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The gigantic fund has not yet been allotted. Some have already been spent, with $ 15 billion outlined in today’s ‘Rebuilding Together’ budget, and $ 20 billion to implement.
The Treasury forecasts that up to 140,000 jobs could be saved in the next two years thanks to the fiscal stimulus, the economy could begin to grow again in July, with unemployment set to return to 4.2 percent by 2022.
What else are we getting?
The government is investing in areas that might not have been expected, such as the Defense Force receiving more than $ 1 billion, part of which will finance new Hercules aircraft as the old ones continue to decompose.
Another 8,000 new transitional and public houses will be delivered, while the struggling tourism industry wins a $ 400 million directed recovery fund. $ 900 million has been set aside to support Maori and $ 195 million for people in the Pacific.
Around 2,000 students will receive a free lunch starting next year through a boost of more than $ 200 million, while services for the disabled will receive $ 800 million, and struggling tertiary students can now access a hardship grant of $ 20 million.
The railroad also gets another big investment in the 2020 Budget. Last year, KiwiRail received a $ 1 billion surcharge, and this year’s Budget spends another $ 1.2 billion on the rail, and that adds to the $ 1 increase. 1.1 billion in January.
And we are not forgetting our neighbors. Aid spending has increased by $ 55 million, and Foreign Minister Winston Peters says he will focus on the Pacific, where “livelihoods have been shattered” thanks to dry tourism.
Why is all this necessary?
New Zealand’s economy, like the rest of the world, is taking a severe hit from the aftermath of COVID-19, and the government has had to dramatically redirect its spending to help the country recover.
The International Monetary Fund (IMF) expects global economic activity to decrease on a scale not seen since the Great Depression in the 1930s, with a forecast for global growth to fall to -3 percent in 2020.
GDP in New Zealand is forecast to decline from 2.8 percent in June 2019 to -4.6 percent in June this year. Meanwhile, unemployment is expected to rise to 8.3 percent by the end of June, peaking at 9.8 percent in September.
The Crown’s net central debt is expected to reach 53.6 percent of GDP after sitting comfortably below 20 percent before the crisis. With countries like the USA USA Starting with over 90 percent, you can only imagine how high your debt could go up.
Finance Minister Grant Robertson is optimistic that huge government spending will see the country begin to recover from July.
“We are doing what is necessary to cushion the blow, support companies and workers and position the economy for recovery,” he said. “We are responding to requests for significant new investments as we face this global shock of 1 in 100 years.”
Robertson’s prediction is in line with the IMF forecast that global growth will rebound to 5.8 percent in 2021. But it will all depend largely on how the coronavirus is contained and whether nations are experiencing ongoing spikes.
This is what has already been announced:
How does it compare to Budget 2019?
The primary focus of the 2019 Budget was health with $ 2.9 billion awarded to DHB and nearly $ 2 billion for mental health. KiwiRail awarded over a billion dollars, while schools and hospitals also raised over a billion dollars for infrastructure.
What happens before the 2020 budget?
The government announced a $ 12 billion infrastructure package earlier this year, called the New Zealand Update Program, with the goal of stimulating the economy through infrastructure projects.
But just a few months later, COVID-19 hit the shores of New Zealand, and in March the government presented a $ 12 billion support package, worth the same amount as investment in infrastructure.
As the country moved to the lockout, government spending skyrocketed, thanks mainly to the wage subsidy scheme, which has so far paid nearly $ 11 billion to approximately 1.7 million New Zealanders.
Until the 2020 budget, the Government had allocated around $ 20 billion in packages related to the economic and health consequences of COVID-19.
