Mike Hosking on coronavirus Covid 19: The economic pain of pandemic still ahead of us

COMMENT:

I wish this column, lockdown column number 3, could have come to you on the first day of level 3.

Personally, I would have preferred level 2, but level 3 is better than what we have, and what we have is five more business days - not two - before another slice of the working community can actually get back and try to salvage, save, rebuild or resuscitate their jobs and businesses.

Even those lucky people will leave others at home, stuck, praying, sweating, scared of what lies ahead for them.

The longer it goes for those people, the more unlikely it is they'll be able to pick up and carry on.

Even those who do get to open up shop can only trade at minimal levels. Being open is a lifeline . . . not an answer at this stage.

The fact that the Government on Monday in that momentous announcement openly tried to tell you that the decision being delayed from Thursday to Tuesday only involved two business days gave a revealing and glaring insight into that age-old Labour Achilles heel - virtually none of them has ever actually owned or run a business.

They rely far too heavily on officials in ministries, who almost certainly have also never owned or run businesses. It's the blind leading the blind.

The fact they can blithely make the number of days up shows you how small that Wellington bubble is, and also displays the stark truth that they have no understanding of the value of a day open and trading for a small business that hasn't been able to do so for a month.

It was the same a week ago when they, instead of offering a rent relief package, told you that you could take last year's profits and get the cash from the IRD.

Failing of course to understand that many small businesses don't make profit and if they do it's tiny.

What small business does with income is underpay the owner, put the money back into the company, they expand, they market, they employ, they invest, all at the expense of profit.

And if you didn't make any profit there isn't a lot of get-back, is there? But then if you've never done that, if your sole source of income has always been the taxpayer, why would you have any understanding of any of that?

This is why this story is so fascinating, and, as yet, barely under way.

You think the lockdown has been dramatic? You think the signs of the economic carnage look bad?

You ain't seen nothing yet. And that's the part tragically most haven't turned their minds to yet, because we have been too busy being locked down, baking banana bread, dobbing in neighbours who kayak, and watching the Prime Minister and the Director-General of Health tell us they have more than enough PPE (personal protective equipment).

Yes, the health side of this has been excellent, that's what a lockdown in a small, isolated island nation can do for you.

It's why we should have dropped to level 3 at least a week if not two weeks ago.

But the real story, the story that will truly shape the entire episode, is yet to play out.

By June or July, in the middle of a cold, wet winter, the true economic landscape will have been revealed.

At that point, we will be at some sort of normal. All those who can open will have, and all those who couldn't will be there with the lease signs on the window.

The forecasts the banks and economists have been making up till now will have real numbers attached to them.

The true size of the Government's bill - and therefore our debt - will be known, the jobless queue length will be precisely understood.

And then the growing numbers of anecdotal stories around depression, mental health and suicide will emerge.

This will be in the new world with borders closed, no tourism, this will be the second half of the story.

This will be the part where we decide if all that emphasis on health, the panic around ICU access, being kind and the determination that weeks on end crashing an economy was worth it.

We will think about that, we will live that reality in July and August, and then we will vote.

And the vote will be based on what it's always been based on, the economy . . . and that's why this story has only just begun.

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