, when Sam Morgan publicly urged, we would never have had to lockdown. If the Government had followed the Trade Me founder's advice and issued us all with Bluetooth cards we would never have had the Auckland lockdown.
If today we had Bluetooth track and trace we could have a bubble with the islands, Australia, Taiwan and China. Our universities could be selecting the pick of the world's international students. Tourism would be booming. The wrong Morgan stood for Parliament.
Today in America there is an election that will affect us. If the Democrats win the Georgia senate seats Joe Biden will be able to implement his climate change agenda.
The Government needs an exit strategy. Photo / File
If the Republicans win just one seat, it is gridlock. Then Joe Biden will be the weakest president since Jimmy Carter. The polls have the Democrats leading by less than the margin of error.
For those who say "the Government should do something" statistics show the US economy does best when there is political gridlock. Wall Street is betting the Republicans will win. The stock market hit a new record high.
My unscientific research indicates that is true here too. When the Government has a huge majority and unbridled power, as it has today, it is not good for the economy.
Governments feel emboldened by a big majority to levy new taxes, pass new regulations and to spend on follies like trams up Dominion Rd. It is why after every landslide victory there is a huge swing next election to the Opposition.
I would love to predict the Government will use its majority to instigate real reform of our health, education and welfare systems and tackle New Zealand's appallingly low productivity.
The PM has admitted the Government only adopted Covid elimination because our hospitals have so few ventilators. If the knowledge that our hospitals could not cope with Covid does not motivate health reform what will?
Instead of needed reform, I predict the Government will spend its mandate legislating against hate speech and other windmills.
I could just reprint much of last year's predictions. Few of the 145 inquiry recommendations will be implemented. Child poverty will not be alleviated. The housing crisis will continue. The gap between rich and poor will continue to grow.
"If something cannot go on forever, it will stop." Stein's Law. It is unsustainable to print a billion dollars a week. At some point, it will stop. We are today in a credit-fuelled recovery.
We all sense something is wrong. Our money is worth nothing to the banks. There is a rush to convert cash into assets. Houses selling as soon as they list. Those who cannot buy assets are just spending their cash. Every credit-fuelled recovery has ended in a recession.
Now even I hope my predictions are wrong.
• Richard Prebble is a former member of New Zealand Parliament. He was leader of the Act Party from 1996 to 2004.
