The rebuilding and jobs and other stuff 50 billion budget

Budget 2020, describe by Prime Minister Jacinda Ardern as a jobs budget and officially called ‘Rebuilding Together’ will be covered all over the media but I’ll post things I think are of interest or will promote some discussion here through the afternoon.

A $50 billion rescue fund is at the centre of 2020’s “once in a generation Budget” as the country braces for the economic carnage promised by Covid-19.

Net debt to increase by $140 billion (around $70,000 per household) from 19% of GDP to 54%

RNZ: 

$15.9 billion is to be spend on the immediate response to kickstart the economy and $20.2 billion put aside for future investment. Here’s where the money is going.

  • $4bn business support package: includes a wage subsidy extension for eight weeks after the initial 12 week scheme.
  • 8000 new public and transitional homes
  • An extra $3bn set aside to fund infrastructure projects on top of the $12bn already announced
  • $1.77bn boost for Defence
  • $1.6bn trades and apprenticeship training package
  • $1.1bn environmental jobs package – it is predicted to create 11,000 new jobs
  • $1bn to improve transport, including $667m on rail infrastructure
  • $900m support package for Māori, including $200m employment package and $400m increase to education
  • $833m to go towards disability support services
  • $400m to replace Interislander ferries
  • $400m tourism relief package
  • $195m Pacific communities support package
  • $130 to maintain New Zealand Post service levels
  • $56m boost to Warmer Kiwi Homes programme – will help an additional 9000 houses
  • $55.6m of aid spending for Pacific Island nations

Read the full wrap on where the money is going here.

Committed to 8,000 houses over the next 4-5 years (6000 public houses and 2000 transitional homes), that’s nothing like Kiwibuild but a bit of a boost.

An addition $3bn to fund “shovel-ready” infrastructure projects, on top of the $12bn spend-up announced earlier this year.

No ‘helicopter’ cash handout.

More than $200 million to provide free lunches for one in four school children expanding the current lunch scheme from 8000 children to about 200,000 by the middle of next year. This is not really Covid related boost. Ok, it sort of is, it will help families who have been hard hit by the pandemic and create 2000 jobs.

Treasury is forecasting growth will shrink by a quarter in the three months ended June, dragging the annual growth rate to minus 4.6 percent.

For the following year growth is expected to shrink by 1 percent, after which it surges to more than 8 percent in 2022, halving over the next two years.

Unemployment is expected to come close to 10 percent in the middle of this year, before gradually reducing to just under 5 percent in three years.

Treasury says trade, business investment, and household consumption will all slide over the next year but will improve from 2021 onwards.

Except that it’s impossible to know what will happen with the world economy, with trade, and how that will affect New Zealand. So this is more guessing than usual from Treasury.

State Owned Enterprises Minister Winston Peters says Budget 2020 is another milestone in securing the future of our rail system, and another step towards economic recovery.

Budget 2020 provides over $1.2 billion for rail, including:

  • $246 million to support investment in the track and supporting infrastructure.
  • $400 million to help replace the Interislander ferries and associated portside infrastructure.
  • $421 million for new wagons and locomotives.

Changes proposed through the Land Transport (Rail) Legislation Bill will also provide long-term certainty for rail by allowing network investment to be channelled through the National Land Transport Fund. Budget 2020 provides $148 million to support the fund to make these investments once the Bill has been passed.

Postal services maintained for Kiwis

Funding of $130 million from Budget 2020 will allow New Zealand Post to maintain service levels as it positions itself for the future of mail, while an equity injection of $150 million will also be provided from the Government’s COVID Response and Recovery Fund.

Aid spending boost in Budget 2020

Budget 2020 will deliver $55.6 million in additional funding for Vote Official Development Assistance, bolstering the New Zealand Aid Programme’s ability to help those most in need and bringing New Zealand’s overall ODA spend to almost .33 percent of forecasted Gross National Income in 2021.

The Minister for Pacific Peoples Aupito William Sio says the Government is backing Pacific Peoples with a $195 million Pacific package to support the recovery and rebuild of Pacific communities from the COVID-19 pandemic.

Major investment in infrastructure projects

The COVID-19 Response and Recovery Fund has set aside $3 billion to fund infrastructure projects across the country. This is in addition to the Government’s $12b New Zealand Upgrade Programme and Provincial Growth Fund infrastructure investments.

Budget 2020 and the COVID Response and Recovery Fund (CRRF) will inject fresh capital, confidence and jobs into our economic recovery as quickly and efficiently as possible.

