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Economic Weekly: I see Red, I see Red, I see Red…in early December?

The much-awaited roadmap out of the current Alert Levels arrived on Friday with the traffic light system to regulate future restrictions.  In the interim, the path to more freedom means 90% of 12+ year-olds being fully vaccinated before there will be a shift to the new system.

The paths differ for within Auckland and beyond.  Auckland, with its hard border in place for now, can move to ‘Red Alert’ once all three of the region’s DHBs have reached 90% full vaccination rates. Currently, the most lagging DHB had a first and second jab rate of 88% and 73%, respectively.  Our rough estimate suggests the second dose target could be hit in the first week of December – bringing more freedom, assuming hospitals aren’t overloaded at that point.

The rest of the country will get to move to ‘Orange Alert’ once all other DHBs have hit the 90% target, with the potential for the South Island to move earlier – if all its DHBs hit the 90% target before the North Island and it remains free of community transmission.  Outside of Auckland, some DHB regions in both Islands have second jab rates in the low 60% mark.  That suggests the transition – and full easing of regional borders – could be later than early December.  It also leaves the question of what to do if some regions don’t hit the target in some reasonable timeframe.  Cabinet will review progress on November 29.

The system brought a clearer stance on vaccination: no jab no fun i.e. no access to many venues or services.  It sounds like the Government is working on enabling employers to impose vaccine requirements on staff, which would make sense to do so.  There is little point limiting entry access to vaccinated customers only for them to be served by unvaccinated staff.  As it is, employers face thorny challenges around Health and Safety requirements for their staff and privacy issues.  Having the Government sort that out through clear laws will save a lot of time and money for employers, particularly SMEs that don’t have the deep pockets for Health & Safety consultants and lawyers.

What does this mean for the economy?  Unfortunately for Auckland businesses (and those in other areas affected by restrictions), it means roughly another 5 weeks of some form of Level 3 restrictions: over 15 weeks in total of heavy restrictions.  That’s a long time to keep dragging a picnic blanket around like Linus to seek some comfort.  The Government has doubled the Resurgence Support Payments for businesses.  But the Government should keep plugged into on-the-ground business associations and be prepared to bolster that support.  Most of us are making some form of sacrifice at the moment.  But it is the owners of many Auckland SME’s, hospitality and entertain venues that are facing huge financial and mental strain.  And soberingly, lockdown conditions could be running up close to Christmas, delivering a significant dent in what is typically a seasonal highpoint in revenues.  The country owes it to these businesses to be compensated for the sacrifice they are making – through no fault of their own – to buy time for the last few to get vaccinated.  nick.tuffley@asb.co.nz

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Jane Turner

Senior Economist

Originally hailing from sunny Nelson, Jane moved to Auckland to join the ASB team in 2008.  As Senior Economist, Jane's main focus is co-ordinating the team’s macro-economic forecasts.  In this key role, Jane was thrilled by the team’s twice consecutive win of the Consensus Economics Forecast Accuracy award.   

During her decade-long career in economic forecasting, Jane has gained a thorough knowledge of the New Zealand economy.  Her current focus is on New Zealand GDP growth, including both manufacturing and the construction sectors.  She has spent time forecasting most sectors of the economy, including inflation, trade, housing, labour and financial markets.

Prior to joining ASB, Jane honed her macro-economic forecasting skills at the Reserve Bank of New Zealand.  Jane is a qualified scarfie, attending Otago University and graduating with a Bachelor of Commerce in Economics with 1st class honours.  In 2014, she took a career break from ASB to travel the world and learn to snowboard.

Mark Smith

Senior Economist

Mark joined ASB in 2017, with over 20 years of public and private sector experience working as an economist in New Zealand and the UK.

His resume includes lengthy stints at ANZ and the Reserve Bank of New Zealand, and he has also worked at the Bank of England, HM Treasury and the New Zealand Transport Agency. Mark's areas of specialisation include interest rate strategy, macro-economic analysis and urban economics.

Born and bred in the Waikato, Mark studied at Waikato University where he graduated with a Master of Social Sciences, majoring in Economics.

Mark's key strengths are the ability to use his extensive experience, inquisitive nature, analytical ability, creativity and pragmatism to dig a little deeper and to deliver common sense solutions to tackle complex problems.

When not at work Mark likes to travel, keep fit and spend time with his friends and family.

Mike Jones

Senior Economist

Mike joined ASB in 2019 armed with almost 15 years of experience in applied macroeconomic and financial markets analysis.

Mike's career has been all about distilling the risks and opportunities of economic and financial market trends for business. Basically asking the "what does it all mean" question. Mike's enthusiasm and skill for drawing out practical, commercial insights from the murky world of economics has been honed over a relatively broad base of experience.

After spending the early part of his career on the tools at the Reserve Banks of both NZ and Australia, Mike had a lengthy stint at BNZ where he was NZ’s top-ranked currency strategist. His regular and topical macro research also saw him pick up several FX forecast accuracy gongs from Bloomberg.

Drawn in by the prospect of putting strategy into practice, Mike moved from Wellington to Auckland in 2013 to join Fonterra as GM Treasury Risk Management. In this role, Mike lead Fonterra’s macroeconomic research output, and was responsible for the strategy and execution of Fonterra’s foreign exchange, debt, and interest rate hedging programmes.

mike.jones@asb.co.nz