Budget 2020: Jobs, Business And Balance
Acknowledgements to all Cabinet colleagues, and party ministers Tracey Martin, Shane Jones and Ron Mark, Under-Secretary Fletcher Tabuteau and to caucus colleagues.
Thank you for your support, your hard work and your successes announced today.
We stand here today in support of the Coalition Government’s budget.
It is a budget that responds aggressively to our present conditions;
It is a budget that will support our transition to recovery, and;
It is a budget that has our people front and centre.
The Covid-19 pandemic is a completely new situation in which the coalition has very few familiar guidelines to shape our response.
We are in unchartered waters.
In this novel situation we look to history to help guide our thinking about the government’s health and economic response and recovery strategies.
Lessons from History
US President Franklin Roosevelt’s response to the Great Depression is one lesson to draw from.
He had no playbook for his response. Nor do we.
So we’ve had to learn as we go, always with the health of our most vulnerable foremost in our mind.
The First Labour Government responded to the ravages of the Great Depression with compassion and practical wisdom.
The Fourth Labour Government, in contrast, responded through ideology and blind devotion to neo-liberal economic theory.
The former tradition helped ‘the many’ survive a massive disruption, and its success shaped settled public policy, even National Party policy, for the next 50 years.
In stark contrast the ‘revolutionary’ tradition adopted by Roger Douglas and Ruth Richardson favoured ‘the few’ and left abandoned a lost generation of New Zealanders cynically cast adrift as no longer economically viable.
This is a crisis where we need to park ideology at the door.
We can well recall at the beginning of the neo-liberal experiment its disciples saying:
“Farming is a sunset industry”
Well, today that sector is the only one standing tall.
For any seeking to defend blind economic ideology there are countless other examples to destroy the validity of that belief.
Desired ends and means need to match and this coalition government’s third budget locates the Coalition’s Covid-19 response closer to the first tradition, while it utterly rejects the second.
We have our eyes wide open about the impact of this crisis. Every ounce of our collective effort is going to be required to fix it, right here, right now, in the short term, the medium term, and the long term.
Simply put, the people are our best resource to drive our economic recovery and we back them.
COVID Commemorative Medal
We owe New Zealanders nothing less.
Their commitment to keep their vulnerable neighbours and families safe is one of the most outstanding community wide efforts in our history.
In recognition of this, we will be taking to our Cabinet colleagues a proposal to create a special Covid Commemorative Medal for service to New Zealand communities.
The medal will acknowledge the many New Zealanders who led their communities since the pandemic hit our shores.
Front-line health staff such as doctors and nurses, as well as community leaders of all types, will be eligible to be nominated for one of a total of , say, 5,000 commemorative medals.
The honour would follow the current honours and awards process.
Because we’re going through an historical moment in time we should as a society celebrate the many contributions citizens have made to keep our team of 5 million safe.
The Covid Commemorative Medal would be for life and we see it being passed on to heirs and successors long into the future, a permanent reminder of a time in our nation’s life when we drew upon the best of our national character to protect life.
Budget 2020 – the recovery
The government knows that it must balance the immediate needs of the people with the long-term need to refashion a vibrant future economy.
When this lockdown started New Zealand First knew that the country faced a massive economic downturn. We also knew the government would need to intervene to keep businesses running and people employed.
We might not always get everything perfect but the coalition is willing to try anything, and do everything, to help businesses survive and save jobs by providing a cushion as the country transitions to a new equilibrium.
This year’s budget is about recovery. And the government is certainly using its balance sheet to assist in the post-lockdown economic phase of our response.
So, while all the rules on ‘fiscal prudence’ are now obsolete the coalition is committed to maintaining our comparatively low debt position against those countries we compare ourselves with.
The budget and the Covid-19 Response and Recovery Fund Package provide the bridge to help steer the country from its initial health crisis response to economic recovery and resilience, New Zealand’s ‘new normal’.
We want to get there as quickly as possible - but this is a marathon, not a sprint, and it will need all of us all working together.
The government initiated a wage subsidy scheme early on. The targeted extension of that announced today is an example of balancing urgent need with greater fiscal targeting.
Business in the budget
Today we welcome the $4 billion Business Support Package. Significant changes in the tax system and low interest free loans will support businesses to recover and help retain jobs.
