The global COVID-19 pandemic had a significant impact on the New Zealand economy. New Zealand has a mixed economy – a free market with some state ownership and control. In mid-March 2020, the New Zealand Government imposed a four-tier alert level system, which placed much of the country's economy into lockdown with the exception of "essential services" such as supermarkets. Due to the success of the Government's elimination strategy, lockdown restrictions on various economic activities were progressively lifted between April and June 2020.
Although somewhat abruptly sidelined from their normal influence within the New Zealand economy, representatives of the business sector continued to feature in media reporting: lobbying against perceived discrepancies in various industries,For example: publicising habitual evaluations such as business-confidence indicatorsFor example: and economic outlooks,For example: and itching for an early return to "business as usual".For example:
On 17 September 2020, New Zealand economy officially entered into a recession, with the country's gross domestic product contracting by 12.2% in the June quarter due to the COVID-19 pandemic. The retail, accommodation, hospitality, and transportation sectors were adversely affected by the international travel ban and a strict nationwide lockdown.
After successfully containing the virus, the New Zealand economy had sharp growth in what is known as a V-shaped recovery and ended the year with an overall economic expansion of 0.4%, better than the predicted 1.7% contraction. Unemployment also dropped to 4.9% in December 2020, down from a peak Covid effected rate of 5.3% in September.
By mid–September 2021, the Restaurant Association's Chief executive Marisa Bidois estimated that about 1,000 hospitality businesses nationwide had been forced to close as a result of the COVID-19 pandemic, leading to the loss of 13,000 jobs. This has led the Association to lobby the Government for continued wage subsidies and incentives to boost customer rates. By mid–November 2021, the Bay of Plenty Times reported that 26,774 companies had been liquidated by August 2021.
In early February 2022, the Organisation of Economic Cooperation and Development (OECD) identified the country's border restrictions and declining house prices as the major risks to the New Zealand economy that year. While the OECD report credited New Zealand's elimination strategy, wage and socio-economic subsidies with helping the economy to bounce back to pre-pandemic levels, it also warned that excessive Government spending was causing the economy to overheat and raising debt levels. The OECD welcomed the Reserve Bank of New Zealand's decision to raise interest rates but also urged the Government to raise the superannuation age, ease building restrictions, and reduce government spending.
In late October 2022, the New Zealand Government ended its COVID-19 "handouts" programme for businesses. Stuff reported a 48% increase in formal insolvency proceedings in the third quarter of 2022, taking the total of business insolvencies that year to 384. In addition, receivership rates increased by 243% to 24 while voluntary administrations rose by 60% to eight. The transport and delivery sectors reported a 229% increase insolvency proceedings due to a shortage of drivers. The building services and construction sectors reported 50 and 107 insolvencies respectively, citing the economic and labour challenges caused by the COVID-19 pandemic.
Sectors Accommodation On 24 March 2020, two local authorities and the New Zealand Motor Caravan Association announced they were closing their camping grounds.
On 12 August 2020, Aged Care Association chief executive Simon Wallace announced that all rest homes in New Zealand would go into full lockdown immediately until midnight Friday (14 August) in response to a recent wave of community transmissions.
Agriculture On 31 March 2020, NZ Pork CEO David Baines warned that the Government's decision to classify butcheries as non-essential services would have serious implications for the welfare of pigs on New Zealand farms. Due to a surplus in pigs, many farms lacked sufficient space to store pigs.
On 22 August, it was reported that about 2.5 million bees had starved to death after workers from Waikato were unable to travel to Auckland to access beehives due to checkpoints imposed following a surge in community transmissions in Auckland. Businesses affected include Waitakaruru Honey Limited. Apiculture New Zealand had applied to the Ministry of Health for an exemption on behalf of commercial bee keepers.
In October and November 2020, the horticultural and viticultural industries reported a shortage of workers since the Government's border restrictions and managed isolation requirements prevented tourists and seasonal workers from entering the country. Under the Recognised Seasonal Employer scheme, horticultural and viticultural producers are normally allowed to recruit seasonal workers from the Pacific Islands and selected Asian countries. In addition, tourists from certain countries are allowed to work on a visitor visa. This labour shortage has caused fruits and crops to rot. Local growers have reported difficulty in recruiting locals due to the long hours, hard, outdoor work, lower wages, and them lacking the specialised picking and plant-care skills that foreign workers.
In mid–October 2020 Richard Palmer, the CEO of the producer representative body Summerfruit New Zealand, warned that the horticulture might not be able to pick up 30% of its harvest that year, a shortfall that could cost NZ$1.25 billion in export earnings. In late October 2020, Horticulture NZ and the New Zealand Apples and Pears Inc launched a jobs service called Pick Tiki to recruit urban young people into fruit-picking jobs in Hawke's Bay, Nelson, and Central Otago.
