Coronavirus: Greens say future generations will pay for today's spending, so spend it on them

The Greens say since it'll take a decade to pay back the borrowing we've done to get through the COVID-19 pandemic, the money should be spent fixing problems future generations will face.

Unsurprisingly, Climate Change Minister James Shaw says that includes climate change.

"We are currently spending at least the next 10 years' worth of Budget allowances, so that's going to have to get paid for by future generations... so it's entirely appropriate we put that money into  things that are going to serve their interests," he told Newshub Nation on Saturday.

"If we don't use the quantum of capital that we're currently injecting into the economy to fix things like the housing crisis and the climate crisis, then we're doing them a disservice."

The Government has thrown its self-imposed Budget responsibility rules out the window to ease the economic blow of the pandemic and lockdown. By May 1, $10.6 billion had been spent on wage subsidies to try and stem job losses, benefitting 1.7 million employees.

The Government's annual Budget is due next week, and it's expected to focus heavily on the post-lockdown recovery. 

"We are spending that money right now - let's make sure we spend it on those things, because in all of those areas we've got an issue that need fixing, and in all of those areas, that helps to decarbonise the economy," said Shaw.

New Zealand has a goal of being carbon-zero by 2050. If the world fails to reduce emissions, it's expected to warm in excess of 2C, with unpredictable consequences scientists warn won't be good.

Rather than pump money into preserving carbon-intensive industries, Shaw says this is a chance to not only fight climate change, but create more jobs than those industries can provide.

"Some of the things that we need to do to de-carbonise the economy are the most jobs-intensive industries out there... Retrofitting a house for insulation or putting solar panels on the roof - actually building a house - creates more jobs per dollar spent than building a road. 

"So given that we're about to see a bit of a spike in unemployment, and given that we are deploying vast amounts of capital to get people back to work and getting the country working again as fast as possible, doesn't it make sense to do those in areas where you get multiple wins for the same dollar?"

Treasury's latest update estimates around 6 percent of the working-age population are currently on the unemployment benefit, up from around 4 percent before the pandemic.

"There are industries where we can create jobs, decarbonise the economy and get the country back to work - and we can do all of that using the same dollar. In fact if we don't, it would be irresponsible not to because we'd still have to fix those problems after we recover from the crisis."

Unemployment in New Zealand doesn't appear to have worsened as much as it has in the United States, where it's spiked to 14.7 percent - levels unseen since before World War II. The US hasn't gone into full lockdown, with different states responding to the crisis in different ways. Sweden, which refused to go into lockdown and has seen several thousand people die from COVID-19 as a result, is expected to post double-digit unemployment soon, according to a Reuters report.

"If we'd stayed open for business - like say the US - we'd have a huge mortality rate, and that itself would also cause carnage in the economy," said Shaw. "I just think the proof is in the pudding that we made the right call."

James Shaw.
James Shaw. Photo credit: Getty

New Zealand has had 21 deaths, and only a handful of new cases in the past week - including one day where no new cases were reported. The Opposition has repeatedly called for restrictions to be lifted sooner, rather than later.

But with the virus incubating in new victims for up to 14 days and able to be spread by people who aren't showing symptoms, health officials have taken a precautionary approach to resuming normal life. 

"It was pretty clear if we didn't really observe the maximum precautionary measure, that we could well be on the same path as a number of other countries in the world that were going through absolute hell at the time - like Italy and Spain and others," said Shaw, defending the Government's decision to lock the country down.

We'll find out in the next week if we're staying at level 3 a bit longer or shifting to level 2 soon.