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My worries about the economic effects for Nelson of the Covid-19 pandemic have multiplied tenfold since raising the issue in February and calling community leaders together. I support the lockdown for the reasons outlined in last week’s column on the health response. We must urgently focus on a plan for rebuilding our economy.

The scale of economic damage is unprecedented. NZ is losing a billion dollars a day under lockdown. Tens of thousands of jobs are lost already. It is right the Government is responding in support with wage subsidies, welfare and business support, but its revenue will also be down. Every dollar provided in the Government support will have to be recollected in future income tax, GST and business taxes. We must spend carefully and wisely.

Nelson is better placed than most regions to weather the economic storm of Covid-19. We have a broader base than most regions. Our seafood, horticulture, forestry, farming and tourism sectors are the pillars of our economy. Tourism has taken the hardest hit but all of our major industries face extra costs, disruption and risk.

The immediate focus must be on getting those industries that can maintain safe social distancing back working. Australia has not shut down the building and construction industry but is achieving similar reductions in new infections. Nelson Pine Industries is a key exporter and employer that can safely be restarted.  We need a return to competition in food supplies from butchers and vege shops subject to tough health protocols. I am not critical of the initial lockdown but want us to quickly progress to a more sophisticated response. Nelson has had no new cases in five days and there is no evidence of community transmission. There is a strong case for our region moving to lesser controls.

Nelson’s tourism and hospitality sector is the hardest hit and needs special support. The only positive is the closure came at the end of the busy summer season. Borders will be closed for months and when reopened will still be very restrictive. We need to be planning a major domestic tourism promotion in spring when out of this health crisis, encouraging kiwis to enjoy our own country.

The challenge for our fruit, wine and seafood businesses will be in maintaining prices and volumes. We export many premium products used in the global restaurant trade and the top end of the consumer market. We will need to adapt quickly. NZ’s trade representatives will need to work extra hard to keep borders open to our products. A risk for Nelson, as the most export focused region in NZ, is that the world turns protectionist as it did in the 1930s with disastrous consequences.

It makes good sense for Government to ramp up its investment in infrastructure in these times. The inadequacies in our state highway network and our public hospital have to be fixed this decade. We need to bring forward these investments so as to provide worthwhile jobs and important assets for the future. I would much rather we borrowed to build such infrastructure rather than paying large numbers of people to do nothing. We should also ramp up our investment in tertiary education to reskill people for the major changes in the workforce.

We need to begin now on the plans to return Nelson to prosperity. That is why this week I have several video conferences with business, community and hospitality sector leaders. We need to act with agility and urgency on the plans needed to rebuild Nelson’s economy.

   

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