Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


Government Grabs The Wheel For Post-Covid Recovery

Wellington, 14 May 2020 - Budget 2020 puts the Government firmly in the driver’s seat to get New Zealand through the Covid-19 financial crisis, but it will need more than good intentions to succeed, according to The New Zealand Initiative.

The Coalition Government announced the largest spending package in the country’s history, adding $50 billion to the already announced $12.1 billion Covid-19 recovery fund for an enormous total of $62.1 billion, with much of that funding held in reserve in case of future outbreaks.

Part of this new funding will include an extension of the wage subsidy scheme, but on a more targeted basis, out to an extra $3.2 billion.

The Initiative’s chief economist Dr Eric Crampton said this new targeted spending may help private sector employment, but the Government has sent a clear signal about how it plans to tackle the economic crisis.

“The Government is banking more generally on its own projects to see things through.

“Although there was no talk of Kiwibuild, it plans to build 6000 additional public housing homes and 2000 transitional housing homes. On top of this is an obvious preference for projects with a job-creation focus, including environmental projects,” he said.

However, he added there was no direct information on how the Government wants to reopen the border or develop its hypothetical trans-Tasman travel bubble.

“While $84 million is allocated for border protection for passenger travel, that seems rather light if they’re expecting any real increase. By way of comparison, it has allocated $315 million for biosecurity pest and weed control,” he said.

“Hopefully the Government plans to run future quarantine schemes on a cost-recovery basis, so these would not consequently show up in the budget. But some sign of an outward-focus, building on the success we have achieved while strictly protecting the gains we have made, would have been welcome.”

The budget documents also show New Zealand’s core net debt levels are projected to peak at 53.6% of GDP in 2023-2024, and only drop to 42% by 2034. While the Government has avoided tax increases so far, they can be expected going into the election, Dr Crampton said.

“Finance Minister Grant Robertson views current and future debt levels as prudent and as consistent with his responsibilities under the Public Finance Act. And taking on debt during a crisis certainly is!

“But where both major political parties have viewed debt to GDP ratios of 20-25% as prudent, it would be nice to see a path back to those levels,” Dr Crampton said.

The Government is also maintaining contributions to the NZ Superfund - $1.46 billion this year and $2.12 billion next year.

“While this of course doesn’t affect net debt levels, it does seem odd,” Dr Crampton said.

Reducing future Superannuation entitlements while using some of the SuperFund to assist with the pandemic response could be warranted, he added.

New Zealand Initiative senior fellow Dr Bryce Wilkinson said the budget is “all about spending” based on “good intentions.”

“Budget 2020 is plausibly consistent with respect to turning deficits into surpluses. It is less convincing on the prudent debt target,” he said.

He points out that the Government expects borrowing to be about 85.4% of GDP by 2022 while its gross debt will rise to 54.6% that year. At the same time, its core Crown tax revenue is expected to drop from 28.5% of GDP to 26.6% by 2022.

“The Government’s strategy to get back to productivity and economic health seems simple enough: just throw money at a few things like research and development (R&D) and vocational training and increase corporate welfare,” Dr Wilkinson said.

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On National's Great Leap Backwards

It isn’t surprising that at the height of its disarray, National should have looked for certainty and picked the least introspective candidate on offer. With Judith Collins, there is absolutely no risk that the leader will suddenly have an angst attack about whether they’re really up to the job. You would have to go all the way back to Robert Muldoon to find a National Party leader less prone to self-doubt, and more willing to use fear as a weapon to maintain discipline within the rank and file... More>>


Gordon Campbell: On The Todd Muller Resignation

Given the factions within National’s own caucus, anyone picked as the new leader of the National Party will struggle to unify their own troops, let alone to convince the electorate that National is a coherent government-in-waiting. Even all of that ... More>>

Green Party: Unveils Clean Energy Plan

The Green Party is today unveiling part one of its plan for a fossil-fuel free Aotearoa, including an immediate ban on new industrial coal boilers. To ensure a just transition away from fossil-fuels, the Green Party’s Clean Energy Plan will: Establish a Clean ... More>>


National Departures: Press Statement From Michelle Boag

Today I am announcing that I have resigned my membership of the NZ National Party. The last few days have underscored for me the unhealthy relationship I have developed with politics. For 47 years, I have devoted much of my professional and personal ... More>>


RACISM IS NO JOKE: Campaign Launched To Fight Racism Against Asian New Zealanders

Race Relations Commissioner Meng Foon has launched the ‘RACISM IS NO JOKE ’ campaign featuring well-known comedian, Filipino New Zealander James Roque. “Since COVID-19, we’ve seen an increase in racism against Chinese and other Asian New ... More>>

Isolation: Government And Air NZ Agree To Manage Incoming Bookings

Bookings for seats on Air New Zealand flights into New Zealand will be managed in the short term to ensure the Government is able to safely place New Zealanders arriving home into a managed isolation or quarantine facility, says Housing Minister Megan ... More>>


Government: New Investment Creates Over 2000 Jobs To Clean Up Waterways

A package of 23 projects across the country will clean up waterways and deliver over 2000 jobs Prime Minister Jacinda Ardern and Environment Minister David Parker announced today. The $162 million dollar package will see 22 water clean-up projects ... More>>


Eenrgy & Environment: Snail Like Progress On Government Vehicle Emissions Targets

First published in Energy and Environment on June 2, 2020. The latest data on the Government’s attempts to reduce the emissions of its transport fleet show no discernible progress. The Ministry of Business, Innovation and Employment’s data on reducing ... More>>

Conservation: New Protection For Dolphins

Extensive new protections are being put in place as part of an updated plan to look after New Zealand’s native Hector’s and Māui dolphins, announced Minister of Fisheries Stuart Nash and Minister of Conservation Eugenie Sage today. More>>


David Seymour: ACT Leader's Address To Election Campaign Launch - ASB Waterfront Theatre, 12 July 2020

Introduction Thank you very much. Elections in New Zealand – like everywhere - are a very special tradition, because they are driven by you. They’re an opportunity to change your future. If you think about it, the Government doesn’t do much. It ... More>>

Foreign Affairs: New Zealand To Review Relationship Settings With Hong Kong

Foreign Affairs Minister Winston Peters has announced that the New Zealand Government is reviewing the settings of its relationship with Hong Kong. “China’s decision to pass a new national security law for Hong Kong has fundamentally changed the environment ... More>>


Covid-19 Patient Info Leak: Hamish Walker - A Personal Statement And An Apology

I have spoken to National Party Leader Todd Muller and informed him that I passed to members of the media, by email, information containing Covid-19 patient details that was given to me by a source. I did this to expose the Government’s shortcomings ... More>>


Economy: Infrastructure Investment To Create Jobs, Kick-Start COVID Rebuild

A new package of infrastructure investments will help kick-start the post-COVID rebuild by creating more than 20,000 jobs and unlocking more than $5 billion of projects up and down New Zealand. Finance Minister Grant Robertson and Infrastructure Minister ... More>>


Covid-19: Isolation System To Be Beefed Up After Stress

A range of improvements are already underway to address issues identified in the rapid review of the Managed Isolation and Quarantine system released today, Housing Minister Megan Woods said. The review was commissioned just over a week ago to identify ... More>>


Election 2020: Parties Get Into Gear

ACT has today announced its list for the 2020 General Election. “The calibre and experience of our candidates will impress voters of every persuasion. We have candidates from all walks of life. People who have built their homes, families and businesses ... More>>






InfoPages News Channels