Coronavirus: Kiwi's "income will reduce significantly" - Finance Minister

coronavirus 26/03/2020

Finance Minister Grant Roberston speaks with Peter Williams about the supply of money for New Zealand and the size of our Gross Domestic Product.

Peter begins by asking, “How much money can New Zealand borrow to keep us afloat during this crisis?”

The amount of money New Zealand had owing was 20 percent of what we make as a country each year, Robertson explains around the world, this is quite low.

He goes on to say that future generations will have to bear the cost of paying the debt down.

Right now, we do what we have to do to keep people housed and fed

“We’ve got room, and were doing what needs to be done to protect New Zealanders”, Roberston claims.

Peter questions the size of New Zealand's GDP, to which Roberston confirms it is around $300 billion.

“We’re spending a lot of money and we’re still not at the point.”

When asked how seriously the finance team are considering the Universal Base Income, Roberston replies; no country has been down this kind of path before.

We are going to have a period of time where a large number of New Zealanders’ income will reduce significantly

An income law allows New Zealanders’ to be in a position where they can say ”at least I have this month's income,” Roberston explains.

There are different models available in New Zealand, such as Superannuation and The Benefit. 

Peter goes on to ask whether there will be a limitless supply of money for each country.

Roberstson explains the US Federal Reserve has said they'll do what it takes to keep pumping money out, and New Zealand should have confidence in our strong economy.

“Central banks have never had to deal with this”, says Roberston, but the financial system remains liquid for now.

Listen to the full audio above.