As the number of Covid-19 cases eases, the jaws of the lockdown are tightening on the New Zealand economy. The local parent company of fast food franchise Burger King yesterday fell into receivership in the latest blow to the hospitality industry. Many companies, including Herald publisher NZME, have announced redundancies and asked staff to take pay cuts. Air New Zealand is looking to lay off a third of its 12,500 staff. Magazine publisher Bauer has shut up shop entirely in this country.
Treasury yesterday released a series of scenarios on the potential economic effects of Covid-19. At the more optimistic end, it picks the unemployment rate — which is just over 4 per cent at present — could stay under 10 per cent if the lockdown remains at four weeks and the Government provides additional financial support. This rises to 13.5 per cent without new support measures. Under grimmer scenarios, if the lockdown were to be extended unemployment could reach between 17.5 and 26 per cent. A figure of 10 per cent would mean 275,000 Kiwis out of work.
Support for the Prime Minister's swift action to move New Zealand to a lockdown state under alert level 4 has so far been strong. Most Kiwis have been happy to stay in their bubbles, playing their part in a coronavirus response which has gained international recognition.
But as families face job losses and an uncertain future all the while dealing with the stresses of life under lockdown, this unity is fraying somewhat.
More questions are being asked about whether the measures have been too stringent. Could more businesses have been allowed to stay open? Should our approach be more like Australia, where there is more construction, manufacturing and retail activity and more schools stayed open?
The appearance of Australia's chief medical officer Professor Brendan Murphy at the Epidemic Response Committee yesterday showed the comparison is not simple. Murphy described Australia's social isolation approach as largely similar to NZ's. Many retail chains had chosen to close and parents had pulled kids out of school.
Epidemiologist Sir David Skegg put Australia's alert level at 3 to 3.5 on our scale but said that could continue for up to six months, while New Zealand could be out of lockdown after four weeks
AdvertisementAdvertise with NZME.
The NZ Government's "go hard, and go early" approach has worked: Just 17 new cases of Covid-19 were announced yesterday. Now, with the obvious exception of public health, the economy should be at the forefront of descent from level 4.
Life under level 3 should be a place where more businesses can again begin to trade and hopefully prosper, with clear rules for operation.
Finance Minister Grant Robertson has hinted at this, describing levels 2 and 3 as a period where "safe economic activity" can take place.
The Government has, rightly, put the physical wellbeing of New Zealanders before all other considerations. For now, it has Kiwis behind it. The next steps will be crucial to maintain that support as we strive to return the economy to health.