Economic outlook 'painful', but Govt has chosen to 'sit up and act', PM says of $50b Covid Budget

Times ahead will be tough, the Prime Minister warned today as she delivered her Budget 2020 speech, which saw billions pumped into the nation's already massive Covid-19 response. 

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Opposition Leader Simon Bridges didn’t move a motion of no confidence in the Budget, which traditionally follows its presentation. Source: 1 NEWS

Budget 2020 will see the wage subsidy scheme targeted and extended, free trades training and apprentices, 8000 new public houses and intends to create thousands of new environmental jobs as part of a $50 billion rescue package. 

What you need to know: Budget 2020

"Global predictions are dire," Jacinda Ardern told Parliament. "Unemployment will rise, and growth will slow dramatically.

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The Prime Minister spoke after the announcement of Budget 2020. Source: 1 NEWS

"We know as a trading nation that will have an impact, and it will be significant and it will be painful."

"We have never sugar-coated what the future will look like, but nor will we pretend there is nothing that we can do about it. Governments have choices, just as we did when we faced Covid-19, and those choices are between sit back and hope, or sit up and act.

"We have chosen to act."

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The election-year Budget looks a lot different than what was anticipated before the pandemic. Source: 1 NEWS

Ms Ardern said she wanted the country to emerge from the Covid-19 crisis "stronger than we were before". 

"Yesterday I said this Budget would be about jobs, jobs, jobs. In total it seeks to save as many as 140,000 of them over the next two years, and to support the growth of 370,000 more over four years.

Budget 2020: Treasury expects unemployment to peak next month at 9.6%

"The Budget sets out a clear plan to generate new green jobs, rural jobs, jobs rebuilding crumbling infrastructure and new training opportunities for those who need it."

"But even this is just stage one."

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Officials touted it today as the most significant economic package in NZ’s modern history Source: 1 NEWS

Ms Ardern said funds had been held back to tackle the next phase of the rebuild, with $20b from the Covid-19 package set aside.

"We know business craves certainty in order to plan how it will operate. And while there is much we cannot predict in these uncertain times, what I can promise is that we know this is not the end of what we need to do."

Later, Ms Ardern was asked about the decision to not extend the tertiary fees free policy from one year. 

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The Government has allocated $1 billion to replace the aging Hercules fleet. Source: 1 NEWS

"Right now it is not a priority. Making apprenticeships free, reopening night school, those are the priority," she said. 

"Now is not the time to look at the wider expansion of fees free beyond apprenticeships in critical sectors like care, construction, areas where we have a skills gap and need."

It was a Labour Party policy to roll out three years’ free by 2024, but last year Finance Minister Grant Robertson would not commit to extending it past one year. 

Opposition Leader Simon Bridges said that with thousands of people a day "joining the dole queue, we need a proper plan". 

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The National leader says today's Budget won't be enough to revive the economy. Source: 1 NEWS

"Spending money is the easy part, but investing billions where it will make the most difference was what we needed.

Budget 2020: Covid-19 wage subsidy boosted by $3.2 billion, extended for eight weeks

"Today we are seeing an extra $140 billion of debt. That’s $80,000 per household and it’s our children and grandchildren who will be paying for it. That’s equivalent to a second mortgage on every house."

"We will have $100 billion in deficits for the next four years."

He said Budget 2020 lacked any detail and accountability of spending and what it would achieve. 

"The problem with debt is that it needs to be paid back," Mr Bridges said. 

The Finance Minister delivered today what he described as a "once in a generation Budget".

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This year's Budget focuses largely on recovery from Covid-19. Source: 1 NEWS

"There are tough times ahead, but we have made it this far in fighting Covid-19 by drawing on every bit of who we are as New Zealanders," Mr Robertson said.

"We were faced with a choice between a public health catastrophe as has been seen in other countries, or unprecedented and difficult measures. 

"There were no costless decisions in this situation, nor was there any playbook to go by."

He said that while the Government would not be able to save every job or every business, "we would do everything in our power to protect our people and our economy". 

Budget 2020: Free trades training for all ages to be rolled out in Covid-19 fall-out