Venkat Raman
Auckland, May 20, 2021
Prime Minister Jacinda Ardern (Picture from The Treasury)
Additional support to beneficiaries, addition spending on Covid-19 Response and Recovery, Transport and Infrastructure, health and education are among the sectors that will receive a major share of Budget 2021 delivered by Finance Minister Grant Robertson in Parliament this afternoon (May 20, 2021).
But most businesses were disappointed that there was ‘nothing ‘ for them in the budget and that it will increase their hardship. According to them, the Budget, along with other measures being considered by the government, including changes to immigration settings will make it difficult for them to quality for migrant workers needed in their companies.
One of three packages
Prime Minister Jacinda Ardern said that Budget 2021 is the next step in government’s plan and that it focuses on securing our recovery, locking in the gains made, and continuing to take advantage of the opportunities available to New Zealand.
“It invests not only in our people’s health and wellbeing through our vaccine rollout, but also through reforms to our health system. It looks to continue to create jobs through infrastructure investment, takes on the challenges we are already facing, such as housing, climate change, child wellbeing and inequality, and continues the work that has made our recovery a success so far – such as training and education opportunities that ensure New Zealanders are prepared for employment,” she said.
Ms Ardern said that this year’s Budget continues the Wellbeing approach of investing in the recovery while putting the government books on a pathway to lower debt.
“As this Budget is one of three this term, we are looking at them as a package. It is simply not possible to fulfil every promise or commitment that we made or address all of our long-term challenges in a single Budget,” she said.
Finance Minister Grant Robertson (Picture from The Treasury)
Wellbeing Budget 2021
Describing his financial proposals as ‘Wellbeing Budget 2021,’ Mr Robertson said that Recovery would be the hallmarks of this year.
“The extraordinary efforts of all New Zealanders to support one another through 2020 have given us a head start on our recovery. The Government’s strong public health response has proved to be the best economic response as well. Against all predictions we have seen thousands of jobs created, unemployment return to close to pre-Covid-19 levels and goods export prices and volumes hold their own. Our success has been recognised, with international credit ratings agency S&P Global Ratings increasing our local currency rating to AAA, and other agencies maintaining our position at similar levels,” he said.
Support for Covid-19 Recovery
Steps to support Recovery from Covid-19 remain a priority and according to Mr Robertson, $5.1 billion is remaining in the Covid-19 Response and Recovery Fund (CRRF). Free Covid-19 Vaccine is being rolled out to all New Zealanders, for which $1.5 billion has been provided.
“Managed isolation and quarantine (MIQ) services at the border ensure New Zealanders and key workers are able to come home and enter the country, while keeping New Zealand safe from community transmission of Covid-19. We have already provided funding from the CRRF to support the MIQ of arrivals at the New Zealand border. $333 million total in additional operating and capital funding from the CRRF has been agreed through the Budget process to support the ongoing management of MIQ and other border services,” Mr Robertson said.
Opportunities such as quarantine-free travel between Australia and New Zealand and New Zealand and the Cook Islands will enable further economic activity and support our economic recovery, while keeping Covid-19 out of our communities, he added.
Increase in benefits
Mr Robertson said that he was increasing the main weekly benefit rates between $32 and $55
As per the key recommendations of the Welfare Expert Advisory Group.
Extra funding will also boost the benefits to families with children.
“The increases will be implemented in two stages: an immediate $20 per adult per week increase on July 1, 2021 and a second increase on April 1, 2022. For families with children, we are increasing main benefit rates by a further $15 per adult per week to continue to make progress towards our child poverty targets. We are also helping students by increasing student support by $25 per week on April 1, 2022,” he said.
These increases will advantage 109,000 families, each getting about$175 extra per week.
Crown Infrastructure Investment
The government’s investment in infrastructure over the next four years would be $57.3 billion, including $1.3 billion on Rail initiatives, all of which are expected to stimulate the economy, creating thousands of jobs.
Mr Robertson said that Infrastructure is at the core of the economic recovery plan.
“As we began this term (in October 2020), we already had a record $42 billion of infrastructure investment in progress over the next four years in roads and rail, schools and hospitals, housing and energy generation. Budget 2021 adds considerably to this investment.
Provides funding for three Future of Rail initiatives that support procurement of 60 new locomotives and 1900 new wagons, provide a top-up to the National Land Transport Fund to help restore a resilient and reliable rail network, and provide working capital for KiwiRail to ensure the maintenance of core freight, tourism, property and ICT assets,” he said.
Investment in Health
Budget 2021 provides funding for priority capital projects within the health sector. This will support the delivery of safe and appropriate healthcare by providing facilities, infrastructure and technology that can appropriately meet demand.
“But now is the time to secure our recovery. We are still at a difficult period in the recovery from Covid-19. The world faces third and fourth waves of the virus, and every economic forecast talks of ‘uncertainty’ and ‘volatility.’ There is hope on the horizon in the form of the global rollout of the vaccine but we are some way off a return to normality, and in turn that has an impact on sectors such as tourism that are significant in our economy,” Mr Robertson said, adding that Budget 2021 strikes a careful balance between continuing to support and stimulate the economy during this period, while looking towards the need to keep a lid on the necessary debt we have taken on during Covid-19 to protect lives and livelihoods.
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