Coronavirus: Jacinda Ardern says 'too early to tell wider impacts' on economy

Thursday, 5 March 2020, 10:25 am
Article: RNZ

The government insists it has everything in place needed to limit the economic damage caused by the Covid-19 outbreak, and to support workers and businesses bearing the brunt.

A group of senior Cabinet ministers has been convened specially to drive the official response.

Over the past week or so the government has announced packages and money for various industries, like tourism, as well as sending the message government agencies would help struggling individuals or businesses, whether that is support through the Ministry of Social Development (MSD) or the tax system.

IRD would be flexible on re-calculating provisional tax, Prime Minister Jacinda Ardern said.

"We've also asked them for a bit of extra advice on some of the mechanisms they used, for instance in Havelock North, when they had a considerable number of businesses affected."

She was asked whether there was a cash contingency fund if the situation for businesses deteriorated further.

Ministers continued to work on ensuring cash flow and workforce for businesses hit by the downturn.

They had not yet been given a 'back of the envelope' figure for the total cost to the government and the economy, Ardern said.

"At this stage what is dictating our decision is where the need exists... connecting directly with those sectors."

The government was "not confined by dollar figures", she said, "but rather working very proactively to address the needs they're identifying with us."

At the moment it could only estimate the total cost as it was still "too early to tell the wider impacts", Ardern said.

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The number of people who had been in touch with MSD was in the "low hundreds", Ardern said, but she expected that number to grow.

Finance Minister Grant Robertson said ministers were working through on a "sector by sector, region by region" basis.

"This is affecting businesses very, very differently", he said.

"We've obviously got export-focused businesses where we've seen some immediate impacts... we're working that through, we've got people on the ground."

He has left open the option of tax cuts or direct cash payments to people to stimulate the economy; Robertson seemed to favour the latter as it would be a one-off measure.

Part of the work being done now was to gauge what level of spending may be necessary, he said.

"I think it's really important we do do this in a measured way, we've got to make sure that anything we do actually gets to the people who need it, that it actually solves the problem that we've got and is sustainable."

At the moment the economy was "continuing to tick over", Robertson said, although "clearly there are significant problems for particular industries and particular regions."

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