Ardern offers a steady hand and consistency to deal with the Covid crisis and build a better future.

Aug 11, 2020

The New Zealand Prime Minister launched the Labour Party election campaign on Saturday August 8 with one piece of new policy in a pitch that focused on maintaining the Covid control and economic recovery plan to support people and businesses and build a better society.

As she spoke New Zealand was about to reach one hundred days without community transmission of Covid-19. All known cases had arrived from overseas and were in supervised isolation.

This is a victory for the government and health officials who kept New Zealanders safe while the virus continued to wreck lives and economies around the world.

They chose the risky path to lock down early and hard in the belief that a strong health response would be the foundation for the best economic outcome.

The most recent numbers show unemployment was at four percent which is lower than projections and even lower than the same time last year.

Critics say this is only because of the Government’s extra support for employment and businesses. Even so it is a remarkable achievement and helps form a foundation for recovery.

Officials warn of a possible second wave in New Zealand. They point to the crisis in Victoria that has stalled plans for a trans-Tasman bubble. The New Zealand tourist industry must make do with domestic travellers.

The Government of Jacinda Ardern aims to turn the disaster of the pandemic into an opportunity to “build back better.” In its first two years the Labour Government posted surpluses and kept debt to lower than twenty percent of Gross Domestic Product, lower than almost any other country in the OECD.

Ardern said this careful management had prepared the economy for a rainy day. That day came but the response comes at a high cost. The first victim was the budget responsibility rules. The Government’s debt could rise to over fifty percent of GDP, still better than the likely outcomes for Australia, the UK, Canada and the United States.

The Opposition’s new leader Judith Collins asserts that the Government has no plan and has no record for the successful delivery of programmes nor for good financial management. This is likely to be a theme of the National Opposition’s election campaign.

At the Labour Party Congress on July 5 Ardern described in detail the measures being used to manage the pandemic and support the economy through the quick and severe Level Four lock-down.

The “Five Point Plan” plan goes further, to tackle the predicted Covid recession without producing poverty, inequality and persistent unemployment. It is a solution that rejects austerity as an option, but uses debt at a time of cheap money to build a new economy.

The first point of the plan is to invest in support for the people of New Zealand. Measures have included doubling a winter energy payment, increases to welfare benefits and financial support for affected employees.

Behind the scenes the tax department was given new rules that are more lenient on taxpayers who have difficulty meeting their obligations because of the pandemic.

The Government’s measures to adapt the work force to the new digital era and move towards a low carbon economy have been boosted by investment in trades training including making all apprenticeships free. Vocational training in key sectors like construction, building and mental health support will also be free.

The second part of the policy involves promoting employment specific areas including infrastructure, housing and improving the environment.

Part of this policy was announced before the Covid crisis struck. In January the Government announced investments in infrastructure that although very large at the time aimed to keep debt under twenty percent of GDP. The initiative targeted road, rail, public transport, schools and health infrastructure, creating thousands of jobs in all regions of the country.

An early response to the pandemic was to quickly house every one of New Zealand’s homeless. The Government plans to continue the process by building thousands of social houses, the largest house building programme in recent decades in New Zealand.

Billions of dollars are being provided for “shovel ready” (ready to start) projects proposed by local governments and Maori communities. These projects are expected to create over 20,000 jobs in the next five years.

Funding for the Department of Conservation is aimed at creating thousands of jobs in projects to clean up waterways, restore wetlands, restore native bush and control pests.

The third part of the plan is to prepare for the future.

Investments are being made in training digital advisers and helping companies adopt digital e-commerce methods. Loans will be provided to businesses that rely on research and development.

New policies are to be announced to improve waste management and to convert New Zealand to entirely renewable energy sources.

The fourth part of the plan supports small businesses. The wage subsidy scheme has helped many New Zealanders stay in work during the lock-down. It has avoided a spike in unemployment.

A small business loan scheme provides interest free loans to help companies meet their cash flow needs.

The fifth plank in the policy is to position New Zealand as a place to trade with, invest in and eventually to visit again. Two hundred million dollars have been provided to help exporters re-engage with international markets and support first time exporters. Twice that amount is being invested in tourism to prepare for the re-opening of international travel.

At her campaign launch rally Ardern announced that if re-elected the Government would provide additional funds which would be used to double a wage subsidy to help businesses employ up to 40,000 New Zealanders whose employment is impacted by Covid-19.

Grants would be made to employees who lost their job to start a business of their own.

The measures to help business and employment through the Covid crisis appear to have helped the Government to retain its high level of popularity.

The latest Roy Morgan poll shows the Labour Party scored 53.5 percent with the National Opposition party on 26.5 percent. The Government coalition group of Labour, New Zealand First and Greens scored 63 percent against the National and ACT alliance on 33 percent.

On those figures in a General Election Labour could govern alone. New Zealand First, which held the balance of power and put Labour into office in 2017 would be out of Parliament.

The poll covered the period before and after Judith Collins became the new Leader of National in mid-July. Early indications are that Collins has had a negligible impact on support for National although a full month of polling in August will provide a clearer picture.

National has yet to launch its campaign and with the election still months away on September 19 anything could happen. There are hints National might offer a tax cut.

Saturday’s campaign launch focused on the existing wide range of measures aimed at delivering the greatest of priorities, a healthy population and a soundly based economic recovery. But for Ardern and her colleagues mere economic survival with an acceptable bottom line result is not good enough. From the upheaval of the Covid crisis they are determined New Zealand will emerge as a better country in which its people can flourish.

Max Hayton is a former political correspondent and foreign editor in New Zealand.

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