Covid-19 update

[mardigras]

1 hour ago, Maximus said:

the one area that looks like it will struggle and cause a lot of damage is tourism

Tourism is not just the businesses that operate experiences for tourists - it's all the related services that survive/thrive (or not) from its presence.

Transport, accommodation, food and beverages (they have to eat), freight, events...the absence of international tourists indefinitely (minimum 12-18 months) surely has flow-on effects across a broad range of sectors

It's along the lines of my stance that the lockdown will have little to no impact on the NZ economy (within degrees of one or two months) - these impacts were coming irrespective. Many countries as I have stated are already seeing it - including those without lockdown. Queenstown won't be hit largely due to lockdown, it will be hit largely across many areas, due to limited tourists (among a few other things, such as fear, and discretionary spend as less people have extra available).

Edited May 6, 2020 by mardigras

[ngakonui grass]

Today 2 new cases and 1 death.

I new case involves the Marist College.Strangely if i heard correctly the person had been in lockdown since March 20.

The new death was from a rest ome where people had been transferred to hospital but she wasn't one of them.

Maybe this virus is going to linger in some shape or form for longer than anyone previously thought.

[Hesi]

1 hour ago, ngakonui grass said:

I have been reading often in the media that the Tourism industry wants Kiwi's to take their holidays in NZ to support the local industry.

My advice.....drop your prices wwaaaaaayyyyy down and people might.

I did hear the mayor of Queenstown on radio, saying they were looking at offering lower cost packages for domestic tourism

[Hesi]

For the doomsayers

NZ red meat exports 1.1 bil in March, up 10% on the previous March, and the first time over 1 billion in a month.

Microsoft looking to invest in NZ with the development of a data centre.

Unemployment at 4.2% in March 31 quarter, below what the experts predicted

A lot of casualties, but a lot of opportunities to be seized.  I wonder how Racing will seize any of the opportunities that may arise

[Hesi]

6 minutes ago, barryb said:

Mate come on, this figure is about to go boom & you know it.

In a weeks time the subsidy runs out and .....

10,000 a week will be gone for the next 2 months at a min.

I'm just saying it is lower than what the predictions were for the March 31 quarter.  The predictions being it will go to 10%, so the June 30 data will tell us just how right or wrong those predictions are

[curious]

27 minutes ago, barryb said:

In a weeks time the subsidy runs out and .....

What?

[curious]

2 hours ago, mardigras said:

It's along the lines of my stance that the lockdown will have little to no impact on the NZ economy (within degrees of one or two months) - these impacts were coming irrespective. Many countries as I have stated are already seeing it - including those without lockdown. Queenstown won't be hit largely due to lockdown, it will be hit largely across many areas, due to limited tourists (among a few other things, such as fear, and discretionary spend as less people have extra available).

I agree with that. A month or 2 of restricted activity isn't the issue. It will quite likely prove to be beneficial to the overall recovery given the results we are seeing. Some areas are still booming as Hesi has pointed out, particularly one of our mainstays which are the primary export industries. Luxury industries will likely suffer in the longer term as you say, because of reduced discretionary spend, international travel etc. There may be a bit of a clean out of weaker players in other areas creating opportunities for others though. More of a fast forward of the inevitable I'd say. Aside from the national debt issue, I reckon things can bounce back quite quickly assuming the COVID elimination status holds.

[Hesi]

NZ Government debt/GDP ratio(19.2%) is very low compared with most other countries, so they are in a position to inject a lot of money to stimulate economical health, until the ball gets rolling again

Aus 45, UK 85, US 107, Germany 57

https://tradingeconomics.com/country-list/government-debt-to-gdp

[curious]

12 minutes ago, barryb said:

I think we all know what Curious.

Under the agreement to collect the subsidy there is to be no redundancies.

Redundancies will be massive the week after & for many weeks.

Yes but the effective dates were the 12 weeks from March 17 to June 9 weren't they? I make that 5 weeks away, not a week. I hear tell they are already underway at the NZTAB.

Edited May 6, 2020 by curious

[Hesi]

For those clamouring for a quicker drop down to Level 2, all fine and good.

Consider this though.

A rebound of the virus, and a need for NZ to go back to Level 3 or 4, will be psychologically crushing for many, both financially and from the mental health aspect.

It will also mean the Govt has to provide quite a few more billions in support, which also will have substantial long term economic effect.

