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CTU welcomes Government investment into infrastructure

"The Government’s announcement that an additional $12 billion capital will be available to address backlogs in our deteriorating schools, hospitals and rail infrastructure and for regional development is welcome news and sensible policy", says CTU Economist and Policy Director Bill Rosenberg. "This increase is greatly needed. After a long period of neglect we have fallen well behind and this investment is significant. It makes sense given government debt levels are low and its borrowing is currently very cheap."

"We also welcome the emphasis in the 2020 Budget on Just Transition and Future of Work. The priorities of the Future of Work Tripartite Forum led by the Government, CTU and Business NZ have the potential to bring significant long term improvements to working people’s lives, to productivity and to the sustainability of a higher standard of living. We hope they will be funded in the way they deserve. We also support the indication of further focus on health, lifting Māori and Pacific incomes, and child wellbeing."

Treasury forecasts that average wage increases will rise to 3.7% a year by 2024 are welcome. It has recognised the important contribution unions are making to support wage rises by saying that these increases over the next two years are driven by minimum wage increases, pay equity settlements and other collective bargaining.

"A significant increase in operating spending is needed too. There is an urgent need to fund our health, education and other public services properly after many years and billions of dollars of underfunding by the previous Government."

"It is critical that the Government continues to develop and implement the wellbeing framework and a broader perspective on how best to allocate our resources. Spending must reflect wellbeing needs rather than arbitrary budget rules."

"Significant public service funding is required to make New Zealand a fairer society and for that to occur the Government will need more revenue. The allowance for new spending in the 2020 Budget is $3.0 billion compared to $3.8 billion in the 2019 Budget. This will need to be increased substantially if we are to make the inroads into providing the public services that New Zealanders need."

"While we welcome the forecast increase in operational spending in 2020/21 to 29.4% of GDP it falls below Budget 2019 forecasts in the following years. Even 29.4% is still low by historical comparisons, and low by international standards, particularly compared to countries which are much less unequal than New Zealand and have fit-for-purpose support for people facing job loss and other changes which New Zealand notably lacks," Rosenberg said.

ENDS


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