A new law to charge some Kiwi returnees will recoup not even 2 per cent of the $0.5 billion cost of the managed isolation operation.
National has slammed the legislation as a "failure" and NZ First has called it "dreadful public policy" but Housing Minister Megan Woods has said it is "absolutely critical".
She told Newstalk ZB's Mike Hosking today that introducing a flat fee of $3000 for every returnee was "not that simple".
She said no one was mooting a system that did not accommodate waivers or exemptions.
"If we did that we would have made ourselves so vulnerable to a judicial review on the basis that it was unreasonable. The Government could then be forced to re-make the decision.
"I am not prepared as the minister in charge of this to introduce anything that undermines the stability or the ability to do long-term contracting around these facilities."
Hosking told Woods he had been advised that the Government was paying $410 a night for a room at the JetPark Hotel in Auckland - when the normal rate was $90.
Woods said she did not know the specific numbers for that hotel, but that the cost would include paying for security and the presence of police and the Defence Force. "We have negotiated good rates," she said.
The new bill sets out a co-payment scheme for Kiwis coming home for a trip shorter than 90 days or those who leave after the law comes into effect.
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It will be rushed through Parliament under urgency, meaning by next Thursday returnees meeting the criteria will be charged:
• $3100 per person in a managed isolation or quarantine (MIQ) room.
• $950 for each additional adult.
• $475 for each additional child.
People who've already booked flights aren't exempt but there will be provisions for full or part exemptions for financial hardship and compassionate grounds.
The fees will also be waived for diplomats, refugees, deportees and people travelling to attend the sentencing of the accused in the Christchurch mosque attacks.
A blanket charge for every returnee was originally explored but Woods said this could have opened the scheme up to being dragged through the courts.
Under the Bill of Rights Act every New Zealander has the inalienable right to return home.
Instead, Cabinet opted for a safer version to only bill some New Zealanders, meaning only an estimated 2200 will meet the criteria by the end of the year.
"It is important that we are making sure that we're doing this within a framework that isn't easily contestable in the courts," said Woods.
"The last thing I want to see is a regime stood up around charging and have government appropriations based on a level of collections that then the courts overturn. Then we're left in a situation where we don't have that certainty of funding for those facilities."
Woods said in the House the system would return between $2.2 million and $8.8 million and cost $600,000 to implement.
That equates to 1.4 per cent of the $479m set aside to pay for the system until the end of the year.
The bureaucracy of charging everyone but with expanded exemptions would cost $33m but return a predicted $125m - almost 20 times what the proposed system would recoup.
Woods rejected the legislation wasn't a waste of time because it would establish the legal right to charge people going through MIQ and it could be expanded to include essential workers granted exemptions and for international students in the future.
"This is absolutely critical that we put this in place. I don't think there is anyone that thinks it would be fair for the New Zealand taxpayer to pay for managed isolation if you or I elected to go on holiday."
Woods said the Government was looking into data-matching to ensure Kiwis didn't lie to get through the system.
NZ First leader Winston Peters wanted to see everyone going through MIQ charged and called the watered-down version "dreadful public policy" because the rising costs of the system on taxpayers won't be solved because of "the self-limiting, tiny population it will affect".
He said Labour and the Greens had put "naked political self-interest ahead of a prudent public policy" and were playing to New Zealand voters overseas.
"It's not totally hopeless - you've got the statutory decision that's been made. Now we've got to put real flesh behind it and we'll do that straight after the election."
NZ First has invoked their "agree to disagree" provision in their coalition agreement and will vote for the Covid-19 Public Health Response Amendment Bill so it passes before Parliament wraps up for the election.
Greens co-leader James Shaw claimed the proposed bill as win for his party and said it "made sure" Kiwis returning to live weren't charged.
"As a country, we should be supporting people to come home if that is what is needed for their wellbeing. New Zealand is their home and they have a right to come back.
"Kiwis overseas are facing job losses, financial insecurity, and not knowing when they'll see their families again. Now is not the time to be making things harder for our people overseas."
National leader Judith Collins, who wants everyone charged, said the legislation was "a total failure".
"They should be ashamed for themselves," she said.
"I just think it's the sort of policy you have when you don't actually want to have a policy."
If elected, Collins said she would tear up this scheme in favour of charging everyone - with some exemptions.
Meanwhile, a man in his 50s from Afghanistan and a man in his 40s from the Philippines were the latest cases of Covid-19 in managed isolation yesterday. New Zealand's total confirmed cases is now 1209.
And there is still no evidence a confirmed case in South Korea was infected in New Zealand, with their five household contacts all testing negative.
The Health Ministry said it was working with its counterparts in Korea and Singapore to further investigate the situation, including awaiting the result from a second test.