02 July 2020
Kapiti, what shape are we in post COVID?
The Electra Business Breakfast was super pleased to be back operating in-person at Alert Level 1 yesterday and hosting Sharon Zollner, the ANZ Chief Economist.
Sharon spoke to a full house at Southward Theatre that transformed the new normal for the Electra Business Breakfast with a small army of people to feed, inspire, connect and engage attendees. There was certainly a sense of people wanting and being ready to get together in person. The full English breakfast catered by PartyPerfect Catering was enjoyed by everyone and Sharon did not mince her words, observations and predictions.
She spoke on the New Zealand COVID economic environment covering the macro global view and drilling down the NZ and regional perspective. She spoke with knowledge and confidence and certainly demonstrated that she and her team are in a unique position to provide the views that she did as we start the recovery phase post COVID.
She made it clear that New Zealand is the envy of the world with no community transmission and a supportive Government, yet our reward for COVID will still be a recession. Quarantine at the border is needed to keep the virus out yet very expensive at $4,000 per person. This has a real impact on all New Zealanders and those wanting to return home – there are more than a 1M New Zealand passports resident around the world so just image the impact if they all want to return home in the short term with pressure on housing and some likely needing social assistance, and others just wanting a safe haven until they can return to where they came from. These New Zealanders have the potential to be high value domestic tourists while they are here.
She went on to cover industries hard hit like health and construction particularly with migrant worker losses and the tourism trail from Auckland, the Coromandel, Rotorua and the South Island along with the education sector with the lack of foreign students. With some hope is the New Zealand agricultural and food production in between the tourism hot spots which other countries need and are demanding. With nimble exporters this means the potential for an export led recovery.
She made it clear that monetary policy is tapped out and New Zealand banks are preparing for potential negative interest rates in April or May 2021. She referred to this as ‘twilight zone material’ and we need to be careful not to give the key to politicians to the money printing room. She confirmed a reset will be necessary for New Zealand to reduce debt and she felt some Governments’ in the world may never pay back money they have loaned during this time.
She was certain the US will shrink, and China will grow out of this recession and New Zealand and Australia tensions will need to make value and commodity price choices. The New Zealand Reserve Bank is likely to print more money in August and interest rates will remain at historical lows for some time which first home buyers and investors will embrace. Sharon was insightful and well-spoken, we thank ANZ for bringing her to Kapiti and for hosting many of their local business clients at Breakfast.
For further information, please contact:
Helene Judge | Kapiti Business Projects | 027 244 9585 | Email Helene
Sharon joined the Economics team in 2010 and became Chief Economist in late 2017. She started her career as a macroeconomist at the Reserve Bank of New Zealand in 1998 and has also worked at the Central Bank of Norway. Sharon created the Truckometer in 2012. Her team of six includes financial markets, data and agriculture specialists as well as general macroeconomists. They undertake regular surveys of hundreds of businesses nationwide which is then analysed and commentated.
Electra Business Breakfast is B2B networking programme and sponsored by Electra. It is an independent networking programme that seeks to INSPIRE, CONNECT and ENGAGE, everyone is welcome. Electra understands the need for the business community to be connected and the importance of socialising, learning and often negotiating deals when we are networking.