Finance Minister Grant Robertson is extending the wage subsidy, committing to investing more in infrastructure and state housing, offering free trades training and throwing the tourism sector a lifeline through Budget 2020.
Robertson has stuck to his word and provided another phase of COVID-19 relief via the Budget, rather than going all out with a huge package - in the context of what is “huge” in the environment we’re in.
The COVID-19 relief schemes announced in the Budget are worth less than the $26 billion of support announced before the Budget (the wage subsidy, business tax changes, loan schemes, benefit increase, etc).
The new schemes are worth $15.9 billion. Robertson has also ring-fenced an additional $20.2 billion in the Budget for yet-to-determined COVID-19 support.
So altogether, he’s put a $62.1 billion price tag on the COVID-19 relief effort.
Treasury forecasts this spend will result in a $28.3 billion deficit in the year to June 2020. In December, it forecast a deficit of only $900 million for 2020.
It forecasts deficits across its entire forecast period, peaking at $29.6 billion in 2021 and falling to $4.9 billion by 2024.
Net core Crown debt is expected to increase from 19% of Gross Domestic Product (GDP) in 2019 to 30.2% in 2020, rising to 53.6% by 2023.
$60 billion of bonds to be issued in year to June 2021
To pay for all this spending, Treasury will have to issue a lot more bonds.
It has hiked its forecast issuance for the year to June 2021 to a whopping $60 billion - six times more than what it forecast in December.
Bond issuance is expected to be $40 billion in 2022, $35 billion in 2023 and $30 billion in 2024.
The Reserve Bank has committed to buying up to $57 billion of New Zealand Governments Bonds over the next year as a part of its QE programme.
In terms of repaying this debt, Robertson said there wouldn’t be major tax changes in this term of government.
Robertson hasn’t committed to directly supporting households with cash payments or further welfare increases through the Budget - as some might’ve hoped. A media package isn’t included either.
Here’s a list of the big-ticket new schemes that make up the $15.9 billion of new COVID-19-related expenditure:
Wage subsidy extension
The 12-week wage subsidy will be extended by eight weeks for businesses that are really struggling.
To date, businesses that have suffered a 30% decline in revenue in a 30-day period between January and June, compared to the same period in 2019, have been eligible.
To get an extension, businesses have to prove they’ve suffered a 50% decline for a 30-day period, compared to last year.
The subsidy will once again be paid in a lump sum and its value will remain the same - $585.80 a week for full-time employees and $350.00 for part-timers.
Some high-growth new firms will also be eligible. Applications will open on June 10.
The extended subsidy is expected to cost $3.2 billion. About $11 billion has already been paid out in wage subsidies.
While this will buy employers and employees more time, Treasury expects the number of people to go on Jobseeker Support and receive Emergency Benefits to more than double, or increase by 158,000 people, between 2019 and 2021.
Infrastructure
$3 billion has been allocated towards infrastructure.
This comes on top of the $12 billion announced at the end of last year as a part of the New Zealand Upgrade Programme.
An Infrastructure Industry Reference Group, set up in response to COVID-19 and headed by Crown Infrastructure Partners chair Mark Binns, will in coming weeks advise government ministers on which water, transport, housing, environment and health projects to spend the funding on.
To date, the group has received 1924 applications worth a combined value of $136 billion.
It will be able to draw on the $3 billion announced in the Budget, some of the $4 billion of unallocated funding as a part of the $12 billion Upgrade Programme, and possibly some regular funding allocated towards capital expenditure.
Housing
The government is committing to building and buying an additional 6000 public houses and 2000 transitional houses over the next four to five years.
This comes in addition to its existing commitments, and according to Housing Minister Megan Woods, “takes the number of public and transitional houses funded by this Government to approximately 17,000 and represents the largest public housing building programme in recent decades”.
Tourism
$400 million has been set aside for a Tourism Recovery Fund.
This will largely help businesses pivot towards the domestic and Australian markets. It will also help protect some of the country’s “strategic tourism assets”.
Training
A raft of programmes has been announced to help train people who might’ve lost their jobs.
Included is this is $320 million towards supporting free trades training in “critical industries”.
While the existing first year fees free tertiary education programme is only available to people who haven’t done higher education, this funding will be available to anyone who wants to retrain in a critical trades industry.
275 Comments
It's an incredible amount of money to throw at some businesses who simply are not profitable in the new normal. But the government must do it, to appear politically compassionate. It's the Treasury version of lower and lower interest rates... but you have to allow for correction or you consign a cohort of businesses to perpetual dependency on government welfare. I just don't see how in the long run it helps, burning through new debt to save unprofitable businesses. Why not just pay everyone who would lose a job what you would pay them on the subsidy scheme to shoot possums. At least you'll have a pile of dead possums to show for it.
Oh and f*** Air NZ.
