$12b for crisis just the ticket

When it comes to spending in an emergency, governments are criticised for spending too little, never for spending too much.

To that extent the $12.1 billion rescue package for the coronavirus crisis is beyond reproach.

By any previous standard, for New Zealand it is a massive amount, and fittingly so for the rapidly deepening twin health and economic crises.

It is not quite as billed by Prime Minister Jacinda Ardern and Finance Minister Grant Robertson, being a package that will give many businesses up to $150,000 rather than being targeted at tourism.

The package gives a much needed sense of comfort but it is no panacea.

It will necessarily be temporary and, as Robertson stressed, it will save some jobs but it won’t save all jobs.

About half of the $12b will be used up by the end of the financial year in June through sick leave and wages subsidies.

The rest will be spent in a variety of measures over the next four years.

The package has been almost universally welcomed and it will enhance the reputation Ardern and Robertson have earned for managing this crisis.

It was clearly an opportunity for Robertson and Ardern to engage in more nationalistic rhetoric as the severity of the crisis intensifies.

“We are all in this together,” said Robertson.

“There are moments in our history where it’s not business as usual,” Ardern began her speech. “When we need unity, not politics as usual and today is one of those days.”

It makes criticism of the “war effort” almost seem unpatriotic. That didn’t stop National leader Simon Bridges.

National actually supports most of the package but Bridges struggled to find the right tone or words for the parts he supported or questioned.

The inclusion of winter energy payments for pensioners in what was called a “business continuity package” for Covid-19 was clearly a surprise, as was the $25-a-week increase in social welfare benefits.

Bridges seized on it as an example of “confused priorities” and “taking the opportunity to prioritise beneficiaries over business”. Robertson and Ardern are off to Rotorua tomorrow to meet businesses that may be saved by the measures.

Robertson has already dubbed the May 14 Budget the “recovery Budget”, which may be hugely premature.