Businesses brace for Covid-19 lockdown decision: 'If it's safe, it should be open'

Friday, 14 August 2020

Michael Barnett, CEO, Auckland Business Chamber, is set to step down after a 31-year run of the top job.

The head of the Auckland Business Chamber has laid down a challenge to the Government to widen its scope of businesses allowed to operate if another lockdown occurs.

Chief executive Michael Barnett said that while elimination was still the goal, ''without a vaccine we have to learn to live with it''.

''Many small businesses, particularly in hospitality and retail, are teetering with reserves run down, jobs at risk and confidence shaken, forced to shut their doors because they are not on the Government’s list of essential retail and services,'' Barnett said.

A public health expert is predicting the Alert Level restrictions will be extended because of the growing number of cases in Auckland.

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If businesses could follow the strict compliance and social distancing requirements, he did not see why they could not stay open.

David Searle, managing director of business advisory firm Baker Tilly Staples Rodway says his clients’ biggest concern is an escalation to level 4 after Friday's announcement.

“Why can a dairy open and a supermarket sell fresh fruit and vegetables, but your local greengrocer cannot?

‘’What we’re saying is as a business community, you could stop some of these businesses that are at risk, you could help save them simply by allowing them the opportunity to comply.’’

Barnett said he also knew of some international manufacturers whose orders were being greatly affected by the uncertainty, and might pull out of the country if it continued.

‘’I was speaking to some today down in the Bay of Plenty who were saying, you’re putting my business at risk.’’

However, he said there was also no room for being lax. Smart technology and robust systems was needed to speed up testing, tracking and tracing Covid cases, but ‘’without leaving New Zealand stranded as an island fortress at the edge of the world”.

It has been estimated that it costs the country about $450 million a week to keep Auckland in level 3 and the rest of the country in level 2.

The Restaurant Association's Marisa Bidois says the hospitality industry hasn’t completely recovered but has regained its footing.

About 250,000 workers in Auckland are unable to operate, and between $60 million and $69m of retail spending was expected to be lost in the lead-up to the weekend.

There could be a 0.15 per cent to 0.5 per cent reduction in GDP for every week Auckland stayed at level 3.

A move to a nationwide alert level 3 would cut roughly 0.3 per cent off the country’s annual GDP. Should the country move to alert level 4, every week of lockdown would reduce annual GDP by 0.5 per cent, ASB economists estimated.

David Searle, managing director of business advisory firm Baker Tilly Staples Rodway, said his clients’ biggest concern was an escalation to level 4 after Friday's announcement.

“There would be such a handbrake on economic activity … We've got to be so wary of moving to the level 4 model we had last time,” he said.

It was important to allow as many businesses as possible to continue operating at some level. For example, greater use of click and collect for businesses at higher alert levels would alleviate some pressure, Searle said.

A Restaurant Association survey showed that more than 50 per cent of members supported contactless takeaway delivery at level 4, should a return be announced.

Chief executive Marisa Bidois was appealing to the Government to allow restaurants to remain open for contactless delivery at all alert levels.

In March, 98 per cent of all hospitality businesses could not generate any revenue.

“Delivery options continue to be made available to other businesses such as online retail and supermarkets. Our industry has already proven it can operate a safe contactless service at level 3, so we see no reason why these couldn’t be extended to level 4,” she said.

The association was also calling for the delivery of fiscal relief to the sector, as more than 50 members had closed resulting in around 1000 job losses. More were anticipated when the wage subsidy ended.

The scheme would need to be extended if lockdown dragged on, she said.

Searle said there was an element of having to live with the virus.

Given that the Government had admitted total eradication was unlikely, completely locking down every time a new case emerged would be completely catastrophic to the economy.

The Government had to look after public health outcomes but long term negative economic performance would also cause negative public health outcomes, he said.