Pandemic to have profound effect on economy
When Arun Chaudhari made a brutally honest prediction about the effect of the coronavirus crisis on the Taranaki economy he faced criticism, but his chilling forecast is coming true.
On March 15, ten days before New Zealand moved to Covid-19 alert level-4 and the country was plunged into a four-week lockdown, the head of the Taranaki Chamber of Commerce said the economy was going to take a bigger hit than anyone had ever imagined.
Halfway through the lockdown, thousands of workers have already been laid off nationally and further redundancies are on the cards as businesses struggle.
The Ministry of Social Development
was processing around
100,000 applications for wage subsidies on April 1, and had paid wage subsidies to more than 500,000 employees so far.
The government has forecast the economic impact to significantly exceed the 2008 Global Financial Crisis.
Taranaki’s business leaders are predicting the impact of the pandemic will be felt for years.
Chaudhari said his insight had not been welcomed by everyone.
‘‘We had a phone call from a business person who was very negative. He said how dare you say such stuff, it’s absolute nonsense.
‘‘He got almost abusive and said Taranaki will be fine.’’
But while there was fear and uncertainty in the business community, there were also positive signs, Chaudhari said.
‘‘The primary industries are doing well and in fact they are increasing their revenue.’’
The fallout from the pandemic and lockdown would hit the retail, hospitality and tourism industries the hardest, with more than 100,000 people predicted to lose their jobs nationally.
Chaudhari said people were not going to travel as much in the near future and businesses were going to need to be innovative.
‘‘The world has definitely changed. It will be a new set of rules. People can survive but they have to reinvent themselves and re-model their business and work smarter.’’
Chaudhari praised the government for its swift action but said more was needed.
‘‘If they want to keep the economy vibrant they have to come to the party for a longer duration.’’ Venture Taranaki chief executive Justine Gilliland said the effects of the pandemic would have a profound impact. ‘‘There is a strong likelihood that we won’t be returning to business as usual. She said the change would bring both challenges and opportunities.
‘‘All of our region’s enterprises need to think about how they can respond, how they can remain agile despite many uncertainties, and how they can deliver value to their staff and customers at this time.’’
New Plymouth businessman
Doc van Praagh believed the Government needed to be doing more to help small-to-medium businesses which had not been able to operate during the lockdown.
‘‘For the nation to come out the other side of this terrible pandemic-caused lockdown, we need as many of these businesses to survive and start cranking so the nation will have more employment, income and tax,’’ van Praagh said.
His bars, Crowded House and Stumble Inn, had not been able to open during the lockdown and were feeling the effect.
‘‘At the moment it has eaten up all of our cash reserves.’’
Former New Plymouth mayor and hotelier Peter Tennant has had to lay off almost 80 per cent of his staff at the Devon Hotel and has predicted it would take years, not weeks or months, for businesses to recover.