- New Zealand’s critical unemployment scenario despite its significant success against the virus indicates an impending concern for the New Zealanders.
- The hard-hit travel sector might have still to wait for the potential Trans-Tasman bubble given the spike in Australian cases.
- New Zealanders need to draft their plans and adopt a resilient approach to avoid severe blow of the income crunch and financial crisis.
- Kiwis can plan long-term investments, skill development in the right direction and make a personalised strategy amidst the current ongoing scenario.
New Zealand has proven to be a strong role model in dodging off critical community transmissions, regarded as one of the few safe haven nations in the ongoing disturbing scenario. Nevertheless, the country’s economic situation has not been immune to the pandemic-induced economic and financial crunch amidst the blow of necessary lockdowns, market volatility and impinged international trade context. Given the turmoil, it is all about quarantining and adopting hygiene practices not just for the virus prevention, but also for financial stability and survivability.
The record rise in underutilisation rate up to 12%, fall in the number of hours worked by 10%, along with GDP fall of 1.6% in the March Quarter typically narrates a dreadful tale of the pandemic catastrophe.
While unemployment rate (seasonally adjusted) has dipped from 4.2% to 4% in June Quarter, we cannot deny that COVID-19 has entirely unnerved the balance of job scenario in the country, affecting a plethora of firms, both large and small, as they struggle to revive their operations back to the pre-pandemic situation.
A significant tranche of the population is still exposed to the chances of job losses, which can topple their stability in the absence of consistent income.
While some sectors suffered huge setbacks owing to varying restrictions, others continued to stay afloat with meagre losses on the back of technological adoption. Nevertheless, the ripple effect of wavering business operations can be witnessed profusely by the New Zealanders. Supply chain disruptions significantly impacted the business flow, with the interruption in bottleneck operations altogether impacting the organisation’s productivity.
Meanwhile, the rise in the cases in Australian Victorian state has held the ‘Transman Tasmanian Bubble’ plan in the lurch.
New Zealanders need to draft their plans and adopt a resilient approach to avoid severe blow of the income crunch and financial crisis. They can plan long-term investments, ensure skill development in the right direction and make a personalised strategy amidst the current ongoing scenario.
- Skill Development
Kiwi landers, to ensure their occupation consistency, need to channel their approach strategically to meet the current dynamic needs of the businesses trying to redesign their models, strategies and products.
Skills targeting Sounder Industries
In the wake of such scenario, when many impacted sectors have minimal probabilities of quick revival leading to job layoffs, their employees can build their skills for other industries which seem to be doing well despite the pandemic.
For instance, Training in building and construction would be provided at a Dunedin-based new trades training centre which will be built at Otago Polytechnic, a subsidiary of New Zealand Institute of Skills and Technology. The Government has announced funding of $28 million to the project, which is expected to provide skilled workers for the Government’s “pipeline of infrastructure”.
Furthermore, while the travel sector-related jobs have seen considerable slump, New Zealand’s agriculture sector has been booming with strong trade demand. The Government’s 2020 budget has dedicated $1.1 billion for the creation of sustainable jobs in areas such as wetlands restoration, predator control, nature and indigenous biodiversity enhancement, pest control and eradication, etc.
Meanwhile, the New Zealanders currently employed in the industries facing severe headwinds should be ready with their plans B and C as the severe scenario may demand alternate resilient approach to venture into other businesses with labour demand.
Skills focussed at New Norm
The transforming work dynamics and the radical adoption of technological models have been unprecedented, forging revolutions of the decade within a few months. The survivability for both firms as well the employees demand adaptation, if not mutation in the current scenario.
Tech-based transformations can be at the forefront, with learning and training driven towards software development, Artificial Intelligence, Internet of Things etc. New Zealand’s strategic partnership with Vietnam is targeted to deepen connection in areas of vocational training and education, along with boosting agriculture and finance.
Need-centric skill additions need be incorporated to evade the future downturns. The strategic programs focussed on handling of logistics and other supply chain operations via technological understanding could boost the employability chances and persist against the economic downturns.
- Long-Term Investment
Evading the collateral damage of the pandemic requires adopting right set of strategies that are cushioned against sudden disruptions and volatile turns. A far-sighted approach can be utilised when planning the finances and investments to avoid liquidity crunch in the future. Incorporating relatively safer investment vehicles in the portfolio may significantly guarantee decent returns for future without extreme risks.
A steady stream of income amidst ongoing turbulence can be useful, especially when financial crunch or unexpected monetary headache troubles the wellbeing. Kiwis can opt for investment in debt funds, like government bonds, corporate bonds, etc. which though offer low returns have low risks associated with it.
Investments can also be made in actively managed bond funds or the exchange-traded Bond ETFs.
Blue Chip Equity Investment
While equity space has revived from March lows, long-term investment plan focused on realising significant periodic income along with capital appreciation, can incorporate tapping blue-chip stocks. Tapping the stocks of established organisations and defensive businesses may aid in reaping sustainable returns in the volatile equity market.
- Strategically Planning the Finances
There is never a single suite of plans which can suit every individual, owing to variations in their goals, psychology, current financial situation and risk tolerance. The strategies, therefore, need to be crafted on an individual basis considering varying personal needs as well as macro aspects. Nevertheless, a few key steps can be undertaken for ensuring that everything turns out well eventually.
Setting up targets
Spotting financial goals and objectives for aligning the plans in the right direction is critical as part of managing one’s finances. The objectives can incorporate future property purchase, loan payments, funding for pursuing education, retirement savings, etc. Based on the income levels, current essential expenditures and macro-economic trends, a realistic goal can be set.
Furthermore, as we sail across the period of uncertainty, ‘safe bet’ may seem like a whimsical term. Thus, contingency funds can be set to be utilised in case of sudden unforeseen circumstances. New Zealanders can also take insurance to evade critical challenges that might all of a sudden appear writ and large on the financial front. A continuous review and monitoring of the strategies will be needed regularly to understand the effectiveness of the plan and success in its implementation.
Many sectors such as travel, tourism and hospitality have been on the receiving end of the pandemic, which has dethroned the business operations owing to travel restrictions and COVID-19 safety measures. Meanwhile, the supply disruptions during the pandemic have also complicated the issue further, with widespread job losses and income sluggishness.
Amidst such a scenario, emerging out of the crisis stronger demands strategically placed measures not only on the nationwide scale but also on an individual basis. Prudent management of finances while tapping blooming prospects via developing one’s skills, actively pursuing long-term investments and clearly charted out strategies can go a long way in bolstering financial objectives.
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