Coronavirus: Economic fallout a 'once-in-a-century shock' - Finance Minister Grant Robertson

Finance Minister Grant Robertson is describing the economic fallout from COVID-19 as a "once-in-a-century shock", saying the Government is prepared to pour as much cash in as needed to help Kiwi businesses weather the storm.

The Government on Wednesday announced a further $3.1 billion package aimed at helping small and medium-sized businesses. That comes on top of the tens of billions in aid already dished out.

Robertson says the Government has earmarked $50 billion to stem the economic fallout of COVID-19, though has stressed "that's an envelope, not a target". Around $23 billion of that has been spent already.

"We do have to do what it takes here to get New Zealanders through this and allow us to kickstart the economy on the other side," Robertson told The AM Show on Wednesday, adding that the Government may go over the $50 billion cap if needed.

The country is now more than two weeks into a nationwide lockdown, which has forced all non-essential businesses to close and prohibits any activities not deemed necessary. The result has hit businesses hard, with thousands of jobs already lost and companies around the country announcing they are shutting up shop.

On Tuesday, Treasury released projections estimating unemployment could skyrocket to up to 26 percent if the lockdown is extended beyond the proposed four weeks.

However, that figure could be kept to under 10 percent if the Government provided additional support.

Robertson said his Government would "try our level best" to keep the jobless rate down.

"If you look at those scenarios Treasury put out yesterday, on the best case of those we had unemployment at around 8.5 percent - that's an extra 110,000, 112,000 New Zealanders out of work - and I hate hearing those numbers and so we're going to work as hard as we can to keep that number as low as possible," he said. 

"It's going to be hard work and there are still going to be job losses - we're just going to do everything we can to limit those."

The projections from Treasury came just a day before the International Monetary Fund (IMF) on Wednesday said the global economy is expected to shrink by 3 percent in 2020, in the steepest downturn since the Great Depression of the 1930s.

That echoes previous views made by experts who warned the outlook is set to be worse than the global financial crisis (GFC) of 2008. 

"It's going to be worse than the GFC, I've got no doubt about that," Roberton said. "This is a once-in-a-century shock to the economy. How we come out the other side will determine how close it gets to the Great Depression.

"I don't see it that way - I see us somewhere well and truly between those two." 

Contact Newshub with your story tips:
news@newshub.co.nz