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Prime Minister’s Budget 2020 speech

Prime Minister’s Budget 2020 speech

Posted May 14, 2020
Media Release

Media Release: Prime Minister Jacinda Adern

Mr Speaker, business as usual in this place would dictate that today, Budget day, is the day that the Minister of Finance comes down to this house and delivers the Government’s plan for the year ahead.

Business as usual, would then have the Opposition stand and give a speech opposing that Budget.

Business as usual would have everyone in this house retrench into our old patterns that the public know so well but, if we’re honest, have probably never had much time for.

Today Mr Speaker, the Leader of the Opposition has acted as if it’s business as usual.

But nothing, and I mean nothing, about this time in our history is usual and so neither should our response be.

We have been a Government that, with the support and efforts of New Zealanders, took us through an enormous health challenge. And we will take the same approach to the recovery of our economy.

I make the offer to Mr Bridges and the Opposition today, to see this period in our history for what it is – a global crisis. And to see this Budget for what it is, a response to the rainy day we have planned for.

Now is the chance for us to come together as politicians. To say that a rainy day demands of us that we shelter and protect New Zealand to weather the storm.

Rather than argue about who gets to hold the umbrella, I hope the Opposition steps away from business as usual, and votes for this Budget and the jobs it will create.

Mr Speaker, a mere six months ago nobody would have imagined a world in the grip of a global COVID-19 pandemic, let alone one that would wreak havoc across health systems and economies globally.

I still vividly remember at the beginning of the year reading about the first lockdowns overseas and thinking what a remarkable thing it was. To ask humans to stay in one place for such a long period of time seemed unfathomable.

And yet here we are, having shut our borders, moved into lockdown, and collectively built a wall of defence to a virus that was closing in on the world.

Mr Speaker, there are few things that I think I will ever consider as being outside the bounds of possibility any more. And perhaps that is the same perspective we now need as we start our recovery.

We have to be focused. We have to be decisive. We have to go into this period knowing it will be tough, but that there is hope and possibility.

In short, I give my commitment to New Zealanders that they will see us apply the same unrelenting focus we have had on our health response to COVID-19, to our economic response.

And that work has already started.

From the very beginning we have said that jobs were our focus, and they are. That is why in March we announced a wage subsidy scheme designed to keep people connected to work, and to the certainty and dignity that can come with work.

That programme has supported roughly 1.6 million New Zealanders to date and has meant we have avoided the spike in unemployment other countries have experienced while our country was in lockdown and businesses were unable to open.

It helped get many, many workers and businesses through the toughest weeks so that they now have the chance to reopen and move to recovery.

But we must keep going. The times ahead will be tough. Global predictions are dire. Unemployment will rise, and growth will slow dramatically.

We know as a trading nation that will have an impact, and it will be significant and it will be painful.

We have never sugar-coated what the future will look like, but nor will we pretend there is nothing that we can do about it. Governments have choices, just as we did when we faced COVID-19. And those choices are between sit back and hope, or sit up and act.

We have chosen to act.

Today, we are starting by extending the wage subsidy. It won’t be exactly the same as the first round, as we look to make it more targeted.

We know there are businesses who are opening up again, but we also know there are some who cannot just yet, while others will take more time to recover.

It serves no one, if in the meantime while businesses are opening back up, to lay off staff unnecessarily. I know how important this is, I have received a huge number of emails from people describing what a difference the wage subsidy has meant to them. In almost all of them they talk about their staff being their family, and how important retaining and looking after them has been.

So today we are extending the wage subsidy for another eight weeks with a focus on providing support to businesses who have been particularly affected by Covid. This will mean employers in sectors like tourism and other small businesses across the country will be supported, and it will ease the recovery for thousands.

And like the first round of the wage subsidy saved jobs, this targeted extension will save jobs too. That’s why it is such an important part this jobs budget – we believe it’s the best thing we can do at this phase of our recovery to help businesses who are getting back on their feet to keep on their staff.

But our response must go beyond supporting those still in work. That isn’t enough. Too many people have already lost their jobs and we need to support their path back to employment.

For them, we must be swift. We must be practical. But we also owe it to ourselves to take this opportunity to solve the problems of both today and yesterday as we go.

If I had asked you before COVID, what it is that we must address as a nation, what our common challenges were, I would imagine that many people would write a similar list.

We have long faced a housing crisis, our environment has been suffering, inequality and child poverty have all been issues we’ve had to tackle.

In three years’ time I want to look back and say that COVID was not the point those issues got worse, but the chance we had to make them better.

We can emerge from this crisis stronger than we were before. That’s why we are focussed on jobs, but also jobs that solve these entrenched problems.

So let’s look at how.

We have had a skills deficit, and now on top of that we have more people who need the chance to train or retrain. That’s why this Budget will target the vocational training and apprenticeships we need most, and make them free.

And I don’t just mean for school leavers, I mean everyone.

It will mean more people training in building and construction, in agriculture, in manufacturing, community health, counselling and care work. This will help those who have lost their jobs retrain, and others to train on the job.

And while many have lost work, there are others who have labour shortages.

Even through COVID-19 people have wanted to buy our high quality food and fibre, and that’s why in this Budget we’ll be looking to partner and support 10,000 New Zealanders into primary sector jobs.

