Finance Minister Grant Robertson is reiterating his commitment to using the COVID-19 crisis as an opportunity to rebuild a different kind of New Zealand.
Delivering a speech on Thursday, ahead of releasing the 2020 Budget on May 14, Robertson said, “There are few times in life when the clock is reset."
He said now is the time to address long-term issues like inequality, the future of work and climate change.
“As someone said to me the other day, if your house were to burn down, you probably wouldn’t build it back exactly the same, would you?” he said.
Strengthening the public sector
Robertson said the focus of Budget 2020 has changed and has “very quickly” become about “providing the strong public services we need”.
“New Zealand’s ability to respond strongly to COVID-19 has highlighted the importance of investing in and maintaining effective core government services…
“The effectiveness of the Government’s response is down to the professionals in these agencies. Strengthening and improving these services is crucial to the ongoing protection of our collective wellbeing.”
Robertson said he had reassessed spending priorities outlined in the February Budget Policy Statement. “Unless they are meeting a core cost pressure, we have put them on ice,” he said.
The word “wellbeing” was only mentioned twice in the speech, as Robertson said: “Our work is still guided by the wellbeing approach, ensuring we balance the needs of our economy, our people, our environment and our communities. These principles are more important than ever in getting our response to COVID-19 right.”
Support will become more targeted
Robertson didn’t specify what additional business/household support will be provided in the Budget, but said: “Our recovery will continue with interventions to sustain households and businesses and get people working, in combination with sector-specific support to help boost wider economic confidence, and regenerate some of the sectors hit hardest by the pandemic…
“Support will naturally become more targeted, as some industries and firms are able to survive and recover on the back of broader stimulus measures.”
Robertson stressed: “In most years the Budget represents the end of a process that began six months before, the sum total of the Government’s economic action plan for the year ahead. That is one clear difference. The Budget this year is just one staging post in our fight against, and recovery from, COVID-19.”
‘We will be running operating deficits for an extended period’
Robertson warned Treasury’s economic forecasts will show the “path forward to recovery will be challenging”.
“We are no longer talking about growth in the near term, but about the scale and length of the economy’s contraction. Business investment and confidence will take a hit. Unemployment will rise...
"We will be running operating deficits for an extended period and allowing net core Crown debt to increase to levels well beyond our previous targets.
“This is a necessary and responsible move...
“This is what other countries around the world are doing. But they are not starting from our position of strength. The UK started with net debt above 75%, the USA 90%, and Ireland 40%. Many countries are already well over 100% as they respond to the virus. Despite the additional borrowing we will need to undertake, we will remain among the least indebted countries among our peers.
“I remain committed to managing our books carefully and responsibly. Right now, being responsible means investing our money to support our people, businesses and communities to get through this and to rebuild.
"In time, we will need to return to a more sustainable fiscal path..."
Housing, climate, infrastructure, retraining workers long-term priorities
Coming back to this concept of a “reset”, Robertson said: “While many of our economic indicators were strong – low debt, low unemployment, rising wages and government surpluses – there were ways in which we had not reached the standards we aspire to as a country.
“Too many children were growing up without the basics, housing has been too expensive, many of our waterways are still not swimmable, our emissions have been rising, people are working harder but don’t feel they are getting ahead. In other words, we are not quite the nation we like to think we are…
“Some significant long-term issues are now right in front of us.
“The Future of Work has arrived, even if not how we expected. Enabling businesses to grow in a digital age, to trade with a country they might not be able to even visit and to sell new added-value products to the world is essential.
“Equipping workers with new skills, training opportunities and apprenticeships, and breaking down the digital divide for our workers and families is more critical than ever."
Robertson spoke of infrastructure, saying he looks forward to seeing new proposals generated by the private sector, local government and more in the coming weeks.
“The opportunity is there to break our housing shortage once and for all," he said.
“In short, in the wake of this dreadful and devastating crisis we have a shot at making things better. And we will take it.”
106 Comments
"an opportunity to rebuild a new and improved New Zealand."
Quite right. And that is going to upset a lot of New Zealanders; change always does.
But we now all have a choice; embrace it or fight it.
Robertson has a vision of what that change looks like. He must lay it on the table before the election, and then we all get a shot at deciding if he's got it right or not.
Change IS coming; in fact, it's already here. Let's hope we have the courage to face it.
Yep that comment reveals a rather sticky problem and that is the competence and integrity of the state controlled sector. Ironic that the article here reverts to Public Service. Would wager you would not find any employees here who would categorise themselves as being public servants. It is an immense problem in NZ that both national and local government are far too willingly engaged in spending other people’s money. A “public service” that is opinionated, unaccountable and vested in self interest is a threat to democracy, our nation at any time, let alone now.
