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Home / Business

Election 2020: Global pandemic is still taking lives, Grant Robertson warns as finance men go head to head

Tamsyn Parker
By Tamsyn Parker
Business Editor·NZ Herald·
13 Oct, 2020 04:38 AM5 mins to read

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Labour's finance spokesman Grant Robertson (left) and National's finance spokesman Paul Goldsmith. Photo / Michael Craig.

Labour's finance spokesman Grant Robertson (left) and National's finance spokesman Paul Goldsmith. Photo / Michael Craig.

Vote2020

The world is still facing a major health and economic threat from Covid-19 despite New Zealand being at alert level 1 now, Labour's finance spokesman Grant Robertson has warned.

"If you look out into the world we are not done with Covid-19. Just in the last three or four days we have seen over a million cases. We continue to see resurgences in Europe and North America as well."

Robertson told members of the financial services sector at the online Financial Services Council conference today that New Zealand had done extremely well as a country.

"We're in a very strong position relatively here at level 1 in New Zealand with our economy able to operate well.

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"But we can't forget this pandemic is still taking lives. And it is still putting huge stress on economies around the world."

Robertson said Labour's focus would continue to be on its strong public health response, on making sure borders were secure and New Zealand was well-positioned to deal with what was a significant health crisis.

"That was why we left around $12 billion of our Covid relief fund on the table so that we can deal with a resurgence."

He said talking to businesses around the country it was clear that they wanted certainty that if New Zealand had to go back to a level 3 or 4 set of restrictions that there would be support from the Government.

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"And that's what that $12b does guarantee for people. We must continue to manage our way through Covid."

But National's finance spokesman Paul Goldsmith told conference attendees the Government's approach meant the country was borrowing around a billion dollars a week over the next year.

"We are borrowing at a rate of our annual pharmaceutical spend every week. And not withstanding that we still have a significantly shrinking economy and the prospect of another 100,000 job losses over the next two years.

"So we have got real challenges ahead."

Goldsmith said the pre-election budget forecasts meant the country was headed for deficits for the next 15 years.

He said there was an enormous amount of uncertainty globally over the progression of the virus and the international economy.

"We have got every confidence New Zealand will get back on its feet as a country. We do have a lot going for us. We are smart entrepreneurial people. Our isolation has been a great asset. We have done well and should have done well.

"We are now well-positioned to forge ahead when global markets reopen. The only question is how quickly we get back on our feet."

Goldsmith said he believed National's policies would get the country back on its feet faster and said the election was coming down to several key differences between the major parties - around tax and job creation.

"What we are seeing over the next few days is a crystallisation of the clear choice between the two parties. On tax it is very simple. Government parties want to increase taxes.

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"Labour wants to have higher income taxes, we have seen the Greens want wealth taxes, reality is any government that can't control spending will inevitably come after more tax."

National is proposing a temporary tax cut while Labour wants to impose higher taxes for those earning over $180k.

Robertson said now was not the time to reform the tax system.

"I just don't think this is the time to do that. We are in the middle of or the beginning of a significant economic crisis that is enveloping the world as a result of Covid-19. I just think major structural change to our tax system at the moment does not make sense."

Robertson was also questioned about the growing wealth inequality being created by low interest rates pushing up asset prices for both shares and property.

"Monetary policy is the purview of the Reserve Bank ... they have played a very important role through the Covid period."

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But he said one potential consequence of that was around what happens around assets prices and acknowledged house prices had increased significantly over the last year or two.

"From Government's point of view we are doing everything we can to make sure we build more houses."

But he said there was no silver bullet when it came to housing and inequality.

"I know everyone wants it to be a really simple answer in this area but there is not. The interaction of monetary and fiscal policy remains important and we are doing our bit to make sure we keep it up."

But Goldsmith said the Government had promised to build 100,000 houses under Kiwibuild at the last election.

"That has been a complete fiasco. Primarily because there was no clear, coherent plan."

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He was also critical of the fee freeze policy and the light rail promises of Labour in Auckland.

"Of course it is natural for people to rally around the flag and the Government in times of national crisis and that is only appropriate. But we've got to think about who has got the best plan to get us back on track as an economy. To provide opportunities for NZers young and old."

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