A Map of New Zealand with the words "What happens after Covid 19" and "RIP' plus the number "22" superimposed over it.

New Zealand – What Happens After Covid 19

 

New Zealand is the envy of the world being the first country to come out of lockdown as of midnight last night, but what happens after Covid 19?

We’ve been in various stages of lockdown since the 25th March 2020 until all internal restrictions were lifted at midnight on the 8th June, 2020.

The whole world is praising our government, and in particular our young Prime Minister Jacinda Ardern, for the way they have handled the crisis.

But all is not as rosy as it seems as the fallout on many fronts started weeks ago and will continue to escalate and get worse.

How will this impact New Zealand and more importantly what impact will it have on you and your family?

22 Deaths - Over 38,000 Casualties (and counting)

We’ve done a wonderful job in keeping our death toll down to 22 during the Covid 19 period. 

All of those deaths are either elderly folk, people with underlying health conditions or both.

At time of writing we have ZERO active cases.

Yes those numbers look excellent – especially when compared with the original predictions of a potential of 25,000 deaths, but do they tell the whole story?

The big picture is a lot worse because we have had over 38,000 small businesses shut down – the lockdown period was just too much and too long for them to survive on narrow margins.

That’s at least 38,000 families affected – it they are one-man businesses and a hell of a lot more if they aren’t!

A New Zealand cemetry with the words "22 dead" in large superimposed over the image

The Warehouse group for example is closing 6 or 7 branches which amounts to job losses for 1080 people.

That’s massive for a country the size of New Zealand!

People have apparently committed suicide as a result and more suicides and family breakdowns are expected as the pressure mounts.  

These deaths will probably not be recorded as Covid related deaths but they are!

The bad news is that early predictions are for up to 30% of businesses in Auckland to go under.

Bearing in mind that 75% of us live in Auckland you may as well say 30% of businesses in New Zealand are likely to go down the tube!

  • How does a small country like our recover from such a disaster? 
  • Where will those newly unemployed find work?
  • Our unemployment rate just prior to lockdown was 4.2% 
  • Conservative predictions are that the numbers will rise to a massive 25%
An image of one of the Warehouse outlets and the words "The Warehouse group is closing 6 or 7 branches with up to 1080 jobs o be cut - that's massive" superimposed over the image

NZ - A Small Country Fuelled by Small Business

With approximately 5 million people New Zealand is less populated than many cities around the world.

We’re rather tiny and probably insignificant.

As a result we are a country with a lot of small businesses, one man or family-owned operations.  We are the genuine “mom and pop” shop!

As mentioned above we have already lost over 38,000 small businesses whose owners and employees are now looking for work in a hugely diminished market.

But what of the larger employers?

Our two biggest industries are tourism and dairy.

 

A picture of small businesses with the words "We're a country made up of small businesses and already about 38,000 have closed down because of the Covid 19 lockdown"

Our biggest employers are foreign owned companies – the larger banks for example are owned by Australian companies.

The board of directors of these organisations are far removed from the coal face and the mighty dollar is what keeps share holders happy.

With a shrinking economy, the likelihood of house prices dropping, savings being eroded, the risk of inflation and a myriad other unknowns facing the economy the banks are likely to feel the pinch too.  

Who knows what they will do – my feelings is that there will be a greater emphasis on online transactions, fewer brick and mortar branches and hence staff being laid off.

I hope I’m wrong …

The Tourism Industry's Future

Our borders are still closed and anyone coming into the country to visit or conduct business will be isolated by the government for the requisite 2 weeks.

This will have a massive negative impact on our tourist industry.

Can you imagine anyone using their limited annual leave  to visit only to have to spend the first two weeks in isolation?

If you’re involved in the tourist industry in New Zealand you are going to have to rely on locals to come visit and fill your coffers. Moves are already afoot to promote NZ holidays to New Zealanders.

But as has been seen New Zealanders are hurting financially and the oulook is not bright.

I think our tourist industry, and all the related businesses, are in for a very tough few years ahead.

Earlier predictions are that 1 in 5 (20%) of tourist related businesses are predicted to fold – personally I think it will be worse. 

I hope I’m wrong …

A photo showing a travel shop promoting tourism with a plane plummeting to the ground superimposed over the photo and the words "what happens to New Zealand's tourist industry after covid 19?"

The Outlook for The New Zealand Dairy Industry

Fonterra is by far our largest single employer and generates a massive (by NZ standards) revenue in excess of $17 billion.

It is Australian owned but almost 90% of local dairy farmers are shareholders.

Our biggest dairy consumers are the Chinese and 95% of all Fonterras’ products are exported overseas.

Hopefully Fonterra will continue to provide this much needed foreign income and in so doing retain it’s staff and keep our many dairy farmers and their families and staff in employment.

