New Zealand finance minister Grant Robertson has announced a NZ$50 billion fund to help retain jobs and minimise unemployment within two years.
The hefty figure was revealed during Thursday’s annual budget speech – and equates to approximately 17 percent of New Zealand’s gross domestic product.
It is 17 times more than what the country’s government normally allocates to new spending, as the world navigates the negative effects of the ongoing coronavirus pandemic.
“They’ve gone big and they’ve gone hard, money’s flowing out the door like we’ve never seen, it’s the right strategy to be leaning on the government balance sheet,” said former ANZ chief economist Cameron Bagrie.
“If there’s a question I have, it’s that the strategy is built on hope. Covid is getting air-time but there’s a lot else going on in the world, globalisation is unravelling. What we got today was a response to Covid; what we didn’t get was a narrative about resetting and reshaping the New Zealand economy entirely.”
Opposition leader Simon Bridges, meanwhile, has effectively dismissed the spending. He questioned the government’s willingness to spend less on tourism than on rail.
“I’m disappointed because I don’t see a plan for jobs and growth. I see pet projects, whether rail or pest eradication, and they may have worth, but added up, they make colossal debt,” added Bridges.
“One thousand people a day face a very uncertain future. Spending money is the easy part but Grant Robertson doesn’t even know today how he would spend it all. Much is unallocated. And it all needs to be paid back.
“Today we see a tsunami of debt about to wash over us. The greatest burden of debt in our country’s history by a long way. Taxes are the last thing New Zealanders need but they are a certainty under a Labour-led government.”
Ardern on point
New Zealand prime minister Jacinda Ardern challenged Bridges, who she said presumed proceedings were “business as usual”. Bridges had not moved a no-confidence motion.
“I take that as a signal that the Opposition will vote for this Budget today. Now is the time to come together as politicians. As a trading nation, that will have an impact, and that will be significant and it will be painful,” she concluded.