Covid-19

Businesses urge clarity on lockdown lift plans

Jacinda Ardern has pushed back on calls to lift New Zealand out of lockdown early - but businesses say we need a roadmap for how and when we come out the other side

Business leaders have urged the Government to provide greater clarity about how New Zealand will move out of lockdown, saying a comprehensive plan is needed to give companies the confidence to rebuild.

With Covid-19 infection rates showing some early signs of levelling off, Prime Minister Jacinda Ardern has faced calls to lift the country out of Level 4 restrictions - something she has resisted, saying the full four-week period is needed for public health officials to understand the spread of the virus.

But business representatives speaking to Parliament’s epidemic response committee said, while it was understandable the Government could not provide an exact date for the lockdown lifting, it should be doing more to provide companies with greater certainty about the path ahead.

Former Business NZ chief executive Phil O’Reilly told the committee while the vast majority of the business community supported the Government’s ‘go hard, go early’ approach, “they also know that good public health and good economic health are two sides of the same coin - you can’t have one without the other”.

O’Reilly said thousands of businesses would have already been damaged by the lockdown, “many mortally”, despite its relatively brief duration.

Those that did survive the lockdown would be more vulnerable and were likely to employ far fewer people than they did a month ago, he said.

“For some, the only sensible course of action may be to close their business - it may be that or they lose their home.”

Many of the Government’s business initiatives to date had been welcomed by businesses, with the wage subsidy scheme particularly helpful for smaller enterprises.

However, there had been some confusion among government agencies with “double messages” and different approaches to the same issue, while there had been some confusion over the subsidy criteria and rules.

“Business is not really saying to government, tell us a date - they’re saying to government, tell us a pathway.”

There was a case for making the scheme more generous as time went on, while O’Reilly suggested the Government should consider employment law changes to allow the “furloughing” of workers - standing them down for a period of time without making them redundant.

The business community also had concerns about the fairness of some decisions “made at the margins” around essential services, with any perceptions of unfairness corrosive to trust in the Government.

“If they can support physical distancing and public health, in principle they should be allowed to open.”

O’Reilly said the Government also needed to be much clearer about how the move down from Level 4 would play out, so they could start to plan their own moves accordingly.

“Business is not really saying to government, tell us a date - they’re saying to government, tell us a pathway.”

Road Transport Forum chief executive Nick Leggett told the committee that while they were still allowed to operate, many trucking operators were now running at a loss due to the “arbitrary labelling” of different types of freight as essential or non-essential.

Leggett said the trucking industry had low margins and high levels of competition, with challenges for different companies even in normal times.

“People see trucks on the road and think every business is doing well - it’s not so.”

Trucks were travelling longer distances with lighter loads, and many companies would not survive beyond lockdown if the level of business did not increase.

Leggett also urged the Government to provide more detail about the pathway out of lockdown, saying it would assist the sector.

Federated Farmers president Katie Milne says many farmers fear being caught with excess stock on their farms over winter due to the lockdown. Photo: Lynn Grieveson.

Federated Farmers president Katie Milne said the farming sector faced an additional challenge with the looming winter, with pressure starting to mount with usual preparatory work yet to be completed due to the lockdown.

Farmers were working hard to move excess stock off their farm and through to meat processors in order to have the lowest possible number of cattle or sheep on their properties for winter, Milne said.

If they were unable to do so, some farms could have upwards of 20 percent more stock than usual, straining their feed budgets. Drought conditions had also limited the amount of excess feed in the market, with those farmers who did have stockpiles reluctant to put them on sale in case they got caught with extra stock.

There would also be longer-term price decreases, with milk and meat prices nearly halving after the global financial crisis. There had already been some changes in the meat industry, with animals that would usually have brought in “five-something [dollars] a kilo down to threes”.

Milne said the Government should pause some of its wider policy reforms in areas like freshwater and biodiversity, not to dodge the fundamental concerns behind them but due to the lack of work on the regulatory impact of the reforms.

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