Jacinda Ardern flags four-day working week as way to rebuild New Zealand after Covid-19

New Zealand is considering introducing a four-day working week to help boost domestic tourism, productivity and employment after the Covid-19 crisis battered the country’s economy.

On Wednesday Prime Minister Jacinda Ardern flagged the idea of using the shorter working week and additional public holidays as part of a “nimble” and creative approach to resuscitating the economy.

New Zealand’s strict seven-week lockdown has been praised around the world for stopping the spread of Covid-19 in its tracks, with the nation of five million people now having 35 active cases and just one coronavirus patient in hospital. In total, New Zealand has had 1,153 Covid-19 cases and 21 deaths.

But strict travel bans have meant tourism and hospitality sectors, which play a vital role in the New Zealand economy, have been hard hit.

“This is an extraordinary time and we should be willing to consider extraordinary ideas,” Ms Ardern said. “I haven't ruled anything in or out.”

She added that the government should be open minded about the “range of options” available to policy makers.

Between March 2018 and March 2019 tourism generated NZ$16.2 billion, 5.8 per cent of the country’s GDP. The indirect value added by industries supporting tourism generated an additional NZ$11.2 billion.

Representatives of the industry, which prior to the crisis employed about 230,000 people, met with the prime minister on Tuesday. After these talks, Ms Ardern said working from home during lockdown had shown how productive employees could be if given more flexibility.

“Think about if that's something that would work for your workplace, because it certainly would help tourism all around the country,” she said.

New Zealand launched an ambitious plan to "eliminate" coronavirus using early and aggressive lockdown and travel bans. 

As early as April 27 Ms Ardern claimed her country had "won the battle" after four weeks of heavy restrictions.

“There is no widespread undetected community transmission in New Zealand," she proclaimed. "We have won that battle. But we must remain vigilant if we are to keep it that way."

On May 11 the country reopened schools and offices, as well as restaurants and cafes following. Strict social distancing measures in cafes meant Ms Ardern was turned away from dining only to be chased down the road by the owner and offered a seat when one became safely available.

International borders remain closed but with New Zealanders now free to travel within the country, tourism operators and airlines ramping up services to meet rapidly growing demand. A three-day weekend and extra holidays could provide a significant boost to business.

In 2018 a New Zealand company that moved to a four-day week, while retaining five-day pay, for a two-month trial found the change boosted productivity among its 240 employees. The firm, Perpetual Guardian, which manages trusts, wills and estates, found that staff spending more time with their families, exercising, cooking and gardening, returned to work enthusiastic and energetic. Workers said the change motivated them to use new ways to increase productivity while in the office, including reducing meeting times from two hours to 30 minutes.

Other companies around the world have reported similar outcomes. In August 2019, Microsoft Japan tested a four-day week and saw productivity increase by about 40%. The experiment also saw a 23% reduction in weekly electricity use in the office and a 59% decrease in the number of pages printed by employees.