New Zealand First understands the crucial role that business plays in creating the nation’s wealth and today’s announcements, while they will help, are not the end of our support.
Where the government could, we have changed regulations and legislation to increase economic activity. Most notable is fast tracking the RMA consenting process to spur job creation.
You’ve heard us say time and time again that if a job can be filled by a New Zealander, then that job should be filled by a New Zealander trained and skilled and paid properly to do it.
And there will be a very large number of people needing employment, or redeployment, especially for the many thousands employed in battered tourism and hospitality sectors.
Budget 2020’s Trades Training Package of over $1.4 billion will provide opportunities for New Zealanders of all ages to acquire new practical skills as they adapt to dramatically changed labour market conditions.
And this Budget provides $3 billion to infrastructure projects across the country. This is in addition to the $12 billion from the New Zealand Upgrade Programme. Minister of Infrastructure, and Champion of the Provinces, Shane Jones, will be leading the charge on implementation and delivery.
The focus is threefold – immediate job creation, income growth and construction activity to be under way within coming months.
Government support, however, is not unlimited so we are targeting assistance to those who need it most.
It means striking a fair balance between social need and personal responsibility.
All New Zealanders need to be productive and if we can in anyway help, to fund our society, then we all should
We owe it to taxpayers, current and future, to do so.
Pre-COVID economy and the global situation
It pays to remember that COVID19 is a global crisis.
But before the COVID-19 pandemic the global economy was already in difficulty.
Slow economic growth and a massive accumulation of debt reinforced that the fundamental factors behind the 2008-2009 global financial crisis and recession were never resolved, merely plastered over.
The global system has received a massive shock and the chickens have come home to roost.
Some of us have been saying this for a long, long time.
New Zealand may be tracking well but many, many countries are not.
We anticipate that 2nd order disruptions will kick in as the global economy struggles to adapt and all the while the risk of 2nd wave Covid-19 outbreaks threatens to prevent an orderly return to economic wellbeing.
Thus, the notion of returning to ‘business as usual’ fades by the day as global output collapses and unemployment soars.
Yet, with that warning, we know our destination, - a ‘new normal’ for New Zealand’s recovering economy.
A ‘New Normal’ – NZ Made, NZ owned
So, what does our ‘new normal’ look like?
First and foremost, New Zealand’s team of five million will need to draw on each other’s strengths.
We need greater autonomy for the New Zealand economy.
This means having the ability to grow it and make it, use it, and export it, rather than waste valuable offshore funds importing it.
And as we’ve said over and over, it is time to put up the shutters to offshore ownership of the New Zealand economy and go back to owning as much of it as we possibly can.
That will provide us with greater sovereignty over our future choices.
Overseas investment should be encouraged only where it expands our employment, wealth creation and export capacity in a way that is clearly new and not just an offshore takeover of what we were already doing.
Overseas investment can be a good thing, but it must be balanced in terms of New Zealand economic needs, and the New Zealand peoples’ interests.
We urgently brought forward amendments to the Overseas Investment Act to protect key New Zealand assets from falling into foreign ownership. New Zealand needs time to recover from the fall out of COVID19 – and not fall prey to foreign interests waiting on the sidelines to snatch up hard-earned New Zealand assets.
There are lessons in the COVID19 pandemic and worldwide economic collapse.
Only a fool would ignore them.
The budget is a key milestone in our response to Covid-19.
We can liken this moment to something Winston Churchill said in 1942: “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”
Our battle with Covid-19 is momentarily paused but we can still lose it - if we don’t remain vigilant.
Five million New Zealanders are winning that battle.
Now, we ask them to fight again. A battle that is even harder. It’s for the country’s economic future prosperity. If they show the same resolve they have so far we’ll win.
Failure is not an option.
And all us New Zealanders need to know that not reaching our goals won’t be through a lack of our ability, but a lack of our commitment.
The Coalition has the commitment to see it through but we need New Zealander’s help.
And after observing the country’s brilliant effort to keep the virus at bay we know we’ll get that help.
Our challenge, our quest, and our commitment, can be summed up in three words.
It’s J, B & B. Jobs, business and balance.
Together - we will win.