Rosenstein, my husband has a catering business at a local golf club, hardly any tourists mainly locals. Not enough .money in it for just catering for the locals. He makes his money doing functions funerals, weddings, 21st. Usually 100 to 300 people, which is also very beneficial for the local golf club as they have the liquor licence. So under current restrictions he cannot do his most profitable part of business. We don't know if we even can appy for an extension of the wage subsidy, as he changed to include takeaway and how many local customers there will be. Not looking good the moment. We lost thousands, but his business is unprofitable in your eyes and should go under, because of government restrictions and does not deserve support?
Trude, Politicians have absolutely no Idea that a large proportion of the work force earn their living by running a business like your husband. The Emergency has shown that our Politicians still are working in the 8 hours a day five days a week scenario, which changed for most New Zealanders years and years ago
Misinterpreted that. Of the $50b only a portion ($3b) is budgeted towards 'saving' existing jobs (i.e., the wage subsidy component) - other money (e.g., $4b in extending the school lunch programme; additional $3b infrastructure spend; $1b environmental jobs) will create new jobs.
Wow, the numbers are eye boggling
$62 billion, raising our countries debt from 19% of GDP in 2019 up to >53% of GDP by 2024, running huge deficits for the next few years and that is assuming tax incomes or state dependencies (benefits etc) that are somewhat guesswork at this stage
That's $41.4 million per infected person... or $2.95 billion per actual death - and that's just the government support, It excludes the impact to the businesses drop in revenue or personal losses = train wreck
Uh Oh
"That's $41.4 million per infected person... or $2.95 billion per actual death"
Not a valid analysis.
NZ incidence and deaths result of early lock down.
If we look at New York and Belgium rates per million we would be looking at 7,000 and 3,900 deaths respectively - but both those still have rising rates, have had considerably longer lock downs than us, and both suffered considerable economic consequences.
It is not the cost of each death - rather the cost of each life we saved.
Brock
Initial modelling was 30,000 to 60,000 without any action (and that is consistent with the 9,000 in 1918 = 45,000 on current population).
And don’t think you wouldn’t have tremendous economic chaos, cost and downturn.
Factor In 30,000 deaths and resulting economic and social chaos and economic downturn and then start to do some analysis.
Also ask the fit 31 year old who spent something like 21 days on a ventilator in Auckland hospital if it is just about geriatrics in rest homes.
add onto that the number of lives lots to medical staff. Italy lost over 1500 health care workers...
That equals less healthcare staff to look after every other serious accident and medical emergency on top of an overwhelmed health service.
Or are the all expendable as well?????????
You could also ask random people if they would rather see three million spent on cancer drugs or road safety improvements or mental health funding or their invested in their children's education or housing infrastructure.
... or marginally extending the length of time someone persists in a rest home before the inevitable.
But I'm aware most people tend to use feelings over logic for decision making.
How is this a choice of feelings over logic? Where does logic come into this? Are you saying that logic dictates a single life is not worth as much as mental health funding, or child education, or housing infrastructure? What value is placed on those things? After all, logic must be based on quantifiable rules, surely. And why do you invest in those things to begin with - for wellbeing or the population right? Population is just a collection of single lives. The same single life you are deciding isn't worth as much. So then why bother investing in those things at all, after all, they are just someone's life. They'll all die eventually, so bugger it, keep all the money. Don't give it to anyone. See how that all went into a very slippery slope...
Logic would dictate that three million dollars would be better allocated preventing cancer and traffic deaths than giving somebody in a rest home a few extra months of waiting it out in a rest home.
You can quantify that many ways with years of life or quality of life but I bet you could just count preventable deaths and get much more bang for your buck elsewhere with three million.
Feelings based decision making is doing the opposite of what's most logical or efficient to avoid negative emotions.
Using your logic Brock,whats so special about cancer patients? Are they worth the expense? Using the logic of others in here,why don't we let them quietly 'pass on',then by virtue of genetics,with those weak links gone,cancer may disappear through herd elimination.
On average a cancer patient will have decades of quality life still ahead of them if treated.
A rest home resident has on average about 18 months of not so quality life ahead of them.
Healthcare already gets rationed on this kind of basis.
If you want to practice eugenics the trick would be to ensure they pass on before they had kids.
Refer above Head_down_bum_Up ;
"So then why bother investing in those things at all, after all, they are just someone's life. They'll all die eventually, so bugger it, keep all the money. Don't give it to anyone. See how that all went into a very slippery slope..."
Will they really have decades of quality still ahead of them...or will we just be throwing good money after bad,will they be a fully productive unit after treatment,ongoing treatment...the cost benefit analysis could be tricky.
I agree Brock. Saving Lives Motto is always politically justified. But how about the costs?
We would have likely seen a higher number of cases without the extreme measures. But who really knows?
For instance, South Korea maintained the virus without a complete lock-down like us, but their death toll remained around 200, which is about the same as NZ when you consider the total population.
Plus, this lock-down would look very silly when we see the second wave, and looking for another big funds to deal with it.
It's much more than that though. I'm a Registered Nurse and I know a fellow RN in New Jersey working 16 hour shifts looking after 18 patients a shift most COVID +ve complex patients. Doctors literally choosing who lives and dies and I found out yesterday this nurse has contracted COVID. It is horrific. I cannot imagine having to work under those conditions, now I consider myself centre right politically but I am so thankful that I live in a country that values the wellbeing of it's citizens. If I pay more taxes and retire a few years later then I am happy to do so.
