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PoliticsApril 28, 2022

What does the High Court decision on MIQ actually mean?

open-MIQ (1)

Yesterday, the High Court handed down a door-stopper of a decision (140 pages!) ruling that the way in which places in the MIQ system were allocated was unlawful. Andrew Geddis explains.

MIQ … MIQ … sounds somewhat familiar. Remind me?

The Managed Isolation and Quarantine system was set up at the border as a part of our elimination strategy toward Covid-19. In essence, it required (virtually) everyone coming into the country to spend at least two weeks (later cut down to seven days) in a hotel room before being able to re-enter normal community life.

Two weeks in a hotel? Time to complete Netflix (again)? What’s so bad about that?

The requirement to stay in MIQ effectively turned getting an MIQ spot into permission to enter the country. And because there were fewer places in MIQ than people wanting to come into New Zealand, it stopped lots and lots of people from doing so. That then burdened citizens’ right to return to New Zealand as guaranteed in the New Zealand Bill of Rights Act 1990

But didn’t we have to do it because, you know, Covid?

Yep – especially while we ran an elimination strategy. The High Court accepted that MIQ as a general policy approach was both lawful and appropriate. Unsurprisingly, you might think, given that not having thousands of people die from a preventable illness generally is accepted to be A Good Thing.

Then why wasn’t “because Covid” the end of the story here?

There’s a distinction between having some system of MIQ and having the system of MIQ that was actually adopted. And so, a bunch of New Zealanders who had been impacted by the MIQ system (“Grounded Kiwis”) brought a number of challenges to how our actually adopted system operated between September and December of last year. In short, they alleged that it went further than was necessary, didn’t allocate places in a lawful way, and stayed around for longer than it needed to.

What happened to those challenges?

Honestly? Most of them were rejected. The High Court accepted that the overall structure of actually adopted MIQ – requiring everyone to stay in hotels for 14 (then seven) days – was justified on public health grounds. Furthermore, the system needed to remain in place throughout the period covered by Grounded Kiwis’ challenge.  

What? MIQ didn’t go on for too long? But didn’t I read recently that Ashley Bloomfield recommend it end back in November last year?

Yeah, turns out that story was a bit of a beat up. Upon getting further information regarding an initial suggestion that MIQ safely could be scaled back, Ashley Bloomfield decided the risk of additional “clusters” being introduced into the country remained too great. And the court accepted that view. From the decision:

“This is an area where the court should appropriately defer to the evidence of the experts. I accept therefore that MIQ continued to be justified on public health grounds at least for arrivals who would not be self-isolating in Auckland. The risks of transitioning to a self-isolation model too quickly were too high in a country that was still trying to control the delta outbreak in Auckland and keep it out of other areas of the country and to increase its vaccination coverage, including in vulnerable communities. The emergence of the omicron variant bears that out.” 

So, Grounded Kiwis actually lost their case?

No. They won on one quite important point. Because there was more demand for MIQ spots than places available, some kind of allocation system was required. Originally, this was done on a simple “first come, first served” basis as and when places became available, which was deeply problematic. So, in September of 2021 there was a switch to a “virtual lobby” system for places, which functioned as a lottery. When MIQ rooms were being released you put your name into the lobby, you got given a random place in a queue, and people then got to claim MIQ spaces in order of their queue spot. If all the spaces were gone by the time your place in the queue was reached, you missed out.

A typical attempt to secure an MIQ slot in September, October or November 2021 looked like this (Screengrab: MIQ lottery)

OK – that sounds a bit fairer. What was the problem?

Several. The virtual lobby system made no effort to distinguish between New Zealand citizens (who have a legislatively guaranteed right to return to New Zealand) and non-citizens (who don’t). It made no effort to distinguish between the individual reasons for seeking MIQ slots. It made no effort to account for how long a person had been trying to get an MIQ slot, as it reset every time it was run. In short, it was a blunt allocation method that gave everyone the same chance of success in a situation where some people ought to have had a better chance than others.

Wasn’t there any way to skip this queue? I seem to remember people getting MIQ spots for emergencies.

There were a few MIQ places set aside for “emergency allocation”. However, the criteria for accessing these were very narrow. And, the court found, those criteria were then misapplied in individual cases. As such, the existence of this method of skipping the MIQ queue didn’t adequately offset the overall bluntness of the virtual lobby lottery. 

So, what’s the upshot of all this?

The court found that the use of a virtual lobby lottery, combined with an inadequate emergency allocation system, was an unjustifiable limit on the legally guaranteed right of citizens to return to the country. While some allocation procedure had to be in place, the government couldn’t show that the one it had adopted (with its various flaws) was the least infringing on individual rights. In short, the court ruled that the government should have tried harder to put in place an allocation system that took account of the individual circumstances of the various applicants for MIQ spots. Exactly what that would have looked like, the court doesn’t say. But it wasn’t convinced that the one adopted was the least-worst option.

What comes next? After all, MIQ has been disestablished.

