Mackenzie hit hard and early

Covid-19 has devastated the Mackenzie’s economy, with the district taking a hit much sooner than others due to its reliance on the international visitor market, according to a leading economist.

Infometrics senior economist Nick Brunsdon said provisional estimates show the district’s economy contracted by 2.3 per cent in the year to June, compared to a national decline of 2.1 per cent.

‘‘Because the Chinese, in general, didn’t come to [the Mackenzie during] Chinese New Year, like they would have normally, the hit arrived in Tekapo in February.’’

Brunsden said the economic hit came before the Government’s wage subsidy scheme started and businesses may have let go of staff before any support was made available to them.

The Mackenzie District Council commissioned Infometrics to prepare a Quarterly Economic Report on the quarter to June 2020, which outlines the early impact of Covid-19 on the district.

The report, which was prepared by Brunsdon, says during the quarter, consumer spending in district was down 43.2 per cent which equated to a drop of $10.5 million. In the quarter to June 2019 the district recorded consmuer spending of $24.4m compared to $13.9m in 2020.

Tourism expenditure also accounted for a significant part of the drop, down $58m from $344m in the year to June 2109 to $286m in the year to June 2020. That equates to a decrease of 16.9 per cent in tourism expenditure in the district. Nationally, the decrease over the same period was 12.3 per cent.

But Brunsdon says it is not all bad news for the district, and a 20 per cent increase in spending during the July school holidays was a ‘‘promising sign’’.

‘‘Pivoting to attract domestic tourists will be essential for the district in the coming years,’’ he said.

‘‘Pivoting to attract domestic tourists will be essential for the district in the coming years.’’ Nick Brundson Infometrics senior economist

In June there were 76 people receiving the Jobseeker Support payment and 24 receiving the Covid Income Relief payment.

The number of recipients of the Jobseeker Support payment in Mackenzie increased 82.2 per cent in the year to June 2020. The national increase in the same period was 19 per cent.

Brunsdon said Mackenzie’s relatively low number of people on the Jobseeker Support payment pre-Covid distorted the figures.

‘‘Certainly coming off a very small base is probably a key factor in that rise, as much as the fact that tourism has been affected dearly and that kicked a lot of people out of employment in tourism.’’

His report was tabled at the council’s meeting at Fairlie on Tuesday.

Mackenzie District mayor Graham Smith was upbeat despite the report.

‘‘We fall below country averages by quite a bit in some areas, but then it’s been a particularly bad quarter’’.

Smith said the greatest economic concern facing the area now is an ‘‘extreme labour shortage’’ caused by the loss of migrant workers.

‘‘Our foreign and migrant workers have been a crucial part of running our businesses in the Mackenzie. I can’t think how we’re going to fill those [jobs] with Kiwis. They aren’t here,’’ he said.

‘‘Just take the Hermitage [Hotel] alone, there were 176 workers. They have gradually got back around 70, but the balance is gone. Where do you find them?

‘‘All those that were on temporary visas, the Government’s first call was to repatriate them. We have a real deficit of people in Mackenzie to actually service the industries,’’ he said.

Smith said there had already been work done in the dairy industry to get back its migrant staff who left the country.

‘‘There is a case to try and get some of these people back to fill our skills needs,’’ he said.

Mackenzie District Council transitional manager Tim Mulcock told the meeting there was ‘‘anecdotal evidence that the local economy has bounced back’’.

‘‘While this presents a bit of a significant downturn, reality is that the next quarter will be more positive.’’

‘‘Our foreign and migrant workers have been a crucial part of running our businesses in the Mackenzie. I can’t think how we’re going to fill those [jobs] with Kiwis. They aren’t here.’’ Graham Smith Mackenzie mayor