16 Apr 2020

Covid-19: Epidemic Response Committee hears from ministers, Reserve Bank and CTU

1:44 pm on 16 April 2020

The Epidemic Response Committee questioned the ministers of Trade and Economic Development, the head of the Reserve Bank and the Council of Trade Unions president.

Watch the Epidemic Response Committee meeting:

The committee questioned Minister for Trade and Export Growth David Parker; MFAT deputy secretary of trade and economics Vangelis Vitalis, the chief trade negotiator; Economic Development Minister Phil Twyford and NZ Trade and Enterprise chief executive Peter Chrisp.

In his opening statement, independent witness Charles Finny sat in front of a Barrett Reef backdrop saying that he drew parallels between the crew of the Wahine hitting the reef and where the country is at with Covid 19.

"If we get things right, we might just miss the economic rocks".

Finny said we are at risk of becoming dependant on only one market, China, and one sector, agriculture.

But we don't want all of our eggs in one basket, he said.

The UK, EU and US export markets will be impacted by the Covid-19 crisis, he said.

Tourism income has flatlined and our education value looks to half, he said.

Finny said international trade can help reduce economic damage, and suggests a 10-point plan, excluding food and beverage.

  • Restart export manufacturing as soon as today, worth $9 billion a year to the economy.
  • Restart the log trade, worth $5 billion. Drop suggestions to impose a levy.
  • Restart the coal and gold businesses.
  • Active market diversification strategy
  • Expand CTPPT as a priority, expand to include Taiwan, Indonesia, UK, Colombia
  • Get NZ-UK free trade agreement finishes as soon as possible
  • Work on rules and protocols for quarantine free travel with a few places like Australia, Singapore and Taiwan
  • Develop world-best distance learning programme for universities
  • Supercharging of government effort to boost Māori exports
  • Re-look at the New Zealand brand story

Minister for Economic Development Phil Twyford told the meeting New Zealand Trade and Enterprise has been very busy and has worked with more than 2500 companies, finding there is widespread support of the lockdown.

It has also, among other things, ramped up its worked with high growth companies, he said.

He noted that food and beverage, classified as an essential service in level 4, have been doing "pretty well".

The export manufacturing sector has been the most affected, he said, with around 70 percent having to halt their services.

Smaller companies have been impacted the most, he said.

Small regional airlines are busy connecting remote island communities and Air NZ is getting high value exports to key international markets, returning with supplies. All of this is supported by government funding, he said.

With much of the questioning, focused on the forestry industry, Twyford told the committee there are many industries that wanted to be classified as essential.

"The imperative for the level 4 lockdown was actually the public health response."

"Everyone's alive to the economic impact of it, no one needs to be schooled on it," Twyford said.

Level 3 will be about safe working, he said.

Minister for Trade and Export Growth David Parker said in years to come New Zealand, arguably, will be better situated than others.

In January, New Zealand was worried about what was happening with Covid-19 in China and so acted from that time, Parker said.

Local manufacturing is important when you can't rely on international supply chains, Parker said.

However, he said we need to take care this doesn't lead to protectionism.

"I've always been of the view that free trade agreements aren't the be all and end all."

Gerry Brownlee said he got the feeling the ministers haven't been advocates at the Cabinet table for how New Zealand gets out of this.

Twyford said that's certainly not the case.

The government has been working intensively to make sure there's a clear pathway for industry to move forward and the economy to get going again, Twyford said.

Brownlee pushed for an early announcement of the alert level 3 rules but Twyford pushed back, reminding him that an announcement was coming today.

Legality of the lockdown

Committee chair Simon Bridges said the complete loss of civil liberties has been questioned by a range of experts from both sides of the political spectrum.

David Parker said he won't waive legal privilege on Crown Law advice.

"The legal basis for these orders is relatively simple."

He said he is confident that it is legal and anyone who disputes this can do so through the court.

Asked by David Seymour whether he would release the advice in secret to the committee, Parker said no.

"We, as prior governments did, are not waiving privilege."

Focusing on this area of questioning frustrated Labour's Michael Wood as time with the ministers came to and end and Labour members of the meeting were only able to ask two questions of them.


One of the worst economic scenarios would be bouncing between alert levels for some time, Reserve Bank Governor Adrian Orr told the committee.

Banks need to be courageous and think about the long-term wellbeing of their customers, he said.

"Our message is that customers are long-term relationships and banks are here to risk share and capital allocate…got out and use that capital but of course use it with your eyes open," he said.

"The longer economic slowdown persists…the harder it is for the banking system to provide that credit."

Banks are balancing many objectives at the moment, he said. These include implementing the government financing scheme and working to assist at-risk vulnerable groups.

Orr said while banks have a big task ahead of them, he thinks they are in a fantastic starting position for an unknown future.

He said this is primarily a fiscal economic challenge.

Assistant Governor Christian Hawkesby said he doesn't think monetary policies can offset but can soften the blow of the effects of Covid-19.

Health and safety in the workplace

Council of Trade Unions president Richard Wagstaff said the union has continued to promote a response that allows workers are safe and have adequate incomes for them to be safe.

Working people who are financially penalised will find a way to go back to work, he said.

The union cautions against business going back too fast, which would be bad for both people's health and the economy.

"Let's make sure that we don't do it too quickly…let's make sure we attend to the reopening process that makes everyone feel confident."

Wagstaff said it is critical health and safety in the workplace is practical not just policy based - health and safety hasn't been a strong point for New Zealand, he said.

As Covid-19 spreads around the world, it can be daunting keeping up with the information. For RNZ, our responsibility is to give you verified, up to the minute, trustworthy information to help you make decisions about your lives and your health. We'll also be asking questions of officials and decision makers about how they're responding to the virus. Our aim is to keep you informed.

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