The Electra Business Breakfast was super pleased to be back operating in-person at Alert Level 1 yesterday and hosting
Sharon Zollner, the ANZ Chief Economist.
Sharon spoke to a full house at Southward Theatre that transformed the new normal for the Electra Business Breakfast
with a small army of people to feed, inspire, connect and engage attendees. There was certainly a sense of people
wanting and being ready to get together in person. The full English breakfast catered by PartyPerfect Catering was
enjoyed by everyone and Sharon did not mince her words, observations and predictions.
She spoke on the New Zealand COVID economic environment covering the macro global view and drilling down the NZ and
regional perspective. She spoke with knowledge and confidence and certainly demonstrated that she and her team are in a
unique position to provide the views that she did as we start the recovery phase post COVID.
She made it clear that New Zealand is the envy of the world with no community transmission and a supportive Government,
yet our reward for COVID will still be a recession. Quarantine at the border is needed to keep the virus out yet very
expensive at $4,000 per person. This has a real impact on all New Zealanders and those wanting to return home – there
are more than a 1M New Zealand passports resident around the world so just image the impact if they all want to return
home in the short term with pressure on housing and some likely needing social assistance, and others just wanting a
safe haven until they can return to where they came from. These New Zealanders have the potential to be high value
domestic tourists while they are here.
She went on to cover industries hard hit like health and construction particularly with migrant worker losses and the
tourism trail from Auckland, the Coromandel, Rotorua and the South Island along with the education sector with the lack
of foreign students. With some hope is the New Zealand agricultural and food production in between the tourism hot spots
which other countries need and are demanding. With nimble exporters this means the potential for an export led recovery.
She made it clear that monetary policy is tapped out and New Zealand banks are preparing for potential negative interest
rates in April or May 2021. She referred to this as ‘twilight zone material’ and we need to be careful not to give the
key to politicians to the money printing room. She confirmed a reset will be necessary for New Zealand to reduce debt
and she felt some Governments’ in the world may never pay back money they have loaned during this time.
She was certain the US will shrink, and China will grow out of this recession and New Zealand and Australia tensions
will need to make value and commodity price choices. The New Zealand Reserve Bank is likely to print more money in
August and interest rates will remain at historical lows for some time which first home buyers and investors will
embrace. Sharon was insightful and well-spoken, we thank ANZ for bringing her to Kapiti and for hosting many of their
local business clients at Breakfast.