The government made the right decision on Monday to move to Covid-19 Alert Level 3 (at 11.59pm on Monday next week) according to ACT leader David Seymour, but attention now had to turn to clarifying the "rules of the game" so safe activity could resume.

"There must also be a renewed focus on support for the narrowing range of sectors who remain severely restricted at Alert Level 3," Mr Seymour said.

"Sectors such as tourism, hospitality, some retail and event centres will now bear the brunt of the cost for a wider public benefit. In these circumstances there is a stronger case for targeted support for those sectors that cannot operate even at Alert Level 3."

"The government has been slow to support small and medium-sized enterprises in particular that faced diminished cashflows due to government policy, he added, calling on it to provide support for ongoing expenses, such as rent, that were not covered by the wage subsidy.

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"However, most businesspeople would much rather be earning a dollar than taking one from the taxpayer. For these firms, it is essential the government continues to clarify the rules of the game with haste," he said.

"We welcome the government's commitment to allowing 'safe' businesses to operate, however it is essential that the rules be clarified in a number of important areas. For example, real estate. People who have settled recently risk being homeless if they can't find somewhere else to live. Similarly, changes in relationships and financial circumstances will require new accommodation arrangements, but the government has sent mixed messages about whether private viewings - not open homes - are permissible.

"One thing that hasn't changed is that New Zealanders must continue to follow the law. The government has made the right decision today at one level, but there will still be a lot of clarification required. It's important that the government does this job hastily, but equally important is that we all follow the game plan and hope it works, because a team that doesn't follow its game plan doesn't have one."

Earlier Mr Seymour said it was increasingly clear that the government had to lower the alert level.

"The health risks of Covid-19 are much lower than first thought," he said.

"The Prime Minister said without the lockdown, tens of thousands would die, but the curve was flattening even before the lockdown came into effect. Economic modeller Ian Harrison has criticised the assumptions in the Government's Covid-19 modelling, including that it had no ability to trace and isolate infected people. Adjustments like this one bring the forecast deaths from the high thousands to the low hundreds.

"On the other hand, the damage to the economy is much greater than ever imagined. Another cycle of rental payments with no revenue will finish off even more jobs and businesses. According to a former Reserve Bank economist, we might have lost $9 billion in economic activity while in lockdown.

"If three incubation cycles of lockdown have not eliminated the virus, then four will further reduce it, but not eliminate it. So long as it exists it can still come back. If the government extends the lockdown we'll still face the prospect that we just pushed any future outbreak further into winter.

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"Small and medium-sized businesses have been forgotten by the government, which has little understanding of them. A few months back the government was criticising supermarkets for being a duopoly; now it has locked that duopoly in.

"The government's Alert Level 3 mantra is 'Safe not essential,' but many retailers won't be given the opportunity to prove they can operate safely. It is illogical that butchers, bakers and greengrocers cannot open on a one-in-one-out basis but dairies can, while supermarkets remain open on a fifty-in-at-a-time basis. Online trading will continue to be restricted, giving Australian businesses an advantage.

"Without greater flexibility and certainty on Alert Level 3 rules, businesses that could operate safely will fold and jobs will be needlessly lost.

"The trade-off facing Cabinet (on Monday) isn't lives versus money, but lives versus lives. Wealth equals health. In poorer countries, people die earlier. Only a few months ago, affording the same cancer drugs as wealthier Australia was one of our biggest policy debates. Cancer check-ups and other treatments missed as a result of the lockdown must be counted. Unfortunately, there may more suicides as a result of economic devastation than deaths from Covid-19.

"Covid-19 has been a missed opportunity for open government," he added.

"The government should have set up the key decisions to be made and openly invited input on its modelling rather than kept to a narrow coterie of favoured academics. That is how you harness the power of a free society - get better advice, and take people with you.

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"It should have been procuring private sector solutions from Day 1. Health Minister David Clark promised a portal that would triage private sector offers such as those for rapid testing and tracing technology. We still do not have one."