Buckle up: it could be a rough time ahead

It was sobering stuff listening to Finance Minister Grant Robertson the other day outline the likely effects of coronavirus on New Zealand.

Treasury and the Government were modelling three scenarios, Robertson explained.

Scenario one predicted a temporary global demand shock, and a temporary – but significant – impact on the New Zealand economy across the first half of this year.

Scenario two envisaged a longer-lasting shock where there were cases of coronavirus in New Zealand and the global impact fed through for a period of time. Scenario three involved planning how to respond to a global economic downturn and a worse-case scenario of a global pandemic.

Nobody knows but with the first case reported here, we may already be on the brink of scenario two.

Couple that with the effects of a severe drought and it could be a tough winter for many businesses and workers.

But let’s remember that we’ve been here before: I remember the sense of gloom and calamity that greeted the global financial crisis.

Those were tough times for many people, but New Zealand showed itself to be an incredibly resilient economy. We bounced back, some would argue stronger and better than before.

This is not the GFC of course; people will get very sick. But we have much on our side; a responsive health system, a bureaucracy that is nimble at dealing with crisis and last but not least, we have shown time and again that adversity brings out the best in us as a country.

The Government will be looking at how to help people ride out the short-term pain; with some sectors already laying off workers, measures like waiving the benefit stand-down period, or more food grants, are presumably on the table.

However, as long as we all do our bit – keep an eye out for our neighbours, the elderly, the lonely and the vulnerable in particular – we’ll hopefully do alright.

Adversity brings out the best in us as a country.