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11th May, 2020

BREAKING: Shift to Level 2 restrictions to boost spending

Economic activity has been restricted in New Zealand, causing huge financial implications for the country’s small business fraternity. But there is light at the end of the tunnel.

New Zealand’s small business fraternity is taking an important step toward economic activity this week as the country moves to Level 2 COVID-19 restrictions.

Life at Level 2 signals a return to spending, with all businesses able to open for trade if safe to do so. Shoppers are also able to return to spend, while travel between regions and weddings, funerals, birthdays and anniversaries able to be celebrated once more (with limitations on how many people can attend, for now).

The New Zealand Government’s breakdown of it’s COVID-19 lockdown measures reveals that Level 2 will be in place when the disease is contained but a high risk of community transmission remains.

Cabinet has agreed that the country is ready to move to Level 2. Retail stores, malls, cafes, restaurants, cinemas and public spaces can open from Thursday this week. On Monday, 18 May, children and young people will be able to return to school. And bars can open on 21 May.

A move to Level 2 is welcome light at the end of the COVID-19 tunnel for New Zealand.

READ: Business owners prepare for Level 2 restrictions

Economic activity released by ASB Bank reveals that business confidence plunged to unprecedented lows in April, which is consistent with the bank’s expectation of a seven percent contraction in the economy over 2020.

Business confidence may improve slightly in May as the NZ economy transitions from Alert level 4 to Alert level 3 in late April. This shift to Level 3 allowed many in non-essential industries to return to work at a reduced operating capacity to maintain a safe distance between staff and customers. Meanwhile, others needed to remain closed, such as hairdressers, arts and sports facilities.

New Zealand Prime Minister Jacinda Arden’s calm and level-headed handling of the COVID-19 pandemic has bought her praise from around the world.

She’s been heralded as giving other leaders a masterclass in crisis leadership. She’s acknowledged the challenges we face at home, and shows empathy about what has been asked of New Zealanders during this crisis. She’s also been happy to answer questions from the media.

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While Arden says the aim of Level 2 is to reduce close contact with strangers, she admits it’s unlikely every case of COVID-19 has been identified, meaning authorities have to stay on guard. New Zealand has recorded 1,497 confirmed and probable cases of COVID-19, and 21 deaths.

Arden describes Level 2 as a ‘safer normal’ designated to get as many people back to work as possible and the economy back up and running in a safe way.

“Strong public health measures such as physical distancing, good hygiene and contact tracing will be essential to making Level 2 work,” said Arden.

“There is a much higher level of individual responsibility required at Level 2 to prevent the spread of the virus. Even though the economy will be significantly opened up, we still need everyone to remain vigilant and continue to act like you and those around you have the virus.

“We need to balance the risk of the virus bouncing back against the strong desire to get the economy moving again.”


Key activities and restrictions in Level 2


  • People can reconnect with friends and family, go shopping, or travel domestically, but should follow public health guidelines.
  • Physical distancing of two metres from people you don’t know when out in public is recommended, with one metre physical distancing in controlled environments like workplaces unless other measures are in place.
  • No more than 100 people at indoor and outdoor gatherings, but in groups of 10 only (for example, a restaurant or event might host 100 people, but they would be from 10 separate parties, appropriate distanced).
  • Sport and recreation activities are allowed, subject to conditions on gatherings, contact tracing, and – where practical – physical distancing.
  • Public venues can open, but most comply with public health measures.
  • Health and distancing care services operate as normally as possible.
  • Businesses can open to the public, but most follow public health guidance including in relation to physical distancing and contact tracing. Alternative ways of working encouraged where possible, such as remote working, shift-based working, physical distancing, staggering meal breaks, flexible leave.
  • It’s safe to send your children to schools, early learning services and tertiary education. There will be appropriate measures in place.
  • People at higher risk of severe illness from COVID-19 (such as those with underlying medical conditions, especially if not well-controlled, and seniors) are encouraged to take additional precautions when leaving home. They may work, if they agree with their employer and can do so safely.

More New Zealand Government information can be found here.