Coronavirus: Prime Minister Jacinda Ardern probed about Treasury not yet predicting recession

The Prime Minister has been questioned about Treasury not yet predicting a recession when one leading bank has done, as the global economy tumbles amid COVID-19 fears. 

Bank of New Zealand (BNZ) became the first major bank to predict a recession as a result of the coronavirus, forecasting that the economy will shrink in the first half of the year. 

Opposition leader Simon Bridges asked Jacinda Ardern in Parliament on Tuesday if she has received advice from Treasury on the likelihood of a recession and how the Government should react. 

"I am reporting to the House that the Treasury has not given us advice of that nature," Arden replied, to which Bridges followed up with: "Is she going to ask them for advice?"

The Prime Minister said she has received general advice on the economic position of New Zealand amid the coronavirus outbreak, currently and going forward. 

"The member already knows that we have already reflected the likely impact of GDP putting us in the position in the future to sit around 2 and potentially 2.5 percent going forward," Ardern said. 

"But we have not received that advice [from Treasury]. The member seems disappointed at that reality but that is not advice that's been received. 

"Regardless of whether we've received that advice or not, we are preparing; we are putting in place what is required to make sure that we maintain cash-flow for businesses and that they're able to maintain their employees - that is where this Government's focus should be."

The Prime Minister said Simon Bridges will be receiving his own economic briefing from Treasury later on Tuesday. 

The National Party leader continued with his line of questioning in Parliament and he appeared frustrated when the Prime Minister sat opposite him appeared to smile.  

"She can laugh," Bridges said, "but I'm asking where the New Zealand economy is heading this year."

The Prime Minister said Treasury is "free to give us advice at any time". 

She said the point she wanted to get across to Bridges is that despite Treasury not yet predicting a recession, the Government is planning and prepared for one. 

"We are getting ahead of the impacts by putting in place a package to support the business community and our employers and our employees."

Ardern announced on Monday that Cabinet had approved the development of a 'Business Continuity Package' to help support the economy through the disruption caused by the coronavirus COVID-19. 

The package - to be announced next week - will include a targeted wage subsidy scheme for workers in the most-affected sectors, training and re-deployment options for affected employees, and a plan for banks to help support struggling businesses.  

"This is one point in time - this is a global situation that is evolving and I expect that some of the advice we get will evolve, regardless we need to prepare ourselves and our economy," Ardern said in Parliament. 

Bridges asked the Prime Minister if she agreed with ANZ Bank's chief economist Sharon Zollner who on Monday said the Government should consider postponing the scheduled minimum wage boost in April to ease pressure on employers. 

"At a time when businesses are very nervous, putting this year's minimum wage rises on hold would support employment and better social outcomes."

Ardern said the lowest-paid workers should "not have to pay for the impacts" of COVID-19.

"Minimum wage has a stimulatory effect - the more [money] that low-income workers have in their pocket, the more they spend which is exactly what the economy needs."

ACT leader David Seymour said Labour is "blinded by ideology" on minimum wage. 

"A growing chorus of economists is now telling the Government to give businesses a break and help them keep workers employed."