The Christchurch business sector has learned much from the 2010/2011 earthquakes relating to how to respond and maintain economic activity in a community.
Never did we think that the lessons we learned in Christchurch would have to be applied to a community so close to home in such a short timeframe. The devastation in Hurunui and Kaikoura is still becoming apparent. The reality is that there are businesses who are stranded, who have disrupted supply chains and broken premises. Further they lack the essential services such as water, power, wastewater and communications to carry on their businesses. On top of all that in many cases their markets have simply dried up. When you have a tourist dependent business and the tourists are not coming you are in trouble. There is no doubt that many of the communities in the Hurunui and Kaikoura districts, including Kaikoura itself, are in dire straits.
One of the critical factors in Christchurch was the importance of providing cashflow to businesses to maintain the fabric of the business until it could get up and running again. Post 2010 I described it as business as usual when there is no business. The lessons we have learned in Christchurch put us in a very good space to help communities to the north. I have often used Kaikoura as a classic example of the interdependency between sustainable profitable business and community wellbeing. With the rapid growth of eco-tourism, corner-stoned by the whale watch activities, Kaikoura has changed from a small railway town to a bustling and vibrant community. Its proposition evolving around eco-tourism is the epitome of sound sustainable business activity. However, if the business activity in Kaikoura is not supported immediately it will be severely compromised and it will take a very long time for the Kaikoura community to recover.
Here are some examples of what I think should be applied to the Kaikoura business community and beyond to ensure that affected businesses can be maintained until markets are restored:
- One of the most critical issues in Christchurch was the introduction by the Government of the Earthquake Support Subsidy that provided cashflow for businesses until they could get themselves into recovery mode. It was based on a number of dollars per employee per week. It was delivered on a high trust basis and it was a very significant component in business survival in Christchurch. It is very good to see that mechanism being immediately introduced into Kaikoura, Cheviot, Waiau, Rotherham, Mt Lyford and Ward. This will make a significant and positive difference to affected businesses.
- We would expect, as was the case in Christchurch, that banks will adopt a very supportive and lenient stance for their customers. Offering additional working capital, delaying loan repayments and being generally supportive of the businesses who are effected by the earthquake directly or indirectly.
- The Inland Revenue Department effectively provided cashflow support to businesses in Christchurch by delaying payments of GST and provisional tax. We would expect the same thing to happen in this instance.
- Insurance companies in Christchurch did make fast provisional payments on business interruption insurance and property damage to enable cashflow to be supported.
- The Government, through its various other agencies, provided support for workers and employees where their companies had indeed collapsed and provided support for recovery operations both in the rural sector and urban precincts.
- The Canterbury Employers’ Chamber of Commerce provided a safe pair of hands for business providing internet based support, a call centre and business recovery coordinators that were put out into the community to assist businesses through the challenging times.
- Businesses helped each other out within and across regions.
We know from the Christchurch experience that these mechanisms combined resulted in minimal business attrition and in fact ensured that through business survival the greater Christchurch community was in good shape to embrace a full-on recovery programme.
The numbers of businesses effected in Hurunui and Kaikoura are much smaller than those impacted in Christchurch but it is just as important that they are supported as they underpin the rural and regional communities in that area. Of course, it is also important that we reinstate appropriate connectivity into the areas within the Hurunui and Kaikoura districts and that involves immediate air and sea support as is already being evidenced. It also involves careful planning to ensure that State Highway 1 and the rail link are options that are considered urgently and strategically. Alternative road access into all the areas will be essential in the short term and it is pleasing to see the emphasis being put on the inland Kaikoura route and the obvious dependency that heavy transport will have on the Lewis Pass in the foreseeable future.
As Hurunui and Kaikoura regenerate themselves their businesses and their infrastructure in the post-earthquake environment they will do so in a way that points to the future as we have done in Christchurch.