We’ll deal with it as we move forward: Grant Robertson gives little on how rules might evolve

ANALYSIS:

If Grant Robertson has a master plan for how the economy will function when New Zealand starts living with Covid, he is not sharing it.

Monday’s in-principle decision to move Auckland to alert level 3 next week, could spark a move towards tolerating Covid-19 in the community.

The Government has neither confirmed it is under consideration but has tacitly countenanced the shift if the expert medical advice is to do so.

What that would look like could have a major bearing on customer-facing businesses – some are already assessing whether operating under the current “Delta 2” restrictions is worthwhile.

And businesses outside Auckland are increasingly grumbling about the lack of direction of what might come next.

The Finance Minister had little to say beyond reassuring yet subjective principles.

If there was advice on a move to tolerate Covid the approach would be to “protect lives and livelihoods” and one that took into account the capacity of the health system, the ability to undertake public health measures “but also allow the economy to operate”.

The comments provide almost nothing to act on or plan for, offering as little practical insight as when Robertson said, for instance, that a move into the first alert level 3 in 2020 would change from allowing businesses that were essential, to businesses that could operate safely.

On practical questions, such as whether the current limit of 50 people per venue could be lifted while cases were still emerging in Auckland, Robertson would only say that hypothetically it was possible.

Robertson claimed the Government was working through different scenarios, without saying what they were.

“We’ve had to work through immeasurable changing circumstances” during the past 18 months, Robertson said, “and we just deal with those as we move forward”.

Kirk Hope, chief executive of BusinessNZ, said the situation reminded him of the first lockdown of 2020, as the country inched towards the first lowering of alert levels, when those outside the Government were “pushing them on, ‘what are the conditions for moving to the next level’ and them not being explicit because the circumstances were changing”.

A developing situation was not a pass to not offer direction.

“Yes, the circumstances are changing, but what are your criteria for moving into that space? I think they haven’t really been clear enough on that,” says Hope.

Robertson would also not share his thinking around the circumstances under which the Government may look to offer more support for the economy, while saying such support would be considered.

As she pleaded for sector specific support for the industry in recent days, Hospitality New Zealand chief executive Julie White also said, at least, the sector deserved a clear answer if more was not coming, so businesses could make “hard decisions” about their futures.

Beyond saying what support was needed would continue to be assessed, Robertson said there was “no specific threshold, per se” that might trigger support, or a point at which the Government was minded to give more support.

“We’ve never committed ourselves to trying to meet all of the costs that businesses have,” Robertson said, with earlier payments simply “subsidies” and “support” rather than recouping the entire costs.

On Friday the Government confirmed further rounds of the resurgence support payments, paid every three weeks, which give businesses $1500 plus $400 per employee, up to a maximum of 50 full-time staff (or $21,500).

Then on Monday, as the Government confirmed an extension of alert level 4 in Auckland, it announced a further two-week round of the wage subsidy.

But rather than operating nationwide, it would apply only to businesses either in Auckland or that could tie a sharp drop in revenue directly to the Auckland restrictions, rather than the new, more strict, level two restrictions in other centres.

“There’s total certainty now about what people will get,” Robertson said. However the tweak of the eligibility criteria for the wage subsidy was still only dawning on major business groups.

Hope said customer-facing businesses, especially in the South Island, would be feeling “very, very frustrated” about having to operate under such strict conditions when there had not been a case of Covid this year.

Robertson noted the political pressure he had come under for the magnitude of the spending on the response to Covid, in reference to questions about direct economic support.

In fact, National and Act have called for more direct support for employers while alert levels were raised, with the criticism mainly focused on spending out of the $62 billion Covid recovery fund less directly linked to keeping the economy together during restrictions.

Robertson has said repeatedly this week that as a result of the added resurgence payments “we are actually providing more support to businesses in this current lockdown than we did when we last had level 4 restrictions”.

This was because over a month in alert level 4 last year, an eligible business with 10 employees would receive about $23,000 “whereas this outbreak it will be about $35,000 for the same sized firm”.

However a staunch critic of last year’s wage subsidy scheme claimed the comments were “false and misleading” because hundreds of millions of dollars were paid out when the economy was operating under alert level 2, when spending roared back to life.

Grant Nelson, who has dedicated most of a fortune he built up in business to the philanthropic Gama Foundation, said the original wage subsidy paid businesses in lump sums for 12 weeks at about $7000 per employee or just over $70,000 for 10 employees.

But Nelson, who is seeking a judicial review of the handling of the wage subsidy, said the first level 4 lockdown lasted five weeks, while level 3 lasted another two “but businesses were never asked to repay the balance of the 12 weeks they received”.

“A business with a 30 per cent drop in revenue for five weeks received $56,112 for the first four weeks,” Nelson said.

“If the post lockdown boom did not start for a business until after seven weeks, they received $40,080 for the first four weeks.”

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