Major news
On 26 February 2020, New Zealand recorded its first confirmed coronavirus case. The person was identified only as “someone in their 60s who had recently returned from Iran”, but the case marked the beginning of an extraordinary period for New Zealand. A year on, New Zealand has achieved considerable success in fighting the pandemic, recording just 2368 of the world's 113,000,000 cases. And although tourism and hospitality have been hit hard, New Zealand has largely avoided the economic turmoil experienced by other countries.
A year of fighting the pandemic! Progress achieved, but 5 major challenges remain
On 26 February 2020, New Zealand recorded its first confirmed coronavirus case. The person was identified only as “someone in their 60s who had recently returned from Iran”, but the case marked the beginning of an extraordinary period for New Zealand.
A year on, New Zealand has achieved considerable success in fighting the pandemic, recording just 2368 of the world's 113,000,000 cases. And although tourism and hospitality have been hit hard, New Zealand has largely avoided the economic turmoil experienced by other countries.
Nevertheless, New Zealand faces five key challenges over the coming year as it seeks to keep the pandemic at bay and leave a valuable, lasting public health legacy:
- Improve border biosecurity
Preventing coronavirus from re-entering New Zealand remains the single most important short- to medium-term challenge in maintaining elimination.
There are clear benefits to a highly systematic response that considers travellers' entire journey: the week before departure, the flight to New Zealand, two weeks in managed isolation and quarantine facilities (MIQ), and the period after leaving MIQ, when they remain at high risk of infection.
We should aim to keep infected people from entering New Zealand wherever possible. This would also allow quarantine-free travel with other parts of the world that have eliminated the virus.
Investing in purpose-built but versatile managed isolation and quarantine facilities would bring important short- and long-term benefits.
- Strengthen outbreak detection and control
For the foreseeable future, New Zealand will need to maintain and strengthen its systems for rapidly detecting and controlling coronavirus outbreaks as a backup when border controls fail.
Potential improvements include daily saliva testing of border workers and wastewater testing to detect possible community transmission more quickly, alongside continued improvements to contact tracing.
Voluntary uptake of New Zealand's coronavirus tracing app is relatively high, but regular use is poor. One obvious improvement would be to make its use compulsory when entering high-risk premises, and for MIQ staff and recently returned travellers.
The alert level system needs revising to address new transmission risks. Greater emphasis is needed on avoiding crowding in high-risk indoor settings, encouraging mask use, and introducing more geographically targeted, less disruptive “partial circuit-breaker lockdowns”.
3. Deliver vaccination effectively and equitably
The vaccination strategy must prioritise effective border controls, protection of the most vulnerable, and health equity. Achieving high coverage will depend on public engagement, community networks, and comprehensive, high-quality information systems such as an upgraded National Immunisation Register.
- Establish an effective public health agency
The pandemic has vividly demonstrated the need to invest in effective public health infrastructure. A dedicated national agency is needed to provide extensive specialist expertise in strategy and implementation, something New Zealand lacked when the pandemic began.
Such agencies are increasingly common in high-income countries. An agency of this kind was also an important feature of Taiwan's effective coronavirus response. It could provide much of the information needed for the government to focus on disease prevention and preparedness.
- Establish the best possible emergency decision-making process
New Zealand's effective pandemic response benefited from a government that considered scientific advice and cared about people's wellbeing. However, the government has been slow to innovate in some areas.
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An opportunity to rebuild systems
One of the pandemic's greatest legacies could be embedding improved emergency decision-making procedures that better support learning, innovation, continuous improvements in the response, and transparency. Key changes include:
- Political processes that enable informed debate and scrutiny while seeking cross-party support for key response strategies;
- Advisory processes that ensure high-level, multidisciplinary expert input into the government's response;
- Well-resourced research and development processes to ensure that high-quality scientific evidence informs response measures and that those measures can be evaluated;
- A commitment and timetable for a formal inquiry to assess the pandemic response and drive wider system improvements.
Taken together, the coronavirus pandemic offers a rare opportunity to reassess how New Zealand's health, social and economic systems operate. It has demonstrated the value of proactive government decision-making in addressing health threats. (Translated from The Conversation; authors: Michael Baker, Amanda Kvalsvig and Nick Wilson.)
2020 migrant arrivals and departures in New Zealand hit a 20-year low
Stats NZ recently said annual net migration continued to decline steadily as border closures since March last year restricted migrant arrivals and departures. Net migration was just 44100 in the year ended December 2020, with annual migrant arrivals and departures both reaching their lowest levels in 20 years.
