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Source: New Zealand Parliament – Hansard

TUESDAY, 26 MAY 2020

Mr Speaker took the Chair at 2 p.m.




Question No. 1—Finance

1. Dr DEBORAH RUSSELL (Labour—New Lynn) to the Minister of Finance: What reports has he seen on the New Zealand economy since Budget 2020?

Hon GRANT ROBERTSON (Minister of Finance): Talofa lava. Malo le soifua. Congratulations to all those celebrating Samoan Language Week this week. The New Zealand economy is facing a one in 100-year global economic shock, which is why Budget 2020’s primary focus was investing to protect and create jobs by supporting households and private businesses. Following the Budget, international credit ratings agencies Standard & Poor’s and Moody’s both highlighted the strength of the New Zealand economy and the Government’s balance sheet. Standard & Poor’s retained the positive outlook on its AA+ credit rating for New Zealand and they expect the economy to recover faster than the Budget forecast assumed, due to the earlier easing of lockdown restrictions, which the Prime Minister detailed some of, yesterday. Moody’s also maintained its AAA credit rating on New Zealand, saying the investments in the Budget would help facilitate the economic recovery. I think all New Zealanders can be proud that their actions during the lockdown, to break the chain of transmission, now mean that our economy can reopen faster and more jobs can be created.

Dr Deborah Russell: What reports has he seen on the international context for the New Zealand economy since Budget 2020?

Hon GRANT ROBERTSON: The global economy faces a period of significant disruption as countries around the world struggle to reopen up their economies. Shortly after Budget 2020 was announced, the IMF’s managing director Kristalina Georgieva warned that the global economic impact from COVID-19 will be severe and that the IMF was set to revise down its forecasts for global growth next month. She said, “We strongly support the extraordinary fiscal actions many countries have already taken to boost [their] health systems and protect affected workers and firms.” She added that “These bold efforts are not only in the interest of each country but of the global economy as a whole. Even more will be needed, especially on the fiscal front.” In New Zealand, Budget 2020 got ahead of this by putting in place a plan of investments to protect workers and businesses while setting aside further money to rebuild the economy in the face of a one in 100-year shock.

Dr Deborah Russell: What reports has he seen on the strength of the New Zealand economy relative to other countries since Budget 2020?

Hon GRANT ROBERTSON: New Zealand is in good shape to make the investments required to protect workers, grow jobs, and support businesses from the worst effects of COVID-19 compared to other countries around the world. We went into this with some of the lowest Government debt in the world, with net debt below 20 percent of GDP compared to the OECD average of around 80 percent. This means the Government is in a strong position to support the economy during this unprecedented shock. In its report on the Budget, Moody’s said it expects New Zealand’s robust fiscal position will remain stronger than most other AAA-rated countries and that New Zealand will have a more moderate debt burden and stronger debt affordability. There are tough times ahead for New Zealand and many New Zealanders, but we are well-placed to respond, recover, and rebuild from COVID-19.