Finance Minister Grant Robertson says tax increases aren't coming soon, but won't rule them out further down the track.
Robertson and the Government unveiled Budget 2020 on Thursday, revealing a $50 billion COVID Response and Recovery Fund focused on creating jobs amid the pandemic.
According to Treasury, unemployment is likely to hit 8.3 percent by the end of June and then peak in September at 9.8 percent.
Of the $50 billion, $20 billion has yet to be allocated, but Robertson has stressed the $50 billion isn't a spending target. Instead, it provides flexibility to the Government to respond to the ever-changing times.
As a result of the increased spending, and therefore borrowing, net core Crown debt is expected to jump to 53.6 percent of GDP by 2023. This is still below what is likely to be the peak in many other developed countries.
The Finance Minister told The AM Show on Friday that the massive measures were necessary during a "1-in-100 year shock".
"This is a period of time where the responsible thing to do is to borrow more money because that's how we are going to support New Zealanders through this. The good news is that the cost of borrowing to us as a country is relatively similar to what it was a couple of years ago but we are borrowing a lot more. That's because interest rates are cheap and the Government can borrow in a way that individuals can't," he said.
"It is worth noting that even at the end of this with the projections we have got here, we will still have one of the lowest rates of debt for a country in the developed world. That's because we started from such a low starting point.
"That level of debt starts to come down over the next few years because we will be growing the economy and growing it sustainably. The whole point of making the investments we are making is so we grow jobs and that we have people who are employed."
The AM Show host Duncan Garner questioned Robertson on whether higher taxes could help pay for the spending.
"No, this Budget is not about that. This Government has made clear that is not the direction we are going into. The election campaign is still to come. My focus has been squarely on making sure New Zealand responds, starts to recover and starts to rebuild. Those are questions for another day. We are focused on making sure we support New Zealanders through this."
Pushed on whether he would rule them out, Robertson said: "The Labour Party's tax policy will be released before the election."
"The public will get the chance and the opportunity to vote on that. What I do know is right now is not the time to be taking money out of people's pockets. We are putting money in, we are supporting people through this," he said.
"The election campaign is still to come, Duncan, and we will have plenty of time, you and I, to talk about those policies. What we are talking about today is a Budget that focuses on investing huge sums of money and creating jobs and getting New Zealanders through this. That's the right thing to be doing."
One of the investments the Government is making is in tourism with a $400 million package consisting of a number of schemes to reorientate businesses towards a domestic and Australian market, protect key assets and establish a taskforce to "lead the thinking on the future of tourism".
The package has, however, been criticised as not being enough for a sector massively hurt by border closures and the lockdown.
"We're being told we've got this wonderful $400 million package. I note with interest recently racing, who somehow managed to be given a bit of a lifeline before the announcement of the Budget, have been given $72 million," Pan Pacific Travel managing director Matt Brady told RNZ.
"I think at best they're claiming $1.6 billion [in contribution to the economy]. Tourism - $17 billion [contribution to the economy] - gets $400 million."
But Robertson told The AM Show tourism will also be supported by the extended $3.2 billion wage subsidy scheme which will run for a further eight weeks. The adjusted scheme requires businesses to show a 50 percent revenue loss for the 30-day period prior to the application date compared to the same period last year.
He also said that there is more coming for tourism at a later date.
"I made really clear yesterday when I gave the Budget speech that this is our initial contribution to the tourism recovery plan. Cabinet actually only signed that plan off this week and we will keep working with the industry to develop it," he said.
"The people I talk to in the tourism industry are aware things are not going to be the same. We are going to be working with them. $400 million is the first part of our contribution.
Key Budget 2020 measures:
- $50 billion COVID-19 recovery fund
- $4 billion business support package, including the targeted wage subsidy extension
- $3 billion infrastructure investment with 8000 public house build programme planned
- $1.6 billion for trades and apprenticeships
- $1 billion environmental jobs package
- $3.3 billion to strengthen health and education