Finance Minister Grant Robertson was yesterday upbeat about the opening of New Zealand’s border soon.
But the big question facing the Government is what happens when the borders open; will the tourists come back; do we even want the sort of tourist industry we had pre-Covid. And if not, what would replace it?
These were some of the questions the University of Waikato New Zealand Economics Forum set out yesterday to try and answer.
Speaking at the Forum, Robertson said the Government was not going to stand still waiting for the whole population to be vaccinated.
“Everyone is well aware of the fact that we’re continuing to work on the Australian travel bubble and work on how we can ensure we can get travel within the Pacific to the extent that those nations in the Pacific are keen on it,” he said.
“And so that process continues while we work to vaccinate the whole population.”
His comments came after Australia’s Health Minister Greg Hunt extended the order closing Australia’s borders to outward travellers till June 17.
But Hunt said the Government remains committed to vaccinating all Australians by the end of October.
Exceptions would likely be made for New Zealand and potentially other countries involved in a COVID-safe ‘travel bubble’, along with passengers who qualified for a medical exemption.
But even if the bubble is created this year and international tourism starts up again, the new Chair of the Productivity Commission, Dr Ganesh Nana, warned the conference that once the borders opened and life post-Covid returned to normal, it was unlikely to be business as usual for the tourism industry.
In short, its golden days may well be over.
“I think that New Zealanders have got to realize that the business as usual model that some of us yearn for; you know, just let’s open the borders and let’s go back to normal like it was in 2019; is not going to happen immediately,” he said.
“It’s probably not going to happen in the short term.
“And to be honest is probably not going to happen for quite a long time, if ever, because there are lots of other challenges that were even before we closed the borders that are becoming even more and more pressing.”
Nana said we had to think about what we did with the tourism industry, “and indeed what we do with our international education industry.’
“Are we serious about having a conversation about whether business as usual is what we want to go back to, or are we serious about having a conversation about reorienting these industries towards something that will deliver high productivity growth and deliver good wellbeing across our communities,” he said.
“We’ve got some serious, serious challenges, and we’ve got to have a serious discussion about what we want to do with tourism.
“The business model that we had 12 months ago; we always knew was not sustainable.
“I think we got as much as we could out of it. And Covid I has accelerated the adjustment that was going to have to happen anyway.”
University of Waikato Vice-Chancellor Neil Quigley suggested to the conference that opening the border would also be a psychological challenge.
“As a strategy, it’s served this country well at this point, and it’s going to need to transition to quite a different way of thinking about covid-19 in the future once a significant part of the population is vaccinated,” he said.
“We’re going to have to face the question, are we ready to start to regard covid-19 as being endemic in the same way we think about influenza now?
“And that, I think, is a challenge, not just from a policy perspective; that is, how do we get from where we are now to that world where we think of covid-19 as something like influenza in the future with a large proportion of the population vaccinated.
“It’s a policy challenge, but it’s also a psychological challenge.”
Robertson also suggested that post-Covid, the country would need a new approach to immigration.
“One of the issues we now have to grapple with as a country is what does immigration policy look like in a post-Covid era,” he said.
“It will continue; immigration will continue to be part of the New Zealand economic story.
“And we will continue to want to bring people in where we have skill gaps to ensure that we can create the high wage jobs we want and have the right people coming in to fill the right job.
“But the large scale inward migration that we’ve seen may not come back quickly because there will be decisions being made by people overseas about where they want to be and how much they want to travel.
“But we also have to look at this as an opportunity to say where in our economy can we be doing more to train New Zealanders to lift the value of the wages and particular sectors?
“And that’s certainly something the government is turning its mind to.”
There was a strong theme running through yesterday’s proceedings at the conference that education and the exploitation of knowledge would need to be at the centre of New Zealand’s post-Covid recovery.
Economist Cameron Bagrie said that across the Waikato region, 53.6 per cent of students regularly attended school; 20 per cent of attended school less than 80 per cent of the time.
“If I go back to 2015, 70 per cent of New Zealand kids regularly attended school,” he said.
“That number is now down to 57.7; 45 per cent of Maori or Pasifika kids regularly attend school.
“Now, I look at those numbers, and I think we’ve got a god damned bomb that’s about to go off in 10 to 20 years.”
“That problem is going to get exported into the business community if we don’t nip it right in the bud very early on.
“Where we see the biggest decline in school attendance, it’s is not the year 12 and 13 kids that are wagging; it’s in the primary schools.”
What was at stake was defined by Lincoln University economist Paul Dalziel.
Growth and the discovery and the utilization of knowledge was the only factor that could sustain growth and living standards, he said.
“Aotearoa New Zealand must forge its own pathway through these challenges, bringing together the wisdom from Western science and the wisdom from Matauranga Maori,” he said.
NZ Initiative economist Eric Crampton said that if we were going to take wellbeing in education seriously and start addressing some of the truancy problems, there was a cargo cult way of dealing with it, and there was a real way of dealing with it.
“We need to be evaluating which schools are able to get hard to reach kids into the classroom, keep them there and teach them things,” he said.
“It’s an evaluation and outcomes-based framework.”
Dalziel offered his own vision of what a post-Covid economy would look like in 20 years time.
“That young person, now an adult, is leading a life that they value and have reason to value,” he said.
“They are able to express their creativity in their work and in their leisure.
“They are able to build families to find very widely they are living as respected people in a vibrant community whose cultural heritage is prospering.
“They are able to be entrepreneurs in the marketplace to create value for customers.
“And all of this is underpinned by public policy that fosters that creativity, that wellbeing.”
It is a big ask. But also a big opportunity.