Auckland lockdown cost $8b

Auckland’s Delta lockdown cost the economy $8 billion last year, according to Treasury’s best estimates.

The true cost will only be known when Stats NZ publishes economic data for the three months to December 2022 on March 17.

However, Treasury’s best estimates were included in a Covid-19 paper produced in November — a paper Treasury says still represents the most current estimate of the cost.

Treasury estimated the economic impact of Covid restrictions in Auckland between August 17 and November 5 — the period Auckland was at levels 4 and 3, and much of the period it spent at alert level 3 step 1 — cost the city $4.5 billion.

That works out as about 5.6 per cent of expected GDP for the whole country over that period.

Auckland’s lockdown, and level 2 restrictions, also hit the rest of the country, costing 4.2 per cent of expected national GDP.

The paper said that “GDP losses would have occurred even without alert level restrictions, as New Zealanders adjusted their behaviour in response to what likely would have been a more severe Delta outbreak”.

This number represents the economic cost of the lockdown, rather than the cost to the Government of the lockdown, known as the fiscal cost.

That number is quite difficult to calculate, but as of early November the Government paid out more than $5b in economic support.

As for the most recent interim Crown accounts, capturing the four months to October 31, Government revenue was actually $2.9b higher than expected at the May Budget.

However, expenses were also higher than forecast — coming in at $4.9b higher than expected.

Net core Crown debt ended up being $8.5b lower than feared, at $116.1b or 34.2 per cent of GDP.