For our young people, those who so often carry the brunt of a crisis like this, we will fund 1,000 more places in trades academies, expand He Poutama Rangatahi to support young people into work in West and South Auckland, Hamilton, Porirua and East Christchurch, and build group training schemes that support Maori apprenticeships.

All in all Mr Speaker, this is a $1.6 billion investment into New Zealand’s future, and into rebuilding apprenticeships, into closing our skills gap.

And that will be so important because of our next challenge. Housing.

Our response to COVID on the face of it, had a very simple premise early on – stay home, save lives. That simple, simple requirement forced us all as a country to ask the question – what if you don’t have a home?

The answer was simple, we will find you one. And through hard work and huge collaboration, between Government, local government, iwi and the community sector, that is exactly what happened. In the midst of the crisis we housed the chronically homeless in New Zealand.

Now we need to keep it that way.

In this Budget we are announcing an extra 8000 houses, providing $5 billion of construction stimulus into the economy over the next 4 to 5 years. This will be split between public and transitional housing and, when combined with what we have already funded, takes the number of housing places to 17,000.

This represents the largest public housing building programme in recent decades, and I hope means that COVID 19 will be remembered as a period where New Zealand didn’t just stay home, it made sure everyone had a home.

Since coming into Government we have seen countless other examples of the under investment in New Zealand’s infrastructure. We have already invested $12 billion in the NZ Upgrade Programme, and our $3 billion fund in this Budget will be squarely focused on projects that are ready to create jobs, but also tackle issues like water infrastructure.

But perhaps there is no better example of the way this Budget can bring together the challenges of today, and the challenges of yesterday, than the jobs it will create in regional New Zealand to restore our environment.

Whether it’s working with iwi on pest control to prevent the loss of North Island Forests, working with farmers to tackle wallaby, fence waterways or stabilise riverbanks – or working with council, local businesses and DOC to employ thousands of people to restore wetlands, boost predator controls, improve tracks and huts – this is a win, win. Wilding pine controls alone require on foot labour, chain saw operators, heavy machinery and helicopters. It has a knock on effect to accommodation, vehicles, and repairs maintenance and food providers.

In total this Budget creates almost 11,000 jobs for our environment, for our regions, for our people.

And that brings me to the last challenge, child poverty.

We know this has the potential to get even worse than where we are now. And while we moved quickly even before lockdown, providing increasing Government support to those out of work through benefit increases and the winter energy payment, today we focus on kids with a major expansion of the food in schools programme.

We started this programme last year, now we expand healthy lunches in schools so that around 200,000 more children across the country benefit. Based on what we know, this will also create an estimated 2,000 jobs in local communities. And equally important it will mean in the tough days ahead we can guarantee our most vulnerable kids will get a filling, healthy lunch every school day.

Mr Speaker, I want to finish where I started. On our businesses, on our job creators, on our innovators and on those who have carried such a huge burden over these last weeks and months.

We know they have faced challenges too, that pre date COVID. The cost of innovation, the need to constantly make productivity gains. The challenge of growing beyond New Zealand, if you choose to make that leap.

That’s why the Budget provides incentives and grants to encourage e-commerce, train more digital advisors and provide information and support for SMEs wanting to incorporate e-commerce into their businesses. It sees a significant increase in support for entrepreneurs and businesses looking to invest in new products and R&D.

This will help create the jobs New Zealand needs. And it puts $216 million into increasing the number of exporters receiving intensive support from New Zealand Trade and Enterprise, and increasing digital services and tools.

Mr Speaker, I said yesterday that this Budget would be about jobs, jobs, jobs. In total it seeks to save as many as 140,000 of them over the next two years, and to support the growth of 370,000 more over four years.

The Budget sets out a clear plan to generate new green jobs, rural jobs, jobs rebuilding crumbling infrastructure and new training opportunities for those who need it.

But even this is just stage one.

You have heard today about some of our sector recovery funds. We must keep working alongside those industries who have been most gravely affected. Tourism has a package announced today. In coming days we will do the same for arts, sports and large events.

But just as the science informing our health response evolved, so too will the economic situation both global and domestic. It is for this reason that the Finance Minister has announced today the next suite of actions we are putting in place but has also held back funds to tackle the next phase of our rebuild.

We know business craves certainty in order to plan how it will operate. And while there is much we cannot predict in these uncertain times, what I can promise is that we know this is not the end of what we need to do.

We will keep working with you, we will keep supporting workers and businesses.

Mr Speaker, you can see the strength of this Government in this Budget. I want to thank our Coalition partner and the Deputy Prime Minister for their partnership in bringing this Budget today. I’d like to also thank our Confidence and Supply partner the Greens for their consistent advocacy to be bold in tackling the challenges of both today and tomorrow.

Finally, I want to thank the Minister of Finance. Grant thank you for your determination and your compassion. Through this crisis you have acted to protect the jobs and livelihoods of millions of New Zealanders. Today you deliver a Budget that will carry us through this crisis and gets the economy moving.

So now, we get on with it.

We went hard and early to fight COVID-19 and that success has opened up economic opportunities. Now, it’s time to make the most of the head start New Zealand has with its economic recovery.

This Budget shows how we are positioning New Zealand for that right now. It shows that we know this is not the time for business as usual, it’s the time for a relentless focus on jobs, on training, on education, and the role they all can play to support our environment, and our people.

So Mr Speaker, let’s begin our recovery and let’s rebuild, together.