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Home / Business / Business Reports

Mood of the Boardroom: A pathway full of potholes

Fran O'Sullivan
By Fran O'Sullivan
Head of Business·NZ Herald·
6 Oct, 2021 03:59 PM9 mins to read

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Watch: More than 150 business leaders share their view of the country's Covid response in the New Zealand Herald's annual Mood of the Boardroom survey.

CEOs were upbeat when the Government finally unveiled Reconnecting New Zealanders to the World; a framework to guide Cabinet as it prepared to reopen the border in the first quarter of 2022.

A week later, business leaders were saying: Where is the detail? The targets and dates? This as New Zealand went into a level 4 lockdown to try and stamp out the spread of the Covid-19 Delta variant.

"Delta predictably caught an unvaccinated and smug New Zealand with its pants down", said an exporter.

"I suspect this policy will now be reviewed.

"Vaccine roll out too little too late."

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Nearly two-thirds of the respondents to the Mood of the Boardroom survey were not satisfied with the plan.

In essence, it involved vaccinating as many New Zealanders as possible in the second half of 2021, conducting a self-isolation trial as a prior step to the phased resumption of quarantine travel and the reopening of the border in the first quarter of 2022.

NZ Initiative chairman Roger Partridge said the vaccination rollout has been too slow.

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"Countries like Denmark with highly-vaccinated populations have recently announced an end to all Covid restrictions. Meanwhile, New Zealand is lagging far behind."

"The Government appears not to be prioritising booster shots, which the evidence suggests will be needed early next year," added his colleague Oliver Hartwich.

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"Not nearly enough is being done on the building of domestic health security," added an aviation chief.

"We need to build health system capacity, build deeper test surveillance options, need permanent MIQ, more ICUs.

"The border is our only defence if we haven't done this work — and they need to move much faster."

The Delta outbreak — which has resulted in Auckland being under either level 4 or 3 restrictions for more than seven weeks now — has put pressure on Government, businesses and citizens alike to get the vaccination tally up. Some businesses report that their initial moves to set up in-house vaccination programmes were stymied by the bureaucracy.

"Why are they talking about 'stepping up' the vaccination rate? They have had a year and bungled it!" said Skellerup's David Mair.

A banker said vaccination rollout has been pathetically slow, and the very limited offshore travel from October to December is "too limited".

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New variants worry

One-third of CEOs worry that the emergence of new Covid variants will render current vaccines less effective. But a large majority — 58 per cent — were just somewhat worried and a further 9 per cent were not worried at all.

A logistics firm boss noted emerging news was there could be more variants coming that are a further deviation from the original.

"It requires a strategy now if we don't want to be the last nation in the world to book in for a top-up or a next generation vaccine."

There was confidence the pharmaceutical industry would develop new and effective vaccines as the virus mutates. "The positive thing has been that vaccines have been developed in record time," said an independent director.

Said the NZ Institute's Roger Partridge, "I would be extremely worried if it were not for the remarkable developments with mRNA vaccines."

Others pointed to the need to get the whole global population vaccinated. "While large 'reservoirs' of the world are unvaccinated the risk of a new variant that renders the current vaccine regime ineffective is a great concern" said a food industry CEO.

"I suspect the variant that is prevalent when we are starting to open our borders won't be Delta but something new," said a Government adviser. "Hence why I accept it is hard for the Government to lock themselves in to a fixed timeline. Once vaccinated we will no longer be crowding the hospitals," said an educator.

"We will get on with life as if having the seasonal flu, as evidenced with the current cruiseliner with vaccinated passengers but a Covid outbreak — they are still partying, eating ….

"Everyone will get Delta eventually. It is literally the nature of a virus, my concern is that the Government will continue on a one-eyed mission to eliminate and will have to keep us locked away."

Self-isolation pilot

A self-isolation pilot was recently announced as part of the Government's "Reconnecting New Zealanders" plan for re-opening borders, which will ultimately allow more people to visit New Zealand.
The pilot has been approved for up to 150 people to travel internationally for business purposes. Prime Minister Jacinda Ardern said it was not the Government's intention that self-isolation be only available to business travellers in the future, but "this narrow scope is for us to kick off safely while we begin the design work".

The Herald survey reveals 41 per cent of respondents plan to apply to join the pilot; 37 per cent are unsure; 22 per cent won't apply.

