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Home / New Zealand

Audrey Young: Jacinda Ardern's AAA minister oversees a Budget like no other

Audrey Young
By Audrey Young
Senior Political Correspondent·NZ Herald·
8 May, 2020 05:00 PM6 mins to read

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Grant Robertson in his Beehive office. Photo / Mark Mitchell

Grant Robertson in his Beehive office. Photo / Mark Mitchell

Audrey Young
Opinion by Audrey Young
Audrey Young, Senior Political Correspondent at the New Zealand Herald based at Parliament, specialises in writing about politics and power.
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Jacinda Ardern has her A team to handle the Covid-19 crisis and then her AAA team.

There are four ministers in the A team: herself, Grant Robertson, Winston Peters and David Parker. They are keeping watch on the bigger picture as to how New Zealand emerges from the crisis.

Her AAA team has one member, Robertson.

As close friend, mentor, Finance Minister, and confidante to Ardern, Robertson has been an integral part of her political career at every step of the way.

During the Covid-19 crisis, they have been even more joined at the hip than ever. They are both across every aspect of the pandemic response and nothing gets done unless it is agreed by both of them.

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When Robertson deputises for Ardern at a Friday press conference, it is an effortless switch.

Trust in Robertson has increased, as it has for her, as events have unfolded and he now is the undisputed winner in Labour's bus test.

Grant Robertson delivering the 2019 Budget. Photo / Mark Mitchell
Grant Robertson delivering the 2019 Budget. Photo / Mark Mitchell

It's the informal test of who would take over if the leader accidentally fell under a bus. And it would be Robertson, no question. Kelvin Davis is deputy in name only.

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Helen Clark, in her first term as Prime Minister, nominated Trevor Mallard as a potential successor should unforeseen misfortune befall her.

By her second and third term, there was only one person who would have had the standing and that was her deputy and Finance Minister, Michael Cullen.

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Under John Key for the first two terms, it was Steven Joyce, although by the third term Bill English was the natural choice.

Cullen was a mentor of Robertson's and publicly backed him for the Labour leadership (with Ardern as deputy) in the bruising contest in 2014.

Robertson got the finance portfolio from Andrew Little, who won the leadership vote through the union vote, and only after the incumbent in finance, David Parker, turned it down.

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Robertson's record, from his three years of meticulous preparation in Opposition to his two years in the job, is eroding the accepted wisdom that National are always better economic managers.

With each passing month in the job, his incumbency is a growing advantage.

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Robertson has faced two National finance spokespeople, Amy Adams and Paul Goldsmith, both former Commerce Ministers but not with the same heft as their political forebears, in Key, English and even Don Brash

The Covid-19 crisis has compounded Robertson's advantage but nothing could have prepared him for it.

The speed and scale of spending demanded by the crisis has been massive compared to what had been in train for next week's Budget.

In the Budget Policy Statement in December Robertson confirmed that the operating allowance - new operational spending - in the Budget would be $3 billion for the whole 2020-21 year.

In the past seven weeks, the Government has committed more than $20 billion on the myriad response measures, including $10.6 billion in the wage subsidy scheme.

Since December there has been little political argument about plans for capital expenditure because Robertson flagged back then that the Government was effectively adopting National's plan, with a massive $12 billion spend on Upgrade New Zealand.

• Covid19.govt.nz: The Government's official Covid-19 advisory website
The only debate is over delays, not the projects.

Much has changed even since February, when the capital projects were identified. At that stage the effects of Covid-19 had hit New Zealand only in terms of the China lockdown and what that was doing to demand for exports and inbound tourism.

The pace really picked up in March once the global impacts hit and it became clear the tourism sector had collapsed in a matter of weeks.

As Robertson himself has said, the compressed timeframes the Government is working under have meant that what might have taken a month took a week, what took a week took a day and what took a day took an hour.

He doesn't have trouble sleeping at night, he told Parliament in response to a question, especially after he has worked for 18 hours straight.

Grant Robertson and Jacinda Ardern during a Covid-19 press conference on the first day of the lockdown. Photo / Mark Mitchell
Grant Robertson and Jacinda Ardern during a Covid-19 press conference on the first day of the lockdown. Photo / Mark Mitchell

Because of the lag effect, the financial hits the country is taking are just starting to appear with yesterday's beneficiary numbers rising by 40,000 since Covid arrived and borrowing having risen $22 billion more than expected.

Next week's official forecasts by Treasury will be eye-watering, with deficits stretching out for years and debt rising steeply.

S & P Global Ratings reaffirmed New Zealand at AA this week, despite forecasting net debt to rise from 19.6 in December to 30 per cent of gdp, a rating which is vitally important because it will keep down the cost of borrowing.

In the short-term, rising deficits and debt won't be a problem for Robertson. The public expects it.

National can hardly describe it as wasteful spending because it called for the massive relief programmes that have been delivered.

If they do, it will have as much effect as Labour had complaining, as it did occasionally, that debt under National had risen to record amounts – because of the Christchurch earthquakes.

Robertson has indicated that the next phase of the wage subsidy scheme will be more targeted than the current requirement to show a 30 per cent decline in revenue due to Covid.

Grant Robertson in his Beehive office. Photo / Mark Mitchell
Grant Robertson in his Beehive office. Photo / Mark Mitchell

It promises to be a different Budget.

There may, in fact, be more debate around general direction given that there should be little quibbling over the last two or three billion as sometimes happens.

Already Robertson has parked the five thematic priorities identified in December: a just transition to a low-emissions economy; the future of work; lifting Maori and Pacific opportunities; improving child well-being; and physical and mental well-being.

The "wellbeing" hoops and hurdles that ministers and ministries had to jump through in last year's Budget bids were simply scrapped this year.

The people who would have conducted them were too busy on Covid-19 response.

It will be the next stage of the Covid-19 response, a Budget like no other.

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