Coronavirus: Govt yet to figure out how to pay the COVID-19 bill

Cabinet hasn't yet started discussions on just how we plan to pay back the billions being borrowed to pay our way through the COVID-19 pandemic - including whether it will involve tax hikes.

A couple of dozen billion dollars has already been spent or earmarked for spending to prop up the economy through its greatest challenge in almost a century. 

Many businesses aren't operating during the alert level 4 lockdown to help eliminate the virus from New Zealand, and many others still operating have suffered dramatic downturns in income as people stay home.

A shift to level 3 is looking increasingly likely, with the number of new confirmed cases of COVID-19 dropping, but even then many businesses will remain shut or only able to trade under extremely limited circumstances. 

"You will be able to get a takeaway flat white," Small Business Minister Stuart Nash told Newshub Nation on Saturday. "If in fact you put a process in place with no customer contact. What we're talking about here is a sort of a click-and-collect process - you phone in your order, you pick up your order. But there's no contact with the staff."

Other small retailers will also be able to resume operations under level 3, with 'safety' the new catchphrase, rather than 'essential'. 

"So things like fish and chips or other small businesses like that, if they've got this process in place they will be able to trade," said Nash. "Innovative businesses will be looking at this already. It's why the Prime Minister and the Minister of Finance did signal that a move to level 3 is imminent."

That decision is expected on Monday. If a longer level 4 lockdown is decided on, it will be to ensure the elimination of the virus from the country altogether, which would reduce the likelihood of having to go back to level 4 in the future, should it start spreading again. 

Economists say the longer we're in lockdown, the more damaging it will be to the economy - but going in and out of lockdown would be even worse. Cameron Bagrie told The AM Show recently it's likely to cost the Government - in spending and lost tax revenue - around $100 billion over the next 12 to 18 months. 

Asked by Newshub Nation host Simon Shepherd how the Government planned to pay that back, and whether it would involve tax hikes, Nash said they're yet to discuss it - but the sooner New Zealand can eliminate the virus, the better.

"Believe me, we're just concentrating on survival and getting through this. And what we do know and what we have said is if we nail this, if we nail the health issue and we get this sorted then we know we've got it we can open up the economy earlier and we come out of the stronger.

"But there's no doubt about it, we're borrowing a lot of money to to get us through this. Discussions around what recovery looks like in terms of tax, they're still to be had."