However, because migrant arrivals (85,800) exceeded migrant departures (41,600), net migration remained positive in 2020 at 44100. Of this, 87% occurred in the first three months, before the border closed in March 2020. Since border restrictions were introduced in March 2020, New Zealand citizens have driven net migration gains. From April to December 2020, New Zealand recorded a net migration gain of 5700, comprising a net gain of 12,600 New Zealand citizens and a net loss of 6900 non-New Zealand citizens.
The population indicators manager said New Zealand citizens were driving the modest net migration gain, continuing a reversal of the historical pattern in which non-New Zealand citizens accounted for most net migration growth.
Under Stats NZ's definition, a New Zealand citizen or non-citizen is classified as a migrant arrival if they spend a total of 12 months living here during the 16 months after arriving. A New Zealand citizen or non-citizen is classified as a migrant departure if they spend a total of 12 months outside New Zealand during the 16 months after leaving. Net migration is the difference between migrant arrivals and departures.
“Non-New Zealand citizens” above includes people entering on residence, work or critical purpose visas; Australian citizens and permanent residents; and others who meet the entry criteria.
New Zealand's 2020 fourth-quarter unemployment rate falls to 4.9%
Data released by Stats NZ in early February showed New Zealand's unemployment rate fell to 4.9% in the fourth quarter of 2020, beating market expectations.
The data showed that, on a seasonally adjusted basis, the number of unemployed people fell by 10,000 from the previous quarter to 141,000 in the fourth quarter. However, this was still 25,000 more than in the same quarter of 2019. New Zealand's unemployment rate had climbed to 5.3% in the third quarter, recording its largest quarterly increase since records began in 1986.
Stats NZ senior analyst Becky Collett said in a statement that the pandemic's impact on the labour market was clear in the third quarter, when unemployment rose sharply. Although the unemployment rate fell in the fourth quarter, it remained above the levels of previous years.
Westpac senior economist Michael Gordon said employment in New Zealand's retail, accommodation, transport, media and tourism services industries fell significantly in the fourth quarter compared with a year earlier. However, a surge in jobs in construction, healthcare, education and the public sector improved the overall employment picture.
New Zealand launches mass coronavirus vaccination
New Zealand's Ministry of Health announced the official launch of mass coronavirus vaccination on 20 February, with border workers becoming the first recipients that day.
Director-General of Health Dr Ashley Bloomfield said in a statement that vaccinating border workers “marks a major step forward”, protecting those at greatest risk of coronavirus infection and helping reduce the risk of the virus spreading into the community.
Dr Bloomfield also told the media that day that the Ministry of Health would continue monitoring vaccinated people to determine how long vaccine-induced immunity lasts.
New Zealand received its first shipment of coronavirus vaccines on 15 February: 60,000 doses, enough for 30,000 people. In preparation for mass vaccination, more than 20 vaccinators received their vaccinations first, on the 19th.
This is the largest immunisation programme in New Zealand's history. Under the government's plan, about 12,000 border and isolation facility workers and their families will be vaccinated first. Vaccination of the general public is expected to begin in the second half of this year.
The New Zealand government has so far purchased enough coronavirus vaccines for the entire population from 4 pharmaceutical companies: Pfizer, AstraZeneca, Janssen and Novavax. Vaccination will be free for people in New Zealand.
New Zealand house asking prices hit record highs for 5 consecutive months
New Zealand's property market has reached another milestone. The latest Trade Me Property data, released on 18 February, showed national house asking prices at a record high. This was the fifth consecutive month in which the national average asking price set a new record.
The data showed New Zealand's average asking price reached NZ$769,000 in January, up 15% year on year.
Trade Me Property sales director Gavin Lloyd said: “We have never seen a record-breaking run of growth like this before, and the housing market is showing no signs of slowing down.”
He said Manawatu/Wanganui recorded the largest year-on-year increase, rising 21% to NZ$500350. Gisborne followed, up 25% to NZ$512150. Wellington was third, rising 14% to NZ$773900.
Almost every region in New Zealand also set a new record, with Auckland and Otago the exceptions.
In the Auckland region, asking prices in January rose 9.9% year on year to NZ$1006900.
World's least affordable housing cities ranked again: Auckland comes fourth
During 2020, the year just ended, Auckland's average house price rose by about NZ$140,000. In the latest Demographia International Housing Affordability Survey for 2021, Auckland ranked as the fourth least affordable major city with a population above 1,000,000. Auckland ranked sixth the previous year.
The report covers New Zealand, Singapore, Australia, the United States, the United Kingdom, Ireland, Canada and Hong Kong, China.
