Recession predicted, financial stimulus package to be announced today

Jacinda Ardern has warned that we are likely to have a recession at least as bad as the one experienced after the Global Financial Crisis in 2008. The Government is announcing a financial stimulus package today, targeting businesses struggling with the effects of Covid-19 and it’s impact, especially the restriction of people coming to New Zealand.

New measures announced yesterday:  Gatherings of 500 or more people will not go ahead – Prime Minister

Prime Minister Jacinda Ardern says Cabinet has agreed today that gatherings of 500 or more people in New Zealand – held outdoors or indoors – will not go ahead.

Speaking at a media conference this afternoon, Prime Minister Jacinda Ardern said the government’s sole focus was protecting New Zealanders’ health and economic well-being, and that was why the decision was made to cancel the mass gatherings.

“This applies to non-essential events such as festivals, fairs, sporting, religious and cultural events.”

She said the new directive did not apply to schools or universities, but the Ministry of Education would be working to reduce these gatherings as much as possible.

She added that preliminary Treasury advice was that the economic impact of Covid-19 could be greater than Global Financial Crisis.

Schools have been closed in a number of countries, but not here yet, but it is being considered: Education Ministry discusses closure plans with schools

The Education Ministry is phoning every school in the country to discuss plans for closures to prevent the spread of the Covid-19 coronavirus.

In its bulletin to principals today, the ministry said its staff would call today and tomorrow to ask principals about their school’s ability to teach children online if they were asked to close.

“We have done a bit of thinking in this area already but as part of our planning we need to get a good idea of what support you and your students will need,” the bulletin said.

“To do that we need to know what you already have in place and what some of the obstacles might be so that we can work our way through dealing with them – or at least seeing what we can do to help you.”

Financial markets are still volatile and generally declining. The NZX dropped a further 3.6% yesterday. The Dow Jones on Monday is down 9-10 %, reversing a recovery following Trump’s announcement on Friday just before the market closed.

The number of Covid-19 cases are still low in New Zealand, but only people with symptoms are being tested.

 

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43 Comments

  1. David

     /  17th March 2020

    Ardern should be sorting out hospital capacity, christchurch has a half empty one and a totally empty one but this would actually require thinking which she has shown little of.
    Fancy announcing those travel restrictions without any enforcement or monitoring system. Why does it take 3 hours to get through on healthline. Why wasnt the economic package announced on Saturday.
    This government has the advantage of a long heads up it’s time they started looking like they know what they are doing.

    Reply
    • Duker

       /  17th March 2020

      Empty hospital is the builders fault… and previous government. most of the equipment comes from the existing hospital.
      Most cases dont even need a GPs attention , only severest need to go to Hospital. Lots of places in Asia only have relatively small numbers of cases for their population size.
      No need to rush into assistance measures for business, the Aussie have found their one last week may need another already.

      Reply
    • Blazer

       /  17th March 2020

      the actions of the RB give a lie to the so called ‘strength’ of the big banks.
      The results of the stress tests they have undertaken,must have been …fake news.
      Basically we have another bailout/rescue of these parasites.

      Fancy ..that!

      Reply
      • Duker

         /  17th March 2020

        Wasnt the RB Governor dragged over the coals over his proposals to make the banks keep more of the profits as capital in case of sudden downturns ?
        It hasnt happened yet , but we will see whos right over next few months

        Reply
        • Alan Wilkinson

           /  17th March 2020

          RB has already put that mistake on hold having previously delayed and watered it down.

          Reply
    • duperez

       /  17th March 2020

      It’s sort of amusing that someone ostensibly calling for cool heads and logical thinking comes out with such comments. And sad.

      Reply
    • David

       /  17th March 2020

      They are quake damaged and the previous government built as a brand new one and they haven’t quite finished moving

      Reply
    • There you go David, an initial $500 million boost in health spending – nothing to whine about there.

      Reply
      • Kitty Catkin

         /  17th March 2020

        The money will be taken from somewhere else; there’s a finite amount.

        It’s playing shove ha’peny; we’re paying ourselves.

        Reply
  2. Blazer

     /  17th March 2020

    What are the enforcement and monitoring measures other countries have utilised?

    Reply
  3. Corky

     /  17th March 2020

    Minimum wage rate increase…Y/N? The true test for our PM. Ideology v Reality.

    Reply
    • Blazer

       /  17th March 2020

      Saving the rich should be our first priority…without them ,there is no…’trickle down’!*

      Reply
      • Corky

         /  17th March 2020

        There’s hope for you after all, Blazer. However, I wouldn’t call small businesses ‘the rich.’
        They are in fact a major player in our economy.

        The rich don’t need saving. They financially plan for such events. The first rule is limited financial exposure to banks. If the gummint panics big time..you can bet every account will get a free trip to the barber shop.

        Reply
    • Duker

       /  17th March 2020

      Best way to pump money into economy – through spenders, should give a boost to beneficiaries as well.

