Polytech Crucial
On Thursday Grant Robertson will deliver a Budget prepared in circumstances such as no Finance Minister has faced before. He talks to political reporter Mike Houlahan about the Government’s approach to planning for the realities of Covid19.
NEXT week’s Budget will offer New Zealanders a glimpse of the depth and direction of how the Government will confront the economic wreckage caused by Covid19, Finance Minister Grant Robertson says.
However, it will not the first and nor will it be the final word on the Government’s economic response to the pandemic-propelled crisis.
‘‘It will give people an idea of the kinds of things that we will be doing, but it will not be full formed because the virus itself has still not been fully contained and the impact of it is still not fully clear,’’ he said.
‘‘It is a Budget prepared in very different times, but it is still a document in which people will still be able to see our direction of travel.’’
That direction is necessarily not where Mr Robertson intended to go, although he hopes the detour he has been forced to take New Zealand on will not diverge for too long from the Wellbeing pathway he embarked on in 2019.
The muchhyped ‘‘Wellbeing Budget’’ was touted as a new way of framing and measuring economic policy, with a peoplefocused rather than bank balancedriven approach to assessing economic success or failure.
Unfortunately for Mr Robertson, much of the work programme that was intended to follow the 2019 initiatives has been shelved, along with the new suite of measurements intended to benchmark New Zealand’s Wellbeing success.
‘‘Probably now more than ever we need to get the balance right between the financial decisions we make alongside their impact on people and the environment, so that lens is still there.
‘‘What hasn’t been able to be gone through were some of the new initiatives which were coming through as part of the Wellbeing Budget priority areas . . . it is still a Wellbeing Budget, but not all of the things that we had originally planned to deliver in that will be possible now.
‘‘One of the casualties of Covid19’s impact on the Budget has been the Wellbeing Outlook. We haven’t been able to complete that this year, as the officials who would have been working on that have been working 24/7 on Covid19 . . . and a lot of that data would now be immediately out of date because of what has happened with Covid19.
‘‘We will return to that in next year’s Budget, if I get the privilege of delivering it.’’
Just before the 2019 Budget, Mr Robertson was forced into some urgent rewrites to incorporate the Government response to the March 15 terror attacks.
Twelve months on, the 2020 Budget has been in a state of constant revision for some weeks now, as the economic effects of the pandemic start to play out.
‘‘It has been quite a time for New Zealand over the past couple of years, but there has been a lot of resilience shown,’’ Mr Robertson said.
Since midMarch the Government has approved more than $22 billion on a host of Covid19 related initiatives — a figure equivalent to the operating expenditure in several Budgets.
There would be more to come next week, and also in the weeks and months ahead, Mr Robertson said.
‘‘I think it is important that people see it as one marker post in the journey to recovery from Covid19. It has to be seen in the light of unlike a normal period of time when you spend six months writing out a Budget and preparing everything about a full economic action plan, but all of that had to be reassessed a matter of a couple of months ago.
‘‘I don’t think it is very realistic to expect in that short period of time, given that we have been working day and night to keep up with the response phase, that we will have the full rebuild phase locked in.
‘‘Apart from anything else we, as with all other countries in the world, are still assessing the full impact of Covid19 on our economy, and it is important that we keep our response dynamic.’’
Naturally all this has to be paid for somehow, most likely with increased borrowing, something Mr Robertson has hitherto been at pains to avoid.
A return to a sustainable fiscal path would be made one day, he said.
‘‘But for now the priority for us is making sure we support New Zealanders and businesses through this, what we do have [is] a plan for recovery, and that we can keep the rebuild of the economy going.’’
In a preBudget speech this
week, Mr Robertson said one of the aims of next Thursday’s economic statement would be to sustain households.
Initiatives such as the wage subsidy, the increased winter energy payment and lifting beneficiary incomes were examples of how the Government had acted to do that and more would follow, he said.
‘‘As we move through the stages of our recovery different types of intervention will make more sense, and we are committed to making sure both households and businesses are able to get themselves back to a sense of normality again.’’