Bloomfield is trying to do his job based on the collective knowledge and science of many people, probably the last thing he needs is an idiot like Bridges telling him he is doing it because he likes to control people's lives

[ngakonui grass]

Level 2 won't be like the previous level 2 which would indicate that the original level 2 was made up in a hurry so as to be seen to be doing something.

[Hesi]

28 minutes ago, ngakonui grass said:

Level 2 won't be like the previous level 2 which would indicate that the original level 2 was made up in a hurry so as to be seen to be doing something.

We'll know soon

[Hesi]

1 hour ago, Maximus said:

Exactly 75 years ago today, the man credited with leading the Allies to Victory in Europe was feted - and rightly so - for defeating Nazi Germany and the Axis powers. Yes, a PM with great communication skills and personal charisma had a great triumphant day.
Two months later, he was voted out of office.

Only because he failed to read the mood of the population, whereas Clement Attlee, campaigned on the ticket of social reform, housing, welfare, which a war weary nation wanted to hear.

Interesting analogy Maxi.  I guess the message for Ardern and Labour, is, don't misread the mood of a nation, and for Bridges and the Nats, tell the people what you are going to do, not what you disagree with about what has already been done

[Hesi]

Unemployment rate predicted to reach 10 per cent amid coronavirus pandemic, pushing Australia into recession

By political reporter Kath Sullivan

Posted 14 AprApril 2020

It would be the first time the unemployment rate has hit double digits since April 1994.(AAP: Dan Peled)

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Unemployment is set to soar to its highest rate in almost three decades, with 1.4 million Australians expected to be out of work.

Key points:

• The unemployment rate will rise from 5.1 per cent to 10 per cent in the June quarter, according to Treasury figures
• But estimates show the rate would have been higher without the JobKeeper program
• The Treasurer said the economic shock from coronavirus was set to be far more significant than the global financial crisis

New Treasury figures forecast the jobless rate will double in the June quarter from 5.1 per cent to 10 per cent, all but confirming Australia will enter a recession as it deals with the COVID-19 pandemic.

It will be the first time the unemployment rate has hit double digits since April 1994 and the figure is a fraction below Australia's peak unemployment rate of 11.2 per cent in 1992.

But Treasury's estimates show the unemployment rate would be much higher, and peak at 15 per cent, had the Government not intervened with the $130 billion wage subsidy program known as JobKeeper.

[Hesi]

And a more recent RBA forecast

RBA to Keep Policy Unchanged But Forecasts May Rattle Aussie

By

 XM.com

 -

May 04, 14:21 GMT

 

 

 

 

 

 

 

 

 

The Reserve Bank of Australia will announce its latest policy decision on Tuesday (4:30 GMT) and is not anticipated to make any changes to the cash rate or its quantitative easing (QE) program. But as one of the newest members to the QE club, the RBA may also be the first to exit its emergency programs as the virus is brought under control in Australia and the Bank has had to make less purchases lately to keep the target on 3-year government bond yields at 0.25%. However, that’s not to say that everything will be rosy in the RBA’s quarterly economic assessment that’s due on Friday (01:30 GMT), meaning potential volatility for the Australian dollar.

“National output is likely to fall by around 10%”

The Australian economy hasn’t been in a technical recession (defined as two consecutive quarters of negative growth) since 1991. It even avoided one during the 2008-09 financial crisis. So things must really be bad if it is now almost certain to break its run of the longest expansion on record for any major economy.

 

The RBA’s governor, Philip Lowe, has already warned of a sharp drop in economic output. Lowe is predicting GDP could shrink by as much as 10% in the first six months of 2020 and the jobless rate could shoot up to around 10%. However, while there’s no doubt that the economy will take a big hit from the COVID-19 pandemic, it is also plausible it may have registered slight growth in the first quarter.

[pete]

7 hours ago, Hesi said:

Only because he failed to read the mood of the population, whereas Clement Attlee, campaigned on the ticket of social reform, housing, welfare, which a war weary nation wanted to hear.

Interesting analogy Maxi.  I guess the message for Ardern and Labour, is, don't misread the mood of a nation, and for Bridges and the Nats, tell the people what you are going to do, not what you disagree with about what has already been done

Actually Hesi National have put forward a recovery plan which looks well thought out.

Maybe you missed it.

