Hospitality NZ chief executive Julie White. Photo / Supplied
The emotional trauma of Kiwis stuck abroad is ending, but the economic trauma for hospitality businesses will continue, Hospitality New Zealand chief executive Julie White says in response to the Government's "reopening" plan.
But other groups cautiously welcomed the plan as long as the Government stuck to the timetable.
The Government announced today that the MIQ system will be dissolved and introduced a 5-step plan to reopen to the world now that the Omicron Covid variant is in the community.
However, White suggests the plan doesn't go far enough - at least not in the short term - and maintains that the 10 days self-isolation rule is "unworkable".
"If Omicron becomes an epidemic in the community as the modellers are suggesting, with high surge numbers, there is no point self-isolating, just emphasis on the vaccinations.
"On one hand the Government is suggesting we are open, on the other hand, we have zero customers," White said.
The 5-step plan starts with fully vaccinated Kiwis, who can return home from Australia without having to isolate at MIQ from February 27.
MIQ will be removed for most travellers, replaced by self-isolation and Covid-19 tests on arrival. But the managed isolation system will stay in place for unvaccinated people.
Two weeks later, the border will reopen to Kiwis the rest of the world and Working Holiday Visa schemes will also reopen - technically defined as 11.59pm on March 13.
On April 12, the border will open to international students and temporary visa holders who still meet relevant visa requirements.
Step 4 will begin "no later" than July 2022 and step 5 begins in October and includes all other visitors and students who require a visa to enter New Zealand, with normal visa processing resuming.
Although the hospitality industry is "desperate" for workers, other business groups welcome the Government's phased opening as starting self-isolation was crucial for the country's economic recovery.
Auckland Business Chamber chief executive Michael Barnett said phased opening of borders opportunity to get back to normal and self-isolation was a crucial step forward from the Government to reopening the economy of New Zealand.
"It's not going to happen overnight, but it will happen, much to the relief of thousands of families and businesses seeking critical skills as the Government progressively opens our borders from February 27 to vaccinated travellers who will bypass MIQ and self-isolate instead.
"The reconnection plan will be about managing and mitigating risks with the support of safeguards from strict testing regimes to healthcare support for the New Zealanders and key visa holders arriving over the coming months.
"The measured opening will bolster economic recovery and begin addressing worker shortages to give us the best opportunity to get back to a sense of normal, join the rest of the world, rebuild relationships with customers and suppliers and acquire the skills which are constraining growth and productivity," Barnett said.
Access to critical skills, particularly in the health, IT, manufacturing, construction, food production and education sectors, is overdue and most welcome, he said.
Under the plan, vaccinated Kiwis from Australia will be the first arrivals from the end of this month, then citizens from other countries, critical workers, students and other visitors in stages from March through to fully opening by October.
"This is a new era to live with the virus and give New Zealand the booster it needs to rebuild our attractiveness and competitiveness as a great place to invest in, trade with, visit, live, work and play in," he said.
White said although the announcement means the bitter plight of internationally stranded Kiwis will finally end, the billions of dollars lost in export earnings and GDP from the absence of tourists and slow return of visa-based workers will continue indefinitely.
The requirement of self-isolation and some MIQ means there will be no tourists until 2023 at the earliest, and the desperate labour shortage will continue as the world will be slow to take up work visas here, she said.
"It's a bitter-sweet announcement; the emotional trauma of Kiwis stuck abroad ends, but the economic trauma will continue into 2023 and 2024," she said.
Hospitality staff will be among New Zealanders now able to return, and long-divided families of hospitality workers will reunite.
"But today's announcement also means that tourists, essential to hospitality and many other sectors, are still at least a year from coming. Despite opening to work visas, the pace of uptake is far from certain.
"New Zealand is mostly closed for the rest of the year – or half-closed at best. The 10 days isolation rule will stop almost any tourist visiting. We will miss the big tourism season and that could embed a pattern for years more of tourists going elsewhere.
"We might have more workers and Kiwi customers this year, but right now many of our members aren't even sure they'll make it through summer," White said.
She said the staged opening does little to assist the "cautious" principle, as Omicron is already here and will arrive with returning New Zealanders.
"The nation is vaccinated and boosted. What is the point of an isolation period longer than the international standard, and what is the difference between the influx of tens of thousands of returning Kiwis, and tens of thousands of tourists?"
