6.7 What we learned looking back Ngā akoranga i te titiro whakamuri

1. The COVID-19 pandemic disrupted all aspects of our lives, and exposed emerging weaknesses and vulnerabilities that had been forming in our social and economic fabric for decades.

• We acknowledge that it was beyond the scope of a pandemic response to address all long-standing issues.
• While some mitigations provided effective protection for many, including for particular sectors and population groups, others missed out or carried a heavier burden.

2. The initial package of economic measures the Government provided was comprehensive and generous.

• The economic response met its immediate aims: to support the public health response to the pandemic by maintaining economic activity, sustaining business confidence, protecting employment, protecting incomes, sustaining financial stability, and ensuring that essential services were accessible.
• Initially at least, the package of social and economic policies – together with the health response – achieved better social and economic outcomes than most other comparable countries.
• At the time, the generous economic response seemed appropriate and was widely supported. But because of the amount of spending it required over an extended period, the economic response left a long shadow on the economy: the level of government debt increased, and a period of elevated interest rates was required to constrain inflation. The cost-of-living pressures since 2021, the surge in house prices from 2020 to 2021, and higher mortgage interest rates, are in part attributable to the economic response to the pandemic, although international forces have also had a significant effect.
• The pandemic revealed there is still room to improve mutual understanding and coordination between the Treasury and the Reserve Bank when it comes to using monetary and fiscal policy to best effect in an emergency situation.
• We also share some concerns that were raised by others about the duration for which the Government and the Reserve Bank provided substantial economic support in the response. This has led to a range of economic pressures that are taking some time to resolve.

3. When decisions were made about allocating government expenditure during the response, the approach to robustness, transparency and accountability was inconsistent.

• While we recognise that decisions about economic support measures had to be made rapidly in the early pandemic period, the consideration given to effectiveness and value for money was inconsistent. Given the significant amount of tax-payer dollars being spent, wherever possible, sufficient opportunities should have been given to more rigorously scrutinising and assessing these measures, and periodically reviewing and adjusting them. This would have ensured the decision-making process was transparent and accountable.

4. The pandemic’s economic impacts put households and businesses under great pressure, especially during lockdowns.

• Government introduced mitigating measures, including the Wage Subsidy Scheme, that supported well over a million workers and their employers. The scheme was necessarily developed very quickly and had some flaws, but it was fit for purpose and an essential support measure.
• Businesses experienced the pandemic differently according to their sector, size and location. They had different abilities to absorb the shock of the pandemic.
• While key goods (including food) remained generally available, supply chains were disrupted by international and domestic developments. It was essentially down to good luck that supply disruptions were not more severe. Aotearoa New Zealand needs to be more actively aware of the risks that can threaten supply chains.

5. The social sector – including government agencies and non-governmental and community organisations – did a remarkable job of ensuring people had their needs met during the pandemic.

• Many positive changes were made in how systems operated, contracts were commissioned, and relationships were built. These new approaches often delivered good outcomes. This capacity, or the ability to rapidly stand it up again, should be maintained to help the sector be better prepared in a future crisis.
• The respective roles of some social sector agencies and groups remain unclear. Resolving these roles and responsibilities, and strengthening regional coordination models, will enable the rapid implementation of local supports, especially during a crisis.

6. A network of non-governmental organisations, iwi and Māori groups, and community organisations provided the frontline services and support that kept families safe and well during the pandemic.

• This network’s important role needs to be recognised, valued, cultivated and strengthened so that it can continue to deliver in future crises. It is these organisations that give government the ability to reach families and communities.
• Locally-led responses were invaluable in addressing the social impacts of the pandemic, as they are based on local knowledge, strengths and trust. Their value was particularly apparent in Māori communities. Local responses will likely be critical in future pandemics and central government needs to actively build relationships and trust with communities now to enable a more effective response later.

7. The economic and social response to COVID-19 helped prevent deaths and protected many people. But the pandemic’s economic, social and wellbeing impacts on individuals and families were unevenly distributed.

• Some groups came through the pandemic better than expected due to targeted mitigations. But some groups (such as Pacific people, women and disabled people) experienced more negative impacts, especially those who were most disadvantaged before the pandemic.
• In a future pandemic, it is essential that government gives consideration to mitigating harms, including the unintended consequences of response measures. Attention should be given to the cumulative impacts on socially, economically or health-disadvantaged groups.

8. For many individuals and families, COVID-19 is not over, showing that wide-ranging pandemic support measures are needed even after the immediate crisis has passed.

• Many New Zealanders continue to struggle with mental health issues, long COVID, loss of learning, relationship breakdowns, health problems due to delayed diagnosis or treatment, bankruptcy or loss of savings and unemployment. The mental health, educational and social impacts on young people are particularly concerning.
• Other impacts have not yet emerged and may well be long-term and intergenerational. The consequences for Aotearoa New Zealand, and for future human capability more generally, are likely to be considerable.