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New Zealanders will see how much the government has spent to bail out the private sector when the books open on Wednesday.
Finance Minister Grant Robertson said Stuff The huge amounts of debt currently weighing on government finances were the cost of propping up the private economy through the Covid-19 lockdown.
And he’s duplicating what he says is a “huge” role for government in the economy.
Robertson made the remarks in an exclusive interview with Stuff before one of the most important weeks of the election campaign.
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On Wednesday, the Government will open its books to the country with the Pre-Election Economic and Fiscal Update (PREFU).
It will reveal the cost of Covid-19 to the Crown, and more importantly, Treasury experts will use PREFU to forecast the dramatic costs of the coronavirus in future budgets.
This will be followed on Thursday by the GDP figures from Stats NZ for the June quarter.
These numbers will cover New Zealand’s lockdown period and analysts expect them to be the worst quarterly GDP results in the country’s history.
ROBERT KITCHEN / Things
Finance Minister Grant Robertson speaks to Stuff ahead of the government’s PREFU announcement and GDP figures to be released on Thursday.
Although Robertson won’t see the numbers until we do, he confirmed his opinion: Thursday’s figure would show New Zealand in deep recession, even though most analysts have admitted the quarter won’t be as bad as they initially feared. .
“It will continue to be a terrible quarter for New Zealand, the worst we have ever had. And obviously we are in a recession, there is absolutely no question about it, “said Robertson.
The government, to date, has allocated $ 62 billion for its Covid-19 response, including $ 20 billion for revenue support, $ 10 billion for business support, $ 4.5 billion for educational skills and training, $ 4.7 billion for infrastructure and $ 3.2 billion for health, plus a little more.
You haven’t spent all of this money and you’ve effectively set aside $ 14 billion “as needed.”
Robertson said that although the wage subsidy was terminated for now, the state’s very active role in the crisis was not over.
“I think one of the contradictions of what I hear from opponents during this election campaign is that the private sector actually turned to the state, and that’s fine. I have no difficulty with that, but it has consequences, ”said Robertson.
“These are the levels of debt that we will have to overcome, reduce and control.”
Robertson’s comments come as a new Horizon research survey found that 46 percent of New Zealand adults think they will keep their jobs for the next 12 months, up from 38 percent in the same survey in July.
That’s a more optimistic outlook that’s tempered by the fact that 7 percent of those surveyed believe they will still lose their jobs next year.
That number equals 287,000 New Zealanders.
The Horizon survey also found that 100 percent of people in the specialty trade, such as plumbers, builders, and electricians, are confident of keeping their jobs for the next 12 months, while only 11 percent of workers in the accommodation hope to keep theirs.
However, beyond the immediate prospects for employees, Robertson says the next few years will be about the government’s “enabling role” in helping the economy grow, citing tripartite forums such as the “Future of Work Forum.” with the government. , Business NZ and the Council of Trade Unions, as of central importance going forward.
However, he sees the government as a crucial and central part of any reconstruction effort.
“Actually, there’s no way we can run ourselves right now without him. Yes, we need the private sector to prosper. Of course we do. And a lot of what we do is create the conditions and the programs that can do that, ”Robertson said.
“But this has taught me once again why it is important that we have strong public services and have the ability to step in when needed. I mean, the healthcare system will continue to require significant resources for the next period of time.
“And, you know, as we move towards a vaccine and make sure it gets published, it’s a very important role for the government.”
Meanwhile, Robertson also rejected suggestions that Australia was recovering better and faster from Covid-19 than New Zealand, in part thanks to the design of the wage subsidy.
“I think in terms of unemployment, you know, I think now it’s pretty clear that they will have higher unemployment than us,” he said.
“I think where we are going to land in the way unemployment is going, where it will peak and where it will decline, we will find ourselves in a better position than other countries, relatively, because we get that money as soon as possible.”
The release of GDP statistics also marks another important milestone on the road to elections; Thursday marks the one-month countdown to the October 17 election.