Ministers will soon decide which projects to progress and consider advice from the Infrastructure Industry Reference Group (IRG) which has received a total of 1924 submissions across approximately 40 sectors with a combined value of $136b.

Rebuilding tourism together

A $400 million targeted Tourism Recovery Fund, alongside the extension of the Wage Subsidy Scheme and a domestic tourism campaign, assist the industry to recover and restart, Tourism Minister Kelvin Davis announced today.

More Warmer Kiwi Homes

The COVID-19 Response and Recovery Fund ensures an estimated 9,000 additional New Zealand houses will be Warmer Kiwi Homes with a $56 million boost to the Government’s insulation and heating programme.

8000 more public houses to be delivered

The Government will deliver an extra 8,000 new public and transitional homes through Budget 2020, in a move that will stimulate the residential construction sector, create jobs and reduce the housing shortage.

The additional housing places will be delivered by Kāinga Ora, Community Housing Providers and transitional housing providers. Kāinga Ora will finance its proportion of the additional 8000 places by increasing its borrowing over the next 4-5 years, anticipated to be approximately $5 billion. Budget 2020 delivers $570m of Income Related Rent Subsidy funding to support this build programme.

This investment is in addition to the 6,400 public housing homes currently being built, in the pipeline or otherwise delivered, and the 1,000 transitional homes announced in February as part of the Homelessness Action Plan. We are also providing $100m of income related rent subsidy funding to deliver 1,650 extra places ahead of schedule over the last two and a half years.

The extra 8,000 homes announced today will be split between approximately 6,000 public housing homes and 2,000 transitional homes.

Free trades training to support New Zealanders into work

Budget 2020 makes major investments jobs and training as we get New Zealand working again after the COVID-19 pandemic.

  • $1.6 billion Trades and Apprenticeships Training Package
  • $400 million in MSD Employment Support
  • $121 million for He Poutama Rangatahi
  • $19.3 million to place 10,000 people into primary sector jobs

Trades and Apprenticeships Training Package

  • $334m funding for additional tertiary education enrolments
  • $320m targeted investment support for free trades training in critical industries
  • $412m support for employers to retain and keep training their apprentices
  • $276m funding for Workforce Development Councils and Regional Skills Leadership groups, to be established to give industry and regions a greater voice and help them respond to COVID-19
  • $141m to support high quality tertiary and trades education
  • $32m increased funding to meet demand in Trades Academies
  • $50m for a Māori Apprenticeships Fund
  • $19m for group training schemes to retain apprentices
  • $26m operating and capital for a new online careers advice system.
Leave a comment

30 Comments

  1. Gezza

     /  14th May 2020

    No ‘helicopter’ cash handout.
    Drat ! So much for Corky’s mates in the chattering class. 😠

    Here was I, looking up the Sikorsky online catalogue … for nuthink !

    Pretty poor show when the chattering class are just talking bs.

    Reply
    • I knew it was too good to be true.

      The chattering classes are like those wind-up teeth.

      Reply
      • Gezza

         /  14th May 2020

        Jess Mutch Mackay, political editor, just said on 1News at 6 that Grant Robertson isn’t ruling out helicopter money at some point if needed….

        Reply
  2. Geoffrey

     /  14th May 2020

    8000 houses over five years when we are short 10000 houses every year. What!? Why not spend some of the billions on infrastructure projects on fixing this? Jesus wept it is said.

    Reply
    • Pink David

       /  14th May 2020

      There is no immigration and no tourism. There is a massive surplus of houses.

      Reply
      • Duker

         /  14th May 2020

        80,000 kiwis have returned home ….. and likely many more( 50K this year) to come from Australia alone.
        As for surplus of houses, a falsehood like you always do….

        Reply
        • Pink David

           /  14th May 2020

          “As for surplus of houses, a falsehood like you always do….”

          There is. We will see this will falling rents over the next months. Immigration is gone. Airbnb is gone, international students are gone.

          Maybe there will be demand from refugees returning from Aussie, but the numbers will not match what has been lost.

          If you do believe that there is a massive shortage of housing, then 8000 houses over half a decade isn’t exactly addressing it now is it?

          You remind me too, the Cullen fund is going to cover the bill isn’t it? Can we cash out $200bn from it?