It is an insurmountable problem, and I don't know what is worse
1. The public bodies spending without thought? or
2. The clearly incompetent parasitic criminals private sector taking the cash while F*$@ing everything up left, right, and centre.
IMO, 2 is worse. ultimately we need the infrastructure - roads, schools, water, etc... So have to spend.
But how do you stop what can only be wilful and deliberate rorting of this need?
The government will just have to develop the dobbing in abilities afraid to say, hang it off the Ombudsman’s office. The EQC/Fletchers travesty in Canterbury surged out of control because they were untouchable, unaccountable. When I approached EQC that a certain contractor was wilfully smashing up perfectly good dunnies ( could make $450.00 a pop you see) was told don’t waste our time with trivialities. Of course that was the corrupt culture that snowballed into $millions of wastage and self enrichment. The government will need an agency of independent hard nosed experienced QS and project manager types in the field.
Problem is the government can't roll anything out that works in the productive sector as they have no experience. The CHC Earthquakes taught many of us that lesson, lets hope they don't try to implement change from Wellington or it will be a complete fail...and $ down the drain.
We had a wide window of opportunity to bring the needed experience and expertise from overseas for quite a while, a window that has now slammed shut. We're now left with an army of laid-off tourism and hospitality workers with low-value service skills who we somehow need to retrain and redeploy in high-productivity sectors.
I heard our ministers (Jones and Parker I believe) on a radio show compare our tourism sector's situation with the auto industry players revamping their production lines in a matter of days to manufacture ventilators instead without the host shooting down that ridiculous comparison right away. Let no crisis go to waste, they say!
Indeed, the ‘idealogical’ dogma also seems to be coming out to play...which is likely to end badly. I think that the government is well beyond its remit now and changes of the scale they are alluding to should not be rushed through with no transparency or scrutiny...it is almost seems that they after wholesale change that is unlikely work when the key driving factors remain or have been amplified.
And that's what's wrong with Democracy?
In a Totalitarian State, those running the show say "Look you lot! This is what we are going to do in the name of nation-building, and if you don't like it, we'll take you out into the street and shoot you - just so all your neighbours can see what happens if you oppose us!".
Whereas we have a Westminster System, with the design fault of 'outbidding' each other to bribe the voters into giving different parties their vote.
That's why what Roberston lays out thas to be believingly meaningful.
It has to 'outdo' the bribery; which the Opposition is by convention compelled to offer.
Who will be better at delivering their message?
We're about to find out!
That's definitely it. That's why a 4 year election cycle is better. It gives the government the chance to be proven incompetent or competent, as they have 3 good years. That way instead of having 6 years of a useless government, we'll only have 4, as in the 3 year cycle they say "give us a chance to finish what we started, we only got started" and like mugs we give it to them. If only we had better political parties. I only vote because not voting is an abdication of my responsibilities, not because I think any of the parties have a decent vision. Typical shallow pool problem - shallow talent.
If the whole world economy relies on said credit card, why shouldn't we use it to invest in something productive? Especially at the current interest rates. If we are all very happy to borrow insane amounts of money to pump up house prices, why is it suddenly a bad idea when we want to borrow to invest in infrastructure and businesses?
If by we you mean you and I then I'm all for investment in businesses. If you mean the govt then certainly no, no, no. Governments know one way to pick businesses to invest in - by the quality of their PR which is invariably in inverse correlation to their prospects.
Really highlights the absolutely dire governance of the last two decades to rely on housing debt and immigration as a pretense of economic policy. Shambolic. What a state they've contributed to the situation NZ now finds itself in, all for their own feather-bedding.
I don't envy anyone in charge of a country stricken with poverty, homelessness and slums. Can't social distance and can't pay unemployed people. No money to test or even count how many people died outside of a hospital.
They are truly stuffed, even if they had the best leader in the world.
The changes are already happening -- led by private businesses and NGO-s state organisations have never been flexible and dynamic -- ask anyone who has an ACC contract how poor they have been through COVID -
Many of the teleconferencing / remote access supports / automation /working from home has been around in NGO world for years -- but PHO/DHBs have always shied away from it -- and already the PHO's are promoting strongly a return to BAU -- not how to keep the gains of video conferencing and online consultations -- as they cant make it work financially and dont trust staff
The last thing we need is a reboot -- that goes back to super bloated government departments and social services -- one man digging and 6 watching -- jobs turning lollipop traffic signs instead of automated lights - and decisions made by five levels of committees and working groups that a new for should have boxes instead of circles to tick
businesses are already changing - and i love replacing two hour meetings + travel to them with a 40 min Zoom or Go conference
Will they be bold enough to act as a leader or be just another politicans looking at next election and their vote base.
Agree that they have been given an opportunity to Reset and rebuild...give direction but have doubts if they will be to rise above being a politician.
