Job losses ‘going to get worse’

A SEVERE increase in the number of people claiming benefits is only the tip of the iceberg, community leaders say.

Ministry of Social Development figures released yesterday show unemployment jumped dramatically between March and April: a 267% increase in Queenstown Lakes, 67% in Central Otago, 37% in Southland and 21% in Dunedin.

The data shows Southern had the highest increase in unemployment benefits in the country at 28%, from 8243 to 10,543.

Otago Southland Employers Association chief executive Virginia Nicholls admitted she was not surprised by the figures and sounded a warning.

‘‘It is going to get worse — that is the reality.’’

She said her team on the ground, particularly in Queenstown Lakes, were hearing bad news daily of the stark reality behind the losses.

While tourism and hospitality were obvious casualties, manufacturing and other processing industries would also soon take a hit.

Ms Nicholls said if the country did not move into Alert Level 2 next week, there would be many more businesses ‘‘that will not survive’’.

‘‘We are really concerned and we must open next week; we cannot stress that enough.’’

‘‘The wage subsidy has given them [businesses] a chance to take a breather, but that is it. It is really tough.’’

Queenstown Lakes Mayor Jim Boult said the figure was much lower than he expected.

Queenstown Lakes historically has had one of the lowest unemployment rates in the country.

The new figures show a jump from 151 to 554, an increase of 403 individuals.

“Our view is that there are literally thousands unemployed across the district . . . my rough guess is that around 1100 people were made redundant in the current week.”

Mr Boult felt the 267% increase did not necessarily reflect the wider situation, due to the district’s large migrant workforce being ineligible for the unemployment benefit.

“The other factor that’s not taken account of here yet is that a lot of people are still on the supplementary wage, and maybe assuming they have got a job when the supplementary wage runs out. I have a fear that there will be more job losses.”

However, Mr Boult was pleased the region would be able to get some domestic tourism once Alert Level 2 kicked in.

“I think the job for us now is to band together across the whole district, Queenstown and Wanaka, and ensure we get as many New Zealanders on holiday as we possibly can, because that is our saviour in the short term.’’

National MP Hamish Walker warned there could be a bigger ‘‘storm to come’’.

“I know of a number of businesses that are making large redundancies over the next two weeks.”

“It’s a complete bloodbath in terms of what’s happened to Queenstown when you have got over 70% of your tourism market taken away and not returning for some months to come.”

Almost 11,000 people had registered with the Queenstown Lakes District Council for emergency support, 76% of them migrants, Mr Walker said.

Dunedin Mayor Aaron Hawkins said the figures reflected what he was seeing in the community.

‘‘These are tough times for a lot of people. The support being offered by the Government was only ever going to take the edge off.’’

While Dunedin was not as badly impacted as other sectors, he admitted that ‘‘didn’t make it any easier’’ for those who were struggling.

‘‘This is why it’s important that we don’t slash and burn our budgets, [that we] keep investing in projects to help drive our economic recovery, and support our local businesses to pivot to new ways of operating in the short and medium term.’’

Nationally, there were 184,404 people on a Jobseeker benefit at the end of April — a jump of 32,600 in just a month.

In all, 346,121 people were receiving a main benefit, a 13% increase since the outbreak was confirmed in this country in late February. Many of them are lining up at Work and Income for the first time.

Finance Minister Grant Robertson said yesterday New Zealand was faring better than the United States, where 10% of the population had filed jobless claims, compared with 0.8% in New Zealand.

In Australia, which had a similar wage subsidy scheme to New Zealand, 1 million people were out of work, he said. — Additional reporting RNZ