 

[curious]

7 hours ago, barryb said:

The nation wants level 2 now,

Not so sure about that. Talking to front line health care workers yesterday, they were generally undecided pending further data over the next few days but I'd say the consensus was that we need to stay at level 3 perhaps till the week after next and more strictly enforced if possible. So, certainly some, but not the nation.

[mardigras]

9 hours ago, barryb said:

Too late, she’s misread it already.

The nation wants level 2 now, Aust never had this nonsense & is financially much better placed. ANZ report shows Aust economy dropping 5% and us dropping 10%, we preserved a few Covid lives but destroyed many others.

This rule about not being able to order at a counter at a cafe is madness, wtf. Those poor bastards have waited 6 weeks to get back and now have to endure weeks more pain. 

Sweden's finance minister are forecasting unemployment as high as 15% (That was three weeks ago). They had 36,000 job losses in March according to their head of the employment service. From Statista - it states they had a further 14,000 in the first 10 days of April. I don't think what we are seeing is just from lockdown. Many organisations are going to continue to struggle well after lockdown, irrespective of whether lockdown was ever even in place.

Yes, many are doing it tough. Some are doing it tough that may not have done it as tough without lockdown. and equally, many will be doing it better through lockdown than they would have without lockdown.

I know first hand a business that is going to come out of lockdown well ahead of where they were pre lockdown - and they were not running and not an essential service. And kept their staff. So we will all know different types of impact to different types of business.

My info is that Wednesday midnight (Thursday onwards), we will be in lockdown 2. Schools will be fully open from the Monday following. We'll see if that is correct. If not, I'll be off to deal with my 'source'. 🙂 

 

[Hesi]

2 hours ago, pete said:

Actually Hesi National have put forward a recovery plan which looks well thought out.

Maybe you missed it.

 

In the interests of balance Pete, unlike other sites who appear to be running an extreme right wing propaganda campaign

Covid 19 coronavirus: Simon Bridges sets out National plan for economic recovery from lockdown

5 May, 2020 12:30pm

 5 minutes to read

 

 

Play Video

National would introduce a GST refund scheme for businesses badly affected by the Covid-19 crisis to help with cash flow, leader Simon Bridges said in a major pre-Budget speech today.

By: Audrey Young

Audrey Young is political editor for the New Zealand Herald

audrey.young@nzherald.co.nz@audreyNZH

 

 

 

 

 

 

 

 

 

 

National would introduce a GST refund scheme for businesses badly affected by the Covid-19 crisis to help with cash flow, leader Simon Bridges said in a major pre-Budget speech today.

"The Covid-19 curve is flattened, but we must not flatten the economy," he said in a speech delivered to a Business NZ webinar.

If the business could demonstrate that its revenue had fallen by more than 50 per cent across two successive months then it would be able to claim back the GST it had paid between July 2019 and January 2020, up to a maximum of $100,000.

"We estimate this could benefit up to 160,000 businesses and save countless jobs," Bridges said.

 

If the business had paid more than $100,000 in GST over that period, it would be able to take a loan of an additional $250,000 repayable over five years.

The interest on those loans would be at the 10-year Treasury bond rate, currently 0.7 per cent, which would make it fiscally neutral.

 

Bridges said the main difference between National's cash-flow scheme and the Government's is that it was primarily a grant, not a loan.

"It is linked to pre-existing revenue levels, it is more generous and it is more targeted."

Finance Minister Grant Robertson last week announced a graduated loan scheme to be run by Inland Revenue to provide loans of up to $100,000 for firms employing 50 people or less, which would be interest free if they were repaid within a year or 3 per cent if paid within five years.

 

 

 

The Government also established a 12-week wage subsidy scheme open to all businesses that can show a 30 per cent drop in revenue due to Covid-19, of $585 a week for staff working at least 20 hours week and $350 a week for part-timers.

Bridges also said National would temporarily change the depreciation threshold for new capital investment, which had been lifted from $500 to currently $5000 under Covid-19.

 

 

National leader Simon Bridges and finance spokesman Paul Goldsmith. Photo / Mark Mitchell

National would lift it to $150,000 for two years. So if a company spent $145,000 on new machinery, rather than claiming depreciation on it over many years, a business could claim depreciation on the full $145,000 in the current tax year.

"Tens of thousands of small businesses would benefit from our schemes to make sure they stay afloat and trading in the months ahead."