Grounded Kiwis only asked for “declaratory relief” – a formal statement by the court that the actually adopted MIQ system was unlawful, and how it was unlawful.  The court has said it will issue such a declaration, but sent the lawyers from both sides away for 14 days to work out what it should say. The terms of that declaration will then set legal guiderails for how any future system of MIQ must operate, which remains a real possibility given new Covid-19 variants. Any additional legal remedies will require individuals to go back to court and seek damages. They’d be silly to do so, because they wouldn’t get them.

As for the government’s response, the minister for Covid recovery Chris Hipkins has put out a statement to say that the government is “carefully considering the court’s decision”. It very well could appeal it, given that the finding of unlawfulness in essence rests on one judge’s assessment that the government could have done more without concretely saying what that more ought to have looked like. Alternatively, it may just take the L and box on.

Anything else interesting in the decision?

The court’s discussion of Ashley Bloomfield’s decision to recommend MIQ remain in place in November last year notes that he reached it “against the backdrop of media articles about MIQ that included, for example, a 29 October 2021 article in The Spinoff .. .” What other publication will give you both director general of health-influencing opinion and a power ranking of New Zealand news stories about potatoes?

Keep going!
Screengrab: Q&A, addition design: Tina Tiller
Screengrab: Q&A, addition design: Tina Tiller

PoliticsApril 27, 2022

What Christopher Luxon should have said

Screengrab: Q&A, addition design: Tina Tiller
Screengrab: Q&A, addition design: Tina Tiller

The leader of the opposition didn’t do as badly on Q&A as everyone says, argues Liam Hehir, but he could’ve been better.

Opponents of the National Party were pretty smug over Christopher Luxon finding the going tough in his interview with Jack Tame on Q&A last weekend. I’m not sure who would have expected anything different, however. Tame is a tough interviewer despite his cheery and friendly manner.

The intense partisans of Twitter are convinced that Tame took Luxon to the woodshed. Overall, however, he really didn’t do so badly. He was certainly no worse than Jacinda Ardern has been whenever she has been grilled by Tame. Which is not to say that it went swimmingly for the leader of the opposition.

Tame challenged Luxon to justify his view that government waste is exacerbating inflation. He struggled to parry the (mistaken) assumption that all spending is equally inflationary. Luxon should have been faster to make the point that good spending helps the economy to produce more goods and services whereas wasteful spending increases demand without assisting production.

When the government spends $51 million to not build a bridge, that’s inflationary. Spending money on a new hospital that increases the provision of necessary services does not have the same effect. Luxon never made that point succinctly enough. The best he managed was a riposte to Tame for not considering $100 million to be a lot of money.

But in any event, it’s not clear that having to contend with Tame’s doggedness on those types of questions really hurts an interviewee. Economic issues are complicated, and economists disagree about cause and effect all the time. With respect to both politician and interviewer, uncommitted voters are unlikely to be fully persuaded by the arguments of either.

The same probably cannot be said for questions over National’s promise to abolish the 39% income tax rate for top earners.

The economic case for the rate was never particularly strong. It was introduced for little economic reason and was principally a bone thrown by Labour to those of its supporters disappointed that the party had not been radical enough. As many people predicted, it hasn’t raised a lot of revenue, but it has provided an incentive for those on top incomes to restructure their affairs in ways than minimise the incidence of tax.

As the IRD notes, the policy has simply failed to do what it was supposed to do.

Where Luxon found it hard, and where Tame made the most of his upper hand, was how abolition of the rate would benefit the leader of the opposition personally. Because the prime minister earns a very good salary, abolition of the 39% rate would see whoever holds the role keeping about $18,000 more a year.

Luxon was immediately put on the defensive. Like most New Zealanders, he probably cringes when discussing personal finances. Nevertheless, Tame pushed and Luxon conceded he would benefit, despite not needing it, because high earners pay the greater part of the income tax in this country.

Personally, I think that National should tweak its proposal so that taxpayers can choose to opt-in to the 39% rate. It would be a bit of a novelty for the New Zealand tax system and a few tweaks to the Tax Administration Act 1994 would be needed. There’s no reason in principle as to why those who don’t feel they need tax relief should be forced to take it, however. And Luxon could announce that he will continue to pay at the higher rate.

That would give him an immediate response to bad faith accusations of seeking self-enrichment while preserving the overall intent of the policy. He could also turn the tables on political opponents and interviewers by asking them to make the same pledge. It would be a simple, confident response to a loaded question that he is going to be asked again and again.

That’s not the only way to handle it. Perhaps all he needs is a suite of good, pithy rejoinders. But whatever it is, it’s got to be confident and decisive. All the other stuff Luxon and Tame tangled over are details. People accept that details are uncertain and usually up for debate. Arguments about details rarely deliver an election result.

But people do care about fairness. National should know this. Its policy of tying tax rates to inflation will only deliver modest initial benefits to most voters but is popular nonetheless because it strikes voters as the fair thing to do.

Until Luxon can respond with confidence on that question, he is going to find himself playing defence on this issue time and time again. And not just against Jack Tame. The prime minister and others in the punditry will be asking the same questions.

He could do with some better answers next time.

But wait there's more!