Coronavirus: 12,400 job losses in Auckland CBD, report predicts

Wednesday, 6 May 2020

A new report is predicting job losses of more than 12,400 in the Auckland CBD as Covid-19 lockdown makes a financial dent.

Business in Auckland CBD could suffer more than 12,400 job losses by March 2021 due to the impact of coronavirus, a report predicts.

The report, by independent economists Strateg.Ease and released by business association Heart of the City, said it could take at least two years for business in the city centre to recover from the effects of Covid-19.

It also predicted a loss of $3.1 billion of gross domestic product (GDP) - the market value of goods produced in the city.

The outlook was 'significantly worse' than the Global Financial Crisis of 2007/8, when jobs fell by 4400, the report stated.

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A lack of international tourists, students and events has taken a toll on Auckland CBD businesses which provide the city with much of its vitality, Heart of the City chief executive Viv Beck said.

'Tourism, hospitality, entertainment, arts and culture and retail - the businesses that give the heart of our city its vitality and distinct character - are amongst the worst affected,' said Heart of the City chief executive Viv Beck.

The loss of international tourists and students and the cancellation of events took an early toll on industries, made worse by people having to work from home, Beck said.

Businesses would continue to suffer a severe impact once the country enters alert level 2, she added, many of which were already struggling due to construction work in the city.

'The drivers of a dense, busy city have now become major risks that need well-considered actions to address.

Auckland Chamber of Commerce chief executive Michael Barnett said smell and medium businesses need 'something here and now' on top of the government's GST relief scheme.

'For many, level 2 will have ongoing restrictions that impact their viability due to physical distancing and a lot less customers.'

Further action was needed for the success of the city centre in the future as most small businesses didn't have the resources for a two-year recovery process, nor to adapt to new operating models.

'We need a collaborative and sustainable approach to support our small businesses to ensure we have a vibrant city centre to showcase with America's Cup and APEC still schedules for next year.'

Auckland Chamber of Commerce chief executive Michael Barnett told Stuff last week that while the Government's GST relief scheme would help some businesses, it would not have a wide impact.

'Most small and medium businesses (SMEs) have slim margins and small profits. So they're not going to be able to benefit from this,' he said.

'They've had a month of having to meet operating costs, rent and rates, and they have had no income.'

'What they need is something here and now. The Government asks landlords to be reasonable, but the landlords have all the power. Small businesses have guarantees over personal assets and they are still at risk.

'The pain needs to be shared.'

Following two days of zero new cases of coronavirus, Prime Minister Jacinda Ardern lashed out at National leader Simon Bridges after he pushed the Government to move out of level 3 lockdown early.

He believed the prime minister should be making decisions 'every single day' about saving businesses.

Ardern responded to say the two-week transmission cycle of Covid-19 meant the news now reflected the level 4 lockdown - and she didn't have the 'luxury' of the Opposition in talking about decisions instead of making them.

'That member [Bridges] may have the luxury of sitting on that side of the House, not bearing the consequences of a wrong move, but we do not. We have to factor in the livelihoods of every New Zealander,' she said.