Government , National both announce hot air on dealing with Covid-19 effects on the economy

Two economic announcements today, one from the Government, one from the National Party, are dripping with political campaigning.

The Government has announced they will be making announcements this week, and are assuring media they have already done some things to help businesses adversely affected by the Covid-19 virus.

Beehive: Next steps of Govt and business COVID-19 response

This week the Government will roll out the next steps of its plans to support businesses and workers as part of New Zealand’s ongoing response to COVID-19.

These initiatives will be on top of the immediate measures already in place, including support for the tourism and fisheries industries, an increase in business support funding, and tax and income assistance through IRD and MSD.

“Ministers are actively considering a range of options in response to the impact of COVID-19, and Cabinet will discuss these tomorrow,” Finance Minister Grant Robertson said.

So Robertson has given assurances the Government is doing something, and says that Cabinet will consider doing more tomorrow.  he follows with general political palaver, and then explains what they have been doing.

Last week, the Ministers of Finance and Revenue met with the Prime Minister’s Business Advisory Council, the Tourism Industry Association and Xero to discuss the situation.

Grant Robertson also met with the Secretary of the Treasury and the Reserve Bank Governor to discuss macro-economic impacts as a result of the coronavirus.

“We’re taking the time now to work with industries to plan for how we kick-start activity again as we exit out the other side of COVID-19. What we do know is that this will pass.”

So more talking, but nothing really to announce yet.

Note to editors: The Government is already taking the following actions:

Trying to get editors and media to say how well they have already been doing things.

  • Continuing to work closely with banks to ensure they are being proactive with their clients
  • Improving cashflow for small businesses by signalling action on prompt payment terms and times
  • Inland Revenue is entering into instalment arrangements and waiving penalties on a case by case basis where individuals and businesses have had their income and cashflow affected
  • An extra $4 million invested in the Regional Business Partner Programme to allow for extra advisors and give them more time on the ground supporting businesses
  • Working with Xero to get real-time information about the impacts on business, particularly SMEs.

Not much there considering the virus impact on business activity. We will have to see what they come out with later this week.

Aimed directly at the Government announcement, National have also made an economic policy announcement today, aimed at concerns over the current virus induced slowdown.

Paul Goldsmith: Relief package needed as NZ nears recession

With four banks now forecasting negative growth it’s past time for the Government to announce a relief package to help people stay in their jobs, National’s Finance spokesperson Paul Goldsmith says.

“When Cabinet meets tomorrow, this should be at the top of its agenda. This needs to be a detailed package to support businesses and workers directly affected by the coronavirus outbreak.

Political palaver edited out.

“It now seems quite likely New Zealand will go into a recession this year.

It’s not good for a major party to be talking up an economic recession.

“Businesses need clear and urgent action from the Government to help them through this period of uncertainty, not just tinkering around the edges and ad-hoc announcements that lack detail.”

So this announcement doesn’t say anything of importance.

Simon Bridges was just on RNZ saying National were announcing part one (of five) of their economic policy, but it was mostly about a promise to cut red tape, cutting two bits of red tape for every bit they introduce, or something. Bridges mentioned a few things that annoy businesses, but this really sounded like opportunist tinkering around the edges.

RNZ: National wants ‘common-sense test’ on health and safety regulations

National says it would introduce a “health and safety common-sense test” if elected, as part of its plan to slash red-tape burdening small businesses.

The Government is at risk of being seen to as slow to react to the developing economic problems, on to of their reputation for talking more than doing. They have to come up with substantial and urgent plans this week to address things.

It will unveil the “first plank” in its five-point economic growth plan this morning, outlining how it will reduce regulation.

Leader Simon Bridges said the programme was about giving small businesses confidence and creating an economy “where it’s not just burden and cost”.

If elected, National said it would commit to a “bonfire on regulations”, doing away with two regulations for every new one introduced.

It would also scrap 100 regulations within the first six months.

So this doesn’t address the Covid-19 effects at all. Ironically the virus requires increased regulations or restrictions.

National are risking putting more negative pressure on the economy, not a good look for a party that claims to be better at managing the economy. At times when the country (and the world) faces potentially major economic difficulties a responsible party would put the good of the nation ahead of their own election campaign. There will be plenty of time for them to bicker and propose their own ideas that can’t be implemented until later in the year at the earliest.

Both Labour and National have started the week doing little but grandstanding. Struggling businesses deserve better than that.


UPDATE: Jacinda Ardern has just been interviewed on RNZ and was asked if the Government would include National in their talks. Ardern said that National were being kept informed and any suggestions from National on what could be done better would be welcome as it was a global and national problem. Sounds good, but whether there’s any substance to cross-party cooperation on this it is yet to be seen.

I’ll post a link when it becomes available