After an initial round of applause for a well balanced Budget, economists have delivered a sobering wake-up call to the Government about the challenge ahead.
"Unfortunately, we can't help but feel that, especially relative to Treasury's forecasts, all the risks to economic growth are to the downside, " wrote BNZ chief economist Stephen Toplis.
That meant the Government's eventual funding needs may eventually be even higher, he said.
"Whatever the journey is that we are now on, [the] Budget highlighted that it will take us, and future generations, a long time to pay for the debts that we are now running up. And, boy, are those debts big."
The Government has committed $62 billion for the recovery - around 20 per cent of annual GDP.
Of this, around $26b had already been announced before the Budget, with another $16b unveiled on the day, and the remaining $20b to still to allocated, Westpac economists noted.
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The Government bond issuance programme was expanded to $190b over five years,
compared to $42b in the Half-Year Update in December.
Net core Crown debt is expected to rise from around 20 per cent to a peak of 53.6 per cent of GDP, close to the record high that New Zealand reached in the early 1990s.
The big spending approach had risks, Westpac economist Michael Gordon said.
"New Zealand has long been staring down the barrel of massive increases in Government spending due to the aging population. That means future governments will either have to spend less or tax more, which could sap the economy's dynamism."
Most economists expected interest rates to remain low for some time but if they
were to unexpectedly rise, "the debts being taken on today could become a very heavy burden to future taxpayers."
Gordon also argues that Treasury's forecasts are too optimistic on the long-run outlook.
"If Covid-19 scars the economy as we expect, the debts could be harder to repay," he said.
The Budget package was "a big umbrella, but this crisis is a monsoon", wrote ANZ chief economist Sharon Zollner, referencing Finance Minister Grant Robertson's line about this be the rainy day we have saved for.
"We think there's more work to do and that tougher choices will need to be made," she said.
"Getting out the cheque book is the easy part. Supply-side regulation, changes to tax settings, and reprioritising existing spending to ensure the taxpayer is getting maximum bang for its buck will be the real challenge."
NZ Initiative chief executive Oliver Hartwich also highlighted the challenge for this Government to effectively execute its spending programmes.
"The Budget was heavy in numbers. A few hundred million here, a few billion here – there were big spending initiatives for everything," he said.
"But it was light on demonstrating how these programmes will help repair the country. As KiwiBuild showed, good intentions plus government money do not automatically equate to success.
But that lesson appears to have been forgotten and Budget 2020 is just KiwiBuild on steroids."