Bold thinking needed by next government to capitalise on NZ's strong Covid-19 response - experts

October 14, 2020

Max Rashbrooke and Eric Crampton joined Breakfast to discuss the parties' policies in the lead up to the election.

The next political party or parties to get into power at the election will miss an opportunity to capitalise on New Zealand's strong Covid-19 response, economic experts fear.

Instead, one expert says major political parties are too concerned with "very modest levels of public debt".

New Zealand Initiative chief economist Eric Crampton told TVNZ's Breakfast this morning that he had hoped to see the two major parties take up more opportunities "that New Zealand's really strong Covid response has given us".

"Right now, all the parties are kind of looking at managing a decline, facing a global recession, how do we deal with that? ... Nobody's really talked about scaling up the managed isolation system in ways that could enable a whole pile more of activity to be happening here so we wouldn't be needing those other ranges of government support," he said.

"Pouring money into that system could enable all kinds of other things to happen."

Victoria University's Institute for Governance and Policy senior associate Max Rashbrooke said "almost all the major parties are being far too concerned about what are actually really very modest levels of public debt".

He said New Zealand's public debt is "going to be 40-something per cent of GDP" compared to many developed nations whose debt is "twice that high".

"What I'm disappointed about is that we're not seeing more parties recognise that actually, now's the time to be investing. Let's solve child poverty, let's mitigate climate change - the sooner that we do those things, the cheaper they are. The longer we put them off, the more expensive they get."

"I think we should be investing now to solve those long-term problems - which are the right things socially and environmentally - but will also build a stronger economy."

Rashbrooke said New Zealand has partly wasted the silver lining in its strong Covid response, adding that while "you have to give some allowances " to the incredible disruptions caused by the pandemic, we "have had a chance to do a real reset ... and I think we missed the opportunity".

SHARE ME

More Stories