Brock I largely agree. But the world wide mass hysteria that has developed means that we would be suffering most of that economic fallout (or maybe even more) regardless of what action the government took. A lot of the joblessness will be in tourism, hospitality, etc.
That's the question isn't it, how much is enough to save lives?
Bearing in mind we're still just talking about government intervention only, not overall cost happening in the private sector, that funds the public sector alongside RBNZ debt monetisation
There will be some good, albeit very expensive lessons that come out of this, that we can hopefully use to develop a better pandemic response plan for the future
See the table in the below link;
https://worldpopulationreview.com/countries/countries-by-national-debt/
You'll have to scroll a long way down to find us at our current %age of debt to GDP. >50% will still see us in the lower ranks on this measure.
No need to Uh Oh provided the additional spend is well spent.
I'm not criticising landlords. I'm making fun of landlords who try to pose as philantropists.
It's a business, that is operated for profits. But some landlords like to thump their chest and announce how amazing they are for providing people with a place to live. We all know they're in it for the money...
Yep the money. Perhaps if it was free accommodation for people in need? Tui
That said I have met one landlord that had a few "charity deal" tenants. He had however owned his houses for over thirty years, was a member and volunteered at his local church, and ran several junior sports teams for no money. Aka... a real community guy.
It's amazingly easy money compared to your standard 'work'. It's the old 'worked hard and earned my share' that boomers yell about their multiple houses when younguns complain and say they couldn't get into a lower quartile neighbourhood with two full time professional jobs. The percentage of people who will out earn their parents has fallen for a good while now.
Even 6 years ago if I look back with the 40k I scraped together from working a very plain job I now receive a lovely little dividend of hundreds per week and a capital increase over that time for almost 1000 per week. From that deposit I am looking at a 1000%, a near 60% annualised growth in 6 years. That is not hard work and investment, that is pure luck. And yes capital investment obviously needs a risk and return, and obviously that risk is compounded with a 5x multiple leverage.
The sad thing is despite all the above, and 6 years later I am no closer to the original purpose of that investment. As a stepping stone into my own home in my home town. In fact it would benefit me greatly if house prices fell nationwide. Problem is only in keeping the job depending what happens to the economy, but lower asset prices will benefit anyone who keeps their job and then have a smaller spread to their next asset if they were looking for something larger, or in a nicer neighbourhood. Obviously for those looking to exit, many of 'boomers' who will no doubt be looking to downsize will suffer greatly if asset prices collapse.
Failed to see the downside to their 'earned wealth'. And maybe it will come home to roost.
So it is a pure jealousy thing?
Apparently house prices are going to drop by large amounts, so that will make you very happy won’t it?
Let’s just see who is correct in regards to house price drops!
I am stating on here that the no.of sales will be lower but the prices of houses will be up in 6 months from now in NZ and up within 2 months in Christchurch.
Do you not think people owning their own home and amassing and accumulating wealth in a specific asset is not a positive thing for the economy? Do you really think that the merry go round of money in our system is most efficiently used in pulling the huge percentages of peoples wages into mortgages and landlords?
We are effectively in a neo-feudalist state.
I wonder how many people in Auckland could afford their own homes as first home buyers on their 'productive wages' even in their later stage careers. I imagine most would crumble. What's the median? A million? So that would be 'affordable' for couples earning $142,000/year. What proportion of Aucklanders make that sort of money? When the median income for a couple is what near $85,000?
All those implications on society, from not having kids to depending on parents into their 30s. You think those benefit society? Is the spend from the landlord more beneficial economically? The old dream of everyone is going to become rich purely under knuckling down and hard work, not luck both in your class of family but whether you can push yourself into the feudal capitalism of modern day NZ. Pretty clear that hard work only gets you so far. And not as far as it used to.
Displacing people from home ownership is a catalyst to so much of the degradation of society you see today. Insecurity in high priced rentals. People that do have kids under extra stress not being in their own secure abode. Apologists of a disgusting system and its dismantling will only improve our productivity and wellbeing.
When did I actually say I was an entrepreneur? How do you know I have debt or bought during a bubble? Honestly, you actually come across a bit unhinged making all these assumptions about someone you've never met. Yes, I've started a few companies but it's nothing to boast about. There are certainly easier ways of making money.
LOL -How do you know I have debt or bought during a bubble? Honestly, you actually come across a bit unhinged making all these assumptions about someone you've never met.
by Te Kooti | 11th May 20, 9:40pm
Ok Audaxes, we've had this dance before.... None of what you say stacks up, I'm calling bluff on the entire story.
Oh sorry was that a different Te Kooti who was on here the other day trying to convince me that Irish housing was a spectacular long term investment? My mistake.
Ah I see so you *could* start a real business if you wanted to, you just don't want to because ripping off the next generation pays better.
Heroic.
