Level up: NZ marches on

New Zealand is about to achieve the improbable — total elimination of Covid19. Hitting zero active cases is no small feat and will no doubt garner this country more generous headlines around the world.

We deserve a moment to pause and feel proud.

As we went into lockdown, our prospects were looking a lot worse. We were braced for overflowing hospitals and a grim winter of illness and death.

Back then, we were flattening the curve. Elimination was just a medical term, we were told. It didn’t necessarily mean zero cases.

The idea New Zealand could be Covid-19-free was too hopeful to openly voice.

But, here we are. There’s no doubt we have exceeded expectations on the health response.

Now what?

The process of shifting through alert levels hasn’t been without debate, but it has been relatively clinical.

It has also — despite the debate — been achieved much more rapidly than initial forecasts by economists.

So it has also created a sense of positive momentum for the country, which is helping to maintain confidence in the economic outlook — at a time when there is still plenty of cause for concern.

Business and consumer confidence are the magic ingredients in a domestic economic recovery.

The public needs to believe things are getting better, not worse.

The direction of travel is vital — it generates an emotive response which translates directly into the behaviour of businesses and consumers.

The Government seems to have a good handle on this now.

Jacinda Ardern and Grant Robertson had a baptism of fire with regards to economic confidence. Remember the dark days of 2018 when business confidence plunged and GDP growth slipped from 3.1 per cent to 2.8 per cent?

It seems a bit laughable now. In fact, it was still a stable and profitable time to be in business.

The problem was that the direction of travel for New Zealand’s economy was negative, however slightly, and that made all the difference.

At that time, the Government faced high expectations for economic growth. This year, those expectations burned to the ground.

The question now is whether the country can maintain that sense of steady progress as we shift focus from alert levels and to the complexity of border management.

I think we can.

I’m sure the Government wants to move things forward in way that keeps the public future-focused.

As we struggle through a winter of severe recession, dwelling in the present won’t be much fun.

The Government will continue to move more slowly than business groups would like — but not much slower.

It is obvious New Zealand can’t afford to go backwards into another tough lockdown.

We went hard, we went early and it worked. But we can only afford to do that once.

But there is a formula now, that is working well economically, politically and for public health.

Those who want to see the costbenefit analysis of policy decisions weighted further towards economic risk call for change as soon as they see a window of opportunity.

The Government is happy to let those calls grow louder for a while.

Then, when they feel they are more representative of broader public opinion, we will get an indication from the Prime Minister that the next round of change is under consideration.

That builds momentum for an announcement on timing, which in turn buys a few more days to satisfy those concerned about the health risks of the move.

It may be coincidental, but the pacing feels perfectly stage-managed to land with middle New Zealand — generating plenty of political goodwill.

The transtasman travel bubble has been in the spotlight, and announcements about plans and progress will build over the coming weeks.

Next up we can expect to see the Government talk more openly about plans for allowing foreign students back for the start of the 2021 academic year.

From there, who knows?

We’ll likely see growing discussion about more sophisticated border management and the prospect of new bubble opportunities through Southeast Asia and China.

It seems increasingly unlikely New Zealand will stay completely shut until we see a vaccine, something that seemed inevitable when we went into lockdown.

This is a Government which is making considered trade-offs between economic recovery and health risks.

It’s a difficult balancing act but one that, so far, looks about right.