Govt in strong position to invest, support economy

  • Hon Grant Robertson

A major international report on the economy has given the thumbs up to the Government’s strong financial position and ability to support families and invest in infrastructure to create jobs in the wake of COVID-19.

International credit ratings agency Moody’s has released an in-depth analysis of New Zealand, following its recent decision to reaffirm its highest Aaa rating on the economy. The report says New Zealand’s low government debt puts us in a position to invest in infrastructure, housing, education and measures to support families.

“New Zealand’s low government debt compared to the rest of the world puts us in a strong position to invest in the economy to create jobs and lift incomes as we recover from the impact of COVID-19,” Finance Minister Grant Robertson said.

“We can do this because we have managed the books carefully and kept debt under control to be ready for a rainy day. Our Economic Plan focussing on infrastructure, skills and education, productivity, regional economies and SMEs also puts us in a good position to kick-start growth again.”

The Government’s early and decisive action to put the wage subsidy in place to protect jobs was recognised in the report, as well as the $3.1 billion tax break for businesses and other positive cashflow measures, the residential rent freeze and benefit increase to support our most vulnerable and those who have lost their jobs.

Moody’s said the Government has a large degree of fiscal headroom to increase spending in coming years to support the recovery. While this will lead to higher debt and fiscal deficits, Moody’s said the commitment to responsible fiscal management means this is manageable.

“We are continuing to build our recovery plan in areas like infrastructure investment, manufacturing, regional opportunities, and the digital economy to cushion the blow of COVID-19, create jobs and boost incomes,” Grant Robertson said.

“Just as the rest of the world is looking to New Zealand’s world-leading public health response, we also welcome acknowledgement of our world-leading fiscal position and ability to invest for the recovery.”