'Generations of Kiwis' will pay for recovery

Finance Minister Grant Robertson. Photo: Getty Images
Finance Minister Grant Robertson. Photo: Getty Images
Generations of New Zealanders will be paying for the economic recovery caused by the devastating impact of the coronavirus pandemic, Finance Minister Grant Robertson says.

Robertson told Newstalk ZB's Mike Hosking this morning the Government needed to take a long-term view - balancing what was needed now to help individuals and businesses, with how a diversified New Zealand economy would look in the future.

"Generations will be paying for it, that's the truth. The massive investment we are making and that other countries are making... will take many years to deal with.

"That's why we have to have a plan for what the economy looks like... [one] that allows us to pay debt back, have taxes at a reasonable level and allows us to maintain living standards.

"We are all aware that in the short term we want to make sure people have money to put food on the table we want to make sure that businesses have a sense of continuity."

Robertson's comments come as the Government is enlisting Kiwis to be its spies and pass on any proof of supermarkets price-gouging, or to report their neighbours for breaking the lockdown rules.

The number of coronavirus cases has reached almost 740,000 globally, with more than 35,000 deaths. The United States and Europe are now the epicentre of the outbreak, which began in mainland China in late December.

In the US, President Donald Trump - siding with public health experts' dire projections - defended his decision to extend restrictive social distancing guidelines through to the end of April, while bracing the nation for a coronavirus death toll that could reach 200,000 people.

The Government will today release the sets of modelling on the spread of Covid-19 that it has based many of its decisions on, including the decision to go into lockdown.

The first meeting of the new Pandemic Response committee, chaired by National Party leader Simon Bridges, will be held today. That committee of 11 MPs will hear from Covid-19 response team head John Ombler and Director-General of Health Ashley Bloomfield first.

Robertson said a post-lockdown New Zealand economy would need to diversify, to overcome gaps left as industries such as tourism and international education recover.

"We need to look at manufacturing, and adding value to products in New Zealand as well as exporting them. Tourism, international education won't be coming back for a while."

The Government was working on a package of initiatives, including infrastructure and other regional schemes, to roll out as soon as possible to help the economy recover.

Credit ratings agencies would be looking at all countries, not just New Zealand, and in that sense, we were in a relatively good position, Robertson said.

Net core Crown debt was at just under 20% of GDP, but this would significantly lift as a result of the initiatives caused by the virus economic impact. "Other countries have higher debt in most cases than we do."

Robertson had seen predictions of unemployment growing to anywhere from the current 4% to anywhere between 8% and 30%. Some economists, he said, were putting their fingers in their wind, but the Government would have an outlook soon.

He said the Government was working with Air New Zealand "every day" as the airline felt the full impacts of Covid-19. Airline chief executive Greg Foran revealed in an email to customers last night that annual revenue was set to fall from $6 billion to $500 million.

Up to a third of staff and 95% of its schedule are set to be cut, and Robertson urged the airline to use the Government's wage subsidy scheme.

About 580,000 Kiwis are already on the scheme.

"Air New Zealand is in an incredibly difficult position... we are working with them every day. We want an airline that comes through this."

 

Comments

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Much of the impact could have been avoided if the Prime Minister had the interests of all Kiwi's at heart and not been so focused on personal grandstanding for the worlds media. Ignoring what what happening around the world, not closing our borders and playing down the risk to NZ pre march 15th has cost the country. Lets be clear here, her personal ego has cost the country. I realise that this is a bitter pill to swallow for her fans, but reality has just bitten. And bitten all of us hard. In the years to come, NZ needs solid leadership in both national and local government. The time for over paid, naive, inexperienced, celebrity leaders is over, NZ needs leaders with financial and business acumen to get us out of this mess.

You should be thankful, things are much worse in the rest of the western world where Jacinda is viewed as a leader in action, and where New Zealand is envied for having such a great Prime Minister. Compare her actions with Scott Morrison, Boris Johnson or Donald tRump and thank your God that you don't have some right wing Greedisgoodite as leader.
Your comments just don't stand up to objective scrutiny.

"You should be thankful, things are much worse in the rest of the western world..."
You can't compare the data we don't have. They are testing, we are not. It is a given that we have far more cases than are stated, because we don't know about them, because we are not testing. We still have planes coming in from overseas and still no testing, no isolation.
So now we are all locked down, the unidentified sick quietly infecting the healthy. Then what? Another four weeks and then another?
Where's the plan from your "leader in action". This kicked off months ago and many health professionals can't even get the basic PPE needed today.

What one-eyed nonsense, there hasn't been a scrap of 'grandstanding'.

It seems that it's the tourist industry that is the cause of this spread, so I expect that they will be happy to pay for the damage they have caused.

Wealth distribution is essential. We are in lockdown to protect the elderly and baby boomers they must shoulder their burden on society once we come through this.

it's not only 'boomers' because chance of survival is not the only question. According to Hong Kong doctors, a few of those who recover do so with 20%-30% of lung capacity lost to the virus: enough to start feeling shortness of breath during a brisk walk. Still not clear whether it's permanent damage but I'd rather be safe than sorry.

Get out of the China addiction. Bring manufacturing jobs back home for our boys.

The pandemic has been around for thousands of years. To be not prepared for it, is criminal. That our system was so fragile that shutting down the border for a few weeks destroyed it, tells you that we were not prepared, for a very old problem. And our current systems were unsustainable. This virus or something like it will come again.

Let the interconnected debt addicted businesses fail. The planes will still be there. We will find someone to fly them. Someone smaller perhaps. The debt is the problem. It is not sustainable. We can't redistribute value based on debt. It is not there.

We have the dole, let that pay for all the newly unemployed. It is not fair that a chef laid off gets $x, whilst and pilot is getting $xxxx on the taxpayers dime. Let all laid off staff be treated the same. Eg, if air travel is shot, why do we need tax payers to pay all the staff a salary more than the dole and all the planes? We need freight and minimal flights for the few remaining passengers. No need to pay for all the other idle plane related costs...let the aeroplane leassors come and get those planes...They will be idle for awhile, along with 95% of the other planes in the world.

Focus on food, shelter, medicine and other essentials. Most tourism, education, hospitality are nice to haves, but, the essentials are first priority.

so short term plan.. what about long term plan..

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