Covid 19 Delta outbreak: government to review economic support program once epidemic has passed
Finance Minister Grant Robertson told the finance and spending committee the economy is well positioned to deal with the Delta outbreak and lockdowns.
Finance Minister Grant Robertson said a review of the economic response to the latest Covid-19 outbreak will be “considered” when the current phase of the outbreak is over.
Robertson had previously received advice on the latest Treasury foreclosure, which warned that additional support may be needed if the foreclosure lasts longer.
Asked by Green MP Chlöe Swarbrick whether the government had carried out internal reviews of the economic response to Covid-19, Robertson replied that a “more comprehensive assessment” of the economic response would be “considered once we get past the phase current pandemic. , while more data should be available on the impacts of the measures. “
Robertson said that “lessons learned from previous alert periods 3 and 4 have informed me of Treasury advice during current and past periods of increased alert level throughout the pandemic.”
Robertson said the parameters of the wage subsidy scheme, which had been altered since the first foreclosure to reflect inflation and tighten eligibility criteria.
Roberson said he had received economic advice on the latest Treasury lockdown, which suggested “a longer lockdown could increase the need for other types of support, including for vulnerable communities.”
Robertson’s answers come from written questions from the Finance and Expenditure Committee.
Swarbrick criticized the amount of monetary support provided to the economy by the Reserve Bank, which had the effect of boosting the housing market.
She and the Greens believe more economic support should come from the fiscal side of the equation – meaning the government is supporting the economy through its own spending, rather than relying on the Reserve Bank.
Swarbrick asked if Robertson felt the right balance had been struck between the fiscal support provided by himself and the monetary support provided by the bank.
Robertson defended the bank’s actions, saying it had helped stabilize financial markets and supported demand “by providing affordable access to credit for households and businesses.”
However, he did not respond if the proper balance had been struck.
Swarbrick asked whether Robertson was concerned about the “distributive impacts” of the economic response to Covid-19, and whether those impacts had helped make the rich richer and the poor poorer.
Robertson expressed concern about these impacts and said the government has responded with things like increases in main benefit rates and the winter energy payment.
“We will continue to monitor and mitigate these impacts by providing additional support to these communities as needed,” he said.
“I am aware that the response must work equitably for all of our communities. The Iwi, Maori and Pacific communities have been very active in meeting the needs of their communities,” said Robertson.
Swarbrick said the government had known “for almost two years now” that the monetary policy pursued by the Bank would have “distributive impacts.”
“The Treasury knows, and has admitted, that fiscal policy has an essential role to play in mitigating this exacerbation of inequalities”,
“It comes down to a political decision to keep our hands on the wheel and allow the poor to get poorer and the rich to get richer,” she said.
The government is set to pass the 2021 budget in parliament this week. He also started this week the process of voting himself for extra money in case it is needed.
This is called advance procurement. It gives the government $ 24 billion in extra overnight money and $ 15 billion for long-term infrastructure investments.
The bill will give the government the flexibility to spend that money if it wants to, but that does not mean that the money will be spent. The most likely area where the money would go is in things like wage subsidies for future Covid outbreaks.