The month our country stood still to combat health crisis
With the nationwide alert level 4 lockdown well under way, Tauranga Chamber of Commerce chief executive shares key messages and reflections from a business perspective.
The Government lockdown will be remembered for centuries. Never before has New Zealand’s economy stood still to combat a public health crisis.
As a result, most businesses are now experiencing what the tourism sector faced last month when the borders were closed to international tourists: The rug has been pulled out from underneath them and their revenue immediately cut off.
It has been a tough week seeing business owners in tears as some could not envision how their business would last a minimum of four weeks in lockdown.
The Government’s economic stimulus for businesses appears to have eased the initial shock for many owners, while the Government-backed mortgage security is helping businesses talk with their banks to restructure mortgages and finance short-term cash flow.
These avenues have provided a lifeline to businesses who were considering closing altogether, but it is not free money. These are commercial loans that businesses will need to pay back over time.
"We will bounce back, but it will take a lot of grit and sacrifice.
Business owners are now digging deep into personal savings to keep paying staff, rent, existing loans and to keep the lights on.
They will also have to factor additional debt servicing into already tight margins once the lockdown is over.
Now is a time for commercial landlords to step up and help their tenants get through the lockdown.
They should be passing on the depreciation tax deductions reintroduced by the Government.
It is in a landlord’s best interest to keep their premises tenanted as nobody knows what the economy will look like after four weeks or more of an economic standstill.
Ultimately, the economic impacts of this lockdown will be felt for years to come. It will take a decade or more for New Zealand taxpayers to pay back the Government’s debt.
Finance Minister Grant Robertson’s announcements are only the start of a generation of debt as the Government will need to have a leadership role in New Zealand’s long-term economic recovery.
As he said, the economy is more like an oven than a light switch; it takes a while to heat up and get going again.
The key to fixing our economic situation is to stop the spread of this virus.
New Zealand must do its part for the global community to stop the spread and therefore avoid elongated economic restrictions.
Despite the economic impact, I support the lockdown to try to get the nation’s economy back to normality faster than if we chose to do nothing.
We cannot allow our health system to be overrun as we have seen in Italy, Spain and Iran.
We cannot have over-worked and rundown healthcare professionals added to the death toll because we failed to stop the spread.
The challenges across the world’s economy are immense as most countries are facing similar lockdown restrictions to stop the spread.
The Bay of Plenty is New Zealand’s freight gateway to the world.
I am extremely proud of our nation’s food-producing strengths to feed international communities.
We will bounce back, but it will take a lot of grit and sacrifice.
We need to support one another as we’re all in this together.