NZ beats COVID-19. Fully opens domestic economy.

When the coronavirus pandemic was initially taking off, MB spent considerable effort urging the federal government to close Australia’s international border, alongside shutting down public gatherings.

Our views were influenced by the famous experience of Philadelphia versus St Louis in the Spanish Flu of 1918, outlined in Public health interventions and epidemic intensity during the 1918 influenza pandemic by Richard J. HatchettCarter E. Mecher, and Marc Lipsitch:


Philadelphia downplayed the Spanish flu and stayed open for three weeks, resulting in a virus pandemic and high death rate. By contrast, St Louis immediately clamped down and banned public gatherings, resulting in virus containment and far fewer fatalities.

New Zealand acted very early, implementing possibly the strictest lockdown in the world. This “go hard, go early” response has paid dividends, with New Zealand now virus free and returning its entire domestic economy back to normal operations, with international border closures remaining in place, in what are termed “level 1” restrictions:

The New Zealand Treasury and the Reserve Bank expect direct economic output to be between 90% and 96.2% that of normal levels at Level 1:

Throughout the COVID-19 lockdown, MB argued that going hard and early with lockdowns would pay dividends, creating far less economic damage over the long-run alongside saving lives. New Zealand is testament to this approach.

Australia has obviously done a far better job of controlling the virus than most nations, helped of course by our geographic isolation and low population density (alongside New Zealand). But the Morrison Government did procrastinate early and acted weeks too slow in closing Australia’s international border and implementing domestic lockdowns.

Accordingly, the virus remains in Australia (albeit at low levels) and we will take longer to recover from the pandemic than our friends across the pond.

Unconventional Economist


  1. But NZ will rush to open borders for foreign students, quarantine them for 2 weeks then another 2 weeks to track them closely. Who know’s how they will police this but I would expect they may let the fox back into the hen house. Anyone they let back in would never others to deliver food etc to ensure they are fully isolated. And by what we have seen in the past a number of foreigners just don’t seem to care about these rules and will go out into public areas. It will also be interesting to see how NZ fairs once all the deferrals are lifted and everyone has to start paying back mortgages/rentals etc. I wonder if Oz is in a much stronger position.

  2. migtronixMEMBER

    Is NZ government, at every level, gifting billions in bogan buyer programmes? Or are they dealing with the collapse of the population ponzi different?

  3. NZ opening up economy? great success?

    The only thing NZ managed to do “better ” than some other places not going with so hard lockdown is to reduce number of deaths so far it’s quite questionable how much of that is due to measures and how much due to other things. This is not over yet so it’s too early to give final judgment about superiority of their acts.
    but there are other things that need to be mentioned: NZ is not going back to normal because borders will stay closed for a long time and tourism is large driving force of the economy (almost 10%) especially in some areas … So even if everything else gets completely recovered NZ is going to experience long economic depression.
    Also, lockdown economic hit was hit much bigger in NZ than some other “less successful” countries while NZ recovery is going to be much longer – many harder than NZ hit countries in Europe are now opened up completely now, including borders to many other countries, even sports events and festivals , …
    So, this NZ elimination strategy didn’t make its recovery faster but it made the hit harder ..

    • New Zealand Coronavirus: How many deaths from all causes (below just cancer) have likely occurred due to lockdowns and disruption to the usual medical services ? …

      Coronavirus: Three month window to diagnosis hundreds who may have cancer … Stuff NZ

      Four hundred people could die from cancer if New Zealand does not act quickly to catch up on cancer diagnostics missed during the lockdown.

      The warning from the Cancer Society comes after a report by the newly formed Cancer Control Agency found there were 1031 fewer cancer registrations in April 2020 compared to April 2019, a 47 per cent decrease, due to the lockdown.

      The figure is in line with what other countries around the world experienced during the lockdown, due to the coronavirus pandemic. The report, released in May, has seen swift action from district health boards (DHBs) to catch up on diagnostics. … read more via hyperlink above …
      How much did Prof Neil Ferguson of Imperial College modelling panic the authorities to impose lockdowns ? …

      ‘Professor Lockdown’ Modeler Resigns in Disgrace … National Review (May 6 2020)
      … h/t PH …

      • drsmithyMEMBER

        Let’s apply the same rationale – they’ve got cancer, a decent fraction of them are probably going to die from it anyway !

        I’d be interested to see if anyone has some data on the health *benefits* of “lockdown”. Eg: parents having more time to spend with kids, people doing more exercise (there’s been easily twice as many walkers and cyclers around my area for the last couple of months usually taking kids to/from school), people not getting stressed out in traffic 1-2 hours a day, less close proximity to others in public transport, etc, etc.

