Otago businesses face ‘pain’, but support available

The economic impact for Otago and Southland of the Government’s announcement to close borders will be significant and long-lasting, says the Otago Chamber of Commerce.

But it is hoped the New Zealand Government’s assistance package, to be announced tomorrow, and a promotion of domestic tourism will offer some relief to businesses.

Chamber chief executive Dougal McGowan said the tourism, hospitality and entertainment sectors in the region would suffer as people curbed spending and international visits were halted.

"We are going to see a decrease in people’s discretionary spend, that does mean areas like tourism, hospitality and entertainment are going to be hit hard, very hard.

"New Zealand is an exporting nation, there’s a lot of people overseas right now, that immediately has an impact on businesses.

"The effect on these businesses is from right now.

"People are going to be less likely to invest in their businesses, because cash will be king."

He encouraged businesses to get support if they were struggling.

"Talk to your banks, your insurance companies, lawyers, accountants, other businesses.

"You’re not going through it alone, every business is going to be hit."

Otago Southland Employers Association chief executive Virginia Nicholls said the association had been "flat out" dealing with businesses who were reaching out for help.

"It’s a very serious situation, it will not only affect tourism and hospitality, but everyone," she said.

"It is a grim picture.

"We’re very much waiting for that government business package, we’re hoping it will be similar to what was offered following the Christchurch and Kaikoura earthquakes."

Tax assistance, compensation for businesses and removing a minimum wage hike were some offers the Government could make to those affected by quarantine requirements, she said.

"We need to keep these businesses going and keep employees employed."

Importers and exporters would be affected by the supply chain not being up and running out of China, she said, but a push for domestic tourism could aid Otago and Southland businesses.

"We want to entice more people within New Zealand to go to Dunedin, The Catlins, Southland, Te Anau, as international travellers won’t be able to come in."

Dunedin city councillor and Otago Peninsula Trust marketing manager Sophie Barker said the Government’s decision would cause "pain" and mean losses, but said most of the cruise ship season was over, and only about 10% of the anticipated further income from the season remained to be made.

"It will be costly, millions of dollars here."

"While I am shocked and upset for everyone in the visitor industry by the effect Covid-19 is having on our industry I think we all agree the most important thing is people."

Managing the potential risk to older people in a hospital system overloaded by Covid-19 was ultimately more important than "a little bit of money" in the tourism industry, Ms Barker said.

Dunedin Mayor Aaron Hawkins backed Government moves to protect New Zealanders from the Covid-19 pandemic, and was keen to focus more on domestic tourism.

"The measures announced by the Prime Minister are significant, but so is the risk posed by a global pandemic," Mr Hawkins said.

"Public health has to be our priority right now, and we owe this to our older and more vulnerable residents in particular."

He said the council was "trying to help mitigate those impacts by focusing more on domestic tourism, as fewer New Zealanders will be travelling overseas in the near future".

"I wouldn’t want to hazard a guess as to the total economic impact in the short term.

"I look forward to seeing what the Prime Minister announces on Tuesday in terms of support for affected workers and businesses.

"As always, we’d be happy to offer our support in terms of developing options that best suit our local situation," he said.