Demographia's rankings consider local incomes as well as house prices. It calculates a score for each city by dividing its median house price by annual household income, calling this the “median multiple”. A value above 3 is classified as “moderately unaffordable”; above 4 as “seriously unaffordable”; and above 5 as “severely unaffordable”.
In the report, Auckland's median multiple was 10, behind only Hong Kong (20.7), Vancouver (13) and Sydney (11.8). Auckland has remained in the “severely unaffordable” category since Demographia began tracking housing affordability in 2004. This year, Auckland's score rose by 1.4 compared with the 2020 report. This means the median house price was 40% higher relative to a household's annual income, a greater increase than in the other 92 housing markets covered by the report.
Demographia noted: “Housing affordability has deteriorated severely in recent decades, becoming a major factor in the decline in middle-income living standards observed internationally.” New Zealand's median household income is currently about NZ$80000, while Auckland's is NZ$95200 (both before tax).
It is worth noting that the data used in this Demographia report was collected in September, and Auckland house prices have risen further since then.
Government announces KiwiSaver rule changes
On 25 February, Commerce and Consumer Affairs Minister David Clark confirmed that, from March, anyone with Down syndrome, cerebral palsy, Huntington's disease or foetal alcohol spectrum disorder would be able to withdraw their KiwiSaver funds before turning 65, because their life expectancy is lower than that of others. The amendments under the KiwiSaver Act 2006 take effect on 26 March.
Alongside these four conditions, an “alternative withdrawal process” will be available for people whose lives are shortened by other congenital conditions. “At an appropriate retirement age, people with these conditions will automatically be entitled to apply to withdraw their KiwiSaver funds, rather than having to wait until they turn 65. The only additional requirement in these cases is for a doctor to verify that the applicant has a life-shortening congenital condition,” Clark said.
To qualify for a withdrawal, applicants must complete a statutory declaration stating that their KiwiSaver funds will become available as though they had reached 65, and that they will no longer qualify for any subsidies. They must also provide medical evidence that their congenital condition shortens their life expectancy.
Clark said the list of conditions was developed in consultation with health and disability experts and was expected to cover most applications under the new withdrawal category.
“However, the government has the flexibility to review the list regularly and consult experts to ensure it remains up to date.”
S&P upgrades New Zealand's credit rating
On 22 February, S&P Global Ratings, one of the world's three major credit rating agencies, upgraded New Zealand's credit rating.
S&P's upgrade raised New Zealand's local-currency sovereign rating from AA+ to AAA and its foreign-currency sovereign rating from AA to AA+. S&P said New Zealand's stable fiscal outlook underpinned its strong economic growth forecasts.
S&P's report stated: “We forecast annual real GDP growth of about 3.2% and real GDP per capita growth of about 2.2% over the fiscal years from 2022 to 2024.”
The report said downside risks persisted, including renewed outbreaks, geopolitical tensions between major trading partners, and delays in administering effective vaccines. It also noted that “travel restrictions will continue to severely affect tourism, international student flows and migration, weighing on near-term population growth”.
Overall, however, “New Zealand's monetary flexibility, wealthy economy and robust institutions will support swift and decisive policy action and offset the country's external imbalances. We believe New Zealand's relatively successful management of the outbreak leaves its credit metrics well placed to withstand potential further downward pressure, including possible housing market weakness, at the current rating level.”
Another major ratings agency, Moody's, reaffirmed its upgrade of New Zealand's credit rating to the highest AAA level as early as September last year.
Fitch Ratings, the other member of the three major agencies, assigned New Zealand an AA+ rating with a “stable outlook”. It also noted: “The country's high net external debt and rising household debt are key weaknesses in its credit profile.”
Soft power rankings released: New Zealand climbs faster than any other country
Well-known consultancy Brand Finance has released its 2021 Global Soft Power Index. New Zealand climbed rapidly from 22 last year into the top 20, reaching 16 — the largest rise of any country.
Soft power is a country's ability to exert influence internationally through its reputation, networks and standing, rather than using hard power, such as military strikes, to achieve its goals.
The top ten in the rankings were Germany, Japan, the United Kingdom, Canada, Switzerland, the United States, France, China, Sweden and Australia.
The report described New Zealand as a “global success story”, praising Prime Minister Jacinda Ardern's “confident and decisive” leadership and world-leading pandemic response. New Zealand ranked first for its economic, health and international aid performance in responding to the pandemic.
However, the report said New Zealand ranked only 16 because it lacked “influence” and, “given its remote geographical location, cannot wield the same level of soft power as European countries”.
Brand Finance produced the report after polling 75,000 experts and prominent figures across 102 countries.