        • Depends what cancer, doctor.
          Breast and bowel cancers (relatively common) have fantastic 5 year survival rates especially when picked up with early screening. So the vast preponderance would live alot longer than an 88 year old in a nursing home.
          As ever the strawperson takes a beating.

    • ApotheoticMalaise

      doctorX, i would legitimately love to see the data backing your claim that NZ’s economy is hit harder than others. The data I have seen does not back your claims.

      From NZ Treasury: “Consumer spending has increased in Alert Level 2, with some categories nearing or above levels seen in January and February.”
      Here’s the chart that they published, showing the relative changes in card spending:

      The NZ Treasury tracks with weekly updates as well. It’s well worth the read:

      • Lol
        Some things are obvious … if more things are closed economic activity is lower
        Spending in crisis when people hoard stuff is not good proxy for the activity , it moves not increases demand …
        Also NZ has much larger share of tourism in the econkmy .. 6% directly and 5% more immediately dependent

      • A business can be put in a sort of stasis for a period during the lockdown, you may even get govt. to cover a chunk of wages etc. and be lucky enough to negotiate reduced rent. The issue is post-lockdown when you actually have to start paying people again and find your revenue and business is down massively.

      • Fake news
        60 million infections were prevented in the US, and Europe saved 3.1 million lives

        How we can trust anyone claiming Covid19 having 5% infection fatality rate when even the most pesimistic estimates by CDC and others are below 1% with most likely cases being 0.3%.
        So even if our glorious governments actualy prevented 60m infections (no proof whatsoever) that would be somewhere around prevented 200k deaths. And based on lower estimates of $10 trillion economic damage it would be around 50m for every elderly life “saved”

        To save 3 milion lives they would have needed to prevent between 1 billion and 2.3 billion infections according to conservative IFR estimates by CDC and other relevant institutions. How many people live in USA and Europe?

        • gimpnessMEMBER

          Surely you concede that when hospitals are overrun i.e. in Italy and Spain at their peaks, that the fatality rate increases?

  4. Perspectives a day or so prior to Mondays decision from New Zealand …

    Should New Zealand ease coronavirus restrictions? Cabinet faces an obvious decision … OPINION Thomas Manch … Stuff NZ

    … concluding …

    … Each person who enters the country will soon be tested for the virus, making it harder for Covid-19 to slip in undetected. More than three months since lockdown, we’re as close to water-tight as you can get.

    With the threat of the virus cleared, the economic and social affects of the Covid-19 response will be front of mind for Ardern and her Cabinet.

    Past Cabinet papers have shown there are no good guesses at how the economy will rebound from this recession. But minister can be confident that ongoing restrictions are a dampener on the economy – meaning more job losses and more shrinking paychecks.

    They can be less confident in the “buy-in” from the community. Previous papers have shown that officials believe they have the backing of the public.

    But as the invisible enemy can’t be found, the public’s tolerance for restrictions has diminished. And, with an election in September, this poses a political risk – any misstep or perceived delay could become toxic.

    This much is obvious, and it’s obvious why Ardern brought Monday’s decision forward. The time has come for level 1.
    Coronavirus: Up to 120,000 Kiwis predicted to lose jobs – economist … Patrick Gower … Newshub
    There are many more chapters to go with this Kiwi story Leith !

    Note my postings on todays Links page.

    Note too on Stuff NZ just how touchy PM Ardern is suddenly on issues relating to job losses and business failures. These impacts could cost her the September General Election.

    • “These impacts could cost her the September General Election.” and see us governed by a third rate, second choice National Party ‘politician’ ( if that is what he is – his presentation and public relation skills don’t seem to indicate that!).
      Anything is possible I guess. After all, Australia voted Scott Morrison in!

  5. So full of it Leith. They did not act sooner than anyone, the PM was still inviting overseas guests in early March for the anniversary of the Christchurch massacre. Indeed they panicked because they have bugger all ICU capacity.
    Its a country of small, not particularly dense population, hardly at great risk for spread in the first place.
    The economy has been murdered by the govts overly harsh lockdown whereby it tried to specify what was or wasn’t deemed ‘essential’.

  6. S.I.L works in public health in the community. Given the lock down they aren’t doing home visits so have been repurposed to work in the hotels supporting those who fly in to the country and are required to stay in hotels for 14 days (and those who can’t isolate at home). They used to just test them day 1 but now it is day 1 & day 13 before they are allowed to leave (or the 14 day clock starting again if they are positive). Despite the stimulus money for mates and other failures I am happy to give the gov credit for this approach……. Her experience – a fair few self entitled Fwits among the returning expats.
    This is NSW.

  7. “But the Morrison Government did procrastinate early and acted..” Leith common.. Fed Gov did not act but was dragged to follow state premiers. Scumo was as stunned not knowing what to do as he was with the bush fires when he decided to run away to Hawaii.

