Well it’s been a week where some voices from the past have been offering their comforting and discomforting voices. So what did we get? And are there any tricks we’re missing.
John Key has spoken a couple of times and there was some comfort to be found in his predictions. He, like all of us, knows the rest of the year is going to be extremely tough financially for all businesses and some in particular.
But he believes we’ll start recovering faster than some people have said. He thinks the regions will be hard hit. That Auckland will continue to grow slowly because of it’s economy of scale. He believes unemployment will reach double figures but not the 25 per cents that some predicts He believes property prices will slump but crawl back relatively well.
He said that businesses will take advantage of the crisis to trim fat from their employees, which is brutal but accurate. Never waste a crisis. He also thinks commercial property will flounder as staff numbers drop and more of us continue to work from home
His biggest concern was access to finance particularly to developers. And this is the big one. You need cash to oil the wheels of business and if it’s not coming in the front door then you have to borrow it from somewhere.
But his only concrete advice about what to do right now was to wake up each day and figure out another business that could go to work. In other words Level 2 the country or at least some sectors that could trade safely.
Today the pleasant baritone of former Finance Minister Stephen Joyce graced the airwaves.
He was asked what is the government missing. He too, like most of National politicians thinks we should go to Level 2.
Stephen praised the quick implementation of the wage subsidy, but that needs to be extended now because of the simple reason that firms that are not going to make it need to give thie employees 4 weeks notice. Which is a good point point. The 12 week wage subsidy started on March 17 so we’re in the 7th week and there are 5 to go. We really need to know this week and before May 11 or the Budget which is on May 14. 2 weeks from now.
He said the government has done a good job stimulating the manufacturing, forestry and construction sectors and he said that farming is still doing well. But he says the government needs to focus more on retail, hospitality, personal services, tourism, accommodation and international education sectors who are hurting more every day. He says the government is showing a bias towards the traditional trades and the traditional exports which is no bad thing but it’s not enough.
This is where we come to the uncomfortable truth. Most of the sectors he mentioned are not suffering because of the lockdown and when the lockdown ends they will not be in the clear. They’ve been smashed by the border shutdown killing overseas visitors. Tourism and accommodation are hardest hit and the hospitality that catered to travellers. You can’t have much of an international education sector if international students can’t enter the country.
No one is asking for the border controls to be eased and no-one will.
So what is the answer to that. Well Stephen didn’t say. Earlier in the week Mark Mitchell couldn’t tell us what his party would do to save the laundry dependent on washing motel’s linen. That’s because no-one knows what to do about that. Including the opposition So far the only policy National seems to be pushing is a change in levels which will do little to fix the endangered sectors
It appears as though the government is picking winners. The way Roger Douglas and Ruth Richardson did in dark days gone past. It appears that the harsh truth is that some sectors will not be saved. But nobody, particularly a politician, is prepared to say that out loud.
So from this week of wisdom from the titans of the past, the concrete proposals are these.
Extend the wage subsidy now and drop the levels. Perhaps sector by sector.
But it all seems too little and it’s rapidly getting too late.