Grant Robertson has hinted at a potential “helicopter” payment to all Kiwis in this year’s Budget as a bid by the Government to encourage New Zealanders to spend again and boost the economy in a post Covid-19 world.
The Finance Minister told NZME this morning the Government is looking at all options to get the country up and running again except one – tax cuts.
“Not in this budget,” Mr Robertson said.
However, he did say one of the ideas being explored is handing out a sum of money to every New Zealander.
"Things like helicopter money, as it's sometimes called, is part of a potential package. But obviously it has downsides as well because it's not particularly targeted,” Mr Robertson said.
“There are upsides and downsides to all of these options, and that's what we have to work through."
Helicopter money is a term coined in the 1960s by economist Milton Friedman to mean simply giving money away in the hopes that the benefactors will spend it and thus boost the economy.
Finance Minister Grant Robertson told Q+A he is looking at a range of options to help small businesses struggling to pay the rent while under lockdown.
Earlier this month, American citizens began receiving helicopter money - up to US$1200 each - for the exact same reason.
But Paul Goldsmith, National Party’s spokesperson for finance, is warning Mr Robertson handing out such money in New Zealand is dangerous.
“Before he tosses the bundles of cash from the chopper, he needs to acknowledge the immediate focus right now should be on business relief,” Mr Goldsmith said.
“He should focus on the thousands of small- to medium-sized businesses that are paying a disproportionately heavy price for the extension of the lockdown. Reducing the number of business collapses is the best way to reduce the number of job losses and livelihoods lost.
“Stimulus will be important, but only once we’re out of this and businesses are allowed to start operating at full capacity. Until then, universal cash handouts will simply result in more Government debt for very little economic gain.”
The Budget will be announced on May 14 and Mr Robertson said it will be focused around the Government establishing support for people as Kiwis continue to feel the effects of the coronavirus pandemic.
Mr Robertson said it means there are a range of options available, with a focus on "strong public sector but also a strong private sector" being underlined.
SHARE ME