On the eve of her government’s budget, New Zealand Prime Minister Jacinda Ardern has warned New Zealand is about to experience “a very tough winter”.
New Zealanders will exit a 51-day lockdown on Thursday after Ms Ardern’s government agreed to lift restrictions that had kept Kiwis inside their households and business on ice.
On the same day, they will understand the economic carnage that COVID-19 has delivered as Finance Minister Grant Robertson reveals the state of the government’s books.
Unprecedented stimulus spending, including $NZ11 billion ($A10.3 billion) to keep Kiwis in jobs will also bring a bumper deficit.
The government has already warned it has scrapped its previous priorities, including commitments for low-carbon economic transition and wellbeing, to deliver a back-to-basics budget.
But that won’t mean across-the-board cuts, or a dreaded austerity approach.
“We believe when times are hard, you don’t cut. You invest,” Ms Ardern said.
“A relentless focus on jobs, economy and businesses is what’s required now for the wellbeing of all New Zealanders.
“The notion that at this time of need we would make cuts to the essential services so many New Zealanders need more than ever is not only immoral, it is economically wrong.
“By investing we will create jobs and get the economy moving again. Just as a rising tide lifts all boats, a growing economy supports us all and allows us to bring the government books back into the black.”
The government has highlighted unemployment as its benchmark indicator, with the budget to unveil a follow-up measure to the wage subsidy scheme as well as industry-specific support packages for tourism and other parts of the economy.
Mr Robertson, who has already unveiled more than $NZ4.2 billion ($A3.9 billion) in additional health spending, says Thursday’s budget won’t be the end of the government’s response to COVID-19, referring to it as one part of a “rolling maul of support”.
“It will very much be a budget of two halves … it will look a bit different,” he said.
“One half will be about normal cost pressures that we have identified to run our government,” he said.
“The other half will be about our response, our recovery and our rebuild from COVID-19.”
Ms Ardern foreshadowed a sobering set of numbers.
“New Zealand is about to enter a very tough winter,” she said.
“But every winter is followed by spring, and if we make the right choices we can get New Zealanders back to work and our economy moving again quickly.”
Originally published as Ardern warns Kiwis of hard economic winter