Fuel for a long winter

Finance Minister Grant Robertson had one stark message yesterday — winter is coming.

Whether a $50billion Covid-19 response and recovery fund (CRRF) is enough to see the return of spring only time will tell, but as Crown debt is projected to be in the tens of billions for a decade or more and unemployment surging sharply upwards, things will be decidedly frigid for some time.

Mr Robertson received a standing ovation from his colleagues when he sat down after delivering a Budget that has money spent like few fiscal statements in our lifetimes.

That reception is what is expected but given the bleak outlook Mr Robertson had just forecast, some of the enthusiasm might have been forced.

Those MPs will be campaigning in a few months, in the teeth of an economic blizzard.

Caution has been Mr Robertson’s watchword during his time as finance minister and even at a time when the purse strings have been loosened like never before, he still exhibited some cool reserve.

About $20 billion of the CRRF remains unspent, a contingency for the very real possibility that further kindling might be needed to stoke the dwindling economic fire.

Also still to be spent is $3billion in infrastructure projects — a sum that may be inadequate given the more than 1900 applications to spend some of that money.

However, there is an inherent and uncharacteristic gamble in Mr Robertson’s ‘‘Rebuilding Together’’ Budget.

He is rolling the dice and hoping that the expected boost to the economy from this week’s move to Alert Level 2, combined with the dregs of the first tranche from the wage subsidy scheme, will be enough to see the more robust businesses survive the Covid recession.

The wage subsidy scheme will continue, no doubt much to the relief of employers and employees alike, but the criteria to qualify for it have been greatly tightened.

Support in the second tranche will be reserved for those businesses in direst distress.

Few would quibble with this, but the required percentage of lost revenue to qualify for the scheme could see many businesses on the edge miss out if the formula turns out to be a rigid rather than flexible one.

Perhaps as befits what will be long-term economic problems, Mr Robertson mostly offered medium to long-term solutions yesterday.

The $1.4billion trades and apprenticeships training package is generous, but it will be training people to be suitably qualified to apply for a job months or years in the future — assuming the demand for those skills exists at that point.

The $570million for 8000 new homes will not be spent immediately either.

Someone has to find the land, draw up the designs and actually build them, and this Government well knows how hard that can be.

Another $1.2billion for KiwiRail is another vote of confidence in the sector, but those wagons and ferries will not be carrying passengers for many months, the $400million tourism recovery fund notwithstanding.

Mr Robertson likes to evoke the spirit of the first Labour Government, and the $1.1billion ‘‘nature jobs fund’’ is the closest thing to that in the Rebuilding Together Budget — guaranteed funding for public works schemes that promise tangible benefits.

Budget 2020 has a beautiful winter landscape on the front, of snow-covered mountains alongside Lake Pukaki.

The sun is out, and Mr Robertson will be hoping it shines warmly on the Rebuilding Together Budget.