HomeNEWSAuckland under alert level 3: Council predicts 250 jobs lost per day

Auckland under alert level 3: Council predicts 250 jobs lost per day

Auckland Mayor Phil Goff has been warned businesses teetering on the edge of collapse during the first lockdown may go to the wall this time around.

The council’s chief economist is expecting about 250 jobs are being lost a day under level 3 restrictions, with about a quarter of the city’s workforce unable to work at all.

About 250,000 of Auckland’s 900,000 working people can’t work at all under the current restrictions. Almost 300,000 are working from home.

Council figures show the first lockdown cost 24,000 Aucklanders their jobs, despite the $585-a-week wage subsidy.

Goff said winning a wage subsidy extension was his number one priority for keeping Aucklanders employed. He said it was also top of the wish list for the business community.

“That’s what will enable a whole lot of businesses to continue through a challenging and difficult period,” Goff said.

But relief for another large fixed cost – rent – is not a priority being pushed in the Beehive by the mayor.

Auckland Council chief economist David Norman said, even if businesses could weather this storm, all forecasts and future plans came with a big caveat.

“If things go well and it looks like we can get things under control in a couple of weeks, then that might be all we need at that level.Mayor Phil Goff said Auckland was experiencing its worst drought on record.

Auckland Mayor Phil Goff. Photo: RNZ / Dan Cook

“But things could equally go the other way, and that means that businesses don’t have certainty, which makes it harder to plan ahead.”

One thing that is able to continue at this stage is construction.

Norman wants even more “shovel ready projects” to be funded in Auckland – as does the mayor, leaning on central government.

“It helps with the creation of hundreds, if not thousands of jobs, but just as importantly it helps to provide the infrastructure that Auckland desperately needs with the growth that it’s had in the last 10 years,” Goff said.

“So what we’re doing in stimulating the economy and creating jobs, we’re also providing long-term assets for future generations.”

The latest iteration of the wage subsidy is set to run for as long as Auckland’s in level 3 restrictions.

Norman is predicting unemployment in Auckland to reach about 8 percent by early 2021 – twice as much as it was pre-Covid. How firm that prediction may hold is not yet clear.

Infometrics economist Brad Olsen described Auckland’s business environment as precarious and uncertain.

For round two of lockdown, Olsen said many companies were in a more vulnerable financial state with fewer cash reserves.

“They don’t have the sort of fallbacks that they previously had. I think for a lot of businesses there’s the general toll of wondering when this will end,” Olsen said.

He said face-to-face businesses – retail, hospitality, and clearly, tourism – would feel continued pain with another lockdown.

To add to the uncertainty of how long the current restrictions will last, the spectre of further lockdowns is now more real. Olsen called this a reality check for businesses all around the country.

“Realising that Covid-19 is going to exist with us for an extended period of time, and that means that planning for business operations needs to include that persistent risk, realising that we could well go into different restrictions at different points over the next year or so ahead,” Olsen said.

This story originally appeared on rnz.co.nz

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