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NZEALAND-ECONOMY-BUDGET
Ardern spends big in New Zealand’s ‘recovery’ budget
WELLINGTON, May 20, 2021 (BSS/AFP) – New Zealand Prime Minister Jacinda Ardern unveiled a big-spending budget Thursday aimed at stimulating the coronavirus-hit economy while carrying out long-awaited progressive reforms.
The centre-left leader — who faced criticism before last year’s election for her cautious approach to implementing change — announced major funding boosts to welfare payments, social housing and climate change mitigation.
“We’re making sure our recovery leaves no one behind,” Ardern said.
“It’s what some people would call a two-birds-one-stone strategy — putting in place policies that ensure our finances remain sustainable while building a stronger New Zealand for the future.”
Ardern said a NZ$3.3 billion (US$2.4 billion) boost to family benefits was the largest welfare increase in a generation and would help lift 33,000 children from poverty.
Spending on health, public transport and education was also increased.
Ardern, who won a landslide reelection late last year following successful management of the Covid-19 pandemic, said she would continue to pursue her agenda throughout her term.
“It is simply not possible to fulfil every promise or commitment that we made or address all of our long-term challenges in a single budget,” she said.
The measures will see government debt as a percentage of gross domestic product (GDP) balloon from 26.3 percent last year to 48.0 percent in 2023.
“This is significantly elevated, of course, from what New Zealanders are used to, but it’s the appropriate response to the situation we find ourselves in,” Finance Minister Grant Robertson said.
Robertson said the economy had emerged stronger-than-expected from a brief coronavirus-induced recession.
“New Zealanders have weathered the storm of Covid-19 and today we take the next steps in our recovery,” he said.
Treasury estimates GDP growth of 2.9 percent in the 12 months to June this year, rising to 4.4 percent in 2023.
BSS/AFP/MSY/0920 hrs