Watch: PM, Robertson announce $14b of Covid recovery fund being set aside

NZ Herald,
Publish Date
Mon, 20 Jul 2020, 4:01PM

Watch: PM, Robertson announce $14b of Covid recovery fund being set aside

NZ Herald,
Publish Date
Mon, 20 Jul 2020, 4:01PM

The Government is setting aside $14 billion of its Covid recovery fund in case the country faces a future Covid calamity.

Prime Minister Jacinda Ardern and Finance Minister Grant Robertson are delivering today's post-Cabinet press conference.

Ardern was also asked questions about what her office knew about an incident involving National MP Andrew Falloon, who quit today.

She said her office received correspondence about an incident involving Falloon last week and she was told about its "general nature".

"I know very little information. From my perspective it was managing the best way for it to be dealt with. Limiting the number of people involved was appropriate."

She said she did not know the person who sent the correspondence, nor did she seek to find out. She said she didn't seek to know which MP or MPs were involved in the correspondence.

She would not say if she knew if alcohol had been involved in the incident.

Ardern would not be drawn on whether it was the right call for Falloon to stand down.

"As far as I'm concerned, it is important to maintain the confidentiality ... my office dealt with it appropriately."

It was now a matter for the National Party and she shouldn't be involved with it, she said.

Asked if politics was a toxic environment, she said "we all have a role to play, particularly leaders of political parties".

"We do have the ability to change the nature of debate in New Zealand in the way that we act and the way we conduct ourselves. I believe for the most part we have done that."

But it remained a challenge, she said.

Earlier, Ardern's office has confirmed it was sent "a piece of correspondence" relating to anthe incident which was forwarded to National Party leader Judith Collins.

"With the correspondent's permission the letter was forwarded to the leader of the Opposition," the office said.

"We treat all correspondence confidentially. All matters to do with Andrew Falloon's resignation are a matter for the Leader of the Opposition."

The Herald understands the incident was not criminal but was deemed "inappropriate for an MP". It's also understood the incident is not related to an extra-marital affair or the leak scandal which engulfed the National Party last week.

RNZ understands the party was notified on late Friday afternoon of an alcohol-related incident.

Falloon, the MP for Rangitata, issued a statement this afternoon saying he will not contest September's election, citing concern for his "own health and wellbeing". He said he had made a "number of mistakes".

$14bn for Covid recovery

The Government is setting aside $14 billion of its Covid recovery fund in case the country faces a future Covid calamity.

The $50 billion recovery fund, labelled an election fund by the Opposition, was the centrepiece of the 2020 Budget and the basis for ballooning future Government debt.

A large proportion of it - $20.2b - was unspent, and Robertson said today that only a further $3.2b will be allocated between now and the September 19 election.

"Cabinet has agreed that further support for ongoing health, border and economic response measures will require about $3.2 billion, with announcements to be made before the House rises.

That includes the $760 million already announced for Three-Waters reform.

"This will leave $14 billion in the Covid Response and Recovery Fund, which is now being set aside in the event, for example, New Zealand experiences a second wave," Robertson said.

Robertson said it was the responsible thing to do to set aside money in case of a future Covid-related shock.

"As we look around the world, it is clear that this global pandemic is continuing to grow. In the face of this, and ongoing uncertainty, now is the time to be cautious and keep our powder dry.

Treasury forecasts show by 2024, the Government would have borrowed close to $200b.

Since the Budget, the Government has announced $570 million for its income relief package, $700 million to extend the wage subsidy scheme, and more than $300 million for health services including more personal protective equipment.

That shrunk what's left of the fund from $20.2b on Budget Day to just over $17b at the start of July.

"We are doing everything we can to keep Covid-19 at our border – nobody wants a second wave," Robertson said.

"The responsible course of action is to make sure we are prepared for the worst. The fund is not there to be used for any old project in the never-never. It is to provide support and stimulus to recover and rebuild from Covid-19."

He said net debt in New Zealand would peak at 54 per cent of GDP, while average debt for other similar countries was closer to 80 per cent of GDP.

He said the $14b left unallocated in the Covid recovery fund would be for a "future rainy day related to Covid-19".

"If it's not needed, it won't be spent."

It would not be used for political projects that won't be started for a decade, he said, a subtle criticism of National's infrastructure plan announced recently.

He said the New Zealand economy was doing better than expected, but the rest of the world had not been as fortunate.

Ardern said the Government had to be prepared for a "resurgence of Covid-19".

"We are one of the few countries not to experience a second wave."

She said some regions had been forced to go back into costly lockdowns.

$30,000 for flood damage

Ardern said damage assessments will continue this week for the flood damage in Northland, and she announced $30,000 to the mayoral relief fund.

Other support to be provided would also be considered.

Most local roads had reopened, but there were eight slips on one section of SH1 and alternative routes were available.

"In the meantime, I urge anyone affected by flood damage to contact those who are on the ground through local civil defence emergency response."

The Ministry of Social Development was also available to provide support, Ardern said.

Charging returnees

On charging returning Kiwis for quarantine and managed isolation, Ardern said final decisions were yet to be made.

"But our first priority is making sure we have facilities that are well run and are protecting the health of New Zealanders and those within them."

She said she didn't want to do anything that would open up the facilities for legal challenge.

The National Party calling for a $3000 charge for returning Kiwis starting from October risked a rush of arrivals, she said.

She said any decision the Government made had to be legally safe.

"It cannot undermine our ability to require people to go into quarantine arrangements."

"Telling people to rush back to New Zealand, in my mind, is not a responsible approach."