They already did a reset. 12 months in, there was a 'town hall reset' which was hailed as a brilliant piece of political theatre by pundits who totally omitted to state why a reset was needed (because the totally unrealistic campaign promises they made suddenly had to be real and they weren't actually possible, despite howls of protests and accusations of hidden agendas against anyone who had the audacity to question them as they tried to make out National had done nothing about major issues). Gotta love irony.
They also had a 'reset' for Kiwibuild (but no subsequent details or meaningful targets). We never got a 'reset' on Light Rail, they just stopped talking about. So this is at least the third 'reset' in three years for this Govt.
Yes, that would be a lot more credible had the current lot not prattled on about nine years of inaction.
So should we give them eight years of siting on their arses before they deliver on say, 20% of their 2017 campaign manifesto? Or do we have to wait until almost another decade is gone before we can actually hold them to their own promises?
Newspeak after you swept yourself into power promising generational change and radical transparency only to do more of the same is not just Newspeak, it's either bait-and-switch or accidental-by-way-of-incompetence. The egregiousness of that doesn't change just because National eventually become a bunch of do-nothing dickheads.
And who has been standing in the way of that change? Oh that's right it's the same pack of d*ckhead Boomers and vested interests who left the country in a position where even a deceleration in the property bubble immediately crashes the economy. So you can't stop immigration, you can't let house prices fall, you can't do anything about the debt bubble without the same people who created the problem turning around and howling that it's "proof" that "Labour crashed the economy again."
Am I disappointed in their failure to deliver? Yep. Am I going to let it slide when Nats start revising history and strutting around like they are paragons of truth and sound economic management? Nope. Would I rather have incompetent implementation of the right policies over competent implementation of pro-housing bubble policy and listing NZ sovereignty on the Chinese stock exchange? All day every f-ing day of the week.
"Oh that's right it's the same pack of d*ckhead Boomers and vested interests who left the country in a position where even a deceleration in the property bubble immediately crashes the economy. So you can't stop immigration, you can't let house prices fall, you can't do anything about the debt bubble without the same people who created the problem turning around and howling that it's "proof" that "Labour crashed the economy again."
That'd be the Government's coalition partner, right? The one with the 'Put NZ First Again' hats, the unchecked pork-barrel spending against official advise, the ones bragging they killed the CGT, the ones that take donations from God knows who but have a lot of problems with certain industry regulation.
It's the same perverse outcomes you hated when it was National, they're just wearing a big sign saying "We're not National!" and you're OK with it.
For the record, I haven't voted in the 3 elections I've been eligible for. I often get criticized for having an opinion because apparently if you don't vote, you aren't entitled to one. But it's like water off a ducks back for me. I'm not going to endorse a party I have no confidence or trust in to satisfy anyone.
Whataboutism. Literally just said I'm not okay with it, I just prefer it to active treachery.
I didn't vote for Winnie so I don't see your point. I'd be content for that bit of dead weight to be gone for the next 3 years. Wuhan virus just implemented half the Labour campaign promises for them so we have a different playing field now.
And it's not the same perverse outcomes, the problems aren't fixed but they aren't actively being made exponentially worse which is what we get when you lot are in charge.
Your whole argument is whataboutism. You're literally deflecting criticism of the current Govt for not meeting its own standards with criticism of the previous government, who, in case you haven't noticed, aren't the ones currently in power.
The outcomes aren't getting worse? So those housing waiting lists, WINZ numbers and house prices were all heading in the right direction?
The irony of you claiming whataboutism is next-level in the first place, but the point you think you're actually making doesn't stack up either.
You are either pro-lockdown at all costs or a pigdog capitalist swine who wants the vulnerable to be sacrificed at the temple of the almighty dollar.
You can't just be a middle-income earner who is working at severely reduced pay. There's no scope for that. The Grey Lynn brigade are still on top dollar and the public sector wonks are still at 100%, even if they are or aren't working. Outside of that narrow frame of reference, the rest of the unwashed masses don't exist.
Haha, I knew you would outright Godwin yourself soon enough.
Hmmm, nothing very deep or meaningful so far.
The trend to globalism - for obvious reasons, peaked some time back (I track the HW mark to 1995). That too, was the peak of neoliberalism, aka the 'free' market. Oddly enough, the free marketeers can't operate without civic infrastructure; stuff like courts and police....
Locally we saw the public reaction via the move to MMP, the vote for the Clark government and the decay of Act. In human form, the recent utterances of ex=PM Bolger sum it up well.
So nobody should be surprised that we are moving further in the direction of elected governance and further away from unfettered selfishness. There is a classic showcase of the difference between our own Govt reaction to the virus, versus the US. It speaks volumes.
