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Hundreds of North Island forestry workers could be relocated to conservation jobs in Southland to soften the economic impact of the Covid-19 outbreak.
A Treasury advisory group is predicting a significant drop in growth for the first six months of this year before things rebound, but is also working on two less likely, but worse, scenarios including the possibility of a global recession.
The tourism and forestry industries are already taking a hit. Air New Zealand is warning ahead of its half-year result that its earnings could be down by up to $75 million, and up to a third of the country's logging crews have been stood down because of supply chain problems in China.
"In the immediate term we have also asked officials to look at whether or not there are options to relocate some of the workers in the forestry industry who have been affected most immediately by this – whether they can be relocated to work on, for example, supporting [Department of Conservation] with track clearances in the South Island where we've had other weather-related issues," Finance Minister Grant Robertson told Checkpoint.
"Obviously that's a significant thing to consider. There are lots of issues and it won't be appropriate for every person, but that's why we've asked officials to go away and develop what a plan for that would look like if we see these effects in the forestry sector being sustained."
The government has already pledged $11 million in assistance for tourism, but Roberston said it is an industry set to lose hundreds of millions, and there will be impacts on education as well.
It is too early say exactly how much will be lost, but the tourism industry is looking at a potential loss of "hundreds of millions of dollars," he said.
"One of the specific things we need to work on is the kind of programme [the tourism industry] will have to rebuild the Chinese market. Clearly if and when we get to the point the travel restrictions are loosened from China we would want to be there to encourage people to return to New Zealand."
If the Covid-19 outbreak turned into a worst-case scenario – global recession – Robertson said the tax system would be looked at.
"But I've got to reiterate it's not something we're predicting.
"If you look at history in New Zealand, when we had the Global Financial Crisis under the previous National government debt I think reached at one point close to 30 percent, so there is the ability for us to look at different levels if we need to.
"We're some distance away from contemplating levels of that nature though.
"While overall we'll see some decline in economic activity in 2020, it won't be long-lasting."
Robertson also said the government is working on possible exemptions on travel restrictions for foreign students, but universities will need to come up with quarantine plans.
Universities have not asked for financial compensation, and the first priority for that kind of relief will be tourism, he said.