Ardern Extends Auckland Lockdown to Get Control of Outbreak

(Bloomberg) -- New Zealand Prime Minister Jacinda Ardern said largest city Auckland will stay in lockdown four days longer than initially planned to ensure a community outbreak of Covid-19 is under control.

Auckland will exit lockdown at midnight on Aug. 30 rather than on Aug. 26, Ardern told reporters in Wellington on Monday. “These extra four days are believed necessary to allow us to move down a level in Auckland, and stay down,” she said, referring to New Zealand’s covid alert level system.

Auckland contributes more than a third of New Zealand’s gross domestic product and is home to 1.6 million people. The city was put into level 3 lockdown on Aug. 12 when four cases were discovered, ending the nation’s 102-day run of being Covid-free, while the rest of the country was placed into level 2, requiring social distancing restrictions to be reimposed.

Ardern said Auckland will shift to level 2 on Aug. 31, allowing schools, hospitality, retail and other entities to reopen, though most gatherings will remain limited to no more than 10 people. The remainder of New Zealand will stay at level 2, with a further review of all settings to be made by Sept. 6, Ardern said.

In addition, the government will mandate face coverings on public transport including taxis and ride-sharing services like Uber at level 2 or higher. The new regulation is effective from Aug. 31.

The Auckland cluster has increased to 101 cases and the original source remains a mystery.

“This is a contained cluster, but it is our biggest one,” Ardern said. “That means the tail will be long, and the cases will keep coming for a while to come. But we can manage that. What we need to do though, is put ourselves in the best long-term position to manage it successfully, and in the most contained way we can.”

Elimination

New Zealand became the envy of the world earlier this year when it succeeded in eliminating community transmission of the coronavirus by imposing a strict nationwide lockdown. The restrictions were lifted after only seven weeks, encouraging a bounce in confidence and spending. While the Auckland lockdown may dent the economic recovery, Ardern said that was preferable to allowing the virus to get out of hand.

“We’ve made a decision around a four-day increase versus the potential that you come out prematurely without the full confidence that we have the cluster and the full perimeter of that cluster well understood,” Ardern said. “You then run the risk of going into another transmission cycle. The idea of yo-yo-ing is very, very unsettling for an economy and comes with a high price.”

Economists at Westpac Banking Corp. have estimated the Auckland lockdown reduces GDP by about NZ$300 million ($196 million) a week, while noting there is scope for some of that to be clawed back when the restrictions are lifted.

Last week, the government extended a nationwide wage subsidy to businesses hit by the fresh outbreak, saying that would protect the jobs of about 930,000 workers. The scheme is in place for the duration of the Auckland lockdown.

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