Businesses call for support in restrictions

AUCKLAND: The reemergence of lockdown measures could sap more than $90 million from the economy and an Auckland business leader says firms need to know the Government will look after them.

Based on cost estimates developed by ASB during the previous lockdown, having Auckland at Alert Level 3 and the rest of the country at Alert Level 2 costs the economy about $440 million per week, or 0.15% of GDP.

ASB yesterday released an updated estimated, suggesting that impact would be about half what was designated in August.

‘‘This time around, we think the GDP impact could be slightly less than half that, given how NZ adapted in the last lockdown,’’ ASB said in a note yesterday.

With the lockdown set to last three days, the cost would be around $94 million under the revised figures.

This would increase only if the lockdown was extended beyond the initial threeday precautionary measures.

The fact that firms have been through this before should prepare us for this latest lockdown development, Auckland Business Chamber chief executive Michael Barnett said.

‘‘Businesses should have had a plan in place, they should have been expecting that at some point we were going to come back here.’’

However, he said some businesses were still facing economic hardship from the last lockdown and he was calling for a fresh subsidy to help with the latest situation.

‘‘I think Government should send a signal to business that they’re going to look after them.’’

Mr Barnett said hospitality and food and beverage firms were running ‘‘close to the line’’ and this latest snap lockdown would not help.

He said businesses should have a plan to manage this and focus on their digital platforms to bring money in.

He expected the cost to be ‘‘heavy’’ for some.

‘‘Many businesses took out loans last year. They were in a process of meeting obligations of those loans and they’re going to have no income but they’re going to have the cost of staff.

‘‘The quicker the Government sends a signal that there’s going to be a subsidy or there’s going to be support, the greater the confidence that business can get through.’’

Mr Barnett said it was now a matter of holding out for the vaccine.

‘‘What business has to do is not see this as a disaster but make the three days work. They should have a plan to manage this and they should be looking at how can they use the digital platforms that they’ve probably created over the last six to 12 months, communicate well with their customers and keep their businesses alive.’’

Last August, ASB modelled a range of costs based on different alert levels.

They range from a weekly economic cost of $1.6 billion (or 0.54% of GDP) if the whole country went back into Level 4 lockdown, to $166 million (or 0.06% of GDP) per week with the whole country at Level 2.

ASB has since revised these estimates, saying the overall impact would be around half that which was projected in August last year.

The return to higher alert levels would have uneven impacts throughout the economy, ASB senior economist Mark Smith said previously.

‘‘New Zealand was operating at about 95% of capacity at Level 1, with the shift to Alert Level 2 and 3 seeing capacity utilisation fall to anywhere from 80% to 92% of economywide capacity,’’ Mr Smith said.

Having Auckland in Level 3 carries enormous economic weight.

According to official estimates, Auckland accounts for broadly 38% of NZ’s GDP and around 33% of employment, and onethird of the nationwide population. — The New Zealand Herald