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Saturday, April 17, 2021

Budget to sharpen focus on COVID recovery

Budget 2021 will sharpen the focus on supporting the New Zealand economic recovery as the Government continues to keep New Zealanders safe from COVID-19. 

Speaking at a BNZ Breakfast event in Wellington this morning, Finance Minister Grant Robertson released the 2021 Budget Policy Statement, saying the May Budget provided a chance to take stock of how New Zealand and New Zealanders have come through COVID-19.

“The recovery is the result of the hard work and sacrifice that New Zealanders collectively put in