      Media Works which is a zombie business, ie private equity owners has saddled with so much debt it cant pay interest, has to take on more debt, even before this crisis. TV3 will shut shop suddenly by this time next month as advertising dries up

      Reply
  4. Trump bluster has lost it’s lustre – a world crisis can’t be managed by reality TV type promotions.

    Reuters: After Trump boasts about rally, Wall Street tanks again

    Trump has repeatedly boasted about the stock market’s performance during his three years in office, and on Saturday he told reporters:

    “I was honored to see that the stock market — you were mostly there with us — set a record in a short period of time — over a 45-minute period that we had the press conference yesterday in the Rose Garden. That was a record. All-time record. I think we should do one of them every day, perhaps. How about every — how about five times a day? We’ll do one five times a day.”

    https://www.reuters.com/article/us-usa-stocks-trump/after-trump-boasts-about-rally-wall-street-tanks-again-idUSKBN2133HY?il=0

    Monday markets have just closed in the US. The Dow Jones is down 2,999.14 points, 12.94%

    That is certain to impact here.

    Reply
  5. Wayne Mapp

     /  17th March 2020

    There will be much more that the government will have do, beyond the announcements of today. For instance 500 for gatherings. Surely a limit of 50 or a 100 will happen very soon.

    On the medical side a huge step up of reserve capacity (turning hotels into hospitals, using Army camp, etc) is required. Using the Army personnel as orderlies, etc.

    So far the government is doing pretty well. It would be better if the PM also convened a regular meeting of senior Ministers and senior opposition MP’s. The govt doesn’t have a monopoly of good ideas. It also demonstrates that the whole country pulling together.

    Reply
    • Kitty Catkin

       /  17th March 2020

      The limit on numbers seems pointless; there could be someone with the virus among the 500.

      Given that we have had a total of 10 mild cases and 0 deaths,. much of the reaction seems like hysteria.

      Reply
    • duperez

       /  17th March 2020

      The govt doesn’t have a monopoly of good ideas? The torrent for two and half years has been that they don’t have any ideas let alone good ones.

      The same sentiment with the ‘whole country pulling together.’ Today Trump was playing that game. Spend all that time creating divisions and distrust then saying, “We’re all in the same team, let’s play nicely together. We soooo respect you.” ????

      Reply
  6. Reply
    • Corky

       /  17th March 2020

      Talking of climate change…well, there is no talk. That’s good. Goodbye Greta. The truth is those liberals who fawned over you are now in panic mode at the supermarket. They don’t give a stuff about you. Fair weather friends, huh? Or am I reading this wrong?

      Reply
      • Zedd

         /  17th March 2020

        actually with all the flight cancellations.. will be reducing the carbon emissions !

        more drivel from corky :/

        Reply
        • Corky

           /  17th March 2020

          I’m sure climate change nutters will be pleased to hear that…in better times that is.

          Reply
    • Duker

       /  17th March 2020

      The IPCC only predicts small changes in temperature over decades, same goes for sea level rise. Droughts, bushfires, floods come and go like they always have.

      Back to coronavirus , some ‘experts’ in UK have been pushing for herd immunity…but they can be discounted as a committee of medical bureaucrats who havent seen a patient of their own in decades. Expertise in a small area can be a fine thing, but doesnt mean they are ‘right’
      Experts are like poker … know when to hold or when to fold.

      Reply
  7. NOEL

     /  17th March 2020

    https://www.newshub.co.nz/home/money/2020/03/coronavirus-economist-calls-for-gst-cut-to-ward-off-recession.html

    I agree. If GST is reduced temporarily back to 10 percent its ability to stimulate the economy would be more than the Australians giving a few of hundred to those on the benefit because only they would spend it.

    Any reduction in GST could also only apply to goods and services in New Zealand. Overseas suppliers would continue at the existing rate.

    Reply
  8. PartisanZ

     /  17th March 2020

    Coronavirus presents the world, and especially Aotearoa New Zealand’s Labour-led government, with an extraordinary ‘crossroads’ opportunity. The opportunity for Jacinda and Grant to rapidly, even exponentially, advance the path we are already on. Neoliberalism’s correction path.

    It’s an ideal opportunity for ‘trial in adversity’ of a Universal Basic Income to maintain the wellbeing of the entire population and foster economic demand coming from the populace, from the grass-roots up (as to speak). Well Fair, not welfare.

    Top-down corporate welfare should also be available but it, not a ‘peoples’ dividend’, should be carefully “targeted”.

    I conclude, therefore, that in about 5 minutes we will hear the unethical “trickle down theory” version of an economic rescue package. Tragic really, and I hope not.

    Perhaps the whole world will need to realize the same thing? We’ll have to import the idea like we did neoliberalism. We can’t possibly be ‘sovereign’ and trial it here without America’s permission. Uncle Sam trialed neoliberalism in Pinochet’s Chile using the ‘shock doctrine’ of a military coup.

