Seven planks to rebuild New Zealand

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As we have observed, the New Zealand Government has already committed around $30 billion to support the economic recovery from COVID-19, with the potential for up to a further $20 billion to be spent.

These spending initiatives are being funded by a massive public borrowing programme. This underscores the need to ensure that spending is wisely directed into the areas that will deliver maximum benefit, particularly around building greater resilience within our public healthcare system, maintaining employment and driving a rapid economic recovery that benefits all segments of society.

Given public finances are limited, there are constraints on just how much the Government can and should do, so decisions need to be weighed and balanced against clear objectives, and prioritised to deliver maximum impact. This is no different than what any business does in terms of rationing capital expenditure off a limited funding base.

We have identified the following seven planks as being fundamental to rebuilding New Zealand’s economy:

1) Maintaining employment may require further support
2) Stimulating real growth requires an honest conversation about what growth means and identification of the critical enablers such as good infrastructure
3) Increasing productivity may include leveraging global investment or people and capital alongside significant structural changes in our economy
4) Addressing intergenerational inequity may mean making some tough decisions
5) Tax reform must be reconsidered to broaden the Government’s revenue base and remove investment bias
6) We need to maintain focus on combating the climate crisis
7) Recovery will need effective partnership between all elements of the public and private sectors

Find out more about the seven planks in our full report.