Finance Minister Grant Robertson will be in Canberra today meeting with his Australian counterpart, Josh Freudenberg to discuss the coronavirus crisis.
His trip is visible evidence that in dealing with coronavirus, New Zealand and Australia, in the words of one senior New Zealand official, are “in lockstep”.
The difficulty for New Zealand is that Australia is, in turn, in lockstep with the United States and it too is now is considering placing a travel ban on all of Europe similar to that announced yesterday by U.S. President, Donald Trump.
The Australian Health Minister, Health Minister Greg Hunt said Prime Minister, Scott Morrison, had “referred the question of all travel from Europe to medical experts”.
The Australian Health Protection Principal Committee will now assess the ban and provide a recommendation.
If New Zealand were to follow suit, that would be a massive blow to our tourism industry which is already ion deep trouble..
Robertson said yesterday that overall forward bookings had “dried up”.
There were nearly 40,000 visitor arrivals from Europe last December; eight per cent of our total visitor arrivals.
But with the World Health Organisation declaring coronavirus a pandemic yesterday, the U.S. decision will also have massive implications.
The U.S. State Department has now warned Americans to avoid travelling abroad, in response to the outbreak.
The State Department issued a global travel warning of Level 3 — “reconsider travel” — one level below its strongest warning.
The Centres for Disease Control yesterday reported that the U.S. now has 938 cases spread across 38 states and Washington DC, and has had 29 deaths.
There are real fears in Wellington that the U.S. could easily lose control of the outbreak there.
The Australian doctor and journalist, Norman Swann, speaking on the Australian ABC yesterday said a travel ban on the United States should be the top of the list behind Iran and Italy.
Swann reflects views being expressed also in New Zealand that a travel ban not only on Europe but also on the U.S., could be on the cards.
The Prime Minister fuelled that speculation with comments yesterday.
“Within the next 24 hours, I expect I will be getting updated advice. We have been moving on a continual basis, to make sure that we are maintaining those tough restrictions that is protecting the health of New Zealanders,” she said in Kaitaia yesterday.
“I expect that we will see further border restrictions in New Zealand because that is what we’ve been doing to date.”
She said other countries’ border restrictions, including the United States’ decision to close the country to European visitors, were one factor in its decision-making.
“Of course we are seeing outbreaks within that primary hotspot where we’ve already had border restrictions, that being Italy. Now, of course, we’re seeing outbreaks in the United States.
“We need to factor all of that in, in the continual advice that we’ve been getting and the movement we’ve been making on our border restrictions.”
Tourism from the United States is likely to be well down now after the State Department warning, but a ban could be catastrophic not only for the tourist industry but also Air New Zealand.
The airline’s long haul network across Asia has already taken huge hits but eliminating the U.S. and Europe would threaten seriously the viability of all of its long haul operations.
Robertson said yesterday that data from Customs showed that Chinese arrivals between February 1 and March 9 were down 80% compared to the same period in 2019.
New Zealanders also appeared to be travelling a little less, with departures down 5% over the same period.
“Experimental data from Stats N.Z. indicates that exports to China have declined in the last six weeks or so, particularly in forestry and seafood, although the dairy sector is proving resilient and appears to be still seeing export growth,” he said.
“While other export markets have held up there will be an impact should further restrictive actions be taken, such as Italy’s nationwide containment measures.
We have started to see the employment impacts resulting from this economic disruption, particularly in forestry in Tairawhiti.
“And in the Tourism and Hospitality sectors effects are showing now, and forward bookings have dried up.”
Speaking at the Wellington Chamber of Commerce, Robertson provided some more detail on the Business Continuity package he will announce next week.
It will include a wage subsidy for workers in the most adversely affected sectors
“You will understand that a wage subsidy will have to have criteria and limits. It will also have to be tailor-made,” he said.
“We want to target the subsidies to those who are most affected and least able to adjust.
“We are also working on adjustments to the tax system to support businesses to manage cash flow and support them to maintain employment.
“And we are developing options to ensure that MSD can support individuals and businesses to provide temporary financial assistance and support to vulnerable individuals and families.”
And he foreshadowed the likely economic package to be announced around the middle of the year.
“Such measures could include tax and welfare changes that support incomes and consumption, and help businesses stay afloat,” he said.
“We want to make sure that this scale of intervention would support not only incomes but also our overall economic, environmental and social goals.
“We need to support improving our productivity and sustainability through, for example, training and education, supporting infrastructure and conservation projects.”
The Government seems to have a twin-pronged strategy to deal with the politics of the virus; to avoid inciting panic and at the same time to appeal to people’s sense of nationhood with a “we’re all in this together” line of argument.
“This is the time for cool heads,” Robertson said in Parliament yesterday.. “This is the time for all New Zealanders to focus on what we can do together to ensure that our workers and our businesses get through this.”
But this is not convincing everybody.
Responding to the Prime Minister’s announcement on Wednesday that travellers from Italy would be required to self isolate, Neale Jones, Andrew Little’s former Chief of Staff and the “left-wing” part of the Hooton and Jones political comment session on Radio N.Z.’s “Nine to Noon” tweeted: “This is no doubt in line with the best health advice and the correct thing to do. But it displays a tin ear that exposes the Government politically. The public wants to see decisive action, not technocratic tinkering. Just close the border to Italy.”
What the Government understands is that every travel ban carries a price. With the likelihood that more on their way, the full extent of the destruction this virus is going to do to the New Zealand economy is slowly starting to become evident.