 

He said the Government took the right steps to contain the virus "but already it's stalling on what to do next. It needs to get out of your way."

Bridges said the pace of business failures and job losses was accelerating.

"It's the economic curve that the Government has created and needs to flatten.

"It's the curve that is affecting and devastating far more families and individuals than Covid-19 has touched.

"Our view is simple; we need to get New Zealand working again. It's time for another curve, an upward curve of growth and jobs.

New Zealand was headed for, by the reckoning of every major economist, the sharpest and deepest recession the country has ever seen.

"The choices the Government makes now, in this Budget, and in the weeks ahead, will have a direct impact on how deep, how sharp, and how brutal it will be."

Bridges said National's agenda had five core elements:

• Getting out of lockdown by getting NZ working again.
• Delivering an effective stimulus to a stalled economy by creating an upward curve of growth and jobs.
• Creating productivity in a 2-metre world. 
• Unleashing private sector investment.
• Investing in things that would guarantee New Zealand would succeed in the post-Covid world.

Kiwis visited supermarkets in their millions with no evidence of significant community spread of Covid-19, while small business like butchers and greengrocers had been forced to stay shut.

"There is no logic in that," he said.

"We can't afford to wait hopefully for the Government to slowly grant us our freedoms back; every week the Government should justify what is absolutely necessary to retain its restrictions.

"Businesses have been forced to shut down in the national interest. It is in the national interest to keep them afloat," Bridges said.

"It's not right that small business should be left to carry so much of the economic suffering. The wage subsidy has helped employees for 12 weeks, but it hasn't helped businesses with zero revenue pay overheads like rent, power and stock."

Bridges said National was looking at "blue-sky thinking" for New Zealand's future.

"What's over the horizon and how can we turn it to our advantage? Where's that going to come from? Well it won't be coming from a Labour-NZ First government living in the Wellington bubble.

"Don't assume a committee of Wellington politicians and officials, with a couple of business folk, a union rep and two iwi leaders can steer our path into the new economy.

"And I wouldn't rely on Shane Jones and Phil Twyford to implement it."

National believed the best ideas should come from all levels of business.

National was the party of infrastructure and had the competence and track record to do what it said.

[Hesi]

It appears there are a few that don't understand the impact of lockdown, that Mardi in particular is pointing out

Countries with no, or a lot looser protocols with respect to lockdown, such as Aus and Sweden, have exactly the same, if not worse forecasts for GDP reduction and unemployment.

Therefore the only conclusion you can take from this, is that NZ's lockdown has not been a factor in contributing to the forecasts of economic reduction.

 

[mardigras]

17 minutes ago, barryb said:

Hesi, I can find 10 different forecasts that show different figures.

I saw last night figures for the US showing unemployment ranging from 12 - 25%.

 

And have been in lockdown for less than most. And how about the future - under no lockdown. I don't like media bullshit but this from a survey done recently.

As governors start easing restrictions and lifting lockdowns, a new Washington Post-University of Maryland poll has found that there is clear and widespread public opposition to reopening businesses. Even if businesses do reopen en masse, unease at the situation and reluctance to frequent them could still prove a major hurdle to restarting the economy, let alone the likely possibility of infection rates spiking even further

Whilst the fear may be less here - it will exist. And would have existed without lockdown - and potentially at higher levels depending on the outcomes had we gone down a more relaxed path.

Edited May 7, 2020 by mardigras

[mardigras]

I support a move to Level 2 myself as per my post above. And then Level 1 as soon as possible - if they have the mitigation strategy sorted for dealing with cases. Which they should have by now.

Edited May 7, 2020 by mardigras

[curious]

There is also the issue that in the US people who were laid off due to shut downs could apply for unemployment as well as get the federal subsidy similar to our wage subsidy, so all those are counted as unemployed I think.

[curious]

Just now, mardigras said:

I support a move to Level 2 myself. And then Level 1 as soon as possible - if they have the mitigation strategy sorted for dealing with cases. Which they should have by now.

Me too.

[mardigras]

Just now, curious said:

There is also the issue that in the US people who were laid off due to shut downs could apply for unemployment as well as get the federal subsidy similar to our wage subsidy, so all those are counted as unemployed I think.

I think they can have a temporary laid off status (like furloughed perhaps) and get a benefit. Due to the downturn, with reinstatement as required. Which probably matches what you say there.