Sir John Key has warned the New Zealand business community to not be complacent about apparent buoyancy in retail, property and equity markets, as "we have a financial crisis coming".

Key said equity and property markets were presently being cushioned by record-low interest rates and healthy surface-level business activity - such as busy used car lots and apparently busy restaurants - masked an underlying economic crisis the country would feel for years.

"There is a lot of stress in the system ... We are in the early part of what is going to be a very significant contraction in the New Zealand and global economy."

Key said previous major economic downturns had seen contractions in GDP of around 3 per cent, and the collapse in international tourism alone - which accounted for 5 per cent of the economy - would exceed this.

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Sir John Key says the fallout from Covid will last years. Photo / File
Sir John Key says the fallout from Covid will last years. Photo / File

The former prime minister, and current chairman of ANZ bank, was speaking this morning at a summit at the ballroom in Auckland's Cordis hotel. Hosted by the council's economic development arm Ateed, the event was intended to discuss the present and looming challenges of Covid-19 to New Zealand's largest city.

Key said the Government should look at relaxing border restrictions to allow international students back into the country.

"We clearly don't want community transmission, but in the same way we welcome New Zealanders who are returning from overseas, appropriately putting them in quarantine for 14 days and testing them - certainly the universities have the capacity to do that," Key told reporters following his speech.

"I think we should allow them to bring foreign students in, I think they should be responsible for that quarantining."

An Ateed report accompanying the summit said the economic crisis sparked by Covid-related disruptions to domestic and international business activity would be sharper than the decline seen in the Global Financial Crisis and could see 50,000 young Aucklanders out of work in the next two years.

Former Air New Zealand boss Rob Fyfe, who worked in a business liaison role at the national command centre in Wellington during the state of national emergency, told the audience the crisis has been marked by evolving uncertainty.

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Early assessments about how the virus spread and its risks - initially thought to only be amongst the symptomatic, and only the elderly being at risk of dying from it - have had to be rapidly revised over the past few months, he said.

"It was clear to me when I was camped out down in Wellington ... one of the weaknesses [of central government] is they are not agile, departments are territorial, and hold on to ideas long after the information has moved on."

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Fyfe said the cohesion and nimbleness of the all-of-government response put in place to manage the response during the peak of the crisis had faded as the public service had since returned to something close to business as usual.

Key said central government and the business community needed to be able to rapidly change course as information becomes available, even if such moves were disconcerting.

"There is no elegant way of dismount a galloping horse."