In New Zealand the government is to announce a major set of measures to stimulate the economy and maintain jobs in the wake of the downturn in tourism and other exports.
The government is touting this as bigger than the US$7 billion infrastructure investment package it announced late last year to spend forecast fiscal surpluses. This was before the worldwide epidemic of Covid-19 devastated international travel and tourism.
Air New Zealand has slashed its long haul flights by 85 percent and made other cuts to Australia, the Pacific, and on domestic routes. It is getting ready to shed 3 700 staff which is nearly 30 percent of its workforce.
Listed casino and hotel operator Skycity is now trading at NZ$2.37, a 35 percent fall from a month ago and a 45 percent fall from its peak of $4.34 in August 2018. Listed hotel operator CDL Holdings which operates the Millennium and Copthorne brands is also down 18 percent over a month.
Shares in Air New Zealand, Auckland International Airport Ltd and camper van and facilities operator Tourism Holdings have all plunged and all have issued profit warnings or suspended earlier earnings forecasts. The NZSX is now at its lowest level in a year.
A wide range of sporting and cultural events have been cancelled and all gatherings of more than five hundred people will soon be banned. Cruise ships are already shut out and travellers from all countries except the Pacific islands are required to self isolate for 14 days.
New Zealand has eight cases of coronavirus and is readying for more. Prime Minister Jacinda Adern has said that travellers are still welcome but are expected to comply with the new rules and aren’t welcome if they don’t comply.
The package to be announced today is expected to include wage subsidies to small businesses and exporters hit by the global shutdown, higher government spending and regional development assistance. The Reserve Bank of New Zealand has already cut the Official Cash Rate to 0.25 percent, its lowest ever level, but in line with moves by other central banks around the world.