Coronavirus: Taking the pulse of provincial and small town New Zealand in lockdown

Saturday, 25 April 2020

Before Coronavirus, things had been looking up for Tokoroa.

The surrounding area had experienced significant growth since 2015, with more than 50 per cent of its GDP coming from agriculture, forestry, timber and paper, and engineering.

* Waikato businesses prepare to open doors when restrictions ease

* Landlord calls for rates freeze and relaxation of rules

* Drop to Level 3 may not be enough to save main street retail in small towns**

But as China started to shut down over Covid-19, the central North Island timber town was an early casualty.

The Kinleith pulp and paper mill is one of its biggest employers. The sudden downturn in demand for logs from China hit hard.

But Francis Pauwels, economic development manager for the South Waikato Investment Fund Trust (Swift), is confident Tokoroa has 'a damn good chance of recovery'.

It had seen boom and bust cycles before; its people were resilient.

'It's going to be tricky because we are a relatively small economy with a relatively narrow range of industries, so we haven't got that big diversity that other places have got.'

But there was plenty of land available, demand for local products and good rail access.

'Never waste a crisis,' says Pauwels. 'Look at this as a gift that has given you a bit of a slap around but also the eyes towards sustainability, resilience, and as a basis on how you're living your life.'

According to the Ministry of Primary Industries, under alert level three, all primary sector businesses will be able to operate so long as they can meet Covid-19 safety guidelines.

The Kinleith Mill, 8km from Tokoroa, was earlier deemed an essential service, but Oji Fibre Solutions said the business had been operating at less than 70 per cent during the lockdown.

Philip Millichamp said the immediate effect was a 20 per cent pay cut for the duration of lockdown for those who could not come to work. The company was also forced to review spending on capital projects and contractors.

'This will impact our communities because our large pulp and paper mills normally spend millions of dollars on external services, such as engineers, tradespeople and the like.'

The Kinleith paper mill looms large over Tokoroa.

He said it was fair to say the company was 'sitting on a knife edge' at present.

'However, what makes us most optimistic is our people.

'The reaction of our employees from Tokoroa and other nearby communities to the level four lockdown measures was inspiring.

'A lot of leadership was demonstrated, and the business is very proud of this. So, we think with communities like this there is a great deal of hope for the future.'

FIRST THE DROUGHT, NOW THIS

In the Far North town of Kaitaia, times were tough for many even before the lockdown. Unemployment was already in the double-digits, and the worst drought in decades was taking its toll. Now, forestry and fishing are taking a hit.

Some retail shops will not re-open, Kaitaia Business Association chairwoman Andrea Panther said.

I know at least one in the retail industry who won't be [re-opening].'

The town's many cafes, restaurants and fast-food providers will also struggle, Panther said.

While the lift to Covid-19 alert level three on Tuesday means eateries can offer contactless orders, many in Kaitaia cannot afford to offer deliveries and will remain shut, she said.

New Zealand's northern-most town has just 5000 residents but is a service centre for the wider Far North area. International tourists - such as those wanting to see Cape Reinga - are another lost income.

According to the 2018 Census, Kaitaia East had a 12.6 per cent unemployment rate - more than three times higher than the national rate of 4 per cent. The median income was just $19,800, far below the national average of $31,800.

But Panther is optimistic Kaitaia will be able to steer a way through the crisis.

Kaitaia was struggling with high unemployment before the lockdown and is bracing for another hit

The town's strength comes from a close network of providers, businesses and leaders, with regular network meetings, she said.

Kaitaia and other Far North towns are about to market themselves to Aucklanders, encouraging them to get to know the treasures of their own country.

'Cape Reinga is not just about the lighthouse, it's the spiritual story and history. We also have 20 beaches within 20 minutes.'

There are also hopes for jobs from infrastructure projects funded by central Government to get New Zealand back working.

'Initially, we're going to enter that big dive but as we get these projects underway, the redevelopment will work.'

TAIHAPE: ONCE A TOWN OF JOBS

At 3.2 per cent unemployment, Taihape's unemployment rate was low enough that anyone who wanted to work could before Covid-19, says Taihape Community Development Trust trustee Jill Duncan.

Duncan, a farm owner, said she was hoping the Government wage subsidy would help keep people in jobs as long as possible.

She said the businesses that survived had been forced to introduce takeaway as a permanent fixture, and set up websites for online trading.

Taihape is another small town waiting to feel the full impact of the coronavirus lockdown

But not everyone had the digital skills to adapt, and there were also parts of the community that did not have internet access.

As a farmer herself, Duncan said it was mostly business as usual but they had struggled to get stock processed at the freezing works.

This put pressure on winter feed, specially as the town had been at the mercy of drought this year.

Rangitikei mayor Andy Watson said the town's freezing works was only running at 50 per cent capacity due to social distancing rules, and that was creating long term impacts for farmers.

