The Executive Director of the New Zealand Maori Council, Matthew Tukaki, has today warned the Government and Opposition parties that they must turn their attention to the economy and be prepared to present a “Building to Recovery” stimulus package. Tukaki who led the worlds oldest and one of the largest employment companies through the Global Financial Crisis has said that “was a walk in the park” compared to COVID19.
“We are faced with a health crisis that will be with us for a long time – it will affect our trade relationships with overseas countries, our distribution and supply networks as well as our domestic trade, small business and much more. I get that we need to focus on the health response, but we must now equally turn our attention to what the economic plan needs to look like over the next five and ten years.” Tukaki said
“We need to do this because the profile of our vulnerable New Zealanders will not just be about Maori and Pacific whanau – it will include those who are in the middle years and have been made redundant, those facing the closure of their small businesses and perhaps the failure of some of our larger companies.” Tukaki said
“As it stands COVID19 has cost the New Zealand economy tens of billions of dollars and it is likely it will be some time before we see the end of the rabbit hole. So, what can we expect? The last quarter unemployment rate, underemployment estimates and those no longer looking for work appears to be an anomaly given we were still to see the decline in hours worked roll through as well as having a tight and meaningful understanding of the role of underemployment in our work place – this means unemployment is likely to rise as the wage subsidies begin to wind down and the take up of small business loans remains stagnant. So far just over $150 million in loans have been taken out from a pool of $5 billion which has meant the Government needed to relax the criteria. That said, the loans may simply be there for cashflow as opposed to being used as stimulus in the economy. The wage subsidy extension saw $167 million paid out to a further 47,000 business with last estimates showing more than 157,000 jobs were now being supported because of the new lockdown. Between 5 and 21 August, more than 325,000 jobs came off the wage subsidy.” Tukaki said
“But the truth is many of these small businesses will not be able to trade beyond Government support because of one of the reasons will be consumers are less likely to spend cash – instead keeping spending at bay. This means not only small business closures but the loss of jobs that will inevitably see the unemployment rise and my prediction is that the 4% seasonally adjust rate was nothing more than an anomaly therefore rising to above 10% by the years end. For Maori this means an unemployment rate of around 14% and higher in already economically depressed regions.” Tukaki said
“While we dwell on the health response what we really need to be looking at is the economy and shifting away from welfare dependency to stimulus and growth. One example is freeing up more capital to stimulate small business to purchase goods and services for the business – this is in turn will see greater investment in trade retail, the electronics and equipment sectors. Another tool the Government can put into place is to see smaller amounts invested into community based infrastructure projects as opposed to singular located larger projects (or a combination of the two) – this means investing more in infrastructure renewal from schools and community halls to Marae local Government. That means every community, or as many as possible is stimulated. All of this means local small business growth as well as jobs.” Tukaki said
“From hospitals to schools, from Marae to home insulation – these are the types of activities that will get the country moving again – I call it “Building to Recovery” and Maori can play a leading role both as project developers and managers right through to investors. Whatever happens our core focus must turn to the economy while we still fight the health battle ahead.” Tukaki said