On 11 February 2021, Stuff reported that the Government's New Zealand Work Scheme to address the labour shortage in the fruit-picking sector caused by COVID-19 had only attracted 54 people since its launch in late November 2020. The scheme had offered up to NZ$200 to cover accommodation costs and a NZ$1,000 incentive payment to workers who had completed jobs that lasted for six weeks or longer.
On 2 August 2021, Prime Minister Jacinda Ardern announced that seasonal workers from Tonga, Samoa and Vanuatu will be allowed to enter the country without having to go into managed isolation from September 2021 onwards. This move was in response to a labour shortage in the agricultural and horticulture sectors.
In late September, horticulture company Zespri had several of its kiwifruit products pulled from Chinese supermarket shelves after a batch of fruit being sold at a supermarket in China's Jiangsu province tested positive for COVID-19. In response, Zespri confirmed that it had launched emergency management plans and that the New Zealand Government was supporting its discussions with Chinese authorities.
Animal welfare On 15 April 2020, Stuff reported that many pets included cats and dogs were stuck in transit at pet shipping companies and animal homes due to the disruption of travel caused by the coronavirus pandemic and lockdown in New Zealand. Due to lockdown restrictions, the transportation of pets is not deemed an essential service. Air New Zealand has announced that it would consider reopening its pet transportation service when Level 4 lockdown restrictions were lifted.
Aviation 2020 On 16 March, the national carrier Air New Zealand announced that it would be reducing its long-haul capacity by 85% and its personnel by 30% in response to declining demand and revenue as a result of the outbreak. In addition to the previously suspended flights to Shanghai and Seoul, the airline suspended flights to several major international cities including San Francisco, Houston, Buenos Aires, Vancouver, Tokyo, Honolulu, Denpasar, and Taipei between 30 March and 30 June as well as its London Heathrow–Los Angeles service. The airline also reduced trans-Tasman capacity by 80%, and the domestic network capacity would be reduced in March and April 2020. It would maintain enough overseas flights for returning New Zealanders and evacuees as well as essential air freight. On 20 March, the Government loaned Air New Zealand $900 million to protect essential air routes and to keep the company operating.
On 19 March, it was reported that Qantas and Jetstar were suspending their New Zealand operations as part of their efforts to suspend international flights in response to the COVID-19 pandemic.
On 25 March, Air New Zealand's chief revenue officer announced the airline would cut back to just ten international and fifth-freedom routes from 30 March to 1 May: from Auckland to Sydney, Brisbane, Melbourne, Rarotonga, Nadi, Niue, Los Angeles and Hong Kong, and from Norfolk Island to Sydney and Brisbane. The Auckland to Shanghai route would resume on 2 May.
On 4 April, it became known that Virgin Australia had decided to shut down its New Zealand operation permanently, resulting in 600 jobs in New Zealand to be lost.
On 7 April, it was reported that Air New Zealand was considering laying off 387 pilots as part of cutback measures. The New Zealand Air Line Pilots' Association (NZALPA), which represents 1520 Air New Zealand pilots, is currently in negotiations with the airline to reduce the number of layoffs.
On 20 May, Air New Zealand announced that it would be laying off 3,500 personnel. This includes 1,300 cabin crew. 950 long and mid-haul crew will lose their jobs while 300 workers will be made redundant in Auckland, Wellington, and Christchurch. In addition, 97 jobs were lost at Air NZ's regional airlines Air Nelson and Mount Cook Airline.
In early June, Singapore Airlines announced that it would resume passenger flights to Auckland and Christchurch on a weekly basis. On 10 June, it was reported that Singapore Airlines staff were being quarantined in hotel rooms for the duration of their three-day stay. In mid-June, Air New Zealand announced that it would be resuming flights between Auckland and Shanghai from 22 June.
On 5 July, Air New Zealand attracted criticism after it removed 11 passengers from an overcrowded flight to Brisbane and erroneously told them they would have to pay for their accommodation, meals and other quarantine costs until the next flight was ready to depart on Tuesday. Police were called to mediate between airline staff and passengers. Air New Zealand subsequently apologised for providing the passengers with incorrect information.
On 3 August, Auckland International Airport announced that it would be splitting its international terminal into separate zones for travellers from "safe travel hubs" and "health management" areas in anticipation for the establishment of a safe air corridor between New Zealand and the Cook Islands.
On 12 August, following several recent community transmissions, it was announced that all passengers leaving Auckland Airport would be issued with masks while passengers entering Auckland would be required to wear masks. Access to Auckland Airport would be limited to those with valid tickets, travel itineraries and travelling overseas. Social distancing would also be re-introduced at airports across the country.
On 15 August, Jetstar suspended its domestic operations in New Zealand after the Government implemented social distancing rules following a second outbreak in Auckland that month.
On 14 September, Jetstar announced that it was resuming domestic flights in New Zealand after Prime Minister Ardern announced that physical distancing on aircraft was no longer required. The airline had suspended its domestic services in New Zealand four weeks earlier following an outbreak in Auckland in mid-August 2020.
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