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  • Writer's pictureBrogan Powlesland

Cash for Vaccines

Former National Party MP, Parmjeet Parmar, recently raised the issue that even after we achieve sufficient infrastructure to allow the general population to take up the COVID vaccination, we may still not achieve herd immunity. She writes:

“It was nice to hear a Covid-19 vaccine related advertisement which basically says that people will be informed when it’s their turn. But what happens if people contacted decide not to get vaccinated? It should not be a surprise that a significant number might say “no”. Various surveys have shown around 1 in 4 New Zealanders are hesitant or will not get a Covid-19 vaccine. …. Believing that by achieving herd immunity with around 75% of New Zealanders getting vaccinated – that are willing to get vaccinated – will do the job for us, is a false hope …”

Parmjeet has a point. By opting for an elimination strategy, we cannot reopen the border until herd immunity is achieved. This means that those 25% of people hesitant to get the vaccine pose a huge risk to our health system and economic future. Economists have come up with a simple solution – cash incentives. Robert Litan of the Brookings Institute was the first to propose the idea. Here’s how it could work in NZ:

Offer every adult $250 to take both vaccines. At a total cost of around $1bn, it may be the most cost-effective way of avoiding lockdowns, which have come at far greater cost to the country. The wage subsidy scheme alone cost over $10 billion. If we’re serious about achieving herd immunity and opening the border, this may be the best approach. But given NZ is second lowest in the OECD in terms of vaccinations per 100 people, and the government isn’t keen on using incentives and market solutions to solve society’s problems, let’s not hold our breath.


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