Simon Bridges says Kiwis need to return to work to avoid 'deepest recession in a generation'

May 10, 2020

The Opposition Leader said this year's Budget could lead to a poorer New Zealand in the future if money isn't allocated correctly.

National Party leader Simon Bridges says the Government needs to trust Kiwis to return to work to avoid “the deepest recession in a generation”.

Finance Minister Grant Robertson warned on Thursday of an “an extended period” of deficits and debt set to go "well beyond" previous targets brought on by the Covid-19 economic upheaval.

In a statement today Mr Bridges took aim at the Government's ability to effectively manage an economic recovery.

“Our worry is that this Government will turn a $40 billion problem into a $100 billion problem with poorly targeted spending and wayward priorities," he said.

“And eventually it all needs to be paid back, with interest.”

Mr Bridges said Westpac was forecasting 10 per cent deficits for the next two years and debt to rise to 50 per cent of GDP over the next four years, working out to about $100 billion in additional Government debt. Meanwhile, ASB’s estimate of debt to rise to 60 per cent of GDP equated to nearly $120 billion.

“These figures are eye-watering and work out at more than $50,000 in additional Government debt per household.”

Mr Bridges also stood by his comments that the lockdown had “gone on too long” due to the growing number of people applying for benefits. 

Leaked documents show the Ministry of Social Development was preparing for an extra 300,000 benefit applications in response to unemployment created by the pandemic.

“We may have flattened the curve as a nation but with 1000 people a day joining the dole queue and employers deciding whether they battle on or give up, it is clear lockdown has gone on too long," Mr Bridges said.

“The Government needs to trust Kiwis to get back to work. We need to get New Zealand working again.”

However, Prime Minister Jacinda Ardern earlier said leaving lockdown too early could endanger more jobs as it risked New Zealand yo-yoing between Alert Levels.

“I will not gamble their jobs by taking risky, knee-jerk decisions that don't protect their long-term futures,” she said in the House.

Mr Roberston said on Thursday as the country moved forward from its immediate Covid-19 response, the next "purpose is to see people back at work ... and to lay the foundations for our rebuild". 

"A move to Level 2 will see the vast majority of our businesses and workers back at it," he said.

"Our recovery will continue with interventions to sustain households and businesses and get people working, in combination with sector-specific support to help boost wider economic confidence, and regenerate some of the sectors hit hardest by the pandemic.”

He said the country’s strong health response would support the economy’s recovery.

The Government’s Budget is will be delivered on Thursday. 

"Budget 2020 gives us the chance to begin this rebuild, better and together,” Mr Robertson said.

Cabinet is set to decide tomorrow when to move out of Alert Level 3. 

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