Source: New Zealand Parliament – Hansard
QUESTIONS TO MINISTERS
Question No. 1—Finance
1. KIRITAPU ALLAN (Labour) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?
Hon GRANT ROBERTSON (Minister of Finance): Today, Statistics New Zealand released GDP data for the March quarter, showing the initial impacts of COVID-19 on the economy as we moved early to close our borders and put public health measures in place to protect New Zealanders. The data showed GDP fell 1.6 percent in the March quarter from December, within the range of economists’ expectations. Annual average GDP was up 1.5 percent from a year ago. We have always acknowledged that GDP in the March and June quarters in particular will show the impacts of the public health measures to protect New Zealand from the global COVID-19 pandemic. It is these measures which have allowed us to open up the economy more quickly than planned and given us a head start on our recovery compared to many other countries in the world.
Kiritapu Allan: How did the global COVID-19 pandemic and public health measures affect different industries in the economy?
Hon GRANT ROBERTSON: Our measures to protect New Zealand from the global pandemic started on 3 February when all foreign nationals travelling from or transiting through China were refused entry through our borders. Moves to close our borders on 19 March, the move to level 3 on 24 March, and to level 4 on 26 March all had an impact on GDP. Activity in the accommodation, restaurant, and bar industries declined 7.8 percent during the quarter, while exports in terms of travel services declined 8.5 percent as fewer tourists entered New Zealand. We also saw the impact of the glut of European logs going into China, which led to activity in the forestry and logging industry declining 5.2 percent, while we also have to bear in mind that the drought at the start of the year was also having an impact in the agriculture sector, which fell 0.3 percent.
Kiritapu Allan: What is the outlook for the economy from here?
Hon GRANT ROBERTSON: We know that the current June quarter will see the biggest impact on GDP of COVID-19, reflecting the alert level for measures through April as well as alert level 3. This backwards-looking data will be released in September. The Secretary to the Treasury yesterday advised the Finance and Expenditure Committee that its outlook has changed since the Budget forecast. Treasury said the move to alert level 1 sooner than expected has meant increased economic activity and said that early indications are that activity had held up better than expected in the June quarter, but they warned about the global outlook deteriorating. Today, Kiwibank indicated that beyond the September quarter, there is a growing sense, albeit small, that the outlook is looking brighter. New Zealand got on top of COVID-19 much sooner than most had expected, allowing the rapid reopening of the economy. Kiwibank have said they’ve been buoyed by the strength in the rebound of spending amongst their own customers and that New Zealand would avoid the worst-case scenarios.