Prime Minister Jacinda Ardern

Statement to Parliament on Economic Response to COVID-19

delivered 17 March 2020, House Parliament Building, Wellington, New Zealand

Audio AR-XE mp3 of Address

 

[AUTHENTICITY CERTIFIED: Text version below transcribed directly from audio]

Mr. Speaker,

There are moments in our history where it's not business as usual, when New Zealanders expect us to come together, when we need unity, not politics as usual.

And today, Mr. [Simon] Bridges, is one of those days.

And on this side of the House, that is what we'll do.

Mr. Speaker,

Saturday was a day when I said that the package we would announce today would be the most significant of my time in this role. And many interpreted that to mean that it was just about the quantum. It was not. It was significant for another reason. The Minister of Finance and I, Grant Robertson, as you can imagine, met over the weekend and spoke many, many times, but on Sunday he gave me a call, and as we were talking about how we were progressing with the work of the package, he stopped to spend a bit of time to talk to me about some of the phone calls he'd had and emails he'd received from businesses, employers -- people who treat their employees like family -- had been sending him.

And that is the reason this package is the scale it is today. It is about people. This entire Government, since the moment we were elected, has been focused on people, and that is why our response right now, in the wake of what is a global pandemic, an economic issue the likes of which we have never seen before, will put first and foremost people.

Now, our response has meant that in unprecedented times you make unprecedented decisions. And we had a window as a nation to take some very difficult decisions, to move early and place restrictions at our border in order to protect New Zealanders' health. We took that opportunity, and it was a big decision. There weren't other countries to look to and rely on, because other than Israel, no one like us was making that decision. But we did. And it was the right thing to do.

But these decisions will have an impact, and they will be significant. But a strong health response is our best economic defense. Countless stories, though, do sit behind the impacts of these decisions, and, as I've said, I totally acknowledge that; and that is why, as I said, we went hard on that public health response, but we will go just as hard with the assistance that we are providing. And it is about people.

Today's package is designed to cushion the impact as we look to address the impacts on areas where we have traditionally had a large part of our economy facing. We are a nation that likes to welcome and open our doors to tourists from around the world, show off our beautiful spaces, give our visitors an adrenalin rush and show manaakitanga1 to everyone who comes; and yet our chance to do that now is on hold; and where does that leave so many of our employers who rely on that?

Well, today we have been able to provide this response because we have always been prepared for the fact that a rainy day could befall us. As a nation that is a part of shaky isles, who has volcanoes, who experiences extreme weather events, earthquakes -- we are a nation who prepares, and we did. We came in and got ourselves in an economic position where our debt was lower that when we inherited it, and we did that just in case we had a rainy day, and, Mr. Speaker, it is here.

This package is significant: 12.1 billion dollars represents, as the Minister of Finance has said, the equivalent of roughly three Budgets' operational allowances. We pulled it together in a short space of time, but we did give it a critique, a lens of people -- what will give the maximum support we can to try and keep people in work as businesses look to reorientate, to prepare, and to focus on what the future will hold, and what will be a new normal for New Zealand.

We could have done what other countries did: If you wanted to move quickly, in a space of a few days, you could have simply given a bulk payment to business. I know the Leader of the Opposition often looks to our neighbors, Australia, for the kinds of initiatives they adopt. I know with interest that their plan included a business payment of 25,000 dollars. It was a cash payment, a bulk payment, a one-off.

In our view, Mr. Speaker, that was not going to be sufficient, particularly for the makeup of businesses in New Zealand. We are a nation of 520,000 businesses. Seventy percent of them have no employees. In fact, we thought about that when we designed our sick leave provisions and our wage subsidies -- sole traders. The Uber driver people we're worried about who might have to self-isolate -- they are covered by these packages. We have 100,000 businesses -- 19 percent -- who have one to five employees; the next group, six to 19; that makes another 7.5 percent.

In total, we are covering 97 percent of our businesses in New Zealand with this package, for all of their employees -- for all of their employees. And whilst we've put in a cap, Mr. Speaker, at 150,000 dollars, that does not stop a larger organization with more employees accessing this package as well.

Mr. Speaker,

What we've also said is we've recognized there will be larger firms that might need specific support, have unique circumstances. We are a nation small enough that we can deal with those in a case by case basis, and that is what the Minister of Finance is focused on. The package includes that wage subsidy I've described. It includes support for those who may be required by health authorities to self-isolate, and who may, for instance, be a food truck driver at a festival who operates their own business and cannot afford to sustain their family while they self-isolate and can't work. We have thought about all of that.

It also, of course, Mr. Speaker, includes a considerable boost to our health response. And I do want to say that on our health front, we are gearing up every day. Every day that we have this additional time, we are utilizing [it] to make sure our response is ready for the cases we inevitably continue to receive. Our testing, for instance, Mr. Speaker, by the end of the week will up -- be up around 1500 per day. And, Mr. Speaker, that puts us on an equivalent footing with those nations, on a per head basis in our capacity, with the likes of Korea. Now our plea is to clinicians: If you believe you should test, test. If you believe you should test, test. The capacity is there, Mr. Speaker.

Mr. Speaker,

We were better placed than most countries in terms of our financial position and in terms of our debt position to weather this storm; and now that, Mr. Speaker, mean we are better able to respond. I have not seen a nation in the world who has yet put up a package of this quantum, and that is because we recognize our situation is particular. We are an island nation who trades, exports, imports, who relies in many quarters on tourism, and that is why we have gone hard with this assistance package.

But, Mr. Speaker, the other point I wish to make, of course, is that we have included two particular parts of this package that are -- three -- that are designed for consumer spending. I'd say to the Opposition: They used the in-work tax credit during the global financial crisis, and we have to. And I would have thought they would support that change. That helps people whose hours drop and who might have otherwise lost eligibility for the in-work tax credit. We've doubled the winter energy payment because that goes to over-65s, who we must keep well this winter. It is a practical initiative.

And finally, on benefits -- again, Australia did the same thing. If you want to stimulate [an] economy, you give it to the -- you give extra support to those on the lowest incomes. Because they have a lower income, they spend it, and that is what our economy needs right now, Mr. Speaker. It is a known tool in situations like this. Other nations are using it, and we are too. Mr. Speaker, I will point out, though, that of the 12.1 billion dollar package, $7.9 billion -- $7.9 billion -- is focused on continuity for business, certainty for business, and stimulus for business.

Mr. Speaker,

My final word is -- is for New Zealanders. As the Minister of Finance has said and as I've said many times before, there is huge uncertainty out there right now, but one thing I'm certain of: We are a nation that has been shaped because of our experiences, and they often have been tough, harsh, and unpredictable. That is when New Zealanders are at their best. That is when we rally: when we look after one another, when we care for the most vulnerable.

So, Mr. Speaker, my final message is this to New Zealanders: Be strong, but be kind. We will be okay.


1 Māori (loosely) for "hospitality," "kindness," or "support" [Sources: https://media.newzealand.com/en/story-ideas/manaakitanga-%E2%80%93-unique-new-zealand-hospitality/ AND https://en.wikipedia.org/wiki/M%C4%81ori_Language_Week AND https://www.bing.com/translator/]

Original Text Source: parliament.nz

Original Audio, Video, Images (Screenshots) Source: Vimeo.com

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Page Updated: 3/27/20

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