But he was confident the town's agricultural base was also the key to its recovery.

'The world will always want our food stuff. We don't have a lot of reliance on industry in terms od manufacturers.'

'WE'VE LOST THE FISHERMEN'

Gore Paper Plus owner and GoRetail spokesperson Doug Grant says the town might not be hit as hard as some of its neighbours, like tourist meccas Te Anau, Wanaka or Queenstown - 'but there has been an impact'.

'I've talked to building firms who have been impacted in the short-term. One guy has lost three home builds, another one lost one build, so it is impacting.

'But it's yet to really develop, it's all very good now because most retailers are getting a subsidy from the Government. Some people think they've been on an extended Christmas-like break, but will have an impact.'

He's expecting at least one local business to close, and there could be more.

The 2019 Gold guitar awards - this year's awards had to be cancelled.

Off he back of recent floods, it had been a tough time for local businesses.'

'We've now lost the Hokonui Fashion Awards, we've lost the Gold Guitars, we've lost the fishermen that come into town.'

The key to recovery lay in the hands of the local community.

'If people shop out of town, we haven't got a town. It's not just retail, it's the engineering businesses, the mechanics, it's buying cars, the lot.'

But Gore district mayor Tracy Hicks is optimistic.

'I am [hopeful] and I think it is relatively well recognised that the world has changed and we need to start thinking differently about a lot of things.

'I've got no doubt there are some pretty inventive and innovative people here that are already planning for what the future might look like, for their own businesses, and also for new businesses.'

SKI TOWN'S BOOKINGS DRY UP

Methven, a small town in the Canterbury region, has a permanent population of around 1600; but over the ski season, its population explodes.

Many Methven businesses are dependent on the influx of winter skiers to Mt Hutt

Mt Hutt Ski Area, the core of Methven's tourism industry, will only be able to operate once New Zealand has moved to alert level 2. But even at this level operational activities will be limited as the number of people on the ski field will be restricted.

Karyn Heald Robertson, a local business owner who has designed websites for many of the businesses in Methven, says the Government's wage subsidy has provided a lot of support to business owners impacted by the lockdown.

'There is a lot of uncertainty for everybody at the moment. Many businesses who would normally have a large number of bookings for the coming winter season, now have no bookings at all..

'Methven has a disproportionately large number of restaurants and pubs because of the ski area. But there is uncertainty if Mt Hutt will be able to operate and to what extent during the coming season. '

Robertson said Methven locals have pulled together to give their town the best fighting chance it has of bouncing back after the lockdown. She has been offering her services free of charge to get businesses online that hadn't been online before and a local graphic designer has also offered her services to help.

'Many of the hospitality businesses have been collaborating and kind of sharing the load to get ready to provide contactless services as soon as they can. That's the kind of town this is,' said Robertson.

The Ashburton District Council has also launched a campaign called 'Mid Canterbury Open for Business'.

Mayor Neil Brown said he was hopeful that domestic tourism would help offset the drop in international tourists.

On the tourist trail - cars, campervans and buses wait to drive through the Homer Tunnel linking Milford Sound to Te Anau and Queenstown

INTERNATIONAL TOURISM COLLAPSES

Te Anau, Southland's biggest tourist town, relies heavily on international tourists.

'Eighty-five percent of our tourists are international,' says Te Anau small business owner and Southland District Deputy Mayor Abel Kremer.

'Now with the borders closed it has had a significant impact on Te Anau. International tourism has collapsed, simple as that.'

An oil rig off the Taranaki coast - the region has had its ups and downs

The job now was to re-market itself as a domestic destination.

'Te Anau is still a fantastic market for visitors, it is a safe and clean place to come and visit and it is still unique.

'We've also got our farmers here and we've got our crayfish market here. That's a huge business, they've just re-opened again so that is good news.'

But there was likely still pain ahead.

'When that Government wage subsidy runs out after 12 weeks, I think we are going to have a second wave of problems where people won't have an income. They won't be able to pay for their food, their accommodation, and it could have that significant domino effect pretty quickly.'

'WE'RE HIRING'

Taranaki dairy farmer and Federated Farmers Taranaki branch president Mark Hooper said the local dairy industry was looking to hire, rather than lay off staff.

'One reason for this is the likely shortfall in skilled migrant workers who are now unable to get into the country. While some migrant workers had extensions to their visas and are able to stay on, April to June is traditionally the period when dairy visa approvals are at their highest and these people are now unavailable to the workforce. '

Hooper said commodity prices had been strong and milk production was slightly up on last season. A slowdown in meat processing had caused some concerns - but otherwise farming businesses have come through the lockdown period in good shape'.

'Coronavirus is going to change the way we do many things in the Ag sector but the fundamentals and longer term demand for quality sustainable food production are going to remain.

'From this perspective Taranaki is well placed to recover strongly and provide the year round grass-fed products consumers are demanding.'