Economy

Coronavirus ban extended another eight days

The Government has extended its ban on travel from China by another eight days until early March, but may provide an exemption for international students, while the Treasury is considering global recession scenarios.

Prime Minister Jacinda Ardern has announced Cabinet decided on Monday afternoon to extend its ban on travel by non-residents from China for another eight days until at least March 3, which takes the ban to a full month.

However, Ardern said the ban would be reconsidered every 48 hours and the Government was investigating the viability of having a targeted exemption for international students. Over 40 percent of international students who enrolled have not been able to start their studies.

She told a post-Cabinet media conference the health system was preparing for the eventual arrival of the Covid-19 virus. There were nine million P2 masks stored in New Zealand, along with nine million surgical masks. New Zealand also had prepared a record number of flu vaccine doses (1.46m).

Finance Minister Grant Robertson also spoke at the conference in the Beehive Theatrette, saying an economic advisory group made up of officials from the Treasury, Reserve Bank and MBIE had prepared a scenario analysis for Cabinet, including for a return to normal activity in China in the second quarter of 2020.

This was the base case, which was likely to see a global demand shock in the first half of 2020, before a rebound in the second half of 2020.

Global recession scenario

He said Treasury had prepared two other scenarios where the effects were longer lasting on the global economy. One involved an extended demand shock, while the worst-case scenario was for a global economic recession.

Robertson said he had asked Treasury to begin work on potential government interventions for each of those scenarios.

He later said the interventions could include direct support, such as the one-off payment made by the Australian government in the immediate wake of the Global Financial Crisis in 2008.

Cabinet had also asked officials to look at options for redeploying forestry workers to work for the Department of Conservation on track clearances and culling wilding pines.

Robertson said he would give more details in a speech in Auckland on Thursday.

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