The Prime Minister appears to have taken the lead in closing the Warehouse down during the coronavirus lockdown which begins today.
The Government confirmed last night that otherwise, supermarkets and dairies would be able to open though dairies would be allowed only one person in the shop at a time.
Bunnings and Mitre 10 will be able to open but only to tradespeople; not the general public.
The Warehouse announced yesterday morning that it would open and its shares then shot up 34 per cent over the day. Presumably, now that it is not opening, they will tumble back down.
Its new shareholders might reflect that “nobody got a bargain”.
The Prime Minister set out the argument for heavily restricting the number of essential businesses in her daily press conference.
“The simplest thing New Zealanders can do to stop the spread of this virus is to stay at home,”she said.
“That’s how we will save lives
“Now, of course, some New Zealanders will still be needed to operate our essential services; those who provide the necessities of life, such as our frontline health workers and police being obvious examples.
“And to these people, every one of us owes a debt of gratitude.
“And I can tell you that we can repay that debt of gratitude now by staying at home.
“Every interaction we have with someone else increases the risk of the spread of the virus.
“And you can see that, for instance, and the spread of some of our cases, you see a cluster of cases have come from one conference.
“And that gives you a little bit of an insight into why we are trying to share that message so strongly reduce contact, reduce risk, reduce the spread.”
That message jarred however with the official “Unite against covid-19” slogan which is being pushed by the officials’ committee advising the Cabinet Covid-19 Committee.
POLITIK understands there is a behind the scenes row going on over which line to take; the reduce contact line used by the Prime Minister at her press conference or the “unite” approach of the committee.
The internal arguments are said to be delaying the launch of a major social media campaign timed to coincide with the lockdown beginning later tonight.
That statement was followed up some six hours later by the Deputy Chief Executive of the Ministry of Business, Innovation and Employment, Paul Stocks.
He said only businesses absolutely essential to ensure the necessities of life, like supermarkets and pharmacies, could stay open.
“If in doubt, the business premises should be closed,” it said.
“So, unfortunately, the Warehouse needs to close its shops.
“Leaving them open to the general public creates too high a risk of further spreading the virus.”
Stocks says “big box”retailers like Bunnings, Placemakers and Mitre 10 can stay open to trade customers for essential purposes only.
“These retailers play an important part in the construction supply chain, but they cannot sell goods to the general public.”
The Warehouse Group’s first statement yesterday morning was set against a background of some confusion about what an essential service was.
It was always clear supermarkets would be able to open.
But on Monday night, John Ombler, the chair of the officials’ committee advising the Cabinet Committee on managing the crisis was asked, given that supermarkets could open, whether dairies and superettes would also be able to open.
“Details still to be worked out, there is a 48-hour window,” he said.
The Prime Minister was much more forthright at her daily media conference.
“An essential service is something required to ensure that people can maintain their own health and wellbeing, that they can get food and the necessities of life that we can maintain our response to covid 19 and we can maintain public health and safety,” she said.
“And so within that, those are the principles that we are working to.
“And so there will be there will be a number of examples that will get thrown at me that will not, in my mind, fit within those circumstances.
“We have at the moment, MBIE working through some finer details to give exact guidance to individual businesses, including those who consider themselves contactless and who work through online systems, on how we will apply these rules.
“But don’t, for instance, expect to be able to go to your local Warehouse.”
The Prime Minister made that statement at approximately 3.30; within minutes the Warehouse had called for a trading halt on its shares.
Uber Eats and other home delivery services will join takeaways (including McDonald’s) in having to close.
“Food delivery services like Uber Eats and Deliver Easy pose a risk to human health.
“We cannot guarantee every kitchen operates strict food preparation controls or that everyone who works in a kitchen is well.
“Evidence overseas suggests the virus has been spread via poor food hygiene practices, so it’s a real risk we have to eliminate.
“Delivery of food that is not pre-cooked will be allowed under strict health conditions.”
There was also confusion over people, particularly students, being unable to travel between the North and South Islands before the lockdown comes into effect at 11.59 tonight.
That, however, was solved with a statement from Transport Minister, Phil Twyford, saying flights and ferries would continue through to Friday.
Meanwhile, Parliament’s Business Committee, which likes to run on consensus, ended up rejecting Speaker Trevor Mallard’s proposal that he chair a Select Committee to scrutinise the Government’s management of the covid-19 crisis.
The committee would replace Parliament which will be adjourned tomorrow and will summons both Ministers and officials to appear before.
There are proposals to have it broadcast on Parliament TV like a regular Parliamentary sitting.
Instead of Mallard chairing the committee, it will now be chaired by Opposition Leader, Simon Bridges, and will have 11 members; five from National, one from ACT, one from the Greens, one from NZ First and three from Labour. The Opposition will thus have a majority, but the intention is that it will provide a counterweight to the Emergency powers that the Government will have conferred on it by the State of Emergency and the Epidemic Notice.
But any crisis is going to have management hiccups.
On its overall direction, the Government is attracting little criticism and additions to its economics package yesterday drew immediate support from a usual foe of a left-wing government, Business NZ.
The package saw the Government, retail banks and the Reserve Bank announcing a six-month principal and interest payment holiday for mortgage holders and small and medium-sized business customers whose incomes have been affected by the economic disruption from covid-19.
Finance Minister, Grant Robertson said the specific details were being finalised and agreed urgently and banks would make these public in the coming days.
The Reserve Bank has agreed to help banks put this in place with appropriate capital rules. In addition, it has decided to reduce banks ‘core funding ratios’ from 75 per cent to 50 per cent, further helping banks to make credit available.
The scheme will include a limit of $500,000 per loan and will apply to firms with a turnover of between $250,000 and $80 million per annum. The loans will be for a maximum of three years and expected to be provided by the banks at competitive, transparent rates.
The Government will carry 80% of the credit risk, with the other 20% to be carried by the banks.
Business NZ CEO Kirk Hope said it was “a great example of collaboration in a time of crisis.”
“It’s great to see the Government, retail banks and the Reserve Bank all coming together to protect Kiwis and unite against Covid-19,” he said.
“This will encourage banks to lend to businesses struggling with the fallout from these very challenging times.”
Many small businesses mortgage their homes to provide security for their business loans. This has been a concern in recent weeks as the economy has slowed. This is a practical way of addressing that problem.
National also supported the scheme, even if its Finance spokesperson, Paul Goldsmith, did claim it was his idea in the first place.
“During this period of massive disruption it is critical that businesses have access to working capital so they have the liquidity to stay in business and can, in turn, keep New Zealanders in jobs,” he said.
“National has been calling for a business lending guarantee scheme for weeks, and we welcome this announcement.”
The Government is now in the thick of the fine print and detail of the lockdown; there will be more stuff-ups. Nothing as big as this could possibly be immune.
But the real test will come today when the responsibility for fighting the virus moves from the Beehive to the people.