I did not for the simple reason that I have never bought a property that was loss making. But I'll gladly admit that property investment has significant tax advantages. You seem to imply that people who arrange their business to legally minimise paying taxes are bad, I don't see it that way, I'm sure you don't pay more tax than you have to either
Just wanted to clarify that not many were working in the first place. We had landlords speculating on house prices and avoiding taxes while collecting rents from people living off welfare and accommodation supplements paid from the government.
Its like a giant leach sucking on the future financial prospects of the country.
Doubling down on debt.
Doubling down on support for "Their"inefficiency. Whatever next.
Keep yer fingers crossed....Vote labour...we need more and more labourers, to fill the gaps.
If ya need a Debt Holiday...use the credit card.
No debt...we will pinch yer Savings.....ta everso.
What I don't understand is how they think the construction industry will magically pick up the slack. Every company I talk to is at the very least
not hiring. They are not letting people go right now because of the subsidy but they will be making redundencies when the 12 week subsidy is up. Yet somehow they expect construction companies to employ people from the hospitality & tourism sector with no experience. This is just delusional.
Here's a doozy for ya:
https://www.abc.net.au/news/2020-05-13/coronavirus-commonwealth-bank-ho…
CBA, Australian house prices -32% and that's with a worst-case unemployment scenario of 9%.
Like the heroic growth predictions Labour used in it's policy costings last election. We really need a fully independent costing body attached to govt, ones not answerable to any political masters, to release independent costings on govt and party policies throughout the electoral cycle.
It will be operational for the 2021 election;
https://www.beehive.govt.nz/release/independent-election-policy-costing…
Nice support package with added 2000 jobs
https://i.stuff.co.nz/national/politics/121506513/budget-2020-free-scho…
This is actually a good idea.
If the data is to be believed 1 in 4 kids are going hungry. While personally I think it is mostly just Sh!t parents rather than poverty (There are exceptions). The result is the same, kids with no food.
If we really want to try and break this cycle, just roll it out to every public school. Start school at 8am - provide Breakfast, morning tea, lunch, and a snack to take home. Provide a generic govt Uniform so that they are clothed, and a safe supervised space until 5pm where they can study, or just avoid the dropkicks at home.
Generally always a good use of funds given how much you can change people's lives for the better without spending much money at all. Would be good to see more centralised funded services instead of relying on a huge network of region-specific charities which are going to find money hard to come by. Will be disappointing if National suggests this was not money well spent.
Yes, big tick up for that one. It will be both a cost and (equally as important) a time saver for families with young children. I hope it extends out to all schools. It's much easier for schools preparing bulk lunches to exclude junk food (e.g., packets of chippies) than it is for parents to pack all healthy food. Children know how to play their parents - doesn't work so well with the school administrators :-).
Here is another way of looking at it.
Let's create a society where both parents have to work to pay for the over-inflated house prices/rent and have forgotten the skills needed to look after their own kids, or just don't have the time, and then rather than fix the problem we double down on it and we the State will now look after the kids.
After all the parents are now going to have to work even harder to pay for the extra tax we will need to charge to pay for all this. and as they say 'control the food, control the people.'
I think there are some good short term reasons to provide free school lunches, but at least, at the same time, fix the reasons so you don't need to long term.
Agree with you on the abhorrent necessity for two working parent families. It's been that way for nearly 30 decades now. Taxes have gone down in that period however, but everything else regarding cost of living has gone up when inflation adjusted. Meaning, the two working parent family of the 2000s is less well off than the one parent working family of the 1960s.
All the stats for the US (completely applicable to NZ as well) are here;
I consider myself centre left, but I struggle to think of many things I am more opposed to than free school lunches.
Burned by watching 'Jamie's School Dinners'. Sure, it will start as sandwiches but in a decade it will be Turkey Twizzlers and dinner ladies.
Also, the news of lockdown school kids in NY being denied their 1 meal a day that families havent budgeted for.... what a stupid dependency to build into the system.
Just make your own sandwiches for chrisake, bit of parental peer pressure is good.
I made lunches for five to help out a struggling solo Dad. It would take me a couple of hours each night, and like adults, kids like variety - so not all that easy to plan either. Granted they were lunches we'd all be delighted to eat - and the two in intermediate ate as much as grown men ... but the point is - what parent(s) working full time have a spare two hours between them every night after the kids are in bed? They don't, so they throw highly processed junk food, a couple of pieces of fruit and a poor excuse for a sandwich together. Then the kids don't eat half of it.
Kids deserve good food.
The Treasury has the backing of the Reserve Bank to spend whatever it deems necessary. Treasury has "hiked its forecast issuance for the year to June 2021 to a whopping $60 billion". This "debt" will end up as owed by the Treasury to the Reserve Bank. It's not really debt if you owe it to yourself - from a consolidated view, the NZ government can always afford whatever is for sale in NZ dollars. This money is rightly being spent into the real economy, into the bank accounts of households and businesses. It will slowly return to the govt as tax, as it flows around and around the economy, meanwhile providing income and savings to people like you and I.
What's Michael Reddell talking about if not a debt to a third party?
