Madison Reidy: This recession is about more than the GDP drop and debt mountain

OPINION: This week’s numbers were ugly - the biggest GDP drop on record and multi-billion-dollar deficits for years to come. 

But the cost of this Covid-caused recession is more than numbers can measure. 

There are no statistics that truly show how people have been displaced by this downturn. 

This is what the GDP drop and debt mountain fail to mention. 

The father who lost his dream career as an international pilot, who is losing sleep every night wondering how he’ll pay rent. He and his wife were planning on having another child, but they can no longer afford to grow their family. 

The Christchurch couple who both lost their jobs and have been forced to sell their home. They took a six-month mortgage holiday but can’t meet repayments when they resume.

The Auckland restaurateur who’s told his staff they’ll likely close for good, because they still can’t serve at full capacity. The wage subsidy only covered one major expense. The bank won’t lend him any more money to stay afloat, he’s already consumed by debt. 

The unemployed Palmerston North man who’s applied for every job he could find, but was told he’s too qualified to be a food delivery driver. 

The migrant worker who lost his job as a cook and was forced to sleep on the street. 

An unofficial measure of the recession is the number of messages I’ve received from these people wondering how they’ll be able to survive on a $250 weekly benefit when they exhaust the three-month Covid income relief payment, or their savings wear too thin. 

Almost 200,000 New Zealanders are in that position - 6.6 per cent of the working age population. Today, the Treasury will reveal an increase in those numbers. 

But they don’t include those whose part-time job and redundancy payments pushed them outside the bracket to receive Government support, nor those who are still living off the extended wage subsidy.

The Treasury forecasts the unemployment rate will hit 7.7 per cent next year, better than initially feared, but frighteningly it’s not known how many years it will take to get back down to pre-Covid levels. Long enough to fall outside of the realm of five-year forecasting.

Those with wealth in the form of homes or shares will profit from others’ pain. 

Mortgage rates will remain historically low longer, encouraging those who can afford it to jump on the property ladder, increasing demand and pushing house prices up. Kiwis returning home from overseas will add to buyer demand. 

The inability to earn much interest off money in the bank will see savers look for returns elsewhere. They’ll find it in our record smashing share market, boosting some already over-inflated stock prices. 

Redundant Kiwis at the bottom of the heap will watch wealth get further and further out of reach. The absence of a capital gains tax rubs salt in their financial wounds. 

Economists predict the sting of this recession is already subsiding, with the quarter we’re in now likely wiping out most of the losses just recorded. 

But the impact of this recession will last longer, and the stories of those bearing the brunt of it should be acknowledged alongside the numbers.

Madison Reidy is a Newshub journalist