Morning Briefing May 15: Govt puts Budget umbrella up for rainy day

The Government revealed their Budget for “recovery and rebuilding” yesterday, labelling it the most significant economic package in New Zealand’s modern history.

With a focus on stemming the damage wreaked by Covid-19, the Budget includes a $50 billion response and recovery fund. 

With New Zealand’s unemployment expected to peak next month at 9.6 per cent, Finance Minister Grant Robertson says the Government is answering calls for significant new investment “as we face this one-in-100-year global shock and rebuild together”. 

National leader Simon Bridges has responded to the Government’s spend-up, saying it lacks a coherent plan.

He says, “spending money is the easy part”, but “investing billions where it will make the most difference” is what’s needed. 

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Where the billions are going

So, how is that Covid-19 Response and Recovery Fund being carved up?

Its $4 billion business support package includes a $3.2 billion extension of the wage subsidy scheme. The eight additional weeks of payments will apply to businesses hit the hardest by Covid-19 and brings the total amount allocated to the scheme to $13.9 billion. 

The recovery fund also includes a $1 billion environmental jobs package, $3.3 billion for health and education and $3 billion for infrastructure and house building programmes (detailed further below).

Another $1.6 billion has been allocated for free trades training for all Kiwis.

Education Minster Chris Hipkins says extending the free targeted vocational training courses from just school leavers to all ages will help people who have lost their jobs in the Covid-19 fallout. 

The struggling tourism industry has been earmarked for a recovery fund of $400 million, however no further details have been given on that funding yet.

Given the tourism industry was worth $17 billion last year, some have questioned if the recovery amount is enough.

The Government is also spending $900 million to support Māori through the Covid-19 crisis. 

Only $30 billion of the Response and Recovery Fund has been allocated so far, with the other $20 billion set aside to deal with ongoing effects.

Some have questioned whether that money will potentially go directly into Kiwis’ pockets via a universal cash handout, however Winston Peters has rejected the idea, saying “we don’t believe in helicopter payments”. 

Climate change funding criticised

One of the pillars of the Budget is the $1 billion environmental jobs package.

Expected to create 11,000 new jobs across the regions, Conservation Minister Eugenie Sage says the investment will support thousands of people with jobs, as well as pay dividends for future generations “by giving nature a helping hand”.

However, the Budget’s lack of targeted climate change spend has drawn criticism.

Greenpeace executive director Russel Norman says, “there’s only loose change from Grant Robertson’s pocket to address our most pressing existential challenge - climate change”.

He says the $20 billion still to be allocated from the Budget should focus on the future.

"The Finance Minister talked about Covid-19 being a one in a hundred year threat, but climate change is the threat that will decide if we have another hundred years on this planet,” Dr Norman says.

Govt eyes 8000 new homes

Eight thousand new public and transitional homes have been promised in the Budget, at an estimated cost of $5 billion over the next four to five years.

The Herald reports National’s housing spokesperson Judith Collins as saying the plan appears similar to a previous National-led policy to partner with housing providers to boost overall supply.

The state housing waiting list is currently at a record high of around 15,000. 

The Government is also putting $570 million aside for income related rent subsidies to support the build programme, while their insulation and heating programme will get a $56 million boost.

Other Budget winners – and losers

Winners from Budget 2020 also include the Defence Force, which has been allocated $1 billion to fund the replacement of its ageing Hercules fleet, and New Zealand Post, which is getting a badly needed cash injection of $280 million.

The Government says the reliance on the mail system during the Covid-19 pandemic shows the importance of maintaining such services. 

The disability sector has also had a major win, with its biggest-ever funding boost of $833 million.

However, there’s been no extra money allocated for doctors, midwives and dentists, leaving them deeply disappointed

Advocates say the Government has also forgotten about the unemployed in the Budget, although social services spending includes a major extension of the school lunch programme, a move both Prime Minister Jacinda Ardern and the Child Poverty Action Group say will make a measurable difference in children’s lives. 

Kiwis embrace Level 2

Of course, the Budget wasn’t the only big event of the day.

Yesterday also saw Kiwis emerging from their bubbles to experience life at Level 2 of the Covid-19 alert system.

Queenstown’s mayor, Jim Boult, signalled the reopening of his town’s tourism industry with a bungy jump at dawn.

Many other Kiwis returned to workplaces around the country, too, however the Herald reports thousands of corporate employees are remaining in their home offices for now. 

People also gained access to health services that have been largely off-limits during the Level 3 and 4 lockdowns.

Doctor and dentist visits, elective surgery and other services like blood tests, scans and screening are opening back up, albeit with a host of new safety precautions

Other news of note this morning:

Police reveal sinister new details in the case of missing Tauranga man, Julian Varley.

New Zealand and France mark the one-year anniversary of the Christchurch Call.

Drought conditions in Hawke’s Bay prompt a crisis relief effort from local authorities.

Event Cinemas says it’s planning to make staff redundant as Covid-19 upends its business.

And former Prime Minister Helen Clark is helping unite world leaders in a call for a free-of-charge 'people's vaccine' for Covid-19.

And finally...

Laura Daniel Source: Seven Sharp

With sports sidelined during lockdown, Kiwis have missed that collective euphoria that unites a nation during its most triumphant sporting moments.

Or have we?

Days like yesterday, where New Zealand recorded another 24 hours without a new case of Covid-19, have given Kiwis plenty of chances to celebrate in true sporting fashion.

So, all together now... go the mighty Ministry of Health!