Finance minister Grant Robertson makes an exit at the conclusion of a Covid-19 financial response package announcement (Photo by Hagen Hopkins/Getty Images)

Covid-19 NZ latest, March 17: Massive $12bn rescue package; Dunedin student among new cases; employers urged to send workers home

Rolling updates on the Covid-19 outbreak for March 17 as they happen, by Spinoff writers.

The Spinoff’s coverage of the Covid-19 outbreak is funded by Spinoff Members. To support this work, join Spinoff Members here

Read the latest updates for Wednesday March 18 here.

7.45pm: Dunedin school closed after student tests positive

Logan Park High School in Dunedin will be closed for 48 hours, after a student tested positive for Covid-19. The student is the son of a man in his 40s, who returned to New Zealand from Europe and only started showing symptoms five days after arriving. The school will be given a deep clean while it is closed. Contact tracing is underway, and those who did come into contact with the student will be told to go into self-isolation.

5.50pm: Tourists in custody; Ardern and Robertson speak

Immigration NZ says two visitors from South East Asia who failed to comply with self-isolation requirements after arriving in New Zealand yesterday morning are in custody and have been made liable for deportation under the Immigration Act.

The prime minister and finance minister have both just given radio interviews – Jacinda Ardern on Newstalk ZB and Grant Robertson on RNZ.

Asked about concerns that enough people were being tested for Covid-19, Ardern told Heather Du PlessisAllan: “The advice that’s going to doctors says, here’s the case profile, these are the symptoms, but in big bold letters the advice says to clinicians: even if the person in front of you doesn’t quite fit the profile, you can use your judgment to decide whether you can test.

“So my message to clinicians is: everyone you think you need to test, you should test. You should not hold back.”

Robertson said that he had asked ministers to go back and look at budget bids so that everything aligned with the new Covid-19 scenario ahead of what will now be “a recovery budget”. He added: “I reserve the right to do more things between now and then as needed.”

Asked by Lisa Owen whether they were considering the possibility of a global depression, he said: “At the moment we’re working on a scenario of a global recession … we continue to monitor things closely.”

5.45pm: BusinessNZ urges employers to send workers home

BusinessNZ and the NZ Initiative thinktank have issued a statement welcoming the government’s action in tightening the border and the economic package, but issuing a challenge to employers. “We encourage New Zealand employers to send staff to home offices where possible. Only people working in jobs that cannot be done from home should still be in their normal places of work,” goes the statement co-signed by Oliver Hartwich of the thinktank the NZ Initiative and Kirk Hope, CEO of BusinessNZ, New Zealand’s largest business-advocacy body.

They write: “New Zealand must avoid a repeat of the European experience. We have a small window and a slim chance to stamp out the virus in New Zealand before it is too late.”

4pm: New on The Spinoff

3.50pm: Three new positive cases, testing increases

New Zealand has three new cases of Covid-19. Two are in a Wellington family, a man in his 30s and his father, in his 70s, recently returned from the US. The other is a Dunedin man who has returned from Germany, the director general of health, Ashley Bloomfield, has announced.

The Wellington men returned on a flight from Los Angeles arriving on Saturday March 14. They travelled on American Airlines flight AA83 from Los Angeles to Auckland on seats 4a and 10h. Both are at home in self-isolation. Nearby passengers are being traced.

The Dunedin man, in his 40s, showed symptoms five days after returning, so contact tracing is not required for the flight. Two family members have symptoms. All are in isolation.

One of his family members attends Logan Park High School. Should the student test positive, the school should close for 48 hours and be cleaned, with contacts traced, said Bloomfield.

All of the cases are associated with international travel, meaning there is no evidence yet of community transmission.

Bloomfield also addressed questions around testing. Across NZ laboratories, there have been 11 confirmed tests, two negative but probable tests, and 570 negative tests. He said they were increasing testing, with around 500 being conducted today.

It was important, however, “that the right people are tested”. The current criteria are: people with a history of recent overseas travel or who have been in contact with a case; and with symptoms suggestive of Covid-19.

The current capacity is 770 tests daily it is expected that will rise to around 1500 a day later this week, he said.

There is “extreme traffic” on Healthline, said Bloomfield. That led to delays and some calls being dropped. Around 3,000 of the 7,000 calls did not require clinical advice and were re-directed to the general government helpline.

Bloomfield said he was “very happy” with the $500m budget boost, which was a “significant sliver”.

