New Zealand plans spending spree to counter virus job losses
WELLINGTON, New Zealand (AP) — New Zealand’s government plans to borrow and spend vast amounts of money as it tries to keep unemployment below 10% in the wake of the coronavirus pandemic.
Finance Minister Grant Robertson on Thursday unveiled a budget unlike any in the nation's history. Debt would shoot up from just over 20% of GDP to 54% of the economy by 2023. The government would create thousands of new jobs by putting people to work building homes and improving the environment.
Still, the increased spending will not be enough to offset the economic devastation caused by the pandemic. Unemployment is expected to rise from just over 4% to nearly 10% by June. And Robertson acknowledged that tourism, which had accounted for about 10% of the economy, was not going to be the same for many years to come.
“We face a global economic and health crisis not seen since the Great Depression,” Robertson said.
Under the plan, the government will spend 50 billion New Zealand dollars ($30 billion) over four years to help boost the economy.
The government had entered the crisis running a surplus and with its books in good shape compared to many other countries. Robertson said the crisis called for increased spending rather than cutting back.
“I’m not a fan of austerity,” he said.
New Zealand has so far been successful in its attempts to eliminate the virus. Health authorities on Thursday reported zero new infections for the third day in a row. The country has reported a total of about 1,500 infections and 21 deaths.
More than half of all workers in New Zealand are currently being subsidized by the government under a scheme that was quickly set up as the nation went into a strict lockdown in March. The budget would extend the scheme for hard-hit businesses.
The plan...