The Vegan and Whole Food Plant Based movements have had a negative effect on dairy consumption and will no doubt continue to do so.

While our borders are closed the closures to not apply to trade and long may our dairy product exports continue.

 

 

 

A photo of a dairy cow depicting the uncertainty of the industry after Covid-19

The Outlook For the "New" New Zealand - Period

With the government having borrowed in excess of $50 billion to help keep the economy and people alive diring the lockdown New Zealand has accumulated a massive debt that will have to be funded somehow – but “how?” is the question on everyone’s mind.

We’ve already seen a dramatic loss of businesses through closures and staff cuts.  

This will in turn will lead to:

  • A smaller tax base.
  • More people on unemployment benefit.
  • An increase in persoanl and corporate taxes.
  • Increased petrol prices (with accompanying taxes and surcharges).
  • Reduced incomes and smaller annual increases.
  • A rise in inflation.
  • A domino effect on house prices – probably down as people try to get out of mortgages.  This in turn puts more pressure on rental demand and prices.

Kiwis are renowned for their “never say die” attitude and we will have to adapt to this “new world” we will live in.

As a result of the Covid lockdown more people will:

  • Work remotely – possibly going into an office far less than previously. Employers have realised this approach can work and will encourage it.
  • An increase in online shopping – something many Kiwis triued for the first time during the lockdown.
  • Trim their budgets quite drastically.
  • Become homeless or live with more people under one roof.

Essentially it will impact on all aspects of life as we knew it in a mostly negative way.

That’s not good news.

I hope I am wrong …

A Map of New Zealand with the words "What happens after Covid 19" and "RIP' plus the number "22" superimposed over it.

What Happens After Covid 19 to You and Your Family?

I guess this is the question we all ask ourselves. 

At the end of the day what happens to others does not have the same impact as what happens to us.

If you have a job:

  • Hold on to it with everything you’ve got – hundreds of others will be queuing up to take your place if you so much as falter.
  • Your boss will be looking to cut costs to keep margins competitive – do not give him/her an excuse to get rid of you.
  • Anticipate smaller annual increases and in some cases even a reduction in pay. Trim your budget accordingly.
  • Work harder than ever before – you’re probably going to have to.
  • Have a plan B – what would you do should you lose your job or we have another lockdwon like the one we have just had? 
An image of a young woman staring into a crystal ball to learn what the future holds for her

The Silver Lining - A Great Opportunity Awaits Us All

Throughout this post I have painted a bleak future for New Zealand because I honestly believe we are in for a rough ride.

I also believe that the pain will be felt mostly by the poor – it always seems that the wealthy can survive and often become even wealthier.

Yes the government will provide a benefit – but it will hardly be enough to live off.

People wil have to be innovative and do whatever work they can get.

More people will turn to online shopping in search of bargains and the convenience of not having to travel to buy goods.

But as always there is a silver lining in every dark cloud …

In fact there are no doubt many silver linings but I want you to consider starting your own business with next to zero overheads – using your passions and life experience to make a really good living.

I’ve written about affiliate marketing throughout this site and I won’t rehash it all here.  

It may be just what you are after and what’s more you can do it with your spouse, partner, family or a friend – all from the comfort of your own home.

You can read more about Internet Affiliate Marketing and how it all works in this post

2 thoughts on “New Zealand – What Happens After Covid 19”

  1. A well thought out, balanced and presented article……..we definitely as a Nation have to think as to where from now….the life we had before March 24th will never be the same and obviously we will try our best to adapt, a few will do this better than others.
    Having said this, and yes, hind sight is a great thing, but I will repeat it until I am blue in the face….we didn’t have to be in this position if our borders were closed when the PM was advised too…….we had enough warning of what was happening around the world and we were ill prepared. That’s not to mention the constant daily reassurance that we had enough PPE equipment, just ask the front line staff if there was…..Our PM failed us and I have little faith she will get our economy up and running. To suggest that businesses who had been closed during the Lockdown have a 4 day working week so NZers could go out and travel around the country to help the tourism industry shows just how out of touch she is. Who can afford to travel and holiday when 1000’s have lost jobs, this just adds extra emotional stress on those suffering already.
    I have no idea of what the future will be, but it will be bleak looking at it from where we are today.
    I look forward to reading more of these comments from you Lawrence. Its always interesting to get different perspectives on these tough times.

    Reply
    • Thanks for your positive comments Lyn.
      Life will have changed and to get back to where we were economically I believe will take at least 3 generations – if ever.
      4 Day working weeks are a joke (and an insult) and just yesterday I heard on the News That croupier’s at Sky City Casino have been offered 8 hour weeks! FGS imagine an 8 hour week.
      People will have to adopt and take advantage of new opportunities that exist out there.
      Your comments much appreciated.

      Reply

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