Covirus 19 coronavirus: Sir John Key’s economic warning to New Zealand

Sir John Key has issued a warning about how the New Zealand economy will be in trouble as a result of the coronavirus pandemic, but believes New Zealand is in a better position than many countries to beat it.

Key, who was elected prime minister during the global financial crisis and led the country during the Christchurch earthquake and subsequent reconstruction, believes New Zealand will suffer for several years from a “recessive environment” due to the damage the coronavirus is currently doing and the resulting national blockade.

“The economic damage is very significant, because it’s really shutting down half the economy, if not more,” he said on the Golfizz podcast.

“Some people work from home and do things, but at the other extreme, companies will inevitably come bankrupt, layoffs, that sort of thing, so we probably have two or three years working in a more recessive environment.”

Key pointed to New Zealand’s largest bank, ANZ Bank New Zealand, where he is president, as an example for parts of the economy that can still function, as nearly 75 percent of his staff can effectively work from home, But he was less optimistic about the tourism sector, which will lose approximately $ 12 billion in the next six months.

“Tourism is observed, and it is completely binary: it is activated or deactivated, and it is deactivated, they simply cannot do anything. I was on the board of Air New Zealand at the end of March and, as has been said publicly, It is a company that made $ 6 billion in revenue a year, and has literally gone to $ 500 million.

“I saw some statistics that said they were transporting 900 people on the Friday before Easter, and at the same time that last year they were carrying 58,000, so for a company like that it is immensely difficult, because all its income disappears.”

“It’s like running a restaurant and saying, ‘I usually take $ 10,000 a night, and now I’m going to take $ 200 and have to pay all my staff,’ is impractical, so it’s really difficult for tourism.”

Key has been watching the crisis unfold from his Parnell home in Auckland, and believes that the factors that often hurt New Zealand have become major advantages in the quest to overcome the pandemic.

“We are definitely going to get through it, and we are really going to do better than other countries,” Key told the Golfizz podcast.

“We have many disadvantages of being a small country at the bottom of the world, but when things like this happen, we are in a better place because we are islands, we can simply cut our borders, and we did it.”

Current Prime Minister Jacinda Ardern has come in for criticism from some quarters for not immediately quarantining all new entrants in New Zealand, although she argued that it was not feasible given the number of entrants before the borders closed.

Key understands those arguments, but believes that the low levels of transmission in the community show that it was not a big mistake.

“You can create the arguments that people should have been in forced compulsory confinement, not self-isolation, but the reality is that the level of transmission in the community looks pretty low.”

He added that the information gathered by looking at other places where the coronavirus hit would have been significantly helpful for the New Zealand government to implement its plans.

“In London and New York and in places where it has been terrible, Italy and Spain, they did not have the knowledge that we obtained from them. The reality was that they simply escaped them, and they are large cities where it is very difficult to isolate themselves, and there is much more people. “

Key has praised Ardern’s communication skills during the crisis and says that while leading the country in difficult times can be a difficult task, it also has its benefits.

“I don’t miss him too much when I’m not there. Sometimes I watch Jacinda on TV and think ‘oh yeah, I’ve done or seen this,’ and when I go out for a walk a lot of people often say ‘oh, I bet you’re glad you’re not there now. ‘I don’t want to be there, but I don’t think if I was there I would worry.

“Obviously it’s a big job, it’s a great job, and some of the things you do can be very thankless.

“But part of the great advantage of being in a leadership role is when people trust you and you can really make a difference, it’s a great feeling.”

When asked by the golf podcast if golf could play a role in helping the tourism industry recover, in part because it could be played while maintaining social distancing, Key acknowledged that it could be a driver for recovery.

“When I was Minister of Tourism we said ‘look, we receive around 3.5 million tourists a year, how do we get the people we really love?’ Obviously, that doesn’t mean we don’t want young backpackers who can fall in love with New Zealand and have a long-term affinity for the country, but the truth is, you want people who spend money, so we went and signed up to a high network of people from Great value and golf tourism was a big part of what we did.

“You look at the people who come to New Zealand and spend a lot of money, [golf courses attract] a phenomenal number of tourists and they really spend a lot of money on the economy, so they are just a great magnet to bring people to our country.

“It was quite disappointing that the greenkeepers were not allowed to access the courses for the first two weeks [of lockdown]”

• Covid19.govt.nz – The official government Covid-19 advisory website