What do water consumption, health-care services and Kiwis wanting to return to their homeland have in common? They are all being rationed. In her recent speech to the Labour Party Congress, the Prime Minister took a swipe at the market reforms of the 80's. At the heart of those reforms was the idea that prices are needed to signal scarcity and allocate resources efficiently. Without market pricing, people may face shortages, queues and rationing. For example, water usage is presently being restricted in Auckland. People are sitting on waiting lists for their medical needs. Now Kiwis have been told that there are not enough virus quarantine facilities to isolate them when they return from abroad.
Minister Woods summed up the approach, "We cannot let this continue to be a purely demand-driven system".
Could a better job be done with a system which is more responsive to demand? Yes. By ensuring that quarantine facilities were priced. Posh people could be sent big bills for staying in posh rooms in first-class hotels. Less well off folks (as well as posh misers) could go for cheaper rooms in economy-class facilities. Revenues raised could be used to provide more quarantine facilities, as well as to especially help those folks who desperately need to return home and yet don't have the money to pay even for the cheapest rooms.
We would end up with better outcomes for all. More efficiency. More equality.