Opinion piece by Roger Childs
Grant Robertson’s third budget sets out a strategy for pulling the country out of the recession induced by the Covid-19 crisis. By taking firm and decisive action in mid March, the government has contained the virus and is now in the fortunate position of being able to focus on the economy. While many countries initially failed to devise a coherent strategy to deal with Coronavirus and are still struggling to manage it, New Zealand can move into full economic recovery mode.
The economy has taken a huge hit but is not smashed, as a few commentators and cartoonists have claimed. The Finance Minister’s 2020 Budget maps out the second phase of the government’s strategy to deal with the damage – to retain jobs, create new ones, support businesses, expand infrastructure (details to come later), and build houses.
Responses on the right
Simon Bridges showed some welcome political maturity in not proposing the traditionally futile Opposition vote of no-confidence, as he knew and later acknowledged that National would have implemented many of the policies. However, he expressed concern about the perceived lack of focus and the ballooning debt. The Opposition will produce an alternative budget in due course, which is sensible as it will indicate to voters what moving to the right in the September election would mean.
TVI lined up right-wing economist Cameron Bagrie in yesterday’s budget special. He looked grim and sounded predictably negative. He kept repeating that there was no clear strategy and sounded as if he hadn’t read the budget document. If housing, infrastructure development, creating new jobs, retraining and extending the wage subsidy for eight weeks isn’t a plan, what is it? This is not the last announcement from the government on the recovery and although billions of dollars have been allocated, there is $20 billion set aside for future initiatives.
A clear strategy in progress
We’ve just returned to Level 2, with most people now back at work and most businesses operating. However, the unemployment rate has risen dramatically and more companies will be forced to close down in the months ahead. The extended wage subsidy will cushion the impact of the recession for many businesses and the short term interest-free loans to small companies may help some to survive. Also, the capital injection for developing infrastructure and building houses will provide more opportunities for tradesmen and companies.
For those who have become jobless, openings in agriculture, forestry and environmental employment offer some hope. However, these opportunities won’t be enough, and many will need to retrain and learn new skills, assisted by the government’s free apprenticeships and trade training programme.
The budget also takes account of the many social costs of the recession and significant money has been allocated for social services providers, community support groups, food banks, family violence services and student hardship.
The proof of the success of this budget in achieving an economic recovery and social stability lies ahead, but as Grant Robertson points out: … Budget 2020 is just one part of our plan. We are doing everything it takes to cushion the blow, support businesses and workers, and position the economy for recovery.