The National Party fears another brain-drain of Kiwis as the New Zealand economy is estimated to have shrunk by 16 percent in the June quarter compared with 7 percent in Australia from the first lockdown.
The Pre-Election Economic and Fiscal Update (PREFU), the first official financial update from the Government since the Budget in May, shows Treasury estimates the economy shrunk compared to Australia, showing the impact of the March and April lockdown.
"I think the Government has a lot to answer for in this and I'll say that because I'm looking at Australia. The Government is always quick to look at Australia and compare itself," National Party leader Judith Collins said on Wednesday.
"We're not only going to see a big drop in activity but we're going to see a loss of skilled people as soon as they can shift to Australia because they will be in a far better situation to get jobs, good incomes and having a future that doesn't involve welfare.
"The Government didn't need to shut down the construction industry. That's just a starter. It is really important that wherever possible people who could work safely were able to do so. Instead, we've been yo-yoing in and out of lockdown."
The June quarter doesn't take into account the prolonged lockdown in the Australian state of Victoria, which has been under restrictions for more than a month since August 2, the heaviest rules imposed in the city of Melbourne.
More than 700 coronavirus-related deaths have been reported in Victoria, compared to 25 deaths in New Zealand. Australia has more than 2000 active cases of COVID-19 compared to 79 in New Zealand, 52 in the community.
Collins said her comparison of Australia and New Zealand is fair because it's about the June quarter, which reflects the first lockdown when the Government imposed stricter rules than its Australian counterparts.
"Australia could keep its construction open. Don't think Victoria is the whole of Australia. It is only one state and they messed up their border and they messed up their quarantine," Collins said.
National's finance spokesperson Paul Goldsmith said, "What we're talking about is the second quarter and the Australians didn't shut down as much of the economy as we did and that has had a real economic cost."
New Zealand First leader Winston Peters also expressed concern over the 16 percent contraction in the economy compared to Australia, and the projected unemployment rate of 7.8 percent by March 2022.
"Now is not the time for the gaudy campaign spending promises being made by some political parties. Nor is it a time when the country can afford to experiment with inexperienced decision-makers around the Cabinet table," he said.
"Voters are facing a serious economic crisis. That is neither debatable nor in doubt. New Zealand First believes that the next Government needs to have a stiff backbone to resist Labour and the Green parties' grandiose spending plans."
ACT leader David Seymour is worried about Government debt clocking up.
Treasury forecasts net core Crown debt to reach $200 billion by 2024, which as a share of gross domestic product (GDP) is 55.3 percent, higher than the 53.6 percent projected by Treasury in May's Budget.
"New Zealand's historic debt levels demand serious political leadership. Our current fiscal track is totally unsustainable. Party leaders need to front up with plans for getting on top of out-of-control spending and debt," Seymour said.
ACT wants to stop minimum wage increases for three years, put interest back on student loans, scrap KiwiSaver subsidies, cut big public service salaries, and abolish the winter energy payment to help pay off the billions of dollars of Government debt.
National will soon release its fiscal plan which it says will "carefully balance the need to inject stimulus, increase investment in core public services and restore Government debt back to prudent levels".
Goldsmith had promised to get net debt to GDP to 30 percent within a decade or so, but that could all change now that National has seen the huge debt the country has to pay off.
"We're working our way through it. You'll get a sense of our response in the next couple of days," he said on Wednesday.
Finance Minister Grant Robertson pointed to the positives in the PREFU, including Treasury's expectation for the economy to grow by an average of 4.2 percent across 2021 and 2022, compared to Australia at 3.6 percent and the US at 3.5 percent.
Treasury initially forecasted the June quarter GDP to fall by about 23.5 percent, which is significantly worse than the 16 percent revealed in the PREFU.
Treasury is forecasting that New Zealand will be in deficit every year for at least the next 15 years, as fiscal stimulus is expected to continue. But the Government has spent $4 billion less on COVID-19 support than it anticipated.
"These are signs that the New Zealand economy is robust, and that our plan to eliminate COVID-19 and open up the economy faster is the right approach," said Finance Minister Grant Robertson.
"The forecasts illustrate our balanced plan to manage debt and reduce the deficit caused by COVID-19, while protecting our investment in services like health and education."