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Update on COVID-19 from CEDA - 18 March

Tēnā koutou katoa,

Now is the time for NZ Inc. to work together.

Yesterday, 17 March 2020, the government announced its support package to dampen the recession New Zealand is now facing. The package is broadly agreed to be significant and comprehensive in its approach and is well aligned with the policy remedies recommended by the OECD.

The real plus is that much of it is weighted towards immediate relief and upfront spending, which means we should see a boost to the economy over the months ahead, and I am hopeful that it will offset the potential economic pain from job and income losses. The May Budget should provide even more stimulus to support a strong recovery, rather than a slow and painful one for us all. That is of course dependent on the extent of the impact of COVID-19 on New Zealand and our trading partners.

The package covers a range of things, including increasing the capacity in the health sector, taking a big step towards reducing job losses and business failures, and provides more money into the pockets of our most vulnerable. See a summary here.

As economist Shamubeel Eaqub points out, “The cost of doing nothing is huge. For any who quibble with the size of the package, here is some context. The difference between say 20 percent and 30 percent infection rates is nearly 9,000 deaths averted, or in heartless economist terms $42 billion. Even at relatively low infection rates, the death toll could be as big as our biggest killers like heart disease or cancer.” This only reinforces the importance that we all need to place on our health and reducing the spread of the virus across New Zealand and in our own communities.

I feel our government has made a good start for us all, but there is still much for us to do.

What can we be doing in our region right now? Firstly – focusing on our health and limiting the spread of the virus is the single biggest action we can all take.

Secondly – getting the information and support available to our business community. If you are worried or already facing challenges to your business, then jump on our website for the most up to date information. Then if you still have questions, or want to speak with someone, get in touch with our business team. They are here to help connect you with the information, services and support that is available from MSD, IRD, and the Regional Business Partners Programme.

And thirdly – consumer spending accounts for around 60% of expenditure GDP in New Zealand. Our economy is largely about service sector jobs, which are ultimately about people interacting with each other. The effort to slow down the spread of the virus will hit these businesses really hard. So, please wherever possible, we encourage you to start spending locally online – support these businesses but do it in a safe and considered way. Many of our restaurants, food trucks, hairdressers and retailers are putting in place comprehensive plans to protect their staff and you as their customers. Please take advantage of online shopping and home delivery wherever you can.

It’s time to stay safe, shop local, support each other, and prepare to come out of this strongly together.

Kia Kaha,
Linda Stewart

This was published in the 60 Seconds with CEDA newsletter on March 18, 2020. Sign up here to receive our newsletters directly

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