Borrowing not on Grant Robertson's agenda despite millions spent on non-COVID issues from coronavirus fund

Finance Minister Grant Robertson has no plans to borrow more money in the wake of the latest lockdown despite millions of dollars spent on non-COVID issues from the coronavirus fund. 

"We've got more than enough money set aside," Robertson told reporters after Prime Minister Jacinda Ardern announced a week-long lockdown for Auckland and at least three days for the rest of the country.

"The New Zealand economy has recovered remarkably. We are at a much stronger starting point than anyone would have thought we'd be facing a situation like this now," Robertson said. 

"We've also shown that we come back quickly, that exports maintain their value through a period like this, so I remain optimistic that it's not going to be necessary to do that."

There was $5.1 billion in the Government's COVID-19 Response and Recovery Fund fund three months ago. The $50 billion fund was announced last year as part of Budget 2020. 

ACT leader David Seymour fears the Government has become complacent with COVID-19 not in the community for almost six months, evident, he suggests, by the fact that millions of dollars from the COVID fund has been spent on non-virus related things. 

"The Government has been dipping into the $50 billion COVID fund, with $515 million on school lunches, $26.6 million for cameras on fishing boats and the day we went into lockdown it announced $17.1 million from the fund for 'creative spaces.'

"Other spending includes: delivery of a business case for the replacement of Te Papa's Spirit Collection Area, the New Zealand Symphony Orchestra, the Royal New Zealand Ballet and the implementation and the Housing Acceleration Fund."

Seymour suggested it was hypocritical of Robertson to spend money from the COVID fund on non-virus related things, when during the election he criticised National's plans to spend it on roads. 

ACT leader David Seymour.
ACT leader David Seymour. Photo credit: Newshub / Zane Small

"It beggars belief that in the middle of a pandemic the National Party is planning to gut the money set aside to protect New Zealanders in case of another major outbreak of COVID-19," Robertson said at the time

Seymour says the Government has been "doing its best to shovel out the door" the remaining $5.1 billion left in the coronavirus fund. 

"Now, when we really need this fund, the Government needs to answer why it's been throwing the money around on non-COVID related spending."

National's Shadow Treasurer Andrew Bayly is also concerned, telling Newshub the Government has "run down the Covid Response and Recovery Fund which was supposed to be put aside for an outbreak". 

"There was $50 billion in this rainy-day fund, but the Government has run it down to around $5 billion by spending it on anything but COVID-related spending.

"The most important thing right now is keeping New Zealanders safe and, from an economic perspective, that means judicious decision-making.

"It's right that the Government supports businesses that are now required to shut-up shop but, just as the Reserve Bank takes steps to reduce uncertainty and cool an overheating economy, the Government must also step up by ensuring its spending is focussed on what matters.

"With inflation and labour shortages now the chief concerns, it is clear the Government needs to cut the waste and target spending where it is needed."

But Robertson doesn't expect he'll need to top up the more than $100 billion the Government has already borrowed to pay for the pandemic response, despite the lockdown expected to cost $1.5 billion in lost economic output. 

"We don't need to take on additional borrowing at this time. We have the resources that we need to meet the supports that we've announced."

The remaining money in the Government's COVID coffers will be used to pay for the wage subsidy, which is available nationally when there's a regional or national move to alert levels 3 and 4 for a period of seven days, to help eligible businesses keep paying staff and protect jobs. 

Prime Minister Jacinda Ardern and Finance Minister Grant Robertson.
Prime Minister Jacinda Ardern and Finance Minister Grant Robertson. Photo credit: Getty Images

The rates have been raised to reflect increased wage costs. The subsidy will be paid at a flat rate of $600 for people working 20 hours or more per week and $359 for those working less than 20 hours per week. Only businesses that can prove a 40 percent drop in revenue will be eligible.

The Resurgence Support Payment is also available to help support businesses or organisations with one-off costs due to a COVID-19 alert level increase to level 2 or higher. This is available to eligible firms at the same time as the wage subsidy. 

It's available for businesses or organisations that have experienced at least a 30 percent drop in revenue over a seven-day period, due to the increased COVID-19 alert level.

Other existing support, such as the Leave Support Scheme and Short-Term Absence Payment, will have rates increased in line with the wage subsidy.   

Robertson said the Government has more than $1 billion left over from the money set aside for the wage subsidy and Resurgence Support Payment. There is also unspent money left over from the small business loan scheme.  

"We've always said," claimed Robertson, "that we'll do what it takes to make sure we support New Zealanders through COVID-19."