Who gives a tweet about MIQ misery

The government’s choice of a randomised electronic queue for the distribution of 3,000 MIQ rooms yesterday had one surprising benefit.  It showed just how many New Zealanders were desperate enough to stand in e-line – more than 26,000 according to Stuff.

It also reminds us that while ministers and their officials can sometimes do one thing well – occasionally even two or three – the system is not designed to meet your personal needs. The fatal conceit, as Friedrich Hayek pointed out, is that the bureaucracy thinks it knows what they are.

A related problem is that once the government machine is committed to its process, it’s irritated by feedback that things aren’t working.

So if we are stuck with MIQ for the time being, how ought it to work?

Officials tell us that the cost of providing rooms is more than double the current $3,100 charge.

Yet the demand is there for lots more rooms.  Who would have thought that people put such a value on seeing each other and doing stuff with their families?  So charge even more for it.  

A high enough charge will certainly bring forth the necessary supply of rooms and security – if it’s allowed to.

Problem that some people can’t afford it?  The state is already funding hardship cases.  Higher charges could provide revenue. And then again it would be perverse to penalise everyone just to keep subsidies within an arbitrary budget.

This is shaping as yet another case study in how abolition of rationing systems can dramatically increase our welfare.  Buyers get to make important choices.  Suppliers direct their resources and efforts to highly-valued activities.  And instead of taking responsibility for everything, the state can focus on making sure the system works and helping the genuinely disadvantaged.  

The numbers involved are far from trivial and give just a hint of the underlying human needs.

Turn over your envelope and start multiplying.  Assume that a queue of 26,000 applicants represents, say, 50,000 potential travellers, many of whom are already willing to pay $3,100 or more.  If the benefit were $10,000 per head, that would give a total social value of $500 million to being able to meet their needs.  

That number might even provoke some more creative thinking on how reduce compliance costs: more frequent testing, bonding schemes, voluntary electronic tagging etc.  

But given what we know about the disruption to lives, the real impact is likely much greater.

Two cheers for the government for trying something new.  The lessons are more than we could have hoped for: that it’s better to have an expensive choice than none at all; that government micro-planned processes are usually worse than adaptable systems designed in the round to empower people; and that choices and costs always tell us something useful.

When the social balance sheet comes to be drawn up and New Zealanders start paying off the Covid debt, you may find that the costs of the controls – financial and social – turn out to be a great deal more than the proponents claimed at the time.

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