A new world after the COVID-19 winter

17 Apr 2020 A new world after the COVID-19 winter image

The New Zealand Treasury has released an assessment on the impact of COVID-19, which makes very depressing reading.  Treasury’s most dire prediction is unemployment could reach 26% and almost a third wiped off Gross Domestic Product (GDP).

However, a more realistic assessment is also presented, and the likelihood of the dire prediction would appear remote.  Set that against a Government that is doing one absolutely fantastic world-leading job limiting the spread of COVID-19, while doing its very best to keep New Zealand’s economy running. 

So, Treasury’s dire prediction was not at all helpful to the Government, but the real issue is the effect it will have on all the people out of work and locked down at home.  It is hard enough for many of them to be locked up with their kids and partners when along comes a very depressing prediction that directly affects them, their families and combined future. 

New Zealand has in the past few weeks become a country of two halves: those in work and those out of work.  Those in work are extremely busy, and those out of work are not busy at all.  Between the two halves, there is a third group who are carrying on from home as if nothing had changed.  This business as usual (BAU) group is still expecting normal meetings to be held, submissions to be made on time, and regulations to be complied with as if New Zealand was not in the middle of an extreme crisis. 

The worst feature of the BAU group is they are demanding responses from the people who are really busy, keeping the country running and feeding people.  These busy people do not have the time, and even if they did have the time, they do not have the money or the resources to spend on BAU projects, policies and submissions.  This is because it is more expensive and time consuming to run businesses with COVID-19 restrictions in place. 

The three groups I have just outlined are on a collision course, with the impact likely to be felt as we come out of winter.  Hopefully by then, however, the country will have successfully endured the COVID-19 storm, and we will be returning to near normal business operations except perhaps at the border.

By spring, those that have fed and kept the economy running through the COVID-19 winter will be exhausted.  Those that have not had the chance to get back to BAU will be fully energised and demanding change.  But a good number of those without jobs will still have no jobs.  What will be missing is money for BAU and jobs.  Treasury is right; the economy will not be in good shape at all.

But winding the clock back to today, we should be asking what we can do to avoid this collision.  To me, the answer is self-evident and comes down to the BAU group taking account of the impact of COVID-19.  Instead of pursuing the plans and targets they had in place before COVID-19, the BAU group needs to be making adjustments now. 

A good example of making adjustments now is the Government’s shovel ready infrastructure initiative, which is designed not only to increase employment but create lasting environmental outcomes by all parties working together. 

Many councils and the Ministry for the Environment are adjusting their timelines but not all of their processes.  What is needed are further adjustments and allowances, recognising that we are in a new world and we will never return to what we had before. 

Rates increases and targeted rates will not be able to be sustained.  The Government will have spent an incredible amount of keeping the country running during the COVID-19 winter and will little spare money. 

So, in order to sensibly advance plans, policies and projects at council and at Ministry for the Environment level, money for prescriptive regulation and enforcement will need to be replaced by co-operation and working together to make the best use of the resources we have left with after the COVID-19 winter.  One of those resources are the people without jobs. 

There will be a new world after the COVID-19 winter.  What we need to do is to start preparing for that now. 

Mike Chapman, Chief Executive