An economist is predicting "sacred cows" will need to be slaughtered if the country's economy is to recover, post-pandemic.
The Government's annual Budget out this Thursday will have the priorities announced in December "put on ice", Finance Minister Grant Robertson said last week.
In December, only China was aware of the coronavirus. Little was known about it, except that it was unusually severe and infectious. Since then SARS-CoV-2, as it was later dubbed, has swept the world. The disease it causes, COVID-19, has killed nearly 300,000 people, including 21 New Zealanders.
Though New Zealand thus far has managed to avoid the kind of death tolls seen in countries like the UK, US and Italy, our economy has taken a massive hit thanks to the combined impact of closing the borders, the lockdown to stop the virus' spread and the global downturn.
"The New Zealand economy is in the midst of the deepest recession we've seen since the 1930s," economist Cameron Bagrie told The AM Show on Monday.
"We need a bit of a reality check out there."
The Government has already spent more than $10 billion on propping up the economy, throwing its self-imposed spending rules out the window. Robertson last week said the Government would likely have to run deficits "for an extended period" - Bagrie says it'll be five to 10 years.
"The numbers are going to look terrible. Net Government debt is going to go up from $70 billion to $170 billion," in the next few years, he said.
"I think the Government's going to be running a $30 billion deficit in the next fiscal year as spending splurges and tax revenue collapses. That's going to be a tax on the next generation if we don't get the economy moving and flourishing on the other side.
"We're going to have to put some real big-picture issues on the table - some so-called sacred cows. One of those sacred cows is the retirement age is going to need to go up. Some assets are probably going to need to be sold off the Crown balance sheet...
"The alternative is taxes are going to go up. Those are the choices we are going to make."
Prime Minister Jacinda Ardern has previously said she'd resign before putting up the retirement age, which is 65. Superannuation is one of the Government's biggest expenditures, at $14.5 billion a year dwarfing all other benefits.
"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," co-leader James Shaw 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."
Bagrie said he hopes the Budget avoids "politically driven" spending, and unnecessary expenditure is "parked" for the time being.
"I worry things such as the relocation of the Ports of Auckland north is going to get turbocharged, when the numbers won't stack up."
And while the wage subsidy scheme has been popular, and so far appears to have staved off the kind of unemployment spike seen in the US, Bagrie says the spending can't go on forever.
"I'd probably make it a loan scheme so the taxpayer is off the hook."