Coronavirus: Multi-billion dollar plan to save jobs as travel rules kick in

Derek Cheng, NZ Herald,
Publish Date
Mon, 16 Mar 2020, 9:35AM
An economic plan is coming tomorrow. (Photo / File)
An economic plan is coming tomorrow. (Photo / File)

Coronavirus: Multi-billion dollar plan to save jobs as travel rules kick in

Derek Cheng, NZ Herald,
Publish Date
Mon, 16 Mar 2020, 9:35AM

Ministers today will flesh out the details of a multi-billion dollar package aimed at keeping workers in jobs, businesses afloat, the healthcare system properly resourced and helping society's most vulnerable.

Prime Minister Jacinda Ardern described it yesterday as the "most significant package that I will announce while I am Prime Minister", hinting that it could be bigger than the $12b infrastructure package announced earlier this year.

It comes as another two cases of Covid-19 were confirmed - one in Wellington and one in Queenstown - taking the total in New Zealand to eight, while three people on a cruise ship off Akaroa were awaiting test results.

Australia also announced last night that it would mostly follow New Zealand's strict new travel restrictions, meaning anyone coming to New Zealand or Australia from anywhere in the world must self-isolate for 14 days.

The restrictions in New Zealand, which began at 1am today and will be reviewed in a fortnight, include an exemption for flight crews and cargo ships, and for people coming from the Pacific.

But people leaving for the Pacific will be given a health assessment, and no one with any symptoms will be allowed to go.

The global disruption from the coronavirus pandemic has economists saying that a recession is now inevitable, while the future of tens of thousands of Kiwi workers and thousands of Kiwi businesses remains uncertain.

The Golden Princess is in limbo until results are back for three of its cruise passengers.

About 20,000 people arrive in New Zealand daily while international visitors spend $300m-$350m weekly - but these figures are now expected to drop off dramatically.

• New travel restrictions mean all international arrivals must self-isolate, except those from the Pacific; Australia has announced similar rules.

  • Cabinet will finalise its "business continuity" package today, with details to be released tomorrow
  • It is expected to include wage subsidies, support for workers on sick leave or quarantine leave, and more health resources
  • It may also include access to capital, and cash for the most vulnerable, including beneficiaries and superannuitants
  • Super Rugby season is suspended and the Warriors are unlikely to play in New Zealand this year - while guidelines are expected on mass gatherings
  • New Zealand now has eight confirmed Covid-19 cases, including the first case in Wellington and the South Island
  • Golden Princess cruise ship passenger a suspected case, ship quarantined in Akaroa
  • Anyone feeling unwell should ring Healthline on the dedicated Covid-19 number: 0800 358 5453

Tourism Industry Aotearoa is calling the Government's economic response, to be released tomorrow, a "survival" package for workers and businesses, while Business NZ wants it to be broad rather than narrowly targeted.

A notice for walk-in patients at the Queenstown Medical Centre.

The package is expected to include wage subsidies so employers can retain workers, a "sick leave" or "quarantine leave" package to help cover workers' pay if they are unwell or in self-isolation, and a massive boost for health resources.

More staff will be needed to trace close contacts and do self-isolation spot checks, and more equipment will be brought in for pop-up clinics, more testing capacity, and treatment including ventilation machines.

The package may also include a cash boost to society's most vulnerable, including beneficiaries and pensioners, and a mechanism for providing access to capital so that businesses can remain viable.

The Government may borrow money to fund the package, and Finance Minister Grant Robertson has previously said that the Budget Responsibility Rules (BRR) - keeping net core Crown debt below 25 per cent of GDP - do not apply in extraordinary circumstances.

Business NZ chief executive Kirk Hope says no one should criticise the Government if it had to borrow money to fund its economic response to Covid-19. Photo / Michael Craig

Business NZ chief executive Kirk Hope said the package needed to offer immediate assistance, but also be focused on the longer recovery once international visitors can return to New Zealand without going into self-isolation.

"Frankly, if we need to move beyond the BRR to deal with an economic and health shock of this magnitude, I don't think anyone would have any problem with that."

He said the issue was so serious that it warranted a stimulus package in the same ballpark figure as the $12b infrastructure package.

The wider economic impact made a case for wage subsidies to be broad, he said, a sentiment shared by Tourism Industry Aotearoa Chris Roberts.

"This impact will be across all of New Zealand," Roberts said.

"There can be no regional targeting. It has to apply countrywide, and there will be thousands of businesses applying to keep their staff on - large businesses too. They can't be expected to retain staff when they're got no work for them.

"Realistically we are looking at six months without international visitors because the tap doesn't just turn back on."

International visitors currently spend about $300m to $350m a week, but Roberts predicted a $10b hole in international tourism earnings because that spending will drop to "virtually nothing".

Tourism is worth 5.8 per cent of New Zealand's GDP and adds $3.8b to the Government's books in GST-take alone.

It directly employs about 230,000 people, but there are almost 400,000 jobs in industries related to tourism, such as hospitality and suppliers of goods.

"There will be casualties. There will be businesses that won't be saved and there will be job losses. The question is how much the damage can be limited," Roberts said.

"It's a survival package - for the tens of thousands of jobs and the thousands of businesses."

The number of overseas arrivals - usually 20,000 a day - is expected to slow to a trickle under the new travel restrictions. Photio / Auckland Tourism

Yet he backed the Government's strict travel restrictions, as wider community transmission of Covid-19 would lead to far more crippling health and economic consequences.

Director General of Health Ashley Bloomfield stressed the importance of curbing the spread of Covid-19 to prevent hospital resources from being overwhelmed, as has happened in hotspots including Italy and Seattle.

There were now eight confirmed positive cases in New Zealand, with the two new cases being overseas travellers who were now in self-isolation.

Passengers on the cruise ship off of Akaroa were not allowed to leave until test results for three people were known, Bloomfield said.

Yesterday Ardern sought to allay fears about whether people would self-isolate properly, saying that the 10,500 people who had done it so far had been overly compliant, with some staying home for more than 14 days.

She said people who refused could be taken by police into a medical facility for quarantine, with staff stationed at the door - but that power had yet to be used.

She would not be drawn on the details of Tuesday's package, but expectations across the business sector and workers' groups were for it to run well into the billions.

"We are excepting something big and anything less will be a disappointment," Council of Trade Unions president Richard Wagstaff said.

Grant Robertson said these were "extraordinary times".

"We are in completely unprecedented territory here," he told RNZ.

"This is very different from the Global Financial Crisis where it was about the movement of capital and issues in the financial system. This is ultimately about people.

"This will have a long lasting impact on our debt levels and on Budgets, but we have to do what we need to do with this virus."

Asked about help for Air NZ, which employs 12,500 people, he said businesses should firstly contact their banks, but added: "We want our airline to be able to keep going."

National Party leader Simon Bridges said the Government should release the advice on which its new travel restrictions were based, and called for wider testing for Covid-19.

Ardern said by next week 1500 people a day could get tested, and it was up to clinicians to decide who to test.