Stick to the timeline
Heart of the City chief executive Viv Beck said it was important to stick to the current timeline and bring the July date forward if they can, but self-isolation is a deterrent for non-essential or leisure travel,
"Self-isolation for non-essential and business travel will be determined and the clarity around self-isolation as important as soon as possible. If tourists are coming for a long weekend they're not going to want to isolate at all.
"It would have been good to see vaccinated Australians being able to get here sooner, and the self-isolation requirements will be a deterrent for non-essential and leisure travel which will have an impact on recovery," Beck said.
Retail New Zealand chief executive Greg Harford said it welcomed the decision to begin reopening the borders but it urges the Government to stick to the schedule outlined today by the PM.
"It is important that businesses here are able to travel to visit suppliers, and MIQ has been a very significant barrier to travel. It is good news that this will start to change, and that home isolation will help keep people safe."
Harford told the Herald there are "significant shortages" of workers in the retail sector, "and we need to be able to see work visa holders be able to return so that retailers can continue to provide goods and services to New Zealanders".
BusinessNZ chief executive Kirk Hope said the phased opening of the border made sense, with permitted arrivals planned for dates in February, March, April and July, and with normal visa processing under way by October.
But businesses would want border controls fully lifted well before the Government's target date in October.
"BusinessNZ would like to see border exemptions removed altogether, as it is an unnecessary bureaucratic step in the immigration process.
"We're also concerned that wage-based restrictions on the entry of skilled workers could be counterproductive. Restricting the entry of skilled workers earning below 1.5 x the median wage will add unnecessary wage pressure on firms," Hope said.
He said businesses would like to have more detail around plans for reopening, for example, tourism businesses need to see a firm date for the end of self-isolation, and other businesses need to know more about entry requirements for skilled workers with prior connections to New Zealand whose visas may have expired during the pandemic.
Restaurant Association chief executive Marisa Bidois said the phased approach to reopening presents more challenges for the hospitality industry, which was "desperate" for workers.
"Our industry desperately needs skilled workers and the restrictions at phase 1 and 2 appear to signal a block on us accessing the skills to help our sector recover.
"Immigration New Zealand has been in contact with us on their immigration rebalance but we are still awaiting specific information on the proposed changes and how these will affect the industry," Bidois told the Herald.
"It appears that the Government is using the border closures and the reopening approach to serve a wider strategy, which ultimately blocks industries like ours from accessing the workforce we need, she said.
Canterbury Employers' Chamber of Commerce chief executive Leeann Watson said the announcement was welcome news for Canterbury businesses who have been grappling with severe skills shortages and a constrained labour market over the past two years.
But a requirement for skilled workers earning at least 1.5 times the median wage would put unnecessary wage pressure on business, she said.
"The biggest challenge facing business as a result of the closure of New Zealand's border has been accessing a sufficient supply of workers and the ability for exporters to remain connected to their overseas customers - today's announcement is a step in the right direction to easing the pressure," she said.
"The Government has indicated there are significant changes to immigration coming and we want to see an emphasis on supporting employers. Rapidly increasing the speed of processing visa applications particularly through the new Accredited Employer Work Visa scheme is crucially important.
"The process needs to be quick, simple and straightforward," Watson said.
"It is positive to see that skilled workers will be able to enter New Zealand in March, however, the requirement of 1.5 per cent median wage is adding unnecessary wage pressure to business. Skilled workers should be allowed in based on their skill, and nothing else," she said.
"We would have liked to hear that tourists would be welcomed back to our shores earlier than October, given the huge impact a lack of tourism is having across our region. It reinforces the need for the Government to provide clear information and financial support to those sectors that continue to be hit by restrictions. A date for the end of isolation requirements will be crucially important for our tourism sector, so they can start to plan for the return of visitors.
"We have an opportunity to boost our economic growth as we reconnect with the world, but we have to remain competitive and attractive to not only workers overseas but those in New Zealand.
"Price increases in our industry are already happening as a result of supply chain issues but there really is only so many price increases the NZ consumer can sustain so raising salaries to the levels needed to be able to meet the immigration criteria is in fact, not sustainable. All of these extra costs coming on top of a long period of business closures and reduced revenues.
"What will be welcome is the return of those on working holiday visas along with tourists, particularly for our holiday hotspots who are desperately in need of visitors.
"We see the isolation periods being a deterrent to visitors so question how many visitors we will see back in New Zealand. While it is encouraging to see the plan, we do not see this being the end of the challenges our sector will face over the next 12 months," Watson said.
Worldline's latest data has revealed how Kiwis spent on Boxing Day this year.