Opinion: 3 ‘L’ogical Reasons for ‘L’ocalised COVID-19 Lockdowns in NZ

  • July 03, 2020 02:47 PM NZST
  • Team Kalkine
Opinion: 3 ‘L’ogical Reasons for ‘L’ocalised COVID-19 Lockdowns in NZ


  • Post marking itself as virus free for considerable time, the current focus on dodging COVID-19 disruptions on businesses has escalated the need to control infection spread while also managing economic growth.
  • Localised lockdown provides the scope for businesses to flourish, while also ensuring active controls are concentrated to specific areas experiencing a spike in cases.
  • In case of infection outside the managed isolations, targeted lockdowns can help in restraining fear and uncertainty in businesses and financial markets.
  • New Zealand’s latest move to join the global initiative for pre-purchase of coronavirus vaccine reflects its far-sighted approach to keep Kiwis safe against the pandemic.

The radically invented prophylactic measures hogging the limelight in the face of pandemic emerged as general modus operandi of many governments that borrowed COVID-19 concepts from each other. Utilising similar themes, New Zealand adopted swift measures and actions that have certainly placed the country in a secure zone.

While all 18 active cases in NZ (3 July, 9:00 AM) are in managed isolation currently, general concerns have erupted over disappearance of 367 people from quarantine facility without a test, who are now hard to contact.

However, Director General of Health Dr Ashley Bloomfield has lately indicated that these missing people present a very low risk to the community, with all of them concluding 14-day managed isolation.

At the time when the Government is on its toes to get hold of these missing people, the resignation of Dr David Clark as Health Minister invited massive public attention. His departure followed emerging concerns of transmissions outside the managed isolation boundary and lockdown breaches.

Amidst a looming threat of the second wave of infections, the NZ Government seems to be trapped between a rock and a hard place, where in future it might have to either put brakes on lives of five million New Zealanders or expose them to a detrimental threat.

Leading the way, ‘localised lockdown’ could become another new normal in this tough spot, as evident from the recent execution of shutdowns in UK’s Leicester city and 36 Melbourne suburbs following a spike in number of COVID-19 infections.

Targeted lockdowns are also a possibility in New Zealand in the event of infections outside the realm of managed isolation, as lately indicated by Dr Bloomfield.

Having said that, let us look at how imposition of localised lockdowns, somewhere down the line, could serve the general interest of Kiwi Land.

Deployment of Better-Directed Efforts

With the ameliorating situation amid no evidence of community transmission, New Zealand has recently raised the criteria for COVID-19 testing, putting an end to massive demand for tests as cold and flu season strikes in.

The substantial costs and efforts incurred during extensive testing across the relatively healthy country seem unnecessary, given these resources can be channelled towards improving business conditions and job market scenario.

However, if confronted with resurgence in cases, New Zealand can opt for localised lockdown approach to focus on dedicated affected areas with vigorous health measures, while allowing other parts of the nation to continue focussing on revitalizing activities.

Citing an instance, Casino Operator SkyCity Entertainment Group Limited (NZX:SKC) has reopened its Adelaide’s venues in a staged manner with less operating hours, to stand back on its feet.

Averting Mass-Scale Spread

Preventing the infections locally can serve in mitigating the risks associated with mass-scale spread across states, controlling massive economic and health damage. While, a large part of prevention still remain in the hands of people who need to maintain social distancing and appropriate hygiene measures to avert the infection.

Containment of virus at inception phase can further evade massive uncertainty over nation-wide lockdown that, apart from massive health and economic challenges, induced stock market crash in March 2020. Notably, NZX 50 Index which bottomed on 23rd March 2020 following the paranoia built around the uncertainty has substantially recovered by ~35 per cent since then.

Besides, infection checks at early stages of transmission can be prospective for the Australia-New Zealand Trans-Tasman travel bubble and opening avenues for COVID-19 battered tourism sector.

NZ-based motorhomes provider, Tourism Holdings Limited (NZX: THL) also highlighted that the proposed travel bubble could favourably influence the vehicle rental business with the return of Australian tourists.

However, it is to be noted that execution of travel bubble largely depends on emerging virus wave and state border restrictions in Australia, as lately indicated by NZ PM Jacinda Ardern.

Escaping Severe Economic Brunt

Undoubtedly, another nation-wide lockdown would cost a sizeable amount to the country which is still trying to withstand the effects of previous set of lockdowns. New Zealand’s economy dealt with a heavy blow in March 2020 quarter amid stringent shutdown, observing its largest GDP slide of 1.6 per cent in last 29 years.

However, some emerging signs are offering glimmers of hope towards sharp economic recovery in New Zealand, as reflected by revival in filled jobs and consumer confidence levels during May and June, respectively.

Besides, retail sales which dipped record low levels in April have massively rebounded on the back of dedicated Government support and improved health conditions. Notably, Stats NZ’s recent electronic card transactions data exhibited a rise of ~80% in retail card spending in May this year.

Echoing similar trends, Kathmandu Holdings Limited (NZX: KMD) revealed strong sales recovery during 18 May to 28 June 2020. The same-store sales for Rip Curl were up by 21.0% while that of Kathmandu rose by 12.5%, underpinned by online channels along with retail stores.

While concentrated pre-emptive actions remain a productive solution for New Zealand to sail through the coronavirus storm, great hopes lie in the development of a safe and effective vaccine or treatment against the disease. New Zealand’s latest move to join the global initiative for pre-purchase of coronavirus vaccine reflects its far-sighted approach to keep Kiwis safe against the pandemic.


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