Our budget panel

Lisa Ellis

Lisa Ellis, professor of philosophy and politics, University of Otago

The Covid Budget arrives at a critical juncture for Aotearoa New Zealand, a moment in our history when we are moving out of one phase of life and towards another.

But what exactly are we moving towards?

As we recover from the Covid-19 pandemic, the Budget represents a $50billion commitment on the part of society to move into a post-Covid future.

The Government’s announcement provides some clues about that future, but leaves many of the most critical issues still to be determined.

Will we build resilient new infrastructure or more of what we already have? We should hear about that later this year.

Will our 8000 new homes be built in places where they can be enjoyed for generations, or, like much of our present housing stock, in zones increasingly subject to flooding and coastal erosion?

These questions matter because government spending at this scale doesn’t just stimulate the economy.

It locks us and our children and grandchildren in to the commitments made at this moment.

So far, the post-Covid future as envisioned by the Government looks less transformative, and more like business as usual, than the future it envisioned in last year’s Wellbeing Budget.

There are important and impressive line items: a welcome $1billion for nature-based jobs in things like pest control and tree planting, warm houses, school lunches, apprenticeships, and many other good things.

But these are line items contributing to a more-or-less conventional economic recovery, not the transformative changes we need to adapt equitably in a fast-changing world.

Anna Mickell

Anna Mickell, Queenstown Chamber of Commerce chief executive

I did a keyword search for the word "tourism" in Grant Robertson’s Budget speech; it was mentioned once.

Another two times in the entire budget document.

Only $400 million for advisory services on how to hibernate or pivot, but no sense of how they are going to deal with the hole that the collapse of international tourism has and will cause.

The extension of the wage subsidy, asked for by many business owners nationally, is false hope for businesses and regions who are heavily exposed to international tourism.

For these businesses, the extension of the wage subsidy amounts to administration of social welfare grants on behalf of the State.

The business that was, is gone, until our borders are open, and with it the need for the same amount of staff to “stay connected” to it.

In stark contrast to the additional $3.2 billion spent on wage subsidies, there is no significant new money for welfare payments for the predicted 9% unemployment.

This is inequitable; those in true need should not have to rely on the ability or will of their employer to pick up and administer an additional eight-week benefit on their behalf.

Business owners in areas with high exposure to international tourism need more help to resize their business for the new trading environment, pay their rents, look after their assets, and keep their heads together.

This budget has not done this, but there is, apparently, more to come.

My keyword search for the word "poverty" returned 124 results.

Paul Hansen

Paul Hansen, head of economics department, University of Otago

Just as there are no atheists in foxholes, there are no non-Keynesians in a great horrendous depression.

The lesson learnt from the (first) Great Depression of the 1930s, popularised by British economist John Maynard Keynes, is that a government’s role in such a crisis is to spend much more than it taxes.

Large fiscal deficits and rapidly rising public debt are inevitable.

The Government has gone all in with its $50 billion "Covid-19 Response and Recovery Fund". (If you are trying to get your head around how big $50 billion is, let me point out that it takes 32 years to count $1 billion at a rate of $1 per second.)

So far, only $30 billion has been allocated for specific policies, leaving a $20 billion war chest for other, as-yet-unspecified, uses.

I think that is a pretty good idea, given how uncertain things are: it makes sense to keep our options open, so long as the money is spent wisely.

And now for the bad news: someone is going to have to repay the $200 billion net government debt that is forecast by 2023.

Who, when and how? Us current taxpayers or our children (and perhaps grandchildren)? Higher income taxes in the future? A capital gains or wealth tax perhaps?

What cuts to government spending might be justified? An increase in the superannuation age? A return to student fees and interest on student loans?

This is an election year: future budgets can address these delicate but unavoidable questions.

Nathan Laurie

Nathan Laurie, Otago Polytechnic Students’ Association president

The Government’s commitment to realising the role of education in New Zealand’s effort to rebuild and recover lacked some much-needed depth in the first few weeks of Alert Level 4.

This Budget takes some steps towards addressing the hardship faced by our learners as well as the barriers to vocational education.

However, students and their representatives across the nation have seen this recent period of strife as a window of opportunity to make transformative change to the tertiary education sector, change that this Budget falls short of capturing.

Initial feedback shows students are mildly whelmed with the Budget arrangements; the positive implications can be seen, but the silence on the widely and deeply felt demands is deafening.

In particular, no mention was made on extension of the Fees Free programme, nor on establishment of postgraduate allowance or Universal Education Income.

The increasing week-to-week costs of being a learner in 2020 remain unaddressed; perpetuated by a blend of deeply-rooted systemic issues that cannot be solved by a one-off hardship grant.

On the other hand, Budget 2020 is set to make some robust investments in job recovery and training opportunities for Kiwis as we emerge from a post-lockdown society.

The $1.6billion trades and apprentices package is most welcome for the vocational education sector.

This is a positive indicator of their understanding that the financial cost of tertiary education is one of the primary barriers for people.

The notion that formal training and reskilling is an opportunity available for people of any age or life situation is an endearing narrative that should be echoed in every region and every town across our nation.