20 Aug 2020

'Choice between health and economy is a bit of a false dichotomy' - Phil Goff

8:59 am on 20 August 2020

Auckland Mayor Phil Goff is hoping the city moves down alert levels after the initial two-week period, but sees a danger in moving too quickly.

Auckland Mayor Phil Goff.

Auckland Mayor Phil Goff. Photo: RNZ / Dan Cook

He told Morning Report it seems like the government is containing the latest community outbreak.

"If we can get the bounce back that we got last time, I think all of us were really pleased that the economy was recovering much more quickly in Auckland after we went back to level 1 than had been anticipated."

But he said it's really important not to act prematurely - going down an alert level only to find that things were worse.

"I'm going to rely on the ability of the medical authorities to determine whether the virus is effectively contained."

Auckland's chief economist calculates that each day at level 3, Auckland loses about 250 jobs and $65 -75 million in GDP - even with the wage subsidy.

Goff says there will be an element of business failure and job loss because Auckland went back into level 3.

But "the choice between health and economy is a bit of a false dichotomy because if we do what Melbourne did and didn't respond fast and effectively then we get both the health cost and the additional economic damage which is greater than it would have been."

The mayor said he pushed the Finance Minister for the latest wage subsidy.

The latest iteration of the wage subsidy is set to run for as long as Auckland's in level 3 restrictions.

Having borrowed a large amount for infrastructure over 10 years, Goff said the margin for continuing to borrow without impacting the credit rating or an increasing interest costs is limited.

"It's good to see that a range of economists ... are all reasonably optimistic about how we'll come out of this, that it might be tougher this year but a faster improvement next year."

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