    Shop local, buy NZ made, support Kiwi industry and innovation, maintain full employment or as close to it as possible … blah, blah, blah … and various other platitudes are being bandied around but only “for the duration”? Why?

    These things were taken for granted before we got Rogered. Developed by First Labour from 1935, Kiwi self-sufficiency flourished through thick and thin, along with primary, secondary and tertiary exports, until the “home-made” part died at the hands of its own grand-spawn in 1984 in the search for yet another “harvest” of natural resources, notably overseas cheap labour.

    2 mins to go now …. Same old or something new?

    Reply
    • PartisanZ

       /  17th March 2020

      Okay … It’s a “differential UBI” … but all things considered –

      Grant Robertson, YOU BLOODY BEAUT!!!!

      History will remember Sixth Labour in the same way it remembers First Labour … that is –

      ABOUT AS GOOD AS IT GETS!

      Reply
      • Corky

         /  17th March 2020

        Yep.. it pains me to agree with you, Parti…but Labour has just spent their way into another three years in power. Simon is presently whining on the radio. Some people just haven’t mastered the art of knowing when to shut up. If he sat down and thought about things, he would realise what lucky man he and National are.

        Reply
        • Alan Wilkinson

           /  17th March 2020

          Agree, Simon is perpetually tone deaf. I hope for everyone’s sake the Government is able to deliver a survival package through this thing for all those seriously impacted. So far so good but a long and perilous way to go.

          Reply
          • Corky

             /  17th March 2020

            Yes, I’m hoping price rises ( and rates) won’t increase exponentially along with this stimulus package.

            Reply
            • Duker

               /  17th March 2020

              That would be a good thing , a maximum rates rise of 2.5% and no work arounds.
              Some councils are looking at 9%

    • Pink David

       /  17th March 2020

      “Uncle Sam trialed neoliberalism in Pinochet’s Chile using the ‘shock doctrine’ of a military coup.

      Worked out a lot better for the people of Chile than the Castro coup in Cuba now didn’t it.

      Reply
      • Duker

         /  17th March 2020

        US sanctions against Cuba meant it had no market anymore for it’s sugar…while Pinochet got a secret thumbs up from US
        https://en.m.wikipedia.org/wiki/Cuba%E2%80%93United_States_relations

        Reply
        • Pink David

           /  17th March 2020

          Oh no! Who would have though that the socialist revolution was entirely on trade with the imperial Yankee running dogs! No one else in the world would touch that sugar stuff after all.

          They made a few buck selling the blood of executed prisoners to the Viet Cong but I guess Castro kept that cash.

          Reply
          • Duker

             /  17th March 2020

            Their economy was based on agriculture exports….. you asked why Chile did better than Cuba – apart from the 1000s executed and 10s thousands imprisoned by Pinochet
            Castro had no choice but move into the Soviet orbit …while the US supported an invasion of the country
            A Dictator is a Dictator… or do you only dislike the socialist kind, replacing the capitalist dictator Battista and his US mob cronys
            Did Britain create sanction for Ireland in 1921 after the uprising against British rule… no they gave them freedom of movement through the UK

            Reply
  9. lurcher1948

     /  17th March 2020

    Watching that halfwit the droning Maori simon bridges, today shes a shoe in in the 2020 election,Why is this greasy person the best they can sacrifice, there are many maori used car salesmen out there, why select this faliure

    Reply
  10. Corky

     /  18th March 2020

    Mikey is upset this morning about the benefit increases and the unreal doubling of the winter energy payment. And so he should be, It was a sly move by Labour. The fiscal reality is yet to sink in for many. Given Labour has other rescue packages in store, I suggest Simon ask the PM for an early election. It’s an election National will lose. But it will future proof National for the 2023 elections, and many more to come.

    Reply
    • Blazer

       /  18th March 2020

      upset Mikey’ is wonderful ..news…lucky he doesn’t work for TV3 .

      Reply
    • Duker

       /  18th March 2020

      Australia will give their beneficiaries an immediate $750 payment….. its about avoiding a recession as they know they will spend it. Now its not seen as ‘enough’

      You would think some would moan about the ‘the Bob Jones’ part of the rescue package where building depreciation is bought back as a tax deduction for industrial/commercial property owners, and made permanent.
      Perhaps Mikey doesnt think that is ‘too much’

      Reply
      • Corky

         /  18th March 2020

        Mikey and I are thinking about the future debt to GDP ratio. You can’t spend what you haven’t got. And the stimulus eventually runs out. No one is saying what Labour has done is all bad.There are lots of good points. The most important thing is ‘they have done something.’

        Not only should Simon ask for an early election…Labour should seek a mandate from the people to shut critics up and strike while everything is in reasonable shape and going Labours way.

        Reply
        • Duker

           /  18th March 2020

          Its 7 months away, there is no need to go early ‘to fix a problem in parliament’ of which there is none as they have a strong majority
          Voters will say they were elected to deal with issues big and small and should get on with it.

          Reply

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