He confirmed that a visitor “who was unwilling to commit to self-isolating” has been found in Christchurch and, given she remains unwilling to self-isolate, plans are being made to deport her. Spot checks on people in self-isolation will begin today.

2.30pm: Reaction to massive economy package

National Party leader Simon Bridges has been speaking in parliament. In his speech to parliament, He criticised the lack of working capital provisions, and said many businesses would struggle to access what they needed through the wage subsidy scheme. He attacked the increase to benefit rates, saying it was an inappropriate moment to push through an ideologically motivated change.

Bridges acknowledged it was a “significant package”, and pointed to previous calls made by the National Party for many of the aspects included in today’s package.

In response, PM Jacinda Ardern said the government’s response was “about first and foremost, people.” She said “in unprecedented times, you make unprecedented decisions,” and today’s package was about meeting those challenges.

BusinessNZ CEO Kirk Hope welcomed the package, saying it will “substantially help businesses keep operating through the period of the coronavirus outbreak”.

Speaking on RNZ, economist Shamubeel Eaqub said the package was “absolutely fantastic”. He said at 4% it was massively higher than most other countries’ responses. Asked about its impact on the balance sheet and the cost of debt, he said: “It doesn’t matter. We are choosing between a recession and a depression … We don’t need to be worrying about that stuff.”

2pm: ‘The most significant peace-time economic plan in modern NZ history’

The government has announced a $12.1bn relief package amid the Covid-19 crisis. Worth 4% of GDP, it is bigger even than the response to the Global Financial Crisis, with the government calling it “the most significant peace-time economic plan in modern New Zealand history”.

The package includes $8.7bn for businesses and jobs; $2.8bn for income support; and $500m for health.

We’ve got more detail here, but here’s a quick summary of the headline changes:

$5.1bn for wage subsidies, available immediately to businesses able to show a 30% decline in revenue compared with the same time last year. For those eligible, employers to be paid $585.80 per week for full time staff, and $350 for part time, capped at $150,000 per business.

$2.8bn income support for most vulnerable New Zealanders, including a permanent $25/week increase for all main benefits and a doubling of the Winter Energy Payment for 2020 to $1400, from April 1. The benefit shift is estimated to affect 350,000 families; the WEP change, 850,000 recipients.

$2.8bn in changes to business tax to free up cashflow, including a provisional tax threshold lift from $2,500 to $5,000, the reinstatement of building depreciation and waiving interest on some late payment of tax.

$126m in Covid-19 leave and self-isolation support. For those unable to work because they are in self-isolation, sick with Covid-19 or caring for dependents in either of these situations. Again, $585.80 per week for full time staff, and $350 for part time.

$100m for redeployment. To support worker redeployment programmes.

$600m aviation support package (Air NZ will be on top of this).

There will be separate support available “for large or complex businesses”.

“This package is one of the largest in the world on a per capita basis. It represents 4.0% of GDP and is more than the total of all three Budgets’ new operating spending in this term of Government put together,” said Grant Robertson.

Jacinda Ardern said: “We will be investing in more health staff, more virus testing, more medicines, facemasks, extra intensive care capacity and equipment at hospitals, and more money for GPs. If we can manage the virus we can mitigate the damage to the economy.”

She noted that it is only “the first tranche of our response”.

The health spend includes doubling resources for Public Health Units, “specifically to increase capacity for contact tracing”, together with $32m for extra intensive care capacity and equipment; $50m in support for GPs and primary care; and $20m to improve video conferencing and telehealth consultations; and $20m to boost Healthline capacity.

There are few people in New Zealand this won’t impact; if you want to drill down into the detail, the government fact sheets can be downloaded here.

Here’s Robertson’s speech in parliament:

1pm: Multi-billion-dollar Covid-19 package imminent

The deputy prime minister, Winston Peters, says the package to be announced at 2pm is more substantial than anything he’s seen before. We’ll have full details at 2pm on the dot.

12.30pm: Air NZ suspends 13 trans-Tasman routes

As well as dramatically cutting capacity across the board, Air NZ has announced that many trans-Tasman routes will be suspended entirely from March 30. They are Auckland to Adelaide, Cairns, Sunshine Coast, Coolangatta, and Perth; Christchurch to Brisbane, Melbourne, Coolangatta; Wellington to Brisbane, Melbourne; Queenstown to Melbourne, Sydney, Brisbane.

