Queenstown in autumn. Photo: Getty Images
Queenstown in autumn. Photo: Getty Images

The BulletinMay 1, 2020

The Bulletin: Queenstown crushed by Covid-19, recovery deeply uncertain

Queenstown in autumn. Photo: Getty Images
Queenstown in autumn. Photo: Getty Images

Good morning and welcome to The Bulletin. In today’s edition: Economic collapse of Queenstown looms, trade minister warns of over-reliance on China, and a must-read new edition of The Side-Eye.

For a lead today, we’re going to focus on a part of the country that could end up wearing the Covid-19 downturn hardest. Before this, Queenstown was booming, to the point where overtourism was a frequent complaint, and there were plans for big expansions in housing and airport capacity. It used to see more than 30 tourists a year for every resident. Now the future for the area is deeply uncertain.

The quickest way of showing exactly how much things have shifted in a hurry is the rental property market. Stuff’s Debbie Jamieson reports a flood of new listings have already hit the market, and a big dip in property values is likely to follow. Many owners are heavily mortgaged after buying into an inflated market. Some will also be AirBnbs, which now have little prospect of regular customers. And some tenants appear to be doing runners – we don’t know exactly how many, but one informed correspondent passed on an estimate that it could be as high as 20%.

The fundamental problem is that the economic base of the place was tourism, and that has been shattered. Radio NZ reports that businesses all over Queenstown are now struggling with commercial rent, and when the wage subsidy runs out further redundancies are all but certain. Many will no doubt take up whatever government support is offered to go dormant, rather than try and stay afloat until they can reopen. But even in those instances, will that time ever actually arrive? To give you a sense of how far away that could be, right now the local MP Hamish Walker is advocating for flights to return to Queenstown airport – it has been totally removed from Air NZ’s schedule.

Some hoteliers are optimistic that a long term recovery could take place, reports Mountain Scene’s Philip Chandler. The short-term is obviously a write-off for them as well, and even with a ski season coming up, domestic tourism is unlikely to come close to replacing international visitors. There is some hope that the borders will gradually be reopened to some of the traditional visitor markets, like Australia and Korea. As Crux reports, mayor Jim Boult is hopeful of getting some taxpayer funding for “shovel-ready” projects. And Mountain Scene has a report on one of those potential projects – a $12 million dollar film studio about 30kms out of town which would aim to attract international jobs.

But for many of the workers in the tourism and hospitality industries, very serious problems are looming right now. Newsroom’s Dileepa Fonseka reported on the situation for suddenly unemployed migrant workers, who are facing what is being described as a “humanitarian crisis”. Those people are currently being supported primarily by Civil Defence, and there are calls for MSD to step in and make an emergency benefit available.

To put it bluntly, Queenstown needs something other than tourism to survive. A range of ideas for what could happen instead have been gathered up by Crux, as part of Project Phoenix – an initiative aiming “to reduce our exposure to mass tourism as a single source of community income and jobs.” The people who made Queenstown what it was until Covid-19 are nothing if not entrepreneurial, but they’re going to need a lot of luck and support too to get through.

Just quickly, a message from our editor Toby Manhire:

“Here at The Spinoff, members’ support is more important than ever as the Covid-19 crisis lays waste to large chunks of our commercial work. It’s a tight time for everyone, of course, but if you’re able to, please consider joining Spinoff Members to help us stay afloat and keep producing work by the likes of Siouxsie Wiles and Toby Morris, whose collaborations have had a real impact in New Zealand and around the world.”

Some of the recent statements from foreign minister Winston Peters would suggest he’s not necessarily on the same page as the trade minister. That was the subject of this crunchy Newstalk ZB interview with the trade minister David Parker, who indicated that there actually was quite a bit of common ground between the two politicians. For example, he stressed that both were concerned about an over-reliance on China as an export market, with Parker raising what happened to the rock lobster industry this year as a reason why.

Meanwhile, exports over March were at record-high levels this year, led by kiwifruit and other food prices being high, reports Interest. Some markets were down, particularly wood and overall exports to China. However, the figures show exports to the US, EU and Japan were all up compared to March last year.

You simply must read the latest edition of The Side Eye by Toby Morris. It catches up with Tasia, a supermarket worker who we met in an editorial cartoon several years ago, and charts how her life has changed since her job was deemed essential. If there’s one thing that you should take away from it, it is that supermarket workers were essential before the pandemic, they’ve been essential during the pandemic, and they’ll be essential after it all as well. They should be treated and paid accordingly.

