The national unemployment rate dropped under 5 percent in the December quarter and the trend is continuing to prove strong heading into 2021, says Finance Minister Grant Robertson.
On Wednesday, Stats New Zealand announced that unemployment had fallen from 5.3 percent to 4.9 percent in the three months to December. The impact of COVID-19 on the labour market was evident in the September quarter, with a sharp increase in joblessness. However, the country now appears to be back on track.
"The New Zealand economy did well in the second half of last year… there's some really, really good signs in our economy," Robertson told The AM Show on Thursday morning.
Robertson noted some sectors, such as the decimated tourism industry, are more affected than others by the impacts of the ongoing pandemic. Some fluctuation in the unemployment rate is to be expected, the minister said, but overall "the trend is really good".
"It's a tribute to the hard work of New Zealanders and the fact that we did go hard and early with the approach to COVID-19."
He reiterated that New Zealand's economy is looking strong heading into 2021, due in part to the implementation of the wage subsidy scheme last year which supported Kiwi livelihoods throughout the restrictive lockdowns.
"New Zealand has come through this really well, but it didn't happen by accident - we had a plan to go hard and early against the virus and support people's lives and livelihoods," he said.
The wage subsidy continued cash-flow by supporting businesses that could prove a 30 percent decline in revenue due to the economic impacts of New Zealand's outbreaks. It paid $585.80 per week for full time staff and $350 for part time staff.
An extension for the most severely impacted businesses was then made available for an additional eight weeks, supporting hundreds-of-thousands of employees. The Government later introduced the COVID-19 resurgence wage subsidy for a two-week period in response to the second outbreak and subsequent lockdown in Auckland.
"I do think New Zealand's economy has shown its resilience through 2020," Robertson said. "We can be very proud of what we've done.
"Obviously the debt that we've taken on, we do have to reduce down over time, but our economy is strong, we've got a good base… our economy is robust and we will be able to manage our way through this.
"There are swings-and-roundabouts in the economy, but this has been a year in which New Zealand has shone when it comes to how to deal with a global crisis like this."
Robertson reiterated the Government's commitment to combating escalating and unsustainable house prices, with soaring property price-tags making it increasingly difficult for first-home buyers.
With low interest rates and the removal of loan-to-value ratio (LVR) restrictions, more Kiwis were able to enter the property market in 2020, leading to sky-high demand for a dwindling supply.
Robertson said that announcements regarding the housing boom will be made in the coming weeks, and in the meantime the Government will continue to "push on" with building more properties.
On Wednesday, Stats NZ senior manager Becky Collett said that despite the drop in unemployment in the December quarter, joblessness is still higher than it has been in previous years.
"Despite the December quarter's drop, unemployment is still higher than it has been in a few years," she said.
"This time last year, the unemployment rate was at 4.1 percent."