Beca CEO Greg Lowe says the pilot scheme is a step in the right direction, and Beca will seek to be part of it.

"We have several projects overseas that need staff onsite to oversee implementation," he says. "One of these is a large carbon reduction project that will help reduce global emissions. Pacific nations are also seeking more infrastructure support from New Zealand teams.

"Key client relationships need reinforcing."

Another director, who is unsure whether they will take part, says "it may be necessary to pursue this," but will depend on what the plan is for the country to open up post-vaccination.

Those chosen for the trial will be able to return to New Zealand and undertake self-isolation on arrival in Auckland or Christchurch, between October 30 and December 8, 2021, forgoing the need to enter a MIQ facility.

The Government says numbers have been limited to ensure the health workforce, MIQ systems and staff have the capacity to establish, manage and complete the pilot successfully.

This level of interest is unsurprising considering 83 per cent of respondents say their business is dependent on staff being able to get in and out of New Zealand for business.

When broken down, 29 per cent say their business is highly dependent on staff travelling internationally and 54 per cent say somewhat dependent. Just 17 per cent say their business is not at all dependent on staff being able to travel.

T&G Global director Carol Campbell says T&G Global is a global company with most of its revenue created offshore, "so we need to visit customers regularly and assess the state of the markets that we compete in".

Beca's Greg Lowe says maintaining business relationships remotely works for a while, but growing them requires more in-person connection.

"Some 30 per cent of our business is international, and while some project work can be created to create export services revenue, implementation requires people on the ground to support local teams," he says.

"Flow of key people to and from project sites overseas is very important."

From Forsyth Barr managing director Neil Paviour-Smith: "We can essentially manage without international travel for a prolonged period."

New potential in a post-Covid world

New Zealand's high value international tourism and student markets were decimated when the Covid -19 pandemic spread and borders shut.

But with the clear prospect of a significant reopening it's time to have another look.

What CEOs are saying:

• A post-Covid environment will not be soon. We need to be looking at how we reinvent our tourism sector and how to incentivise New Zealanders to see "home" now. (Michael Barnett, Auckland Business Chamber)
• Tourism can recover, but as long as the Government understands it properly and enables the border. Contrary to popular opinion, NZ is a high value international tourism destination and was worth $14b per year. That pays for a lot of hospitals and schools. (Aviation boss)
• The key driver must be to get New Zealand open. I suspect many people will want to move here and we should encourage that, providing the right incentives through subsidies and other support mechanisms. (Tourism boss)
• Allowing universities to arrange isolation facilities for international students would make an enormous difference to our universities and to the wider economy, and would enhance New Zealand's reputation. That should be possible particularly for students coming from low-risk jurisdictions such as China. (Banking boss)
• NZ will be an even more attractive place to visit, work and study. The Government needs to get the borders reopened as early as possible in 2022 — that is the best support it can give the tourism and education sectors (Tourism chief)
• Get a decent Covid vaccine passport. For goodness sake, please don't leave it to the MOH. Move to accept saliva and other less invasive Covid testing for travellers (Kiwis and others). Allow self-isolation outside MIQ. Let the education sector organise private MIQ. (Director)
• NZ has an opportunity to become the "safest food producer in the world". International consumers will identify with food producers that can claim many of the things that NZ already can. This perception needs to be supported by a deliberate promotional campaign. (Timothy Myers, Norwood)
• This current environment provides a chance to reset our tourism sector for value and yield over volume. We should not waste the opportunity. (Don Braid, Mainfreight)
• There is no post-Covid world — we have to live with Covid. We need to be looking to the next generation of trade partners will have to learn to live with Covid. If the vaccine means that we won't have large hospitalisation rates, but that some of us still get sick then that is OK. It is about the amount of risk. (Independent director)
• New Zealand is a desirable travel destination, and as one of the few Covid-free nations on earth, could be an ultra premium tourism destination starting with 5 star MIQ. (Media boss)
• Forget tourism. Bring in talented workers and build technology businesses that deliver long term value. (Digital CEO)
• Attract people from wealthier nations e.g. US, EU. Set up a formal OE /gap year scheme to attract wealthier millennials to come work, travel or study? Promote NZ for boutique golf tourism and eco-tourism. Not mass market cruise ships or coach trips. (Adviser)

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