Hopes of more to come from Budget 2020

For our city, the best of the Budget may be yet to come, writes ChristchurchNZ chief executive, Joanna Norris.

This Budget should be considered just a start. But a start of what can’t yet be fully answered. Finance Minister Grant Robertson has wisely kept a tidy

$20 billion tucked in his back pocket. This nest-egg could be a

$20b bridge to a transformational future, or $20b of frantic spending to mitigate the worst of the Covid19 shock.

Only time will tell. Thursday’s allocation shows a willingness from the Government to continue to put money behind saving jobs and supporting the economy in the short-term.

But other than some nods towards innovation through R&D loans for business, this is very much a Budget rooted in the here and now of survival.

Christchurch, like the rest of the country, is already feeling the pain. By the end of last week, an additional 4627 people in Canterbury had registered for the Jobseeker Allowance – a 31 per cent increase compared to pre-lockdown and slightly above than national growth rate of 29 per cent.

We know that this underestimates job losses – people with working partners don’t qualify for Jobseeker Allowance and therefore aren’t captured in these figures. We also know that the pain is nowhere near over, with thousands more expected to lose their jobs in our region over the next few months.

This Budget addresses the shortterm through the extension of popular wage subsidy scheme, and through funding to support people from unemployment into training and workforce schemes such as the $1.6b Trades and Apprenticeship Funding, the $1b Environmental Jobs Package, and Ma¯ ori Trades Training.

Past experience suggests environmental sector jobs – such those envisaged through the Jobs for Nature Fund – are quick to establish and may well provide opportunities in the short and medium term for those unemployed.

But the jobs these schemes create tend to be lower paid, many of which can disappear once the scheme itself concludes. Those workers may be left with a portfolio of low skills and still excluded from higher-skilled industries.

The tourism sector, meanwhile, will see benefit through the $400 million Tourism Recovery Fund but details so far are light and will not mitigate the devastating impact of Covid-19 on this sector.

This Budget is unlikely to counter a rising tide of frustration. The extension of the wage subsidy will benefit some tourism businesses but will be of limited use for those with little prospect of surviving the winter.

The home building and warmer homes programmes may deliver benefit to the South Island, through job creation and the provision of accessible housing – though demand is not acute in Christchurch, where the postquake rebuild has seen supply largely meet demand.

The Budget includes over $20b of capital investment. On a purely proportional basis, Christchurch should expect to secure $1b-$2b of this, which would create or retain about 7000 to 14,000 jobs in our city economy.

Allocation of this spending is not yet clear – nor the forces that will influence the spend.

But where this Budget is yet to deliver are areas that would be of most benefit to Christchurch, which does not suffer the same infrastructure challenges as other cities (thanks to the massive postquake build programme).

And that is in investment in transformational activity to create high-value jobs and a low-carbon economy in the future.

Equipping our workforce with skills for the future must be the focus over the next few years, if we are to ensure we take active steps to drive a future-focused and productive economy.

This is an area where Christchurch is well-positioned to lead. The city is home to three university campuses, and Ara Institute of Canterbury as well as several research institutes.

Nga¯ i Tahu meanwhile is highly focused on skills development and empowerment through learning. The city is organised and ready to work collaboratively with central government to get our people ready for the future.

The Government has responded to the initial economic impacts of Covid-19, but with $20b left to spend it also has an opportunity to look towards a new future for New Zealand.

Our country’s post-Covid investment cannot be onedimensional, and it needs to be look beyond the easy and tangible – albeit expensive – stimulus provided by low-wage workforce schemes and ‘‘shovel-ready’’ projects and do more than simply put back what was lost.

Locally we were working to build industry clusters around health tech, future transport, and food and fibre that brought together education, research, businesses, iwi and community. But we need to move faster and invest more.

An investment in innovation, education, sustainability and R&D is a common thread.

Our universities and vocational training can be deeply entwined with regional industries, quickly developing nationally complementary centres of excellence and education programmes to support the transition of the newly unemployed into the industries of the future. This should be supported by investment in Crown Research Institutes and Callaghan Innovation.

The Christchurch Economic Recovery Plan is working to short and long-term horizons, and the aim of transitioning to a sustainable future is built in at the beginning. Our strong, compassionate city is well placed to work with the Government to recover strongly by making the best use of government and local resources.

Investment in this ‘‘soft’’ innovation infrastructure can help us emerge, not only hard and fast thanks to short-term spending on hard infrastructure and work schemes, but also cement long-term sustainable growth.

On a purely proportional basis, Christchurch should expect to secure $1b$2b of this, which would create or retain about 7000 to 14,000 jobs.