Urgent legislation to open up billions of dollars for small business loans has been introduced by the government. More details on the scheme will be announced today. Our live blog from yesterday also reports that Reserve Bank rules on lending restrictions (LVRs) have been scrapped for the next 12 months. Those updates are just two of many in what was a fairly full day of news.

New Zealand’s decriminalisation of prostitution has meant sex workers have not been as badly hit by lockdown rules compared to other countries. The Guardian reports that like any other workers or sole traders who have lost income, sex workers have been able to claim the wage subsidy, meaning that many actually have been able to afford to stop working. There is an acknowledgement in the story that such an experience won’t be universal. However, the decriminalised status is seen by researchers as a major advantage in the effective provision of assistance.

A story for those of you who follow issues like central bank independence: Interest’s Jenée Tibshraeny has reported on speculation that the Reserve Bank will step up the way it is funding the government at the moment, through buying bonds directly from Treasury. The effect of that would be to more closely bind two institutions together, that in recent years have had much more distance.

We had a story above about a South Island region where things are looking bleak, but here’s a place where things are looking up a bit more. Michael Andrew has reported on the mood of businesses in Golden Bay, up the top of the South Island. What seems to be getting the hospitality industry through there is community goodwill – right now people are reportedly being active in their support for the outlets they liked before the lockdown.

Meanwhile, a review of freedom camping bylaws for the Tasman District is being kicked up to the District Council, reports Stuff, with a decision likely to be made before next summer. A big impetus for this has come from Golden Bay locals, whose community board recently called for a local ban. I’m personally inordinately interested in what the Council decides, after visiting Golden Bay earlier this year and reading the intense debates on the topic in the local paper. One wonders if the rapid decline in tourist numbers will force a rethink on whether freedom campers should be turned away.

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A bond created in lockdown. Illustration: Toby Morris.

Right now on The Spinoff: Sam Brooks writes about processing grief during lockdown, when you cannot share it in person with other people. Former MP Holly Walker writes about how loneliness can be taken into account at a policy level. Business is Boring speaks to figures in the magazine industry about the survival of publications. Josie Adams reports on the spike in injuries being seen among those who are trying out being handy around the house. Charles Anderson writes about his kids learning from home, and him learning to balance order and disorder to make that happen. Zoe Walker Ahwa writes about the dismal outlook for New Zealand’s fashion industry. Sam Brooks (again) reviews the TV adaptation of Sally Rooney novel Normal People.

We’ve also got an update from our mates at Unity Books. They’re back open for online orders, and it is thrilling to see the reading community get behind them.

And finally, we’ve got a gorgeous aerial video of Wellington’s streets under lockdown. Watching it, it was hard not to feel a little nostalgic for one small aspect of the lockdown – the calm and pleasant walks through quiet streets.

For a feature today, a wonderful piece of writing about the heroic perception of doctors right now, from one who is out there on the front lines. Dr Lucy O’Hagen, writing on health publication Corpus, has looked at the recent deification of Dr Ashley Bloomfield, arguing that it’s not that it isn’t warranted, but that it is based on a particular set of circumstances that the writer doesn’t share. Here’s an excerpt:

We trust him. Ashley Bloomfield couldn’t tell a lie to save himself. The worst he might do is save some critical information for tomorrow’s show, so that he has more of a handle on its implications.

I’d like to be the Ashley Bloomfield kind of doctor but I’m not. I’ve got bits of Ashley in me but I have a different job from him. I’m not sure how he would go delivering flu vaccines and good cheer in overheated council flats that smell of urine and mutton fat, as I do; checking a patient is not overmedicated even though the floor is littered with a month’s unopened blister packs; wanting to get away before the patient’s son walks in the door because I suspect he is a criminal and selling his mother’s morphine.

Ashley is great but my situation requires another sort of doctor.

An extremely grim financial forecast has been released by NZ Rugby, reports the NZ Herald. They’re projecting a 70% decline in revenue, with major All Blacks fixtures not yet cancelled, but not very likely to go ahead. They’ve also made a loss on the purchase of a stake in Sky TV, a deal which included the clause that they’d have to hold the shares for two years. There has also been a changing of the guard on the board, which has set itself the goal of rebuilding the sport to survive. Meanwhile, Stuff reports the global governing body has made a $15 million payment available to tier one nations, which is money that otherwise would have come at the end of the four year cycle in 2023. NZ Rugby is considering whether or not to take it now.

That’s it for The Bulletin. If you want to support the work we do at The Spinoff, please check out our membership programme.

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