One of the incidential curiosities of the bond purchase programme is that at times like this you hear a great deal of talk about how it is a wonderful time to borrow and the government can lock in very cheap long-term funding. And yet what do really large scale central bank bond purchase programmes do? They transform the liabilities of the Crown from quite long-dated to increasingly quite short-dated, exposing the Crown (us as taxpayers) to really substantial interest rate risk. Perhaps at the end of all this the Reserve Bank will have $50 billion of government bonds, with a representative range of maturities. On the other side of its balance sheet, it will have a lot of very short-dated (repricing) liabilities – all that settlement cash (see above). Whether the Bank eventually sells the bonds back into the market – which hasn’t happened a lot in other countries – or holds them to maturity, the interest rate risk doesn’t go away. It isn’t obvious what public interest is being served by skewing the Crown’s (net) debt so short term. Perhaps interest rates will never rise again……but that won’t be the view many people will be taking...
I think he is talking about the newly created cash used to buy the bonds. Cash is a liability to the government (an I.O.U to be exchanged for payment of taxes), but in particular an operational liability for the Reserve Bank since they choose to pay interest on cash reserves.
either the Reserve Bank will have to pay much more interest on those settlement cash deposits or do some other market operations (eg sell government bonds back to the market) that have the same effect.
I'm not sure I understand what he means by "the interest rate risk doesn't go away". Maybe he means there is a risk that rates will rise and the Reserve Bank will be paying more interest to reserve account balance holders. However this is not a solvency risk as the Reserve Bank creates that money itself.
Funding for Trades apprenticeships and construction of 6000 new state housing goes hand in hand. Good for trades sector and youth employment, and building supply in that area. More state stock not so good for CV appreciation speculation/investment. If they keep this up they will hose in in the election.
But the Labour MP's of yesteryear used to come from a variety of backgounds, it was a broad church, the "cream of the working class" with significant commercial experience and managerial accumen. Those days are long past, now it's the "dregs of the middle class" Labour cabinet is all ex student politicians, teachers, union organisers and civil servants. David Parker is about the only one with any commercial experience. They desperately need to select MP's from other backgrounds to inject some of the experience they plainly lack.
Is this status quo;
https://www.eds.org.nz/our-work/media/media-statements/media-statements…
Nope. It's a whole new direction and one I'm delighted with!
What an weak effort and wasted opportunity to make some meaningful progress in addressing our long-standing problems. For example housing. Only 8,000 houses. Their pre-election promises were greater than this/year. This government does not care the un/poorly housed under privileged New Zealanders. Here is a golden opportunity to give our burgeoning unemployed a chance to do something meaningful and satisfying, and provide something that the country badly needs.
Compare this with the money that they will throw (largely waste) propping up tourism. Tourism will be largely dependant on international air travel and no amount of wasted money is going to change that. Best to bit that bullet now and put it on ice until international travel starts happening again. Isn't that pretty much what Ngai Tahu did a few weeks ago? Our tourism sector pays very low (minimum) wages so in the big picture it needs a strong shift to smaller volume of high value tourism. Where is the transformational vision to change this. It is not there.
Sadly lots of other examples of wasted money and wasted opportunities. What we are seeing is an enormous contrast between the brilliant communication from Jacinda Adern being totally let down by weak and pathetic management of government and the country. This was the case before Covid 19 so it is not surprising it continues.
"Tourism will be largely dependant on international air travel and no amount of wasted money is going to change that."
Hard to argue with that.
" Where is the transformational vision to change this."
Or that!
Let's hope this is a Budget to set the scene for more fundamental change. "Go Hard, Go early - and Go Once!"
Do we need more than that when we have all these empty Air BNBs that may go back to be used as housing again, and immigration could be halted for years? IMO we made a major error to rely on immigration to grow the country, because with that, you have to spend huge amounts improving infrastructure including health resources, and higher ongoing costs. Significantly increasing the population year on year isn't going to last forever, as the population can only grow to a certain size. What is the ideal size for an NZ population?
Free trades training = $1.6b will help in terms of the building programme;
https://www.tvnz.co.nz/one-news/new-zealand/budget-2020-free-trades-tra…
Tourism = $400m
It's hardly propping it up - more is needed and I hope it will come with a voucher system to every NZ household to spend in that sector (and I'm hoping it comes in time for the next school holidays). It would be a wonderful opportunity for a wide range of NZers to see a bit of the country and have a break away.
https://www.stuff.co.nz/business/121510219/tourism-says-many-jobs-will-…
How will it help? How are they going to magically call such a training and apprenticeship system into existence? It's not some magical spigot that you can just turn on. Apprentices take a lot of supervision, if they are not motivated and smart they can be worse than useless to a builder due to the cost of mistakes, and in an economy overflowing with more experienced and proven workers and mired in falling house prices and low demand who is going to bother taking them on? Shades of Kiwibuild aspiration without a well thought out plan for delivery.
Considering the amount of building companies that are likely to go under in this climate?
I would say they will have companies begging them for the job. Compared to during kiwibuild where they struggled to get anyone to join up.
Plus... Land prices dropping. Everything seems a lot more optimized for them.
