Hoping for an investment Budget
The Government should look to the Budget to speed up stalled infrastructure projects and assist regions most impacted by climate change policies, BusinessNZ chief executive Kirk Hope says.
The Budget on Thursday week looks likely to be more low-key than could have been expected last year when it was assumed unemployment would be far higher than 4.7 per cent and the economy might still be requiring a big boost to recover from Covid.
But Hope said BusinessNZ’s members still wanted the Government to push on with investment, particularly in infrastructure, rather than seeking to dial back debt too aggressively.
‘‘In the short term you have got to continue the economic growth track after we have come out of Covid, given there will be ongoing impacts, and Standard & Poor’s and Moody’s have confirmed they are pretty comfortable with the net debt to GDP track,’’ he said.
ANZ yesterday said that the Budget should bake-in recent, more positive figures in Crown accounts into the Treasury’s fiscal forecasts. That should translate into fresh forecasts for core Crown debt peaking below 50 per cent of GDP and guidance for cumulative government-bond issuance up to June 2025 dropping by $20 billion, the bank predicted.
BusinessNZ will host a preBudget lunch with Prime Minister Jacinda Ardern on Thursday.
Hope said one option would be for the Government to review some of its intended infrastructure projects that hadn’t obtained ‘‘shovel-ready’’ status or fasttracked resource consents to see if any of those could now be speeded up.
Education Minister Chris Hipkins announced in March that 106,600 people had taken advantage of free trades training since July, including more than 58,000 apprentices, and Hope said they would need ongoing employment.
‘‘We are also competing against Australia, and the Government needs to clearly commit to a pipeline of projects so those people with those skills stay here. We all acknowledge there has been an ‘infrastructure deficit’ whether you think about roading, housing, or even rural broadband.’’
Better roading could make the difference between an electrician doing either two jobs or three jobs a day, he said. ‘‘That’s a real thing for people trying to move around most of our cities now.’’
It was hard to separate the economic benefits from ‘wellbeing’, Hope said. ‘‘If you have to travel a long way for work that makes a big difference to how much time you can spend with your kids.
‘‘It is not just about getting cars, trucks, buses or bikes to places faster, it is about improving the overall outcomes for New Zealanders whether they be business or personal.’’
Finance Minister Grant Robertson announced last month that departments had identified $926 million that had been allocated to them for Covid initiatives but which they did not expect to spend, and that had been returned to the Covid Response and Recovery Fund.