21 Apr 2020

Covid-19: Epidemic Response Committee question ministers over lockdown extension

2:42 pm on 21 April 2020

Small Business Minister Stuart Nash, Employment Minister Willie Jackson and Finance Minister Grant Robertson were all in today's hot seat.

Watch the Epidemic Response Committee meeting here:

New Zealand will move to alert level 3 from 11.59pm on Monday, meaning five more days in lockdown than originally planned.

National Party leader Simon Bridges said he had "very significant" questions about the impact the extension will have on the economy.

Some in business sector had called for the lockdown to be lifted this week, while some health advocates wanted a two-week extension.

Prime Minister Jacinda Ardern said the decision took into account health, the economy and public sentiment.

Minister for Small Business Stuart Nash started today's meeting, he said the government's first priority was to mitigate the risks of the coronavirus and mitigate the economic risks.

He also wanted to make clear what the move to level 3 next week meant.

"Alert level 3 is not a return to pre-Covid days.

"Level 3 is really a waiting room or recovery room."

Nash said there are no set rules for responding to a crisis of this kind but that our strong health system and relatively low government debt put the country in a good position.

"New Zealand is a trading nation ... there was never a way to stop job losses and business impacts."

He said it is important to pay invoices on time and keep cashflow moving.

The wage subsidy scheme has paid out to nearly 1.6m people at a cost of $10bn.

He said additional $4m is being put into helplines for businesses seeking support.

Small businesses 'sacrificial lambs' - National MPs

Stuart Nash was grilled by the committee chair Simon Bridges and National MP Todd McClay over what analysis the government had done on the impact of the lockdown on businesses.

Both Bridges and McClay referred to small businesses as sacrificial lambs during the lockdown.

Bridges asked how many businesses will go out of business because of the length of the lockdown with the additional level 3 lockdown length.

Nash didn't answer Bridges' question, but said the last thing the government wanted to do was go back into level 4.

He reiterated that if the country eliminates Covid-19 early then it will help the economy and small businesses in the long run.

Nash added that 400,000 and 500,000 workers will be able to go back to work on 28 April.

Bridges said what he took from Stuart Nash's comments were that he he didn't do the analysis required to help protect small businesses.

National MP Todd McClay said businesses are predicting revenue will fall 70-80 percent when they reopen after the 7-8 weeks of the lockdown.

McClay questioned Nash on why dairies are allowed to have a one in one out policy yet a small business like a florist can't use the same method.

Nash said they can do that with a click and collect method if they can prove they're practising safe physical distancing measures.

Simon Bridges said he had communication with a local baker in Tauranga who said while the wage subsidy scheme has been well received, it won't make up for the loss of revenue they're facing in the 7-8 weeks of lockdown.

Stuart Nash implored businesses like the bakery to move to a click and collect method, though he acknowledged they won't have the same revenue levels they had before the lockdown.

ACT MP David Seymour asked if there is any chance between now and Tuesday 28 April that the prime minister will change her mind over whether New Zealand will move from level 4 lockdown to level 3.

Nash said that will not happen.

Following Nash was Employment Minister Willie Jackson who said the government was doing its best to keep unemployment as low as it could post-Covid-19.

Labour MP Meka Whaitiri asked Jackson what support the government is giving to the Māori economy

Jackson said the government announced a $100m redeployment package in the regions designed to support displaced workers because of the lockdown.

Jackson said it would be unacceptable to see Māori unemployment get back to the levels, or more, seen after the Global Financial Crisis (14 percent).

Simon Bridges asked Jackson if he had done any analysis on what a seven-week lockdown will do to unemployment.

Jackson said he's seen the same numbers as Stuart Nash and that 450,000 odd workers will return to work on 28 April, but he's unsure on what it will do specifically to unemployment.

Jackson, who was more candid than Stuart Nash, said he accepted that a longer lockdown will lead to more unemployment.

Bridges referenced numbers from Finance Minister Grant Robertson that unemployment projections for the year would increase from 360,000 by the end of June to 480,000 by the end of 2020 and asked Willie Jackson if he accepted that.

Jackson said that depends on what government support is offered in the short to medium term.

He said the government is coming up with new ideas and initiatives every day and doing its best to curb the unemployment rate.

Louise Upston questioned a paid Labour party advertisement on 16 April in Whangārei that quoted Jackson saying he is proud of the work he's doing for putting young people in work.

She asked how he could do that given 10,000 young adults are on job seeker benefits, up from 5000 before the lockdown.

Jackson said he wasn't aware of the advertisement and said he hasn't said that in the last week and that the quote was probably from a year ago. He accepted that the times have changed but that he is still passionate about doing what he can for the New Zealand workforce.

In a follow up question, Simon Bridges asked if it was acceptable to be paying for ads like that during the lockdown.

Jackson said he would have to come back to him on it because he wasn't aware of the ad.

ACT MP David Seymour told Jackson he believed the government was "blowing and sucking" at the same time, clarifying that by increasing the minimum wage during the crisis, more jobs for the likes of Māori won't be available - he referenced a report from MBIE that said increasing the minimum wage would mean 9000 less jobs in the labour market.

Finance Minister Grant Robertson went straight into questions from MPs due to the length of time the other two ministers had in front of the committee.

Simon Bridges asked if we can be certain New Zealand will come out of level 3 after two weeks.

Robertson said 'absolutely' that was the hope of the government if the country can eliminate Covid-19.

Following that, Robertson said that the business loan scheme the government announced is now up and running completely and that any businesses who went to their banks two weeks ago and were told they weren't going to get support that they should go back to them now as they should be able to get support.

Simon Bridges referenced a report that said based on the limited resources they have available at present, it appears Australia will come out in a better position than New Zealand post the lockdown.

Grant Robertson said that on a number of indicators going into the lockdown NZ was in a better position than Australia and that by the time Australia comes out of its lockdown the two countries will be about even.

He also cautioned the national sport that is comparing NZ to Australia.

National Finance spokesperson Paul Goldsmith asked Grant Robertson how many SMEs have applied for the business loan scheme and how many have been declined.

Robertson said he asked for those figures today but that they are still be collated, he added that he will provide those numbers to the ERC as soon as he gets them.

Goldsmith said the reason he asked is because he believes SMEs will be reluctant to take on more debt in the current situation.

Robertson then fielded questions from Todd McClay.

McClay asked about the commercial rent initiatives that Robertson had said was being worked on when he spoke to the committee for weeks ago.

The reason for his questions, he said, was because businesses were still struggling to pay their rent.

Robertson said that the reason it has taken so long is because they are trying to find solutions for both parties (businesses and landlords).

He said that the government schemes they've announced already have helped the situation a little bit but work continues to find positive outcomes for both parties.

McClay said he respected Robertson's comments but that it was the same rhetoric the committee heard from him four weeks ago. McClay said while the schemes like the wage subsidy scheme have helped workers, landlords and businesses are still incurring debt through the loan scheme (banks are still charging interest on their loans).

ACT MP David Seymour asked Robertson if the government consider a time limited tax free redundancy period for New Zealanders made redundant because of the lockdown.

Robertson said he is interested in exploring that option.

Green MP Marama Davidson was granted the final questions to Robertson, asking him what he was doing to help the Māori economy.

Robertson said he is working with a group of people to ensure the Māori economy recovers from the Covid-19 crisis.

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