Did you miss these bits:
$80 million to encourage entrepreneurs and businesses to develop new products by enabling them to claim tax deductions for unsuccessful or abandoned assets.
On-the-ground support for Kiwi exporters in key markets to boost trade.
$230 million to encourage entrepreneurship and risk-taking to kickstart growth.
Giving SMEs a leg-up to increase sales through e-commerce.
Protecting small businesses and consumers by sharpening the Commerce Commission’s teeth
OMG haha crown revenue to June 2019 86.5, forecasting a drop to 82.3 for ending June 2020? YEA RIGHT, Tui add right there.... If crown revenue drops only 5% given the last 4 months to end of june this year ill be able to stand on my head and see pigs fly at the same time. Wish the TAB took ods on stuff like this, would be like 1000:1 odds or something.
I don't even think it's much of a survival budget either. Seems to offer very little to people who have already lost their jobs and income. Nice to plan for the future, but people out of work need to eat and pay rent now.
Pretty underwhelming budget I reckon.
Especially given the backdrop.
Actually - make that, extremely underwhelming.
A bit like hit & hope, print & pray has similar characteristics. Kill or be killed. Win or lose. They choose.
I think the fiat money system is close to collapse. It literally has no interest, which the banks are going to struggle with. Small banks in Japan & China & Europe are already closing or merging with other smaller or medium size banks. Here in enzed all our big banks are really just small banks on a global scale.
Jacinda may be the media queen, but this is getting real now.
Most of this could have been avoided if the government committed to a new Covid-19 management strategy and said they won’t lock the whole country down again in future.
If they adopted a “keep calm and carry on” approach rather than pushing doom and gloom unemployment and GDP figures then we might maintain enough consumer and business confidence to avoid most of the job losses in the first place, and it becomes a self fulfilling prophecy.
I also get the feeling there are a lot of businesses that were already failing and are now just using Covid-19 as a convenient reason to shut their doors, save face and even draw public sympathy.
farmer,I agree on your view re marginal businesses...and John Key suggests successful ones as well will take advantage and act under the cover of Covid19...
"Key believed companies would, after lockdown, operate with significantly fewer people - another looming issue for commercial landlords.
"Everyone is going to kick out 20 per cent of their people . . . even if the company is doing well . . . their worst performers. Never waste a crisis."
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…
NZ doesn't have the health system to cope not going into lockdowns, nor did we have the tracking system at the time we went into lockdown the first time. If we had the same proportion of deaths as UKs unofficial death count, which according to Piers Morgan on his TV show, which is 50,000, NZ would have 4000 dead by now, and I suspect our health system would now be overwhelmed. I understand we have less than 1000 ICU beds. They are in for far more problems than NZ in the future IMO, and their elderly don't look like they can leave home until a vaccine comes out. If we eliminate it in NZ, then we can even get rid of physical distancing, which very few other countries will be able to do.
we only had 153 ICU beds in the whole country at the outbreak , where Australia have 1020 beds in NSW alone
https://www.rnz.co.nz/news/national/412529/153-intensive-care-beds-in-c…
https://www.smh.com.au/national/covid-19-data-centre-coronavirus-by-the…
Key sentence in the article. This is the key constraint in the medical health system.
"The Health Ministry survey shows there is space and equipment to look after another 80 patients in ICU."
To put above in context. Here is current situation.
"Another zero day yesterday in New Zealand, the third in a row. There are still 1497 Covid-19 cases here. Twenty-one people have died (unchanged). There are still only two people left in hospital with the disease (unchanged), and none are in ICU. Our recovery rate is now just over 94% with 86 people known to be infected (-9) and 68 of those are in 12 clusters. That means 18 other cases are recovering in self isolation in the community (-4 from yesterday)."
Yes a lot of comments have no understanding of how dire our Healthcare system was prior to lockdown.
178 ventilators in the country and 80% were being used for life saving treatment.
We would have absolutely fallen apart if we were to bare the full brunt of a herd immunity approach.
Even now the fact we have so many dhb's is a real issue.
National clearly underfunded the Healthcare sector during their run (I don't think this is even debatable) but the nurses and doctors took a classic kiwi approach and handled it the best they could.
This Pandemic would have truly revealed the massive amount of problems we have in our Healthcare sector.
I agree with your final statement and think it is looking likely. Not to mention New Zealand being the first western country to be completely Covid free will be fantastic for our image.
Still relevant:
A plan would be nice.
How it all fits together on a couple of slides.
Send it back, tell them to do it again!
This seems more of the same, a holding pattern.
Housing already more promised, income support more of. Trades nice, but too far out.
Where is the
Building covid resilience
Building productivity.
Youth employment opportunities & resilience now.
The vibe.
https://www.newshub.co.nz/home/politics/2020/05/rob-fyfe-calls-for-long…
A former Air New Zealand CEO believes the Government needs a long-term post-COVID-19 plan in order for the country to economically get back on its feet.
Rob Fyfe, who now works with the Government by liaising with the private sector to help shape the COVID-19 response, says there's a risk if the current mindset of stimulating the economy doesn't change.
