2020 New Zealand budget

Budget 2020, dubbed "Rebuilding Together",[1] is the New Zealand budget for fiscal year 2020/21 worth NZ$50 billion,[2] presented to the House of Representatives by Finance Minister Grant Robertson on 14 May 2020, the third budget presented by the coalition government of 2017–present. This budget occurs during the COVID-19 pandemic in New Zealand and on the same day that the country exits the lockdown brought about by alert level 3.

2020 (2020) New Zealand budget
Submitted byGrant Robertson
ParliamentParliament of New Zealand
PartyLabour
WebsiteBudget 2020
‹ 2019

Background

The 2020 budget was released in the midst of the global COVID-19 pandemic, which spread to New Zealand in late February 2020.[3] In response to an increase in the number of COVID-19 cases, the country entered into a nationwide lockdown on the evening of 25 March,[4] in which all non-essential businesses were closed.[5] Because of the closure of businesses, the government offered a $12.1 billion wage subsidy scheme to offset employment costs in an attempt to keep as many New Zealanders as possible in their jobs.[2]

The original contents of the budget were set aside and replaced with a plan on how New Zealand will recover from the lasting effects of COVID-19, of which this budget is only the first step.[6] Finance Minister Grant Robertson states that the economic recovery for New Zealand will create an extended operating deficit and increase debt to above previous targets, however he points out that New Zealand entered the COVID-19 crisis with a debt of below 20% of GDP compared to the United States with 90% and the United Kingdom with above 75%.[6] The budget expands on the $12 billion New Zealand Upgrade Programme infrastructure project.[6]

Major announcements

The 2020 budget includes allocating NZ$50 billion to the COVID-19 Response and Recovery Fund, which will be spent on several areas including a NZ$3.2 billion wage subsidy scheme, business support, trades training support, a NZ$1.1 billion environmental jobs package, $900 million to support Māori, housing, and extending the school lunch programme.[7][8][9] NZ$15.9 billion will be spend on rejuvenating the economy while NZ$20.2 billion will be put aside for future investment.[7]

Arts and Culture
  • Investing NZ$246.8 million operating total and NZ$37.5 million total capital in supporting the local film industry, culturally significant historical collections, and improving the accessibility of public media platforms to the deaf and Pasifika communities.[9]
    • Investing NZ$5.3 million operating total and NZ$26.6 million total capital in preserving the Crown's audio-visual heritage content including broadcast news, documentaries, films, music, and oral histories.[9]
    • Investing NZ$25 million in crucial public media platforms including the Pacific Media Network (PMN), disability media (captioning and audio descriptions) and community access radio stations.[9]
    • Investing NZ$6 million in Heritage New Zealand's efforts to renovate the Kate Sheppard House into a heritage and public education space.[9]
    • Investing NZ$46.6 million operating total and NZ$146 million in constructing a new Archives New Zealand facility and renovations to the National Library of New Zealand.[9]

Defence and foreign affairs
  • Investing NZ$927.7 million in operating total and NZ$942.5 million in defence and foreign affairs.[9]
    • Allocating NZ$666.3 million operating total for the Defence portfolio including information and communications technology, defence infrastructure, and the capabilities of the New Zealand Defence Force.[9][8]
    • Investing NZ$897.6 million in replacing the Defence Force's ageing C-130H Hercules fleet with newer C-130J Super Hercules aircraft.[9]
    • Investing NZ$10.2 million to improve the Defence Force's internal security.[8]
    • Allocating NZ$840,000 to veterans' affairs from the COVID-19 response and recovery fund.[8]
    • Investing NZ$55.6 million in Official Development Assistance (ODA) to Fiji, Vanuatu, Solomon Islands and Timor-Leste.[9][7]

Education
  • Investing NZ$813.6 million operating total and NZ$115.1 million in total capital in education.[9]
    • Investing NZ$375.1 million in the education sector including early childhood education, school operations grants, trade academies, and tertiary providers.[9]
    • NZ$414.2 million for early childhood education providers.[9]
    • Investing NZ$79.7 million in learning support services including English as a Second Language and students with needs.[9]
    • Investing NZ$119.5 million operating total and NZ$115.4 million total capital in school property.[9]
    • Investing NZ$291.6 million in the Early Learning Education Package.[9]

