Coronavirus: Lockdown will reveal New Zealand’s ‘silent heroes’ as ‘economy goes on ice’ – economist

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However, with New Zealand cut off from other trading partners, who are also dealing with the respiratory illness, and now having domestic operations mostly ceased, our economy is in for a gut-punch. Anticipating the hard times to come, the Government has implemented a raft of economic measures, like wage subsidies, mortgage holidays, loans and benefit increases.

But the lockdown, which will last for at least four weeks, is unprecedented, meaning there is no playbook to work out of, according to economist Shamubeel Eaqub.

“We are working really hard to find out what is actually happening on spending,” he told The AM Show.

“This month of the lockdown, the economy is on ice. We are not going to go about our everyday lives, we are going to see a significant contraction in the economy.”

With people staying home and alternative working methods set up, often remote to workplaces, Eaqub says there are some things we can expect, but others, like who are essential to our economy, which will only become clear as the lockdown progresses. 

“We are going to see lots of things change. Our electricity use will go down a lot because factories and offices use quite a lot of our power. We are going to see things like internet use go up a lot because we will be at home streaming videos and working from home,” he said.

“We don’t have a very good daily read of it yet, but we are going to see essentially what are the basics of life that New Zealand needs and who are the people that hold the fabric of the New Zealand economy together.”

The Government has compiled a much-debated list of what are New Zealand’s essential services and businesses. That includes those on the front-line, like supermarkets, pharmacies, and petrol stations. But also those behind the scenes, working in freight or in the primary industries. 

“These are the silent heroes of our society and economy. So when we shut everything down, these are the people who have to keep working because without them, everything grinds to a halt. We still have to make sure our medicine comes in, our food is there and the basics of life go on.

“There will be a lot of argy-bargy around whether it is exactly the right list or not, but really we need to make sure we protect as many people as possible.”

Eaqub said the economic recovery package unveiled by the Government last week, which totalled more than $12 billion and which was extended this week with new measures, will become pivotal in ensuring New Zealand comes out the other side of this harsh economic period somewhat secure.

“When we come out the other side, we still have the businesses that exist and still have the jobs that are secure. If we can do that, then at least the recovery out of this is going to be better than most other countries.”

There are 205 confirmed or probable cases of coronavirus COVID-19 in New Zealand. Worldwide, there are about 440,000, with nearly 20,000 people having died of the illness. In an effort to stop its spread, most countries have closed their borders, leading to airlines pulling out of routes and trade lines being disrupted. The tourism sector has also been shattered as a consequence. 



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