          Reply
          • Duker

             /  14th May 2020

            Heard of private sector ? I hear private builders do a few
            “Statistics NZ said a record number of consents were issued for 37,010 new houses in the year to November 2019, “the highest in a year since the mid-1970s. There were 37,919 new homes consented in the year ended September 1974.”
            9 years of neglect of home building from 2009 to 2015 meant a big reduction in home building
            “”Nationally, 13 per cent more new homes were consented in the November 2019 year compared with a year ago”
            https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12300260
            Done like a dinner again

            Reply
            • Pink David

               /  14th May 2020

              I’m fascinated, what does any of that have to do with my post? I looks like this shortage of housing really doesn’t exist given tons of new homes are in the pipeline from the private sector. It’s almost like there is a market with demand and supply drivers or something? Who knew!

            • Duker

               /  14th May 2020

              No immigration – false ( wave of kiwis returning)
              No housing false – false ( why was last year 13% higher)
              Done like a ( dogs) dinner

            • Pink David

               /  14th May 2020

              “No immigration – false ( wave of kiwis returning)”

              These are not people immigrating back to NZ, they are resident NZ’ers returning home from travel. I’m sure a few of that number will be people who were non-resident returning, but it’s that will be a small fraction.

              “No housing false – false ( why was last year 13% higher)”

              I said this where exactly? I said there was a surplus of housing which is the opposite thing I think.

  3. Gerrit

     /  14th May 2020

    Nd a lazy billion for Maori only job creation. Jesus wept some more it is said.

    Reply
  4. Alan Wilkinson

     /  14th May 2020

    An estimated increase in the public payroll of how much?

    Reply
  5. Zedd

     /  14th May 2020

    The Govt. introduce a budget (paraphrasing)
    ‘Lets make every effort to restart the economy & make things better for everyone’

    the response (paraphrased) ‘Lets reinforce Fortress National & repel all borders.. even our fellow kiwis, who dont support us’ (politics at its WORST) typical Tory 😦

    Reply
    • Alan Wilkinson

       /  14th May 2020

      I’m unconvinced about your interpretation, Z. Can you point us to the unparaphrased version of that response?

      Reply
      • Zedd

         /  14th May 2020

        OR did I get it about right… BUT the tories just dont like hearing/reading it ?! :/ 😀

        What do tories really want: TAX Cuts for the wealthy & slash the options for rest of us… sounds typical

        Reply
        • Alan Wilkinson

           /  14th May 2020

          I don’t know of you got it right since you ducked my request but I’m guessing you ducked it because you got it wrong.

          Reply
    • Pink David

       /  14th May 2020

      “paraphrasing”

      Paraphrasing you, here is some crazy shit I though while really really baked. I’m glad you got hold of such good stuff.

      Reply
  6. Greens co-leader James Shaw says today’s Budget shows what it means to have green support in the government.

    But an ex-Green MP is disappointed:

    Reply
    • And a new Green candidate:

      Reply
      • Pink David

         /  14th May 2020

        Everyone in NZ has just got quite a lot poorer. Wages are being cut across private industry and jobs are being lost every day. Poverty is locked in.

        Reply
  7. Conspiratoor

     /  14th May 2020

    $2.492 billion spent where it’s needed
    $1.258 billion squandered on bureaucrats and troughs

    So on that basis I’m agreeably surprised and prepared to award a 66.65% mark for listening skills

    Reply
  8. Reply
    • Pink David

       /  14th May 2020

      “Tagging benefit increases to wage increases”

      Are benefits going to fall in like with the wage decreases most of the country are experiencing?

      Reply
      • Duker

         /  14th May 2020

        No ones going to repeat the same mistakes of the Great Depression….except you
        Wage decreases were for the short period of the lockdown when people were on furlough

        Reply
        • Pink David

           /  14th May 2020

          “Wage decreases were for the short period of the lockdown when people were on furlough”

          Let’s check in on that in a few months.

          Reply
  9. Grant Robertson on RNZ – debt will increase from about 20% of GDP to 50% of GDP, and after ten years will reduce to about 40% of GDP – if we don’t have another major economic blip and have to borrow up again.

    Reply
    • Gezza

       /  14th May 2020

      Cameron Bagrie was pretty scathing about it to Jack Tame during Robertson’s budget speech for having no strategy – for being just a borrow, spend & hope budget, with $2 b in reserve for more spending to cover holes (or something along those lines).

      Is Bagrie any good?

      Reply
      • Gezza

         /  14th May 2020

        *$20b in reserve

        Reply
      • Alan Wilkinson

         /  14th May 2020

        Seems like a good Lefty throw money at everything and hope it works budget.

        The one certainty is a lot more bureaucrats and beneficiaries pronto. This Government’s track record of delivery ranging from non-existent to appalling doesn’t raise high hopes.

        Reply

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