How the lockdown end may be a false dawn

Cabinet will decide on Monday week whether to come out of Level Four of the lockdown.

But as the year unfolds and the grim reality of what now looks like an economic depression sets in, we may regard the lockdown as the happy time.

In a sense, the end of the lockdown may be a false dawn.

POLITIK understands that a massive work programme is now underway within the Government on not only whether to come out of the lockdown but what Level Three will look like and how the country will go forward from there.

One source suggested to POLITIK that there could be as many as 80 working groups currently employed looking at “what next”.

Of particular attention is what businesses will be able to operate under Level Three. The Ministry of Business, Innovation and Employment is working on that now.

Meanwhile, as the Prime Minister promised yesterday, a decision on mandatory quarantine at the border for 14 days is very close, probably today.

That will bring New Zealand’s border arrangements into line with Australia. However, countries like Britain are not only not detaining their returning nationals at the border but are allowing them to go home and go to work.

The indication that the end of the lockdown is in sight is coming with increasingly upbeat comments from the Prime Minister at her daily press conferences.

Yesterday the Director-General of Health, Dr Ashley Bloomfield, reported only 50 new cases and 41 recoveries.

“We may yet see bumps along the way, but as I said yesterday, I remain cautiously optimistic that we are starting to turn a corner,” said Ardern.

Indeed POLITIK understands that yesterday the Ministry of Health was standing down some of the extra staff it had brought in to contact trace because there was not enough work for them to do.

But asked at yesterday’s press conference if she could give a definitive answer on the future of the lockdown, the Prime Minister simply replied “no.”

“I have cautious optimism,” she said.

“But now is the time to stay the course.

“That means we need to continue to uphold the rules of Alert Level 4 and the data that we’ll be making that decision on is in real-time.

“And we need to see more of that.

“We are only halfway through before we can make those decisions.”

And the Government has hired the New Zealand media company founded by former young Nationals, Sean Topham and Ben Guerin to run a  Facebook  campaign to target people wtih various messsages including tough warnings for people who may be at risk of breaching the lockdown.

The right-wing political commentator, Matthew Hooton, is working with Topham Guerin on crafting the messages for the ads.

Education Minister Chris Hipkins revealed yesterday that as far as his portfolio is concerned, planning is going ahead for a variety of scenarios at the end of the current lockdown period (April 22).

Though the Covid Response Select  Committee yesterday heard depressing accounts of overall business activity, particularly in the tourism industry, provisional goods export figures published yesterday by Statistics NZ show that imports were down and exports up in February and March this year compared with previous years.

The figures are provisional, and Stats says they should be treated with caution.

The figures show that meat, dairy and even machinery and technology exports were up though seafood and forestry were down.

There was another positive indicator on Tuesday night with the Global Dairy Trade auction price for wholemilk powder (a key indicator) rising by 2.1 per cent and the overall index rising by 1.2 per cent.

Westpac economist, Michael Gordon said the auction results were surprisingly positive, against the backdrop of a severely weakened global economy.

But he said that while the recent stability in prices was encouraging, “we still think that the dairy sector still has a long hard road ahead of it.”

“We expect further price declines over the next few months,” he said.

“Global demand for dairy products, particularly outside of China, will be hit hard by the lockdown.

“The impact will undoubtedly vary across products – for instance, infant formula could be considered an ‘essential’ purchase, but that’s less true of the various processed foods that use milk powder or butter as an ingredient.

“Demand from food services has been especially hard hit as cafes, restaurants and bakeries have been shut down.”

However speaking to the Covid-19 Epidemic Response Committee yesterday, Federated Farmers President, Katie Milne, painted a gloomy picture of the future for farming.

“Animals that were bringing in $5 something a kilo are down to threes if you can get them off-farm,” she said.

“And we know the milk price has got a seven in front of it this year, but we know next year predictions are already starting to come out that it’s going to look like a five.

“So, farming is not going to get through this unscathed either.”

Adding weight to her comments, Regional Economic Development Minister, Shane Jones speaking on “Sarah’s Country”  said unemployment was likely to reach 15 per cent.

There have been of practical issues that have emerged in the economy during the lockdown. Some were raised yesterday at the Committee such as the illogic of not allowing backloads on trucks taking feed to drought areas because the backload was not an essential product or the difficulty getting stock killed at meatworks at present because workers on the chain have to be two metres apart and that is slowing the chains down.

The Committee yesterday heard mostly from lobby groups rather than actual businesses.

It is to be hoped that real business will front up with real projections of how the international COVID-19 lockdown will impact on them.

They may be the most frightening stories of the whole pandemic.