Treasury's modelling on unemployment and capitalism with Rod Oram: April 17, 2020

On Tuesday, the Treasury announced some unemployment figures based on modelling from different scenarios relating to the Covid19 pandemic and our subsequent rāhui.

The scenarios show:

• That unemployment can be kept below 10%, and return to 5% in 2021 with additional Government support. Work is already well advanced on further fiscal support.
• Without additional support, unemployment could have hit 13.5% under scenario 1 (four weeks in Level 4), while scenarios requiring more time in Level 4 showed a peak of 17.5%-26%.
• New Zealand’s underlying strength means the economy can bounce back to be $70 billion larger by 2024 than in 2019.

So, the best outlook we are dealing with at the moment is an increase in unemployment to just under 10 percent, and some commentators have pointed out this number is already a reality for Māori. So! What does this all mean? And what effect will Covid19 have on the economic system in general? To get some idea, Lillian Hanly rang Rod Oram. They started off by talking about the figures but ended up talking about Capitalism more generally.

Image credit:
Original image from Harvard Business Review | Animation by Thomas Fink-Jensen