Finance Minister Grant Robertson has been granted authority to spend up to $41 billion over and above Budget 2021 as a contingency for "unexpected expenditure".
Robertson's Imprest Supply (Second for 2021/22) Bill passed through Parliament on Thursday - legislation that gives the Government power to spend billions of dollars more than had been laid out in May's Budget plan.
It's the second time Robertson has sought this financial authority to keep up with COVID-19 costs. The initial Imprest Supply Bill passed in June last year authorised up to $56.5 billion, of which $20.5 billion - or 36 percent - was utilised.
The Government doesn't necessarily intend to spend $41 billion more than set out in the Budget, as some of the amount is funding shifted between allocations, is already accounted for in the Budget, or is unlikely to be used.
"The Government is seeking a maximum authority of $41 billion," Robertson said in Parliament on Thursday. "It is an authority to spend, not a target for spending."
National and ACT were the only parties in Parliament to oppose it, because the additional spending would add to the Government's current debt pile of more than $100 billion. But because Labour has a majority, their votes were not needed.
"They are going to increase net Government debt by $140 billion over four years. Let me put that into perspective," said ACT leader David Seymour.
"There are 5 million New Zealanders, and if everyone was in a family of five, there'd be a million of them. So for every family of five, this Government is borrowing an additional $140,000 to get through COVID."
National MP Michael Woodhouse bet a bottle of wine in Parliament last week that Robertson would seek the authority to spend over and above Budget 2021.
He's been critical of Robertson for spending around $12 billion from the $50 billion COVID Response and Recovery Fund - established to pay for things related to the pandemic such as the wage subsidy and vaccinations - on projects with tenuous or no links to COVID-19.
"We know COVID-19 has created the need to support those affected by the various lockdowns," Woodhouse said on Thursday, "but funding for things like cameras on fishing boats and Papua New Guinea tattoo practice and revival should be put through normal Budget scrutiny, not slapped on the COVID fund tab."
Prime Minister Jacinda Ardern reminded National in Parliament that during the election, leader Judith Collins pledged to spend the COVID fund on non-COVID related things.
"I recall the member campaigning on spending that fund on roading," Ardern said.
The latest financial update showed there was about $5 billion left in the COVID fund, but Robertson recently revealed $2 billion from the small business cash flow loan scheme hadn't been spent, and tax intake was about $6 billion better than expected.
Ardern promised not to bump up taxes.
"No, we will not be increasing taxes," she said in Parliament. "We didn't campaign on doing that and we did that, of course, knowing the impacts of COVID-19 and our various preparations we would need for the response to COVID-19."
Any spending from the $41 billion envelope of funding under the Imprest Supply Bill has to be approved by Parliament. But Seymour is skeptical, due to the Government's handling of the $30 million Ihumātao land purchase.
The Auditor-General in April deemed the purchase unlawful, because the Government did not get Parliament's approval to create a special fund within the Ministry of Housing and Urban Development to purchase the south Auckland land.
"The Ministry did not seek the correct approvals, the expenditure was incurred without appropriation and without authority to use imprest supply," the A-G said at the time. "For these reasons, the payment is unlawful until validated by Parliament."
Housing Minister Megan Woods told Newshub at the time she would "tidy up" the issue, describing it as a "technical error", but admitted it was "not the way we aim to operate".
Seymour said the public purse should be spent carefully.
"The Auditor-General ticked them off for spending money outside the exact type of appropriations that we're debating today that are required by law for the Government to spend the taxpayer's money."
Robertson argued the economy is performing well under his watch.
"Not only is net core Crown debt in New Zealand tracking below Budget forecasts but New Zealand's level of net core Crown debt sits at one of the lowest in the OECD."
Robertson revealed on Friday that around $2.2 billion has been paid out during this latest outbreak on the wage subsidy and resurgence support payment.