"We're going into significant debt, we're going to have significant unemployment. We need to attract investment into our country, we need to attract people into our country that can create jobs, that can restimulate our economy and bring value to New Zealand," he said during an interview on Rebuilding Paradise with Paul Henry.
And that's the problem for me. I don't in principal have any problem with throwing huge amounts of government debt at the country in a time of crisis to potentially head off a depression, but all i heard in that budget were numbers and titles. The money could be wasted, or the money could be transformational but I currently have no idea which and I have lost faith that either the blue team or the red team have any ability to deliver what they claim they will. If I am optimistic, then this budget could work. If I am pessimistic then the money just gets spunked wastefully by committees and bureaucrats. If there is no cap on immigration for instance, what is to stop NZ being inundated by immigrants who will surely be very keen to work for a government initiative in a virus free country? I'm not against immigration by any means, it can be very positive but it is not positive in an era of high unemployment or a housing shortage.
Indeed, GN. I just don't see much that makes the boat go faster, in terms of productivity. Swapping one port (AKL) for another (Whangarei) is the classic boondoggle until shown to have a rilly, rilly positive cost-benefit.....and I wearily echo Michael Reddell here: show us the underlying analysis! If it's anywhere as awesome as that given to them pre-lockdown, we are gonna be in a decade of hurt....
Don't know if you're familiar with the difference between Wellington's waterfront and Auckland's? No comparison. But Wellington's was hard fought for over many years and just got better and better with time. Auckland needs space on the waterfront to become a world class city. Simple as that. You have to have a long term vision, waymad as most Aucklander's now do.
Cost-benefit is an orthodox economics tool - but it only measures value in one of the Four Capitals;
https://treasury.govt.nz/information-and-services/nz-economy/higher-liv…
It's a new framework TSY is working to now.
Pathetic really. This is the kind of budget you would expect from a tired government at the end of their third term, not one in their first term that has billed itself as transformational. I expected it to be at least a little bit impressive. However it's just a continuation of the last two and a half years, but with a huge amount of debt.
There is no real plan here. Just borrowing and hoping. Extend the wage subsidies through winter - sure. Put some more money into jobs training -yep. But look at these housing and infrastructure spends. There's no detail. 8000 houses sounds like a random number. $5b = $625,000 per house, that's more expensive than the average house price in most regions. They could just wait and buy houses that are already built (for a lower price) and let the market go ahead and build new houses.
How long does it take an Infrastructure Industry Reference Group to decide which "shovel ready" projects are going ahead? They should have announced it today. $400m for Tourism? What's that gonna be? It's a mess and we are just racking up debt to kick the problem down the road.
Businesses are going to collapse, a wave of unemployment is coming and there will be lower houses prices - all without knowing if we will have further outbreaks of Covid-19. An extra $20b borrowed and not allocated is just a joke. Robertson's election kiti.
Let's just hope the Opposition has the ability to come up with a decent alternative.
I did not know we had 60 billionaires to join the Party...
I thought it was illegal to avoid ones taxes and miss-use funds.. I thought the objective was to avoid theft by a Servant.
I thought, it was safe to kiss my money Bye Bye.
I thought we were out of Funds, cos I was feeling quite pennyless, not worth a cent, nor a dollar, but discovered If I live to be a hundred, I will be Buried in ermine, along with a pile of Gold, Frankin-sense and Mer. If I pay my Taxes.
We will be rich.....we will never owe another carrot, just pearls of wisdom and I will leave a Blank Cheque to pay for my funeral...in the Coffin, near the Crook of my Arm.....and the other prisoners of ill repute...the Debt Free.... ..Cough Cough...
Taxinda..you win. I Grant you one wish.....a Happy Ruler..plus ...Endless Munny for Life.
New moniker for Simon Bridges "Simon the Sheep" cos all he ever does is bleat bleat bleat... This is the same turkey who was lining up to give money away last week with no strings attached. What would their budget have looked like? More debt, yes but also more health cuts, more benefit bashing? Opening the borders to rich Americans that can't be bothered dealing with their own domestic problem?
National are toast at the next election unless they begin to engage and acknowledge rather than continue to play silly she said he said games.
Not so much brilliance as common sense. The short term measures are no-brainers - especially tourism and transitional wage subsidies. The infrastructure fund simply brings on line stuff that National was going to borrow and hope to pay for prior to the last election, so in many respects its not new borrowing. The total debt is eye-watering, but manageable. Making job training freely-available (real jobs not PR and Bachelor of Acting Studies) is what I've been waiting for since the 90's - especially if it allows more people to get involved in ag/hort, construction-related trades and other grounded industries. What I like about Robertson (and others can't stand) is that he's prudent, not pompous like Cullen. He's made some good calls over the past three years (never thought I'd find myself saying that, but there you go).
How can you form a strong opinion on something when we still have yet to see the other 60% of spending?
This was an announcement about an announcement at some point in the future. Exactly what they did in December with their big infrastructure 'spend-up' where they only announced part of the total spend earmarked the rest TBA.
