More COVID-19 cases but businesses going under: High stakes in Cabinet's COVID-19 alert level 2 decision

Businesses are folding under alert level 3 restrictions, but as Cabinet decides whether to shift us into alert level 2, ministers will also have to consider the three new cases of coronavirus - an increase on Sunday. 

Cabinet will announce at 4pm if the nation is ready for the shift to alert level 2, which would allow businesses, schools and public venues to open after more than a month under heavy restrictions to help stop the spread of coronavirus.

Many businesses are at a tipping point after weeks of no income. The Government has spent more than $10 billion subsiding Kiwis' wages throughout the crisis, as well as tax tweaks and loan schemes to help companies get by - but the business community is getting impatient. 

Newshub will have special coverage of the alert level 2 announcement on Three from 4pm. It will also be streamed on

"The economy needs to reopen on Monday," Business New Zealand chief executive Kirk Hope said, citing what he described as a "huge desire by businesses to reopen as soon as possible" given the number of active cases in New Zealand is low. 

"Every day counts for thousands of businesses that are still closed. The longer they stay closed, the more they risk losing everything."

New Zealand has a total of 1497 confirmed and probable cases, compared to 1386 reported recoveries from the coronavirus, meaning there are just 111 people who currently have it. 

But the virus is still spreading in New Zealand - even if at a much lower rate than it was a month ago. The Ministry of Health reported three new cases on Monday - two of them nurses at Waitakere Hospital. 

It comes after two consecutive days in a row last week when there were no new cases reported, sparking a flood of optimism among businesses and increased calls from the Opposition to initiative alert level 2 as soon as possible. 

But Prime Minister Jacinda Ardern repeatedly pushed back against those calls, explaining how she wanted at least two weeks before a decision was made because experts say that's how long the virus be can present in a person's body without showing symptoms. 

An example of that came on Sunday, when it was revealed one of the new cases in New Zealand was a woman in her 20s who had just tested positive for COVID-19 despite flying back from the United States more than two weeks ago. 

The risk of lifting the current alert level 3 restrictions and giving the virus another chance to spread will weigh heavy on the minds of Government ministers as they decide if it's time for level 2. 

But just as heavy is the weight of businesses going under. 

The Government will have to consider the further 700 jobs SkyCity said on Monday it's looking to axe to ensure it can operate going forward after its revenue streams dried up. 

Cabinet will also have to consider that spending on hospitality food and beverage services has fallen by about 95 percent - down $814 million - in just one month, according to new Stats NZ data. 

Retail card spending across the whole country fell by more than $2.6 billion, down 47 percent - the largest drop in both dollar and percentage change since 2002. 

"The Stats NZ figures show the enormity of the impact and the importance of why restaurants and bars need to open again under alert level 2," NZ Alcohol Beverages Council executive director Bridget MacDonald said. 

"The industry relies heavily on domestic and international tourism. Without these in play, it will be hard yards for businesses to continue to survive, let alone get back to a position where they are sustainable or thriving."

The Government has the power to make it better. Under alert level 2, the hospitality sector can come back, but venues will only be allowed to invite customers in to sit down and they can only be served by one person, to enable contact tracing. 

The tourism and hospitality sectors will also benefit from inter-regional air travel coming back under level 2, with Air New Zealand set to operate around 20 percent of its usual domestic capacity, once the Government gives the green light. 

ASB Bank analysts say New Zealand looks to be managing the health challenges posed by COVID-19, and they expect a "modest rebound in card spending" in the coming months. That's on top of a slight lift in business confidence in May. 

But they warn the "huge economic toll" imposed by COVID-19 means any retail rebound will be "short-lived" as consumers adjust to the new normal, as well as the looming possibility of unemployment reaching an estimated 9.4 percent. 

Another factor in Cabinet's decision will be spending. The Government has so far announced $20.7 billion - about 6.7 percent of GDP - to support the country's economic fight against COVID-19, and more is expected to be announced in Budget 2020. 

The longer the Government keeps businesses shut to help stop the virus spreading, the more desperate those businesses become, meaning more has to be spent on keeping them afloat, because the alternative is mass unemployment. 

The Government's initial $12 billion COVID-19 package included $500 million for the health sector to combat the virus, and since then $55 million was approved to bolster the Ministry of Health's contact tracing capabilities. 

That, combined with high levels of testing in New Zealand - 3865 tests were processed on Sunday alone - puts the country in a relatively strong position to respond swiftly to any new COVID-19 outbreaks during a level 2 scenario. 

It's now for Cabinet to decide if Kiwis are up for the challenge.