I have a decent handle I think on the economy. Two weeks of holiday chat and calls and feedback and what seems to have happened is this.
For some, it’s a catastrophe to this point, at least 40 000 have lost their jobs. The health outcome might have been solid, but the economic one has been life-changing.
The mixed reports we have been getting is some doing well, some not, appears to come down to the fact that those so far unaffected work-wise have taken the money they would have spent on travel and are spending it elsewhere.
Here is a fascinating number I was given. We spend $7 billion a year on travel. Most of that now has to go elsewhere: where is it going?
Cars, major dealers are struggling to keep up, I have this from good numbers of sources. Art is selling like it hasn’t in years. And the stories of renovations are more than true: a fortune is being spent tarting the place up. If you’re in those industries this is all working out very well indeed.
So we are getting a clearer picture of what’s happening. The early carnage was in the tourism areas. Close the borders, you close an industry. Planes, hotels, motels, travel agents; all a disaster.
Now, the next part is the one a lot of people are worrying about. Job losses – phase two.
In Britain, they are saying one in three companies will be laying off when the furlough money stops.
Here, the wage subsidies September 1. Businesses all over this country right now will know what state they are in, how they are tracking, what their likely future is. They will have an idea of what the next round of job losses looks like
This will play out in the weeks running up to the election. Mix in the mortgage holidays coming to an end, and we will be revisiting the worry and uncertainty of April and March.
It’s possible it won’t be as bad as they said. They said 10 % unemployment, they said 80 000 more jobs lost. Let’s hope they’re wrong.
But like all things economic, some do well, many do not.
The same questions we have been asking for months now apply more than ever: where is the recovery plan?
When does the welfare stop? The borrowed/ printed patch up money stop? The talk stop? And when do the polices start getting delivered?
The Prime Minister was in Invercargill last Thursday talking jobs post-Tiwai. What jobs? Talk is not a job, a visit isn’t a job.
Crunch time is coming, when the sugar money is gone and reality arrives. Once again, what’s the plan?