Business needs looser rules now
New Zealand has crushed the curve of coronavirus cases. We have only a handful left. But even under the loosened rules of alert level three we are continuing to crush far too much of the economy.
Small businesses remain locked in a mortal struggle to survive. And broad government bans like that against most retail trade mean that tens of thousands, maybe more, remain inoperable or with only a meaningless trickle of trade.
The Ministry of Business, Innovation and Employment says it doesn’t know how many of the country’s small businesses were unable to trade in alert level four, and it doesn’t know how many remain in that predicament now.
But we do know that these firms (defined by Stats NZ as those with under 20 employees) numbered 487,000 at the last tally. They constituted about 30 per cent of the workforce. And their owneroperators often risk personal assets to secure both bank loans for the business and a commercial lease for premises.
Treasury has used modelling to understand both unemployment and GDP in light of policies to contain coronavirus. But it seems not to have considered bankruptcies.
Nevertheless, without swift action, many of the stories of these entrepreneurs will unfold as tragedies, a term favoured by Prime Minister Jacinda Ardern, and those tragedies will be written, not simply in financial loss but in shattered lives and ambitions.
A range of small operators spoke to the Epidemic Response Committee on Tuesday: a Wellington chiropractor, the owneroperator of a cleaning business in Dunedin, several bar owners, a landlord and shopping mall owner.
They were a disparate group and they wanted varied help from Government. They asked for help renegotiating leases, an immediate cash injection to help cover expenses that have not stopped alongside the sudden end of revenue, and perhaps most nettlesome, they want the Government’s trust to operate within looser rules to give them a chance to get back up and running again.
This last plea underscores a difficult point for the Government. The locked doors of business remain, to a disproportionate degree, New Zealand’s continued health response to coronavirus.
Lockdown, after all, is a substitute for a health system that can shoulder the burden of containing a communicable illness.
When a crushingly hard lockdown was speedily announced and somewhat chaotically enacted in March, there were many reasons to accept at least most of its privations.
But we are now more than five weeks on from that juncture. Those weeks, the health experts told us, needed to achieve two things. The first was the control of viral spread to below the critical rate of one, whereby cases would dwindle to zero or close to it. That was achieved some weeks ago.
The second objective was to prepare a system to maintain that very low rate of viral spread. When that was achieved, strict measures could be lifted, though to be fair, ongoing border closure was always going to take much longer and many businesses in tourism especially would not survive.
Small business owners understood Government unpreparedness back in March. But as we head into May that patience is fraying.
As Glenfield mall co-owner Dallas Pendergrast fumed to the Epidemic Response Committee this week, ‘‘the virus is contained, let’s be real. To try to prolong this because another person might pop up out of a cluster is insane’’.
Though she may not have read the report by Ayesha Verrall of the University of Otago to the Ministry of Health of April 10, Pendergrast has hit on one of its critical recommendations.
A health system with a widespread and rapid testing regime coupled with effective contact tracing, it suggested, has over 90 per cent efficacy against Covid-19: ‘‘as effective as many vaccines’’.
Such a system, then, would allow for much wider commerce. But do we have it? Director-general of health Ashley Bloomfield recently touted a much improved contact tracing regime. The Ministry of Health now reports that 80 per cent of close contacts were traced within 48 hours of a case being notified to public health units.
But a far broader achievement is required for the kind of efficacy Verrall described. She said the system must achieve the isolation of
80 per cent of close contacts for a
Covid-19 index case (originating case) or for someone exposed to an index case within four days of the onset of that case’s symptoms.
It’s not clear how close our system is to reaching this ‘‘critical’’ measure. When queried, Emily Barrett, senior media adviser for the Ministry of Health, said she was still ‘‘pursuing an answer’’.
That’s the nearest thing we have to a reason for the continued risk of so many livelihoods. Their loss would be a tragedy which, the prime minister might remember from school days, is a narrative structure that belongs to an ancient tradition of storytelling. Its drama is not derived from terrible things like death or poverty but from a radical change in fortune.
- Journalist Kate MacNamara has covered business and trade for the Canadian Broadcasting Corporation, and worked for the BBC