David Cormack: Sometimes it takes more than a tax cut

National Party leader Simon Bridges. Photo / Alex Burton

COMMENT:

White gold. That's what toilet paper has become. As global panic spreads over Covid-19, supermarkets have turned into battle grounds as people desperately stock up on toilet paper. I never thought that when faced with the possibility of forced lockdown in your house that humanity would think that toilet paper was the highest priority. And yet here we are.

Except the panic hasn't really spread to most people. Not that I've observed anyway. My local supermarkets have remained oases of calm. The panic has manifested itself in the stock market: That amorphous gambling ring where the rich get richer when it does well and the poor lose their jobs when it does badly.

All the international markets have taken a pounding as the panic has spread worldwide.

Here in New Zealand we've been fed steady information from the Director General of the Ministry of Health. As I write this there have been five confirmed cases with no fatalities yet. That's not to say it won't get worse but thus far it seems like our Government has done the right thing. The Government has also removed the stand-down period for the benefit for anyone who loses their job as a result of the coronavirus. Which is nice and all, except there shouldn't be a stand down-period at any time, but I guess progress is progress.

When the people of a country are on the verge of panicking or being stressed out, we look to our leaders for guidance. There have been regular updates from the Prime Minister as the Government capitalises on the fact that in a crisis, Jacinda Ardern is the perfect spokesperson. She exudes a calm authoritative empathy. If those three words can be used together.

National leader Simon Bridges had the opportunity to step up and also be a leaderly figure. Yet whenever he's presented with these opportunities, he always chooses to give the impression he'd be the sort of guy to boo during a minute's silence.

He's boldly politicised people's fears by issuing statements like "telling people to wash hands and tinkering with the jobseekers stand-down period isn't a plan." When actually telling people to wash their hands is a very good plan. Wash your hands people. And don't touch your face. That's what health experts have been saying. But Bridges doesn't think this is right, his petulance actually just makes it sound like he's getting all defensive because he doesn't wash his hands.

Bridges' big theory of saving New Zealand was tax cuts. Which yes, can have a stimulatory impact on the economy, but also we need our health sector properly funded when it's already straining. And also it would be great if Bridges had ideas to solve New Zealand's problems that went beyond tax cuts.

The lack of imagination shown by Bridges as he defaulted boringly to tax cuts was at least not shared by his finance spokesperson, Paul Goldsmith. After Bridges' initial blurt of cliches Goldsmith said the Government needs to be providing wage subsidies for heavily impacted sectors - something the Government said it was already considering. Goldsmith has clearly thought about the actual problem and then come up with genuine solutions which is exactly what we want to see from politicians.

I would think we'll see some announcements this week that are more Keynesian than Hayek, so wage subsidies are far more likely than tax cuts.

There's been a lot of talk that the Government's response to this could be the making or breaking of it, but really so long as people see that something is happening, it will just be enough that we're comforted.

While it certainly is a risk to the Government, National also has a serious issue facing it; between the global nature of the crisis and the focus on the government's response, National could lose any relevance it might have had. And if that happens, if people think the Government is responding acceptably and not hearing anything constructive from National's leader then we could see a more lopsided election result than seemed likely. And if that plays out, I suspect we'll see National finally wash its hands of the weird experiment that is the Simon Bridges leadership. Even if he doesn't think washing hands is a good idea.