'Imperative' to keep people in south

There was a growing sense of urgency that people, skills and businesses affected by the Christchurch earthquake could be lost to the South Island, Otago Chamber of Commerce president John Christie said yesterday.

The New Zealand Chambers of Commerce meet next week and Mr Christie was expecting to raise the issue of how to retain a valuable part of the South Island economy.

The New Zealand chambers were aware of the need to help damaged Canterbury businesses as much as possible but Mr Christie said there were wider issues at stake.

Strategic thinking needed to take place at the highest levels of business and government to ensure that the right decisions were made about the rebuild.

It was obvious people had left Christchurch for good or were contemplating whether they had a future in the city, he said. That was frustrating for Christchurch as its residents and businesses moved away.

"It's imperative those skills and businesses are not lost, first, to the South Island, and secondly, to overseas."

The Otago chamber had been receiving inquiries about short-term help, such as the with office space. Longer-term relocations were more of a challenge.

"It's a slow, gradual process. Businesses have a lot to face up to."

They need to con-sider the viability of shifting, where their customers are, where their suppliers are and where their staff live.

"Some businesses will need to shift but they have to take their time to investigate their options.

"Some businesses will leave Christchurch and their only decision is where to go.

"If Otago doesn't put its options out there, it will only get what it receives rather than what it could have."

Small and medium businesses were the most likely to leave Christchurch, Mr Christie said. Larger companies would find ways of staying if they could.

The Christchurch earthquake had also shown how vulnerable the rest of the South Island was when a natural disaster struck its major city, he said. The tourism, service and manufacturing sectors were all hit, affecting the economies of Otago and Southland.

Companies in the south were having difficulties receiving supplies and that was affecting their own economic viability. Central Otago builders were reporting a shortage of building supplies, giving an idea of how widespread the effects of the quake were, Mr Christie said.

A discussion was needed about whether such large-scale centralisation in Christchurch was in the best interests of the South Island and New Zealand as a whole.

The Reserve Bank responded to the quake by cutting the official cash rate by 0.5% in recognition that the economy would take a substantial hit, he said. "This affects us all in some way, even down to the cost of insurance going up for businesses and homeowners."


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