Covid 19 coronavirus: 'Plan must protect economy and lives'

the Ardern Government is creating a money pit to try and cushion the fall, but will it be enough? Photo / Marty Melville

Opinion

COMMENT:

The Government needs to be honest with the public that this country's Covid-19 response must protect the economy as much as it protect lives.

Thousands of people - amid a national lockdown - continue in work at the country's farms, dairy plants, meat processors, canneries, orchards and packhouses.

Most of that production is not "essential" domestic food or medical supplies – it is for export. Sure, cows must be milked and if the kiwifruit and apples aren't picked they go to waste, but all the rest is still essential - for national income.

The Government knows this. The wreckage from the pandemic to the global economy – which we fundamentally rely on - is going to be vast. Regardless of how long the current lockdown lasts, thousands of New Zealanders are going to lose jobs and the Government is wisely creating a money pit to try and cushion the fall.

But it will only soak up some of that damage and the costs to many families will be huge. For the country, paying for it is likely to take decades.

That's why the Government needs to be upfront, because doing otherwise is damaging and creates confusion. It results in woolly policy thinking and knee-jerk responses from businesses and the public who are trying to do the right thing.

We have excellent logistics chains in this country. But moving "essential" freight was put at risk last week only after officials started talking about "non-essential" freight and forgot that if you shut down a firm there will be no-one to collect its import container from the wharves, unload it and return it to the pool.

Many times last week the Government's decision to stop forestry harvesting was explained with "well, you can't eat trees".

No, but you can't make medical tissue without wood, and we make it in a highly integrated process that includes using every part of a tree to make timber, fibre board and paper, most for export.

And you can't eat aluminium either. And no-one really considers that wine – another "essential" industry – is something we can't do without.

But we do need those export industries – and others we have effectively shut - to keep running if they can do so safely. Because we are going to need every dollar they generate.

Businesses that close now may not reopen. Like the smelters at Glenbrook and the autoclave at the Macraes gold mine – we have to find a way to keep the most important parts of the economy, and the workforce - warm and ready to go.

Unfortunately, the real economy and the provinces it resides in are foreign countries to many of our politicians. Our officials are high-calibre and are working around the clock, but their sector knowledge is necessarily narrow and some are also afflicted by the institutional biases present in the machinery of government.

Our big primary players are hot-wired into Wellington in a way that much heavy industry and the more fragmented manufacturing sector is not.

Don't believe me? Check out the essential services list in the Employment Relations Act. How else can you explain the specific inclusion of butter, milk and cheese – up against power, gas, water, sewerage, hospitals, pharmaceuticals and dialysis - among the 16 items listed?

But our "traditional" food exporters, and their regulators, have also benefited greatly from strong biosecurity protocols and processes which have been adapted relatively quickly for the latest crisis.

That has proven a great template for action, which now needs to be applied across other sectors.

Because those other sectors – be it timber processing or mining – shouldn't be arbitrarily left to wither.

Forestry doesn't have a great health and safety track record but harvesting has to be re-started. Photo / Mark Mitchell.

The policy challenge is not – as one official said last week – to keep essential industries operating while keeping as many people at home as possible.

The challenge should be to keep as many domestic-essential and export industries operating as possible, based on a risk assessment of the workforce movements involved and the overall impact on the containment effort.

There is a headcount to be achieved, but not at any cost. If it was, the Tiwai Point smelter would be shut now. Some jobs are worth more than others.

That may not sit well with silly media characterisations of 'war room' policy formation – but cool heads are needed now.

• Covid19.govt.nz: The Government's official Covid-19 advisory website

Firms that are still operating have done great things minimising on-site staff and putting in place new virus controls. It is also exactly the approach the Government has approved with the Covid-19 protocols for the horticulture sector.

If those controls are appropriate for the hundreds of orchard pickers, packers and sorters now working then they must also work for much lower-risk export activities with smaller and known workforces.

Logically, how can a forestry felling crew, spending much of their day alone in a truck or a skidder, be a higher potential virus risk than dozens of casual fruit pickers working under kiwifruit canopy, or having smoko, or attending a picking briefing – all two metres apart?

How can an excavator operator be a greater virus risk just because she is digging export coking coal, instead of thermal coal for the dairy plant down the road? How can the virus protocols already approved for the latter not be appropriate for the former?

Having signed agreements to ensure we keep receiving "essential" goods from overseas, are we really not going to supply coking coal and timber to the steel makers and construction firms near-neighbour Australia has declared "essential"?

Forestry doesn't have a great health and safety track record but harvesting has to be re-started, even if only in a limited and regional way initially.

Because the alternative of trucking wood from Northland to the South Island would be heroically dumb within a virus control regime that is meant to be limiting road movements.

And are we really going to truck tens of thousands of tonnes of logs now marooned on the port at Gisborne to Kawerau, when there are existing, highly-integrated contractual and logistics chains in place in the central North Island to get nearby wood to plants efficiently?

Why – at a time like this - would you try and design new supply chains when players in the existing ones know each other, know who can be relied on and are ready to go?

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The Government needs to have a little more faith in the public, the vast majority of whom are trying hard to make the lockdown work.

And it should lean a little more on New Zealand industry and the provinces, because they are deep with talent, will come up with solutions given the chance, and know how to get things done.

• Gavin Evans is a Wellington-based BusinessDesk journalist, covering heavy industry, energy and commodities in New Zealand and Australia.