The hospitality sector has been similarly stretched. About 2,000 eateries stopped service and turned off lights last month as part of a two-month campaign to draw the government’s attention to the severe shortages of chefs and other skilled labour.
Ardern has indicated she will remain cautious when she on Thursday outlines her government’s six-month plan for public health and border control.
“Any changes to border settings will be carefully considered in phases, based on risks,” she said on Monday. “We have come too far and gained too many freedoms to rush at this next step and go backwards.”
Ardern last week opened one-way quarantine-free travel for seasonal workers from Samoa, Tonga and Vanuatu, all countries with no active COVID cases, to address labour shortages in the horticulture industry.
New Zealand has recorded about 2,500 COVID-19 cases, including 26 deaths, among the lowest in the world and a track record that helped Ardern retain power in a blowout re-election last October. The last reported case of local transmission was in February.
The roadmap will be based on the findings of a report by experts including epidemiologists titled “Reconnecting New Zealanders to the World.”
Still, businesses are pressing for the plan to include the resumption of labour imports, sooner rather than later.
The country’s unemployment rate is at pre-COVID-19 levels, with more jobs than skilled workers. The underutilisation rate, a measure of how many people are working less than they would like, is at a record low.
The labour shortages are pushing up costs as employers pay more to keep staff. Annual inflation reached a record 3.3 per cent in the second quarter, much higher than central bank predictions.
CHANGING TRACK
Economists think the pressures will force the Reserve Bank of New Zealand (RBNZ) to tighten monetary policy next week to avoid overheating the economy.
“Monetary and fiscal policy quite possibly overachieved in creating demand,” said ANZ Chief Economist Sharon Zollner.
The government pumped stimulus through wage subsidies while the RBNZ dished out a NZ$100 billion quantitative easing programme in pandemic-induced policies that have caused rising inequality and worsened a housing crisis.
A major concern for Ardern and policymakers is the Delta coronavirus variant, which is raging in neighbouring Australia and the world.
Delta-fuelled outbreaks across Australia led Ardern to last month suspend the so-called “travel bubble” that allowed quarantine-free travel between the two countries.
Experts have warned that the arrival of Delta into New Zealand would result in longer lockdowns, particularly given only 21 per cent of the country has been fully vaccinated.
“It (Delta) is much more dangerous than other strains of COVID,” Ardern said. “It changes our risk calculation in the same way that it’s changed everyone’s risk calculation.”