Meanwhile, the postponements continue. The latest is Fieldays, which was to run June 10-13.

11.45am: Ministry briefing

Another busy afternoon awaits, with the big rescue package coming at 2pm, then a Ministry of Health briefing at 3.30pm. We’ll be looking for details on the ramped-up testing programme, and new information on any additional cases. If there are new positive tests, an important question will be whether they have arrived from abroad or are “community transmission”.

10.50am: Markets abroad and in NZ plunge

Glimmers of optimism which saw a sharp rise in the US flagship S&P500 index on Friday were obliterated by the end of the day’s trading on Monday. When the dust cleared, the index was down a hair under 12%, its largest single-day fall since ‘Black Monday’ in 1987. The sell-off came as the market processed an extraordinary series of events in realtime, with newly-released guidelines recommending avoiding groups of more than 10 people, along with discretionary travel, bars, restaurants and foodcourts. The index is now off by around 30% in a month.

The decline came in spite of attempts by the Federal Reserve to restore confidence, as it slashed interest rates to zero and pledged to buy hundreds of billions in government debt. As with similar moves across the world, the broad consensus seems to be that this crisis is beyond the range of central banks. Even gold, long seen as a safe haven during crisis, plunged to its lowest level since 2019. 

Meanwhile the NZX50 has opened down nearly 5%, suggesting investors lack confidence that the government’s looming business support package announcement might not be enough to hold back the Covid-19 crisis.

10am: Auckland theatres plough on

Auckland Theatre Company says Black Lover, currently being staged as part of the Auckland Arts Festival, will continue as planned. “Based on the advice we’ve received, and discussions with other organisations, all Auckland Theatre Company performances and all events at ASB Waterfront Theatre will proceed in compliance with this new government guideline, which permits gatherings of 500 in capacity. We will do this by limiting ticket sales and attendances to a maximum of 500 people.”

The Pop-Up Globe’s last NZ show, Emilia, is set to run through to the end of the week in the company’s Ellerslie Racecourse venue. “We have immediately reduced the capacity of the Anthony Harper Pop-up Globe to a total of 400 persons … We have more than halved the capacity of the standing ‘Groundlings’ area to 100 persons, allowing plenty of space for our patrons to spread out and keep at least one metre apart.” 

9.30am: Union warning on job cuts

E tū Union are warning that Air New Zealand needs to do all it can to avoid mass redundancies, after the airline’s revenue forecasts were slashed back. In a release today, the union warned that Air NZ’s long term interests would not be served by losing huge numbers of people, and that the economic impacts of such a move would be felt widely through the country. E tū Assistant National Secretary Rachel Mackintosh said “dedicated workers are the backbone of their operation. Our challenge to them is to hold fast to their commitment to high-wage, high-skill employment.”

9.15am: Canada closes borders

Canada has joined a growing list of countries taking dramatic border measures. Justin Trudeau (whose wife has tested positive for Covid-19) announced that foreign nationals from all countries except the US would be prohibited from entry, and international flights limited to four airports.

7am: Small businesses are already suffering

To get a sense of how small businesses are facing this crisis, The Spinoff’s Michael Andrew walked a block of Dominion Road in Auckland and knocked on doors. For many of those he spoke to, the picture right now is bleak. Here’s an excerpt:

“With no revenue and yet still needing to pay rent and staff salary, Mohammad sent a letter to his landlord requesting a six-month rent-free period. His landlord instead told him to contact his insurer, which advised him that the onslaught of travel cancellations connected to Covid-19 was not covered in the policy. With customers continuing to cancel bookings and request refunds, Mohammad says his staff are growing nervous about where it could lead.

“They’re worried, they’re so scared that we might just do an announcement to say look we’re sending you home, we’re closing down. What do we do?”

Media is another industry that is now facing a severe economic crunch, despite a surge in demand for news and journalism. As Duncan Greive reports, it is having a ripple effect through the whole sector – from travel companies not wanting to buy radio advertising, to Sky TV not having the sporting content promised to customers. It’s an unprecedented situation, hitting at a time when media companies were already up against it. Here’s an excerpt:

“Radio, the great cockroach of the media might have finally met a worthwhile opponent. The medium has thrived in part because its well-defined audiences and scalable distribution makes it of real value to small-to-medium sized businesses, so it can make even relatively tiny markets work. On a recent trip to Gore I was surprised to find an NZME office – but I shouldn’t have been, it also has offices in Dannevirke and Waipukurau.