Actually that's my point. He hasn't rushed to solution or pushed a one shoe fits all budget. They've given themselves room to respond as things evolve without breaking promises. They're doing the same as an established business would do... keep a bit back so if your first option goes XXXX-up, you're not heading strait to the wall.
Exactly and ask anyone in infrastructure and they still wondering when initial 8 mill of funds, projects are going to hit. Ones on go now are national projects, we yet to see any details re labour's intial announcements..let alone the new ones... hence why infrastructure, construction companies are preparing for redundancies....so they better start delivering.. and fast
Then think of the living dead projects, the never ending zombie projects.
These guys don't know when to finish.
20% cost over run on a road contract is breath taking!
Transmission Gully, contractors same day ripping up tarmac, & now blaming the virus..
NCITR, Kaikoura, job for life.
https://i.stuff.co.nz/national/300005927/transmission-gully-project-a-c…
One [contractor] told RNZ they would drive past different sections of the road and see the same contractors ripping up the work they had done earlier in the day and starting over.
From yesterday....
https://amp.rnz.co.nz/article/5ffc43c4-3561-4698-8785-1a4d6cee6dff
Covid-19 will blow the budget again on Wellington's billion dollar road project Transmission Gully, but who will pay the extra is unclear.
The 27 kilometre stretch of motorway was supposed to cost $850 million but that bill has already grown by nearly $200m more.
Now that Covid-19 has pushed the completion date into next year, more money is needed to cover off delay penalties.
And, yes, it lives on....
https://www.kaikoura.govt.nz/roading-status/
With the increased traffic on our roads due to the rebuild and NCTIR work, please take extra care. Drive to the conditions and watch your speed. We're working with NCTIR and the police to make sure everything possible is being done to enforce careful and safe driving on our roads - do your part too. Complaints should be referred to the police as soon as possible after they happen. You can:
Leave a message for NCTIR on 0800 628 4737 or info@nctir.com
https://www.journeys.nzta.govt.nz/traffic/areawarnings/226623
Earthquake Damage
This road is open 24/7, there are multiple roadwork sites through this section of road, under Stop/Go control and/or with traffic lights with speed restrictions in place. Road users are advised to expect delays and to plan ahead for their journeys. Allow a minimum of five and half hours for journeys between Christchurch and Picton.
Scheduled time:
Start: 31 Aug 2018 8:50am
Detour route: Not Applicable.
Update received: 16 Mar 2020 8:40pm
Expected resolution: Until further notice
Let me see now, $62,000,000,000 divided by 5,000,000 = $12,400 a head. Bargain. I think. Well, it probably is, anyway. Especially as that nice Mr Orr has promised to pay for it, so we won't have to pay it back (ok, we might choose to, but no compelling reason to do so).
Should be interesting. Can't see the harm in it, but it could be habit forming. Bureaucrats and politicians will see sunlit uplands in their future and unlimited funds for the fashionable vanity projects of their dreams.
"Just a little bit more won't do any harm, you know."
Far, far better than the us against them crap of "tax the rich", or "blame the dole bludgers". Let's do this!
Jenée, regards the Infrastructure Industry Reference Group and this comment;
To date, the group has received 1924 applications worth a combined value of $136 billion.
Yikes, that there is that much money proposed/requested in applications and only a bit over 10% that will be able to be funded.
You have to be nervous, so much money promised, so little detail. Tourism get less than Maori? Most those already pay no tax. I have grave concerns the admin structure is not set up to deliver this from government to those who need it....I just keep thinking of KB disaster Same people still there talking the talk.
Moving forward we all need to give it 110% if we are going to move the needle, there is no silver bullet here. Starting with a strawman and working in new agile ways we all need to collaborate and leverage our diversity in order to think outside the box, it's the only we we'll create the synergy needed to identify the low-hanging fruit and adjust to this changing paradigm. At the end of the day it's about not having a fixed mindset and being strategic in our intent.
Wow - I got one on my wishlist - and the detail of where the money will be spent is fantastic!
https://www.eds.org.nz/our-work/media/media-statements/media-statements…
Congrats to everyone who participated in the vision :-). So much work to be done!
Yes but the problem is that most construction education is learnt on the tools in the real world. These people doing their free courses still need to get a position in a company. These positions just won't be available. So you will end up with a bunch of guys /girlswho are qualified builders according to a piece of paper.
There is already a massive issue in the industry with all these people who spend 2 years getting a trade in a classroom but are completely clueless when it comes to actually doing work.
I look back on my machine-operator training: operating dozers, loaders, scrapers, graders, rollers, crusher plants, excavators, rock quarry blasting, and of course trucks. Total training for any one of these was less than a day. It was always a case of - get 'er rolling and don't Break it'...
Most such operations depend much more on muscle memory and a feeling for machinery, than any amount of theory. Simulators like the Caterpillar series do help with the muscle memory, but not much with the practicalities - like a tracked machine can slide sickeningly down-slope if walked across it in the wet.....
Not much help now, because you need two years and a piece of paper to climb aboard....
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.