Wellington asleep at the wheel on Auckland needs – major change needed immediately

In what might seem an unexpected pairing, Viv Beck and Ariana Paul are joining forces to shine a light on problems with the way Wellington is engaging with Auckland and seek urgent action to avert major fallout across the city. 

“Lack of understanding, urgency and action on the needs of Auckland businesses has come to a crunch and we cannot politely work around it any longer, offering advice and support that gets ignored.  The effect on our impacted businesses, their staff and suppliers from across Auckland will be a huge cost for our city to bear if we don’t see an immediate change in attitude and approach,” says Viv Beck, Chief Executive of Heart of the City.

Ariana Paul, Manukura of Amotai, says “Tāmaki Makaurau needs resuscitation right now. Our Māori and Pasifika business owners, sole traders and entrepreneurs are facing into the extreme sharp cutting edge of this lockdown. For many, resources are depleted, government support is too little and too late, borrowing from whānau and friends is no longer an option - the only other option is to look at is closing the doors.”

Beck and Paul are both seeing the impact of the pandemic first-hand – hard-working people desperate to keep their businesses open, their staff employed, their suppliers in business and food on the table for their families.   They both see the need for substantial action to support business, including targeted support and access to low-cost and easy-to-repay money to keep businesses afloat.

“There is no urgency to review suggestions that could help people.  Three weeks ago, we asked Treasury to review a proposal for a low-cost and easy-to-repay ‘overdraft’ facility that was proposed by Dr Richard Meade in April 2020.  There is no action so far, despite many people saying over and over that these needs are urgent.  They continue to view macro-economic data for Auckland, which hides the reality.   They are seriously missing the impact of allowing wholesale failures amongst businesses that have been hit over and over again through multiple lockdowns,” says Beck.

Ariana Paul also has major concerns about the impacts of ignoring what is happening.  She says “Business owners, whānau and employees are the casualties of this prolonged lockdown. Just look at the demand for food parcels and the unemployment rates of Māori and Pasifika. We know that after every economic shock, Māori and Pasifika are disproportionately impacted. The only difference between this lockdown and the first lockdown, is this lockdown feels 10 times worse.”

Action Beck and Paul would like to see immediately:

• An effective voice for Auckland in Wellington.
• A commitment to financial support in Level 2 for those who need it – the wage subsidy, the resurgence payment and access to low-cost and easy-to-repay money. 
• A clear and integrated plan of action to drive economic recovery, support business and impacted sectors. 

Impacts of COVID-19:

City Centre

• 20% of Auckland’s GDP.
• Has been significantly impacted by the loss of international tourists, students, large-scale events and people working from home – on top of large-scale, long-term construction.
• Business closures impact staff and suppliers from across the region.
• Loss of $820M in consumer spending since January 2020 (vs 2019), an average of more than $610,000 per business. Includes:

Restaurants & Hospitality            $325M
Retail Sector                                   $357M

• Loss of $134M in consumer spending (vs 2019) since the start of the Level 4 lockdown on August 17th 2021, an average of more than $100,000 per business.

Maori & Pasifika Businesses

Business survivability in lockdowns

• A business survey of 700 businesses, [1] 53% reported they could last up to 12 weeks in Level 3 or 4, of which 22% reported they wouldn’t last longer than 4 weeks.
   
• 41% of the businesses reported that cash flow is a major pain point.

Digital

• Digital and income equity gaps are a substantial barrier for businesses shifting to online work even if they have the right jobs or skills.

Recovery from previous lockdowns

• Auckland’s economy overall recovered more slowly than other parts of the country due to not being a focus of national tourism over the summer period, or of international tourism during the period that the Trans-Tasman Travel Bubble was operational in 2021.

-ENDS-

[1] HTK Group (August 2021)