Employment
  • Investing NZ$1.6 billion in free trades and vocational training.[8][7]
    • Investing NZ$200 million in a Māori employment package.[7]
  • Investing NZ$1.1 billion in an environmental jobs package to create 11,000 jobs.[7]

Ethnic communities
  • Investing in a NZ$900 million support package for the Māori community.[7][8]
    • Investing NZ$50 million for a Māori trades training fund[8]
    • Investing $136 million for Whānau Ora Commissioning Agencies to continue delivering care packages and support to Māori communities.[8]
    • Investing NZ$200 million in Māori language programmes, teachers' salaries, and maintaining school facilities.[8]
    • Investing NZ$11 million in targeted housing innovation.[8]
  • Investing in a NZ$195 million support package for the Pasifika communities.[7]

Health
  • Investing a total of NZ$5.6 billion operating total and NZ$755 million total capital in health services.[9]
    • Investing NZ$3.9 billion in the country's 20 District health boards.[9]
    • Investing NZ$160 million in the Combined Pharmaceutical Budget.[9]
    • Investing NZ$832.5 million in the Supporting New Zealanders to Live Good Lives initiative.[9]
    • Investing NZ$177 million in maternity services and the Maternity Action Plan.[9]
    • Investing NZ$750 million in capital investment into district health boards.[9]

Housing
  • Investing NZ$56 million in the "Warmer Kiwi Homes" programme to build an addition 9,500 homes.[7]

Infrastructure
  • Investing an extra NZ$3 billion to fund infrastructure projects in addition to the NZ$12 billion already invested.[7]

Justice sector
  • Investing NZ$606.1 million operating total and NZ$169.7 million in the justice sector including legal aid, community law centres, and the Canterbury Earthquakes Insurance Tribunal.[9]
    • NZ$47.8 million to replace ageing communications capabilities for the New Zealand Police, Fire and Emergency New Zealand, and ambulance services.[9]
    • Investing NZ$36.9 million operating total and NZ$163.5 million total capital in upgrading court buildings around New Zealand.[9]
    • Investing NZ$110.4 million in supporting safety and security of Corrections staff and prisoners.[9]

Primary Industries
  • Investing NZ$443.7 million operating total and NZ$42.5 million total capital in primary industries.[9]
    • Investing NZ$193.5 million in the Mycoplasma bovis eradication programme.[9]
    • Allocating NZ$126.1 million into funding the Ministry for Primary Industries' operations.[9]
    • Investing NZ$43.4 million operating total and NZ$36.2 million in the "Rebuilding Forestry Emissions Trading Scheme (ETS) Infrastructure to Meet Demand and Support the Transition to the Low Emissions Economy."[9]

Social sector
  • Investing NZ$663 million operating total and $87.2 million in total capital in social services.[9]
    • NZ$246.1 million investment in community services including NZ$183 million for family violence service providers.[9]
    • Investing NZ$43.3 million in community services for disabled peopled.[9]
    • Investing NZ$19.8 million in improving access to community services in regional New Zealand.[9]
    • Investing NZ$833 million in disability support services.[7]

Transport
  • Investing NZ$222.9 million operating total and NZ$1.1 billion total capital into improving transportation services and infrastructure across New Zealand.[9][7]
    • Investing NZ$148.2 million to enable rail activities to be funded by the Land Management Act and Crown funding for the National Land Transport Fund.[9]
    • Investing NZ$399.5 million to replace ageing Interislander ferry assets.[9][7]
    • Investing NZ$421.7 million to replace ageing locomotives, upgrade KiwiRail's mechanical maintenance facilities, and Auckland's train control system.[9]

Tourism
  • Investing NZ$400 million in a Tourism Recovery Fund. The amount will be divided up between a nationwide domestic tourism campaign, targeted advice for businesses, and asset protection.[7][8]

Reactions

On 14 May, Leader of the Opposition Simon Bridges described the 2020 budget as the "greatest burden of debt" in New Zealand history and accused the Government of burdening the country's children and grandchildren with NZ$140 billion worth in debt. Business New Zealand chief executive Kirk Hope welcome the 2020 budget's free trades and apprenticeship scheme, describing it as a way of "turbo-charging" the economy. Tourism Industry Aotearoa chief executive Chris Roberts welcomed the NZ$400 million tourism recovery fund and wage subsidy scheme but stated that further extensions were needed to support the tourism sector. Mental Health Foundation chief executive Shaun Robinson welcomed the Budget's investments in addressing family violence, Whānau Ora services and housing, and targeted funding towards Māori.[10]

