NZ Election 2020: Judith Collins expecting dire news at pre-election economic update

The AM Show 16/09/2020

This article is brought to you courtesy of NewsHub reporter Jamie Ensor

National leader Judith Collins believes Wednesday's economic and fiscal update will show "just how bad things are" for New Zealand's economy.

The Government is set to open its books on Wednesday in what is referred to as the Pre-election Economic and Fiscal Update (PREFU). It provides an in-depth look at the Crown's financial position, especially significant this year in light of the sky-high borrowing the Government has been forced into due to the COVID-19 pandemic. 

Finance Minister Grant Robertson has previewed the update by saying that it will show that "our response to the 1-in-100 year shock caused by COVID-19 required significant ongoing investment to support business and protect jobs and incomes."

The PREFU will also provide updated economic forecasts, and while Robertson said it's difficult to make predictions in the current climate, "New Zealand will remain in one of the best economic and fiscal positions in the world coming out of COVID-19".

But the Leader of the Opposition believes there will be dire news on Wednesday, claiming the Government "panicked" with its COVID-19 response.

"They shut down just about everything, including the construction industry. I am now hearing of property developers or people doing the buildings, you know, the building people building houses, who are going broke. Why? Because they had months of not being able to get work done

Collins told The AM Show on Wednesday morning.

"It is [a] totally naive situation to expect people to just keep going with businesses, keep up the costs and just think that's going to solve it. I think today, when the Government is forced to open its books, we are going to see just how bad things are."

To fight the spread of COVID-19, the Government imposed a raft of measures early this year, including closing the border and putting the country into lockdown for nearly two months, stopping non-essential businesses from trading.

Those moves have been praised internationally, with New Zealand having recorded just 1450 confirmed cases of COVID-19 - including those reported in its second wave - and having suffered 24 deaths.  

The Government has repeatedly said the best economic response is a strong health response, arguing that it's better to have a short period of lockdown and stamp out the virus, rather than extended periods of minor restrictions with the virus remaining in the community.

To support businesses through the disruption, the Government implemented several schemes, like small business loans, three wage subsidies, and a more targeted tourism package. But that required billions of dollars of borrowing the Government hadn't previously expected.

After Auckland's August alert level 3 lockdown, Robertson said spending jumped back to levels seen under alert level 1. 

"The data shows the economic benefits of sticking to our clear elimination plan and investments in extra contact tracing and health resources. It follows from the strong bounce we saw after the initial moves after levels 4 and 3

he said.

Collins isn't ruling out imposing lockdowns if she becomes Prime Minister but says they would be more targeted in terms of the areas of the country covered. 

This article is brought to you courtesy of NewsHub reporter Jamie Ensor