Finance Minister Grant Robertson told Parliament’s Epidemic Response Select Committee the Government needs to give as much clarity as it can about what activity is possible at levels three, two and one.
That guidance is due on Thursday and Robertson promised a combination of very clear principles along with examples and, in some cases, detailed rulings on how certain types of economic activity can occur.
The principles will centre on businesses ensuring they have systems for ensuring physical distancing continues, contact tracing is possible and basic public health requirements will be met.
Meat works, dairy plants and other primary industry workplaces deemed essential have made great strides developing such protocols with that experience being applicable to non-essential industries facing a return to operations at alert level three.
“Confidence of workers to return to work is very important,” Robertson said.
“It’s all very well to say a particular sector can open up but the people in that sector need to be confident they are going into an environment that is healthy and safe.”
Robertson and an earlier witness, Otago University epidemiologist David Skegg, both faced pressure from National Party MPs and Act leader David Seymour, who repeatedly suggested Australia had achieved similar success to NZ in containing the virus while allowing more of its economy to remain open.
That prompted an irritable outburst from Skegg who said Australian political leaders are predicting the country will need to maintain its lower level lockdown for most of this year, whereas NZ’s lockdown might last only four weeks.
A decision on whether to move out of level four is due next Monday, two days before the 28-day initial lockdown ends.
NZ had chosen to pursue more stringent measures for a short perio with the aim of a more normal life afterwards and less economic harm, Skegg said.
Both Skegg and Robertson were appearing before the committee after the release of Treasury scenarios showing that while unemployment could have spiked as high as 26% if the Government did nothing about the covid-19 outbreak, actions already taken were likely to keep unemployment in the mid-teens.
The scenarios also suggest between $20 billion and $40b of extra Government spending will keep unemployment under 10% and jobless numbers could be as low as they were at the beginning of this year by 2024.
A strong economic bounceback in 2022 is also forecast under most scenarios after a deep recession in 2021.
Seymour said $20b is equivalent to all the GST collected in a year and $40b equivalent to a year’s income tax receipts.
Robertson said the lockdown is achieving exactly what the Government wanted it to do.
He was optimistic of reaching a good position to enable activity to get under way citing detailed work that should help the construction industry return to work quickly.
Australian construction sites have continued to operate during that country’s less strict lockdown.
“The last thing we want is to come out of level four and yo-yo between the levels.
“What worries me when I look at Europe and the United States is that the enthusiasm that people have to come out of a very restrictive level too early leads to the possibility of yo-yoing.”
Robertson indicated the Government is considering how much more to spend in the May 14 Budget and it was mindful to target further new spending at particular types of public investment in contrast to early efforts, such as the wage subsidy scheme, simply to inject cash quickly into households and preserve jobs and businesses for the short term.
“That’s a significant part of our thinking around the Budget and where our priorities lie,” Robertson said.
The government continues to want to bring a wellbeing len to an economic agenda that is adapting to cope with the covid-19 crisis. – BusinessDesk