The New Zealand Council of Trade Unions (CTU) welcomed the 2020 Budget's efforts to address the economic effects of the COVID-19 pandemic through wage subsidies, free trades training, and increased health spending and social spending but opined that other issues such as higher wages needed to be tackled.[11] The Aotearoa New Zealand Association of Social Workers (ANZASW) welcomed the 2020 budget's investment into aiding disabled people and addressing elder abuse and child abuse but expressed disappointment at the pay gap between social workers in statutory organisations and non-governmental organisations (NGOs).[12]

Auckland Action Against Poverty criticised the 2020 budget for not doing enough to aid welfare beneficiaries.[13] Fish & Game New Zealand welcomed the Budget 2020's announcement of NZ$1.1 billion investment to create 11,000 environmental jobs in the regions.[14] The Opportunities Party's leader Geoff Simmons criticised the 2020 budget for prioritising businesses over people and advocated a universal basic income in order to stimulate economic growth.[15]

References
  1. "'We are ready to move into level two': Jacinda Ardern's speech in full". 11 May 2020. Retrieved 11 May 2020 – via Spinoff.
  2. Small, Zane; O'Brien, Tova (17 April 2020). "COVID-19: $12 billion package includes wage subsidies, tax relief and sick leave support amid coronavirus pandemic". Newshub. Retrieved 6 May 2020.
  3. "New Zealand confirms case of Covid-19 coronavirus". Radio NZ. 28 February 2020. Retrieved 6 May 2020.
  4. "Covid-19: New Zealand is now in lockdown". Radio NZ. 25 March 2020. Retrieved 6 May 2020.
  5. "Covid 19 coronavirus alert 3: New Zealand to move to alert 4 lockdown for next four weeks - Jacinda Ardern says schools closed, essential services only". NZ Herald. 23 March 2020. Retrieved 6 May 2020.
  6. Small, Zane (7 May 2020). "Budget 2020: Government's original priorities 'put on ice' to prioritise '1-in-100 year shock'". Newshub. Retrieved 11 May 2020.
  7. Dreaver, Charlie (18 May 2020). "Budget 2020: What you need to know". Radio New Zealand. Archived from the original on 14 May 2020. Retrieved 18 May 2020.
  8. Molyneux, Vita (14 May 2020). "Budget 2020: Where the Government is spending big to rebuild New Zealand after coronavirus". Newshub. Archived from the original on 18 May 2020. Retrieved 14 May 2020.
  9. Wellbeing Budget 2020 - Rebuilding Together (PDF). New Zealand Treasury. 14 May 2020. Archived from the original (PDF) on 18 May 2020. Retrieved 18 May 2020.
  10. Small, Zane (20 May 2020). "Budget 2020 reactions: Simon Bridges tells Kiwis to prepare for 'greatest burden of debt in our history'". Newshub. Archived from the original on 20 May 2020. Retrieved 20 May 2020.
  11. New Zealand Council of Trade Unions (15 May 2020). "2020 Budget: Some Great Initiatives But More Needed – CTU". The Daily Blog. Archived from the original on 20 May 2020. Retrieved 20 May 2020.
  12. "ANZASW Budget Response 2020". Aotearoa NZ Association of Social Workers. Scoop. 20 May 2020. Archived from the original on 20 May 2020. Retrieved 20 May 2020.
  13. Auckland Action Against Poverty (14 May 2020). "The Government's 2020 well-being budget continues to fail our unemployed – AAAP". The Daily Blog. Archived from the original on 20 May 2020. Retrieved 20 May 2020.
  14. Fish & Game New Zealand (15 May 2020). "Fish & Game Welcome Budget 2020 Announcements". The Daily Blog. Archived from the original on 15 May 2020. Retrieved 20 May 2020.
  15. Simmons, Geoff (15 May 2020). "GUEST BLOG: Geoff Simmons – Budget 2020 a failure of imagination". The Daily Blog. Archived from the original on 20 May 2020. Retrieved 20 May 2020.
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