The New Zealand Government is spending more than any other country responding to Covid-19 yet will still suffer some of the worst economic impacts, National’s Finance spokesperson Paul Goldsmith says.
The International Monetary Fund have compiled a database of fiscal responses to Covid-19 which measures the level of additional spending or foregone revenues countries are using to respond to the pandemic.
“Their figures show New Zealand has spent the most amount of taxpayer money in response to Covid-19 by far, with new spending equivalent to 21.3 per cent of GDP. This is higher than any other country measured including Australia at 8.8 per cent, Canada at 5.6 per cent or the UK at 6.2 per cent.
“Yet despite this Government’s mammoth spending, New Zealand is still expected to achieve one of the worst economic outcomes in the OECD which will mean fewer jobs for New Zealanders.
“It doesn’t add up.
“If this spending doesn’t deliver higher growth, which so far appears to be the case, then it will have to be paid back with higher taxes on future generations.
“Jacinda Ardern and Grant Robertson will try to pin the blame entirely on Covid but the reality is we came into the crisis weaker than we should have, our GDP growth per capita in the last year was negative two per cent.
“Throughout the crisis the Government has continued to pile on costs to businesses and create uncertainty with Coalition in-fighting.
“Labour’s only plan appears to be debt-fuelled spending on a massive scale, while waiting for a vaccine.
“New Zealand needs a comprehensive economic recovery plan, with investment in quality infrastructure, regulatory relief to restore New Zealand’s jobs machine and no new taxes. Not spend, borrow and hope from a clumsy and incompetent Government who can’t deliver.”