New Zealanders were seen to work as a “team of five million” – to quote the Prime Minister – to combat COVID-19. We still need to be cautious but it seems working as one team has been successful.

New Zealanders are resilient under pressure. The Christchurch earthquakes, the mosque shootings … and now COVID-19.We have a new crisis: a possible recession here and the rest of the world. New Zealanders have to face this new challenge. 

There are calls from the Government and business associations and organisations for the “team of five million” to support the damaged economy by buying and thinking local. But will we? Is it worth spending a few extra dollars and buying locally or supporting a local business?

People are naturally going to be cautious about their discretionary spending in the economic climate ahead. Following the Great Depression, people were hesitant to spend and businesses cautious about investment.

As a result, the recovery post-Depression took some time to kick in.Now, the next months and possibly years will be critical to New Zealand’s economic recovery. That’s when thinking locally comes in. Despite the urge to put our money under the mattress, we need to buy and support local businesses in these crucial times. Simply put, we need to spend.

“If the average household spent an additional $200 every month for the next six months, more than 500 jobs could be saved”

New Zealand – a country of small businesses

There are nearly 500,000 small businesses – the bulk of all businesses here.

They employ 30 per cent of the work force and, importantly, produce some 30 per cent of our Gross Domestic Product. While the Government (particularly through its recently announced business incentives), investors and economic trade are vital to support our economy, it’s local businesses and consumers that will have the biggest impact on our recovery.

According to New Zealand economic adviser David Dyason, if the average household spent an additional $200 every month for the next six months, more than 500 jobs could be saved.Also, supporting your local shop can have a knock - on effect. US research shows local businesses are more likely to utilise other local businesses such as banks, insurance brokers, mortgage companies, service providers and farms.

Buy local protects you

Buying local not only helps the economy, it’s helps protect consumers. Retail NZ has started a #ShopLocal media campaign to encourage us to buy local rather than shop online for overseas goods. 

It points out that the Consumer Guarantees Act ensures that goods and services meet certain standards and sets out remedies from retailers and manufacturers if they don't. When buying from offshore websites, customers  may not have such assurances.

With the Fair Trading Act, consumers buying from local stores have accurate information about what they're buying and that goods meet safety standards. Many local retailers will allow customers to return goods. Offshore retailers may not and, if they do, shipping costs generally must be met by the consumer.And, most importantly, buying local means local customer service and local knowledge.

This is not just your local grocery store but larger businesses who, in turn, help and advise smaller business. For example, local insurance brokers have lived with you through the earthquakes of Christchurch and even going back to the Global Financial Crisis.

They can  help ensure the vital small businesses of New Zealand are protected against calamities that befall them in these sensitive economic times.

Now is the time to think local

COVID-19 and the subsequent closedown of the country has had a devastating effect on many small businesses. Some went under or had to drastically reduce their workforce. In the future, buying New Zealand goods and services has a two-pronged impact: it can help save your local business, who in turn can help rebuild our economy. 

At the end of the day, after the magnificent work of our essential services during the pandemic, we now have a new frontline team: consumers and business - thinking locally.

Important disclaimer - Steadfast NZ Limited, its related companies and associates.

The views expressed are those of the author only and do not necessarily reflect those of Steadfast.

This magazine provides information rather than financial advice. The content of this magazine, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, and seek appropriate financial advice before you act on any information. 

Information is current as at the date articles are written as specified within them but is subject to change. Steadfast, its related companies and associates make no representation as to the accuracy or completeness of the information. Various third parties, including Know Risk, have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast .