New Zealand Finance Minister on 2021 Budget, Economy and Covid Recovery
New Zealand’s economic recovery from the Covid-19 pandemic has been “much better than expected,” Deputy Prime Minister Grant Robertson told CNBC on Thursday.
This has allowed New Zealand to spend “large sums of money” to help its low-income population while keeping its net debt under control, Robertson told CNBC. Will Koulouris.
“We are in an extremely fortunate position,” said the minister.
Robertson, who is also finance minister, presented the New Zealand government’s latest budget earlier Thursday.
One of the strengths of the budget has been to increase weekly welfare payments to NZ $ 55 (about $ 39.50) per adult to tackle inequality and child poverty. Robertson said in his budget speech that the expected increase will be the largest in “over a generation”.
On the trade front, Robertson said the government was negotiating bilateral deals with the European Union and the UK.
New Zealand is also part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a mega trade deal comprising 11 countries including Canada, Australia and Singapore – but not the United States and China.
The CPTPP, in its original form called the Trans-Pacific Partnership, was led by the United States under the former president Barack obama and seen as a strategy to counter the growing influence of China. But Obama’s successor, Donald trump, unilaterally withdrew the United States from the agreement.
Deputy Prime Minister Grant Robertson addresses the media during a post-cabinet press conference in Parliament on November 9, 2020 in Wellington, New Zealand.
Hagen Hopkins | Getty Images News | Getty Images
China has indicated in recent months interest in joining the CPTPP.
When asked if New Zealand would be open to China’s joining the trade pact, Robertson said, “We welcome all interests.” He added that China was not the only interested party, noting that the UK had also said it would join.
“But obviously this is an agreement that we signed, and therefore we are looking to these countries to see where the agreement stands today and whether or not they can join it,” said Robertson.
Compared to many countries, New Zealand has been relatively successful in containing the spread of the coronavirus locally. This allowed the economy to rebound.
The New Zealand Treasury has forecast a strong economic rebound in the coming years.
According to the Treasury, the economy is expected to grow 2.9% in the fiscal year ending June 2021, before reaching 3.2% and 4.4% in the following two years.
“It has been an extremely difficult year in New Zealand and around the world, but we can certainly see some light here,” said Robertson.
Ministry of Health data showed that on Thursday morning, cumulative confirmed and probable Covid infections in the country stood at 2,659, with 26 deaths.
Thursday’s budget allocated spending on Covid-19 vaccines, infrastructure, education and the welfare of indigenous Maori.
Planned spending is expected to bring the budget deficit to NZ $ 18.4 billion ($ 13.2 billion) in the fiscal year ending June 2022 before declining in subsequent years. according to the New Zealand Treasury.
The deficit for the current fiscal year ending June 2021 is expected to be NZ $ 15.1 billion. Net debt is also expected to rise from 34% in the current fiscal year ending June 2021 to 43.8% in the following fiscal year.