150,000,000 lost in three days! Does keeping Auckland at Level 3 mean prolonged pain or short-term pain?

As of 1h this afternoon, New Zealand had recorded 13 new confirmed cases, of which 12 were linked to the affected South Auckland household.

The community transmission cluster has now reached 29 people. Today's 13th confirmed case is a concern: the patient is in hospital, although not critically ill, and no link to the affected household has yet been identified.

Why remain at Level 3?

When establishing its four-level alert system, the Government defined the risk criteria for Level 4 as ongoing community transmission, with widespread outbreaks and new clusters.

Health Minister Chris Hipkins therefore said in an earlier interview that a key criterion for moving to Level 4 was whether a second chain of community transmission emerged.

Some experts have pointed out that the virus may already have been spreading undetected for weeks, given that symptoms take several days to appear and asymptomatic transmission is possible.

However, Hipkins said there was currently no evidence to support this view, although the source of infection in the South Auckland household remained unknown.

'All confirmed cases identified so far are linked and belong to the same cluster. So far, testing nationwide has not identified any cases unrelated to this cluster.”

To date, the transmission chain involving the South Auckland household has included 30 confirmed cases.

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The economic impact of keeping Auckland at Level 3

Auckland has the strongest economy among New Zealand's 16 main regions. Official estimates put Auckland's share of national GDP at 38%, its share of all jobs at around 33%, and its share of the population at a third.

Auckland's economic structure differs from that of the rest of the country. Its economic activity is concentrated in goods (27%) and services (71%). Primary industries account for just 2% of regional GDP, a lower share than the national average.

An earlier report by ASB senior economists forecast that even if other regions remained at Level 2, each week Auckland alone spent at Level 4 would reduce annual national GDP by around 0.25%.

Meanwhile, if Auckland remained at Level 3, the hit to annual GDP would be around 0.15% for each week.

ANZ chief economist Sharon Zollner said less than 20% of economic activity would be affected at Level 3. For Auckland, 20% would mean direct losses of NZ$60,000,000 a day. That puts the estimated total loss from the Level 3 lockdown, which began at midday on Wednesday, at around NZ$150,000,000 over three days.

If restrictions moved to Level 4, the share of economic activity affected would rise from less than 20% to a third — a burden that Auckland and New Zealand might struggle to bear.

As Auckland Mayor Phil Goff put it, 'There is no doubt that this has had an economic impact', but at least under Level 3, 'the construction industries the city urgently needs can continue working'.

 

The Government's new outbreak-control measures

Although the Government ultimately decided against moving to Level 4 after weighing various considerations, the past few days have shown that this Level 3 period differs from the previous one.

• Stronger preventive measures.

Although not compulsory, masks are strongly recommended for everyone in Auckland in all public settings. Masks are mandatory at Auckland Airport. (Elsewhere in the country, masks are recommended in busy places such as supermarkets and on public transport.)

• Stronger response measures.

All confirmed cases will be transferred to dedicated isolation facilities, away from their families and communities.

• A focus on protecting aged-care facilities.

All aged-care facilities nationwide have been closed to visitors since the first confirmed case emerged.

• Expanded border testing.

All frontline airport workers and border staff, including Customs and Immigration personnel, are required to be tested. Staff at isolation facilities, including hotel employees and drivers, are also progressively being tested.

In addition, all Auckland port workers will be tested for the virus to safeguard the maritime border.

• Genomic comparisons to trace the source.

An expert team is comparing viral genomes from the South Auckland household with those recently detected in isolation facilities, hoping to trace the source of infection.

• Auckland in lockdown.

9 checkpoints have been set up around Auckland to control vehicles entering and leaving.

• Increased testing.

A record 15703 people were tested on Thursday alone. Auckland currently has 16 testing centres, which at this stage are testing only people with symptoms.

 

Government support measures

The Government's earlier Budget set aside NZ$14,000,000,000 to respond to a possible second wave. Now the time has come to use that money.

• Finance Minister Grant Robertson said on Thursday that he was considering extending the wage subsidy scheme, originally due to close on 1 September, even though the Government had previously ruled this out.
• Grant Robertson also said the Government was examining a possible new regionally targeted support scheme if Auckland's lockdown was extended.
• The pandemic unemployment payment, previously due to expire on 30 October, will be extended until 13 November.

 

Looking back at the first wave

New Zealand's first domestic wave began with its first confirmed case on 26 February. The last community transmission case was recorded on 1 May, and the final active domestic case was cleared on 8 June. There were 1154 confirmed cases in total, including 22 deaths. New cases continued to emerge intermittently over the following months, but all were among people in isolation after arriving from overseas.