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