Mike Williams: It's going to be a long road back

Our tourism industry has already taken a huge hit. Photo / File

COMMENT

Now more than a week into an unprecedented lockdown, we are already hearing from anguished businesses whose losses, despite the government's best efforts, will be mounting.

This will be especially true if the tally of new victims remains relatively low (as it seems as I write this).

Pressure to begin relaxing restrictions must be resisted until there is clear evidence that the threat posed by the virus is over.

If my maternal grandmother was still around, she could tell you why.

She migrated here from England with her mother Lucy and brother Stuart in 1908.

With the untimely death of her father, her adventurous mother decided to sell their property in London and come to New Zealand to open a guest house of the kind they'd enjoyed in English seaside town of Herne Bay where they'd taken holidays.

The plan was a good one and there were happy years living in Auckland until the Spanish 'flu pandemic stuck New Zealand in 1918.

Like 9000 other victims, Lucy and Stuart died in the pandemic, leaving my grandmother to make her own way.

I only know of this sequence of events because of modern ancestry search tools. They were so painful to my grandmother who I knew well and loved very much that they were never mentioned.

Perhaps the only positive aspect of this epidemic was that it effectively lasted only two months.

Public anger about local government's ineffectual responses after the pandemic resulted in a Royal Commission which rewrote the Health Act to put responsibility for future outbreaks squarely in the hands of the central government.

Even with the scant evidence available to historians, it seems likely that those local authorities trying to enforce physical separation saw fewer casualties than those that did not.

We got the message that only the central government has the resources and authority to deal with such crises, a lesson that's serving us well right now.

I recently recalled a conversation of many years past with the late Sir Paul Holmes about just how lucky in life our age group had been when compared with the lives the previous generations of our parents and grandparents - both of whom had their lives disrupted by world wars.

Paul quipped that the biggest threat to our comfortable existences had been the collapse in wool prices in the 1950s and the "Black Budget" of 1958 when taxes were increased on alcohol, tobacco and petrol and the second Labour Government of Sir Walter Nash, grandad of Napier MP Stuart Nash, was doomed to just one term.

Though it's happened late in the lives of most of the baby boomer generation, hindsight will tell us that the Covid-19 pandemic is likely to be just as disruptive as the two world wars, though it will be in quite different ways.

In the space of just a couple of weeks we have seen entire industries stop dead in their tracks with the probable loss of thousands of often well-paid jobs.

Many of these industries will not recover quickly and some have surprisingly deep roots which reach into unexpected places.

New Zealand's huge tourism industry is just one example.

I got a rude awakening early in the lockdown when a retired friend told me that a major source of his income had effectively collapsed.

He's been doing well on returns from Airbnb. This international enterprise connects travellers looking for accommodation with house owners, like my friend, who have unoccupied rooms or batches that they are prepared to rent out short term for what were very attractive returns. In the case of my friend who has two properties available, his income is down by more than $50,000 per annum.

Local tourism will undoubtedly return slowly after the lockdown ends, but international tourism will almost certainly take years to recover and return only after a reliable vaccination becomes available.

Another friend who owns a string of rental properties thinks that the demise of Airbnb will solve what he calls the rental crisis caused by too many long–term tenants chasing too few houses for rent. Some clouds have silver linings.

A new phenomenon we may have to get accustomed is likely to be middle-class unemployment.

The demise of once solid companies like Air New Zealand, the publisher Bauer Media, SkyCity and more to come will throw people used to comfortable $100,000 plus salaries into a shrunken job market.

Mike Williams

It could be a long road back!

* Mike Williams grew up in Hawke's Bay. He is CEO of the NZ Howard League and a former Labour Party president. All opinions are his and not those of Hawke's Bay Today.