The downside of this small business focus is that such clients book direct, and are less likely to long-term plan than larger nationwide clients, who often book through agencies. These will follow soon enough though – an agency radio booker I spoke to said that over the weekend they had calls from travel companies saying “get me off air immediately”, but that otherwise they were “waiting for the onslaught”. (Incidentally, media and advertising agencies, often run on a global basis, are already starting to order all staff to work from home to ensure business continuity contracts are upheld).”


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6.50am: Global markets continue to crash

Once again, stocks on Wall St have taken a hammering overnight. Reuters reports that for the third time in just six days, trading had to be paused to halt a plunge. In the US, a drastic rate cut from the Fed doesn’t seem to have soothed markets much – instead, it appears to have led to panic about just how bad the crisis could get.

6.45am: An overnight update

Via Alex Braae in The Spinoff’s morning newsletter the Bulletin, here are all the latest developments in the Covid-19 story: Gatherings of 500 or more people have been banned in the latest round of measures aimed at preventing the spread of Covid-19. It has meant the cancellation of many events, some of which are listed in yesterday’s Live Updates page of all major developments. Included in them are Polyfest, which is sadly off for the second year in a row. It was an example of an event in which contact tracing would be impossible, should a case be found, because of the sheer number of attendees. The crowd size limit rules out more than 100 events over the next month, and there will be huge implications for that part of the hospitality and tourism industry.

The rules are an attempt to enforce social distancing, in case of an outbreak. Schools have been exempted, but more specific advice from the Ministry of Education is on the way for them, reports Stuff. It is likely that schools will still look to limit the number of people in any one place at any one time. The NZ Herald reports that the ministry is currently ringing around to assess capacity and capability for teaching to take place online, however unless community transmission of the coronavirus takes place, it is unlikely that schools will be closed outright. The measures are understood to be partly inspired by countries in Asia that have been successful in preventing outbreaks from getting out of control – here is a New York Times report on Taiwan, Singapore and Hong Kong.

PM Jacinda Ardern says a policy of social distancing should now be treated as a new normal. To reiterate those messages from yesterday, the purpose of social distancing is about keeping everyone safe, as it slows any potential spread. It’s a very real concern that the health system won’t be able to handle the volume of cases if there is a massive outbreak – Italy in recent days giving a stark example of what that looks like. Newsroom’s Marc Daalder has spoken to health system experts in New Zealand, who warn that slowing any spread is essential if the country’s Intensive Care Units are going to be able to withstand the pressure.

To give some examples of how that new normal is playing out, there was a note on Checkpoint last night that Unite Union have serious concerns about workers on the floor at SkyCity casino, and the NZ Herald reports that couriers will stop taking signatures upon delivery of packages.

Major businesses are also in the process of stepping up their social distancing protocols, reports Business Desk (paywalled.) Among the measures being taken: some are cancelling all non-essential domestic and international travel, others are telling any employees able to work from home to do so, and others still are requiring staff to stay on the floor that they’d normally work on during the workday. In case you missed it, Richard Simpson put together some simple tips for workplaces to adopt, if people are going to be in the office. Among a whole lot of other businesses, we at The Spinoff will be testing out a work from home day later this week. Regular coverage will continue as normal.
And speaking of wider community safety, the government has warned travellers who don’t have self-isolation plans that they will face deportation. Newshub had a report yesterday morning about backpackers who were fairly blase about the whole thing, and it’s fair to say that was not a popular position. Later on they followed up with some much stronger comments from the PM, who said that those who didn’t have self-isolation plans in place would have to either accept being detained, or be deported. To quote her directly, she said those who didn’t adhere to the rules were “not welcome,” and that there were “high chances of being refused future visa applications here and overseas.”

A media release hit the inbox right when yesterday’s Bulletin was being sent out – the Reserve Bank had a surprise update. It turned out to be a major cut in the Official Cash Rate, which went from an already record low of 1.0% to 0.25% – for more on what that means, and why the Reserve Bank is doing it, read this cheat sheet. It comes ahead of a massive fiscal package today, to be delivered by finance minister Grant Robertson – Stuff reported yesterday that he had welcomed the OCR cut, and that it will be backed up with billions of dollars today. He also talked about bringing in the business sector and unions in protecting jobs amid the wider economic downturn.

For more editions of Covid-19 NZ Latest see here.


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