    • drsmithyMEMBER

      Yes, it was the standard “did something right after exhausting all other options”.

      This Government is chronically incapable of being a first mover.

  8. In other news:
    “The spread of Covid-19 by someone who is not showing symptoms appears to be rare, Maria Van Kerkhove, the World Health Organization’s technical lead for coronavirus response and head of the emerging diseases and zoonoses unit, said […].”
    Wasn’t this a main factor in these shutdowns? It was the asymptomatic carriers, who didn’t know they had it, who posed the biggest threat to the at-risk category?

    • This. I’m surprised the overlords are that dumb to come out with this now. People will never consent to lockdown again, even if it is a far more dangerous contagion.

      • We should just quarantine those at risk, not everyone else. That’s where Sweden went wrong – they didn’t protect the aged care facilities.

        • I believe it was a representative of the Taiwanese government who said “we quarantine the sick, not the healthy”. Need more be said?

  9. A sheep in wolves clothing.….03.20089854v3

    This is a meta-analysis of 25 studies looking at the infection fatality rate (IFR). IFR is the mortality rate if you get infected.
    This figure is different (and lower) than the case fatality rate (CFR) as the CFR refers to the mortality if you are diagnosed as a a case. To be diagnosed, you have to have symptoms sufficient to take you to a doctor, and you have to qualify for a test, and the test has to come back positive. So, many infections will not get diagnosed, and it is the more serious infections that become cases.
    Not surprisingly, the mortality rate among those sick enough to get tested is higher than the fatality rate among all those infected.
    Conversely, it is hard to die from a respiratory infection that is not causing symptoms.

    The CFRs are easier to measure, but are very difficult to compare as different countries use their limited testing capacity in different ways and so diagnose different cases. So North Italy was only testing the very sick and had a very high CFR. Places that test well people (including well contacts on cruise ships) will have a much higher number of asymptomatic cases and a much lower CFR.

    Anyway, the overall IFR in this series was 0.64%.

    But this 0.64% average IFR hides a number of things
    1. This IFR of 0.64% is for all ages. It likely drops to 0.1% for those less than 70 years.
    2. These studies include a number of places where the health system became overloaded. Not surprisingly, those studies skew the IFR upwards. The relevant IFR is likely lower if you live somewhere where the health system is functioning.
    3. The serosurvey studies are likely the most accurate, and these studies have much tighter confidence intervals. The IFR in the serosurveys was 0.53% and 0.79% in the non-serosurveys to give the pooled result of 0.64%
    4. The pooled IFR for the 12 studies in May (0.56%) was a bit lower than the pooled IFR for the 13 studies done in February, March and April. Again, the overwhelmed systems happened earlier on and the serosurveys are among the more recent studies. The lower IFR in May does not represent some medical advance or new drug.

    This virus does not kill people very efficiently. However we have zero immunity to this new virus, and it is moderately contagious. It therefore infects a lot of people. And 0.64% of a lot of people is still a lot of people.

    • Mitchell Stuart

      It kills a lot of people because we had weak-sauce Flu seasons for the past two years. A lot of dead wood, and COVID-19 was the match.


    Travel bosses told ‘air bridges’ to be allowed from June 29 as quarantine is eased … Charles Hymas, Oliver Gill, Christopher Hope … UK Telegraph
    … behind paywall …

    Travel bosses suspended their legal action against quarantine after being privately assured air bridges will be in place by the end of June (behind paywall) … read more via hyperlink above …
    F-AIR PLAY Air bridges allowing quarantine-free travel in place by June 29, say top travel bosses … Kate Godfrey … The Sun

    BRITS may be able to avoid quarantining on holiday after all, as plans for air bridges are expected to be in place by the end of the month. … read more via hyperlink above …


    Stock market news live updates: Stocks gain, Dow adds 200 points as Boeing rises … Yahoo Finance

    Stocks rose Monday, pointing to a second straight session of advances as the major stock indices continued their march higher.

    Shares of airlines, travel and leisure stocks surged, with these stocks buoyed by hopes of reopening the economy. Shares of American Airlines (AAL) rose another 6% Monday afternoon, following a 77% weekly surge last week, and Boeing (BA) led advances in the Dow. Cruise lines including Carnival (CCL) and Royal Caribbean (RCL), along with lodging companies including Hilton (HLT) and Wynn Resorts (WYNN), outperformed the broader market.

    An unexpectedly strong May jobs report fueled a stock rally that sent the Nasdaq Composite above its February 19 record high. The surge added to a weeks-long melt-up in equities, as investors eyed signs that early moves to reopen businesses were bringing back some workers and driving advances in economic activity. … read more via hyperlink above …
    … To illustrate … check out new daily cruise ship rates … about half the price or less of the pre – covid rates ! …

    Vacations To Go