Champagne holidays on a beer budget: The true cost of the ‘Great New Zealand Shutdown’

Sunday, 7 December 2025

Summer holidays are essentially an enshrined right for most New Zealand workers.

Tracy Watkins is editor of The Post and Sunday Star-Times.

OPINION: The “silly season” is nearly upon us. We are already looking ahead to barbecues, beaches, and long hot summer days (we live in hope).

No news is good news for some, though not for journalists rostered to work through the summer break. Hence the silly season label: stories that wouldn’t have passed muster a month ago are suddenly front-page news. Cat up a tree, anyone?

But while the media scrambles for content, much of the rest of the country engages in the “Great New Zealand Shutdown”. Desperate phone inquiries go straight to voicemail, government departments close their doors, tradies become scarce, and contacts switch their status to “do not disturb” for three long weeks.

We know we’re nearly there because conversations are increasingly ending with, “Let’s just get through the next couple of weeks and we’ll revisit this next year”.

While a minor inconvenience for journalists ‒ and a source of envy for those in essential industries where a summer holiday is a pipe dream ‒ there is a deeper problem to consider: productivity slumps. It is a phenomenon we share with Australia, though their dip is masked somewhat by a mining sector that keeps the lights on 24/7.

Business director and investor Toss Grumley recently suggested the shutdown had become too extreme and was actively contributing to our economic woes. He argues the “summer mentality” is extending from weeks to months, with “let’s circle back mid-February” becoming an increasingly common refrain as early as November.

Who doesn’t dream of a summer holiday after the year we’ve had?

“Which means while many are at work, they aren’t doing much productive work,” Grumley says.

Grumley took heat on LinkedIn for his comments, which isn’t surprising. There is nothing more sacrosanct than the Kiwi summer holiday. We are privileged to have generous leave entitlements protected by law ‒ something American workers, for instance, do not enjoy.

Long may our status as a nation of holidaymakers continue. We all recognise the value of rest and recreation for workers and bosses alike.

I don’t buy into the view that people are already switching off in November; I suspect most are desperately trying to push through a huge number of projects and clear any backlog of orders to beat Christmas deadlines.

However, our laws entitle employers to force workers to take leave over the shutdown period, which may be entrenching the issue.

But Grumley makes a valid point: come March or April, he says, many of his business owner clients find themselves cash-flow poor.

“This can be due to longer shutdown periods than necessary, and means that the benefit of the holiday gets washed away in what is now cash flow or money-related stress,” he argues.

This naturally leads to the bigger issue: the productivity hit. Is the problem that we like to holiday? Or is it that we don’t generate enough value in the hours that we do work?

The productivity gap between New Zealand and the top half of the OECD is significant and has been widening since the 1970s, when we were on par with leaders like Norway. We try to bridge that gap by working more hours overall ‒ our hours worked are now among the highest in the OECD.

It is a Catch-22: No wonder we desperately need a break over summer; we are exhausted.

While a German or French worker might take the entire month of August off, their GDP per hour worked is significantly higher than their New Zealand counterpart. They can afford the downtime. We, effectively, are taking champagne holidays on a beer budget.

Treasury notes that under-investment in knowledge-based capital ‒ product design, research, and development ‒ are key drivers of this gap. These are things we’ve discussed for years but never taken seriously enough. We are either too cheap or too poor to innovate on the scale required.

That needs to change. But until it does, let’s not cancel Christmas ‒ let's just figure out how to pay for it.

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