All this is atop the morph from perceived-limitlessness to limit-acknowledgement. The secondary question is the one of sharing that which is limited, and sharing is best done by rules. This applies particularly to sharing with future generations - our one generation versus how many of them, hypothetically?
The choice is between putting the hammer down (and hitting the wall) or becoming long-term maintainable. And that, as I say, requires rules. Which at least in the formulating stages, will require rule-makers. Those who believed the ideological claptrap - economic growth forever, unlimited resources just waiting in out brains, global populations of x trillion possible - have to be sidelined.
"Oddly enough, the free marketeers can't operate without civic infrastructure; stuff like courts and police...."
This is almost certainly a straw man rebuttal of something nobody claims.
All markets are constructs and some are just more free than others, and in some of them you can't even choose what house or apartment you live in.
pdk thinks more than 15 years into the future so it's not surprising his musings sail straight over your head. You think you're the master chess player but you can't see checkmate coming until you're in it.
We tried it your way, that is literally the reason we're in the mess we're in right now, but if there's one thing you can count on neoliberals for it's their insistence on arguing with the data.
Your premises lead to systemic failure. Every single time. No matter how many times you run the simulation.
Your errors are:
1. Adam Smith wrote the wealth of nations back in 1776 so 15 years is a spit in the bucket.
2. I don't play chess.
3. I am not an economist so have never published any 'way' that could have been tried.
4. You don't present any data that anyone might attempt to argue with.
5. I didn't state any premises.
6. No simulations can possibly have been run because points 3 and 5 are true.
What happened here is I pointed out a reasonably obvious straw man and then stated a truth (that all markets are constructs) as a direct retort to PDK's implication that a market could exist without any construct.
For the record, you should realise that unless you post an actual argument I generally won't respond to character attacks or click on your links.
I might correct any outright lies if you post them about me, so if hate or stalking is your thing that would be the best row to hoe. But I will respect and respond any actual argument or rational on its merits.
And just so readers are clear; Speechless doesn't know me.
See that way up there Ralph? That's the point, flying over your head again.
I am not engaging you because I don't believe you have the cognitive tools to understand why you're wrong. Generally my prerequisite for trying to engage someone is that they understand why their ECON104 textbook is not a map of the world. But here goes.
You = cheerleader for a dangerously flimsy neoliberal globalisation system that creates bigger and bigger blow ups every 10 years until it hits total systemic ruin.
Contradictory data = the global economic collapse happening right in front of your eyes as a direct result of that system.
Can't make it any clearer than that.
It will impressive if they take the big difficult political decisions: cutting expenditure on my Super, cutting tertiary education subsidies (thats where next years unemployed will be hidden), cutting accommodation allowances to match new rental realities, closing Shane Jones wallet, reducing the number of MPs. If they don't do something that saves money then just be paying our beneficaries out of an increasing Govt debt.
The danger is they will spend my children's and grandchildren's future.
I'm worried. You would think GR concludes we are out of the Covid tunnel and on a platform ready for a new beginning.
House fire destruction? Why not take 5, make sure the fire is out?
Throwing caution to the wind when the storm may not have passed.....globally speaking we may be in the eye of the storm.
Maybe GR is talking it up because there is bad news coming.
Oh for goodness sake , a new Socialist New Zealand is not what anyone with half a brain would want to see .
We had that crap in the 1950's ,60's and 70's and then again under Ms Clark , and its a failed ideology , with hopeless Government interference in our everyday lives , high taxes , all manner of hopelessly inefficient nationalised industries , and of course arrogant Trade Unions taking their ideological cues from Moscow
Seven million Ukrainians starved to death. Somewhere between 15-35 Chinese starved to death. A third of Cambodia murdered.
They even managed to bankrupt Venezuela, which given its so oil rich took quite some time and cannot have been easy to do.
So things can get pretty bad.
I think there has been a lot of work by NGOs going on in the background about a re-envisioning, e.g.,
https://pureadvantage.org/ourregenerativefuturecampaign/
https://www.eds.org.nz/assets/pdf/Letter%20to%20PM%20Final%20200409.pdf…
https://www.nzinitiative.org.nz/reports-and-media/reports/policy-point-…
A glossary:
- "investing in and maintaining effective core government services" = hiding unemployment from hospo, tourism, retail and SME's
- "interventions to sustain households and businesses" = we're gonna Tell you What to do, When to do it, and if you Don't comply, we'll turn off the Munny Tap
- "breaking down the digital divide for our workers and families" = endless work for our teachers and universities, with the bonus that being Trained != being unemployed or NEET, and not forgetting continuing Dues for our
labour-voting segmentValuable Public Sector Unions - "housing has been too expensive" = but for Gawd's sake leave the local gubmint planners, the labyrinthine District Plans, and the RMA well alone, nothing to see here, move along.
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