Budget 2020 Live Special: The Government will borrow an extra $50 billion in the June 2021 fiscal year to mitigate the hit from the Covid-19 pandemic.
Opinion
The Government will spend a mammoth $50 billion, announced in today's Budget, on its Covid-19 recovery plan in a bid to save almost 140,000 jobs nationwide.
It's the single biggest spending package in New Zealand's history.
But to pay for the recovery, Government debt will more than double to $200billion and there are deficits in the tens of billions of dollars for years to come.
A fast way for a company to go broke is to have fantastic advertising and an awful product.
It is true of countries, too. This government has the best PR ever and no product.
It is the first Budget where Government says it is going to spend but does not know what on. As if just spending is a sensible policy. Thirty years of prudence blown in one Budget.
Government was warned of the pandemic in January. By going too late and then too hard the economy has been smashed. The Budget's massive borrowing and reckless spending will be a burden for years.
Debt is projected to increase to $70,000 per household. The Reserve Bank printing $60 billion dollars is a rash experiment.
As Walter Nash observed: "If social credit works, no one else has to." We are heading for an Argentina-like currency and economy.
None of the steps to create sustainable new jobs such as reform of the job-killing RMA have been taken.
The Budget's objective was never jobs, jobs, jobs but votes, votes, votes; "Spend whatever it takes" to win an early September election.
Whether the Budget has bought your vote is over to you.
• Richard Prebble is a retired politician who served in a Labour cabinet and as leader of the Act Party.
Josie Pagani
Josie Pagani
Despite the eye-popping numbers, this is a cautious Budget. A trickle-up Budget with the emphasis on "trickle".
I hope Treasury's forecasts are right because they see the economy bouncing back much faster and taking a smaller hit than I expected. Consequently, the cash relief for families is smaller than I hoped.
But free job re-training, the big, immediate environmental stimulus and state house building programmes are all great decisions.
They could have built twice as many houses and generated twice as many green jobs by partnering with local councils and experienced non-government agencies, like Salvation Army and iwi authorities, using Government money.
With the Pacific facing devastation of its tourism-based economies, the increase in our overseas aid is the right thing to do. It will help our neighbours, and move us towards a Pacific travel bubble faster. A win-win.
True, the economy needs a clearer long-term strategy and that will need to be spelt out before the election. But not today. Right now, the priority is helping people through the crisis.
Businesses need customers more than they need a handout right now. Cash in customers' hands trickles up. That's why I wish there was more cash going to families who will lose incomes as the economy shrinks over the next two years.
Ten per cent unemployment is less than I feared. I hope they're right.
• Josie Pagani is an international specialist, former Alliance press secretary and former Labour candidate.
Ben Thomas
Ben Thomas
Early reaction to the Budget showed the magnitude of the challenge even a fiscally unleashed Government faces in the wake of Covid and lockdown.
Eye-watering items of expenditure that would each be the centrepiece of a "wellbeing" Budget in any ordinary year are criticised as inadequate.
In part, the Budget's massive bill is just buying time. Benefit spending will double – to $4 billion – without any increase in the rate paid to individual job seekers (beyond the previously announced $25 a week), as unemployment peaks around per cent.
More will be spent on the targeted wage subsidy extension in order to give businesses breathing space to prove they have a future beyond the downturn, and vitally keep people in work.
Ironically, the Greens may have done the most to create jobs in the short term with large-scale conservation and pest-control projects that will be labour-intensive, suitable for the young tourism workforce, and help improve our number one international drawcard.
"Shovel ready" infrastructure projects from about 2000 proposed by councils, government agencies, iwi and the private sector will get $3 billion, essentially the Provincial Growth Fund on steroids.
If it can deliver on the promise of "modernising the economy" in a newly sustainable way with these projects, then it may quiet critics.
• Ben Thomas, a public relations consultant, is a former journalist and former press secretary to Chris Finlayson.
It was informally billed as "The Jobs Budget" and on that front it delivered. The expansion of the wage subsidy scheme and funding for retraining will provide relief to some SMEs, and the newly unemployed.
The tourism industry will be disappointed, however, with just $400 million. Some operators will see it as a kick in the teeth. An extremely tough winter approaches for tourism.
The Budget also needed to fix some of the problems with the benefit system. It hasn't. That will be disappointing to the many who will shortly find themselves on the dole.
We have to hope extra DHB funding will go to mental health because, if Australian estimates are correct, demand for mental health services is about to rise sharply.
I was pleased to see some dedicated funding for Māori for training, employment and health. It was smart, too, to keep money in reserve to give room for further crisis responses.
The debt burden we're shouldering is immense, but given the circumstances, understandable.
My hope for my fellow younger New Zealanders is that when times are steadier we look at sharing that burden more equitably, which may involve eventual changes to things like superannuation.
• Lizzie Marvelly is a musician, writer and activist.
David Cormack
David Cormack
It was not the Budget of hope, but it was a hopeful Budget.
The Treasury forecasts: hopeful. Unemployment forecasts: hopeful. And the solutions offered up are hopeful.
The extension of the wage subsidy is sensible, and by making it for businesses that suffered losses of 50 per cent it really focuses it more tightly on tourism and hospitality that suffered more than most.
The vocational training component is the best part. Obviously training people for jobs is important, so pouring money into training and infrastructure makes sense. There is obviously the hope this will be the closest thing to an unemployment panacea that we could get.
The lack of benefit increase is upsetting, but people don't want to be on benefits, they want jobs. So focusing it on job creation is clever. But the question will always be why not both?
It's excellent there's such a green focus and the programme to build 8000 houses is good, so long as it can actually be delivered.
Overall it feels like this could have been a traditional Labour budget, just with more zeroes. The opportunity for wholesale change rejected, let us hope Grant Robertson has hit the right solutions.
• David Cormack, a public relations consultant, is a former staffer for the Labour and Green parties.
