Trans-Tasman practicalities
Beyond boosting visitor numbers, a trans-Tasman bubble could lead to long-term strategies, experts say. Katie Kenny and Amanda Cropp report.
Roman Jewell, chief executive of peanut butter company Fix & Fogg, was meant to be in Texas this week. Instead, like many Kiwis, he’s been forced to cancel travel plans and remain at home in Wellington. And, like many business owners, he’s upping digital marketing efforts and reaching out to Instagram influencers.
While there hasn’t been much disruption to Fix & Fogg’s day-to-day trade, he said, the lockdown has seen his shops shuttered and the cancellation of trade shows around the world would make it difficult to crack into new, overseas markets.
Fortunately, the company in February set up a new factory in Houston, after it struck a deal to supply gourmet grocery chain Central Market in Texas.
‘‘We went on their shelves last week.’’ Jewell was supposed to be there, doing tastings. Still, the peanut butter is selling. ‘‘Honestly, we could just camp out in Texas for 10 years. There are 29 million people there.’’
Opening the borders and allowing quarantinefree movement between Australia and New Zealand could allow other local businesses a similar opportunity to expand, he said, particularly as hospitality was hurting.
Both governments have started work on the socalled trans-Tasman bubble. In a joint statement, Prime Minister Jacinda Ardern and Australian Prime Minister Scott Morrison said the safe travel zone would be mutually beneficial.
The move could help both countries recover from the economic effects of the coronavirus pandemic, as travel to and from the rest of the world was off the cards until the virus was under control, most likely with a vaccine.
Given there has never before been a coronavirus vaccine for humans, and the record for developing an entirely new vaccine is at least four years, experts are saying any international return to normalcy will be years from now.
On Tuesday, the Australia New Zealand Leadership Forum announced the formation of the Trans-Tasman Safe Border Group, to investigate and help establish the bubble.
Morrison told media the bubble was ‘‘still some time away’’, with the safety of each country’s citizens remaining the priority, but it was important to flag early as it would be an important part of economic recovery.
The Pacific Islands would probably be the next countries to join the bubble, while some experts were hoping countries in Asia would also be added when possible.
Infometrics senior economist Brad Olsen said that given New Zealand’s top exports with Australia were service focused – with travel, ‘‘other business services’’ and transport service being the top three by value – an opening of the borders would be beneficial.
New Zealand Travel Brokers director Steve Lee said he was keen to see the development of the trans-Tasman bubble to give local operators an international product to sell.
Along with the rest of the industry, the Palmerston North company had to refund clients forced to cancel trips owing to the global pandemic.
Following news about borders potentially reopening, Lee said he had already received inquiries about travel to Australia and the Pacific, as well as domestic destinations.
‘‘[We are] getting inquiries and bookings for domestic travel and once we are in level 2, I’m sure that demand will step up.’’
Tourism Minister Kelvin Davis said launching the trans-Tasman bubble sat between the recovery and rebuild phases of dealing with Covid-19, but he refused to speculate on a time frame.
‘‘Health has to be our number one priority, we have to work in parallel with the Aussies.’’
He didn’t rule out allowing travel only to and from specific states in Australia, depending on Covid-19 case numbers.
‘‘These are the sorts of conversations we have to have, there’s a bit of work in the background about the logistics with engagement at foreign affairs level, customs, immigration and certainly at a health level.
‘‘It’s too early to say what it may look like, that you can fly from Perth but not the Gold Coast, it’s way too soon to make those calls,’’ Davis said.
That was for the Australians to work out, he said. ‘‘We have to focus on our side of the Tasman and make sure we get it right, so we’re ready at the first possible opportunity.’’
Davis said the number of Australian visitors could exceed the 1.5 million that came to New Zealand last year, if it remained the only option for Australians wanting an overseas holiday.
‘‘If 10 million Australians are not flying off overseas, and they’re looking for somewhere to go, and New Zealand is the only place open, we could see more Aussies than we anticipate, which is a blessing in some ways, but it could create more problems in other ways if we get more than we can handle.’’
NZSki chief executive officer Paul Anderson said his view of a trans-Tasman bubble was rosy, but he didn’t expect it to become a reality this year.
The Queenstown fields were expecting to see a quarter of their normal numbers, based on a domestic market, he said. Mt Hutt, which had a bigger local customer base, was expecting to see about half.
‘‘Australians make up about 40 per cent of our market in Queenstown and 10 per cent at Mt Hutt, so [the trans-Tasman bubble] would be a huge positive not only for us but our communities, with guests spending in cafes, bars and accommodation,’’ Anderson said.
He hoped businesses currently struggling, such as those in accommodation and hospitality, could survive long enough to see international visitor numbers pick up again.
Infometrics’ Olsen said if they didn’t, it could be hard for tourism-heavy regions to ramp up again quickly. ‘‘I wonder if that’s another issue that might be looming.’’
Only time would tell, too, whether Australian and domestic tourists would spend the money they previously have, given many have suffered hits to discretionary funds.
Conservative spending habits could also prove painful for New Zealand businesses exporting goods across the Tasman, Olsen said.
‘‘Given the scale of disruption over there, even though it hasn’t been as much as what we’ve seen domestically, there’s still going to be some restraint on spending.’’
Scotty Baragwanath, owner of five-year-old company Blue Frog Breakfast which championed locally sourced ingredients, said its cereals were sold in 400 independent stores across Australia and in Harris Farm Markets in Sydney.
Demand in both New Zealand and Australia had spiked as people rushed to stock up before the lockdown periods. However, demand had
We have to focus on our de of the Tasman and ake sure we get it right.’’
Tourism Minister Kelvin Davis
remained continual, if not higher than normal, since then. ‘‘People are home having breakfast again,’’ he said.
‘‘We’ve actually seen business continuity and if anything an increase domestically, with that mirrored in Australia.
‘‘We haven’t seen any delays in shipping times. It’s really been business as usual.’’
He hoped a trans-Tasman bubble would result in more Kiwis and Australians valuing ‘‘Anzacsourced’’ products, as countries around the world focused on supporting local goods and services.
The opportunity for all New Zealand food manufacturers after the Covid-19 crisis was that people would be much more aware of where their food came from, Baragwanath said.
‘‘We’re already seeing a trend towards localisation and on keeping things a little bit simpler.’’
Dr Hongzhi Gao, an associate professor at Victoria University’s school of marketing and international business, hoped the trans-Tasman bubble would lead to long-term cooperative manufacturing strategies for the global market.
In particular, there was an opportunity in providing medical supplies, he said, given trust in supplies coming from China in particular had been compromised by faulty equipment.
‘‘New Zealand is viewed as a very trustworthy country. If international buyers don’t trust China, they’d trust New Zealand and Australia,’’ Gao said.
Personal protective equipment, ventilators, and other medical supplies were ‘‘life-saving’’ products that were in short supply, he said.
‘‘There’s over-reliance on sourcing from China, and it’s something [Australia and New Zealand] should look into.’’
In terms of what New Zealand could bring to the table: ‘‘We can do things Australia mightn’t be willing to try,’’ he said.
‘‘We have a small government and an entrepreneurial culture.
‘‘In order to have an innovative economy you need innovative consumers, and we’ve got those, too.’’