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Difficult decisions will need to be made to deal with the economic consequences of Covid-19, and one of them will be a raise at retirement age, says economist Cameron Bagrie.
An elderly couple walks on the beach.
Before tomorrow’s budget reveal, Mr. Bagrie presented Covid-19 select committee today.
“Hope is not a strategy, but New Zealand is going to need something,” he said.
“The numbers [at Budget 2020] They are going to be absolutely terrible. “
Bagrie anticipates deficits of more than $ 30 billion next year and a net government debt of more than $ 180 billion at the end of the projection period.
“Wow, do we have a tax repair job that we’re going to need to do?”
He said that there are aspects that are essential in rebuilding the economy.
“The answer must be based on microeconomics, not just around massive spending.”
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“The key question here is how fast the economy will return to pre-Covid levels. I suspect it will be quite some time,” he said.
Source: Q + A
“The temptation will be to think big, rather than small, and throw money like confetti. That growth will have to come from the private sector.”
“Don’t think big, think small.”
Bagrie said the government must make difficult decisions.
“The retirement age will have to increase at some point. KiwiBuild, that money needs to be redirected to Housing New Zealand.
“I want to see signs that it will be a pragmatic economic plan rather than an ideological one.”
He says it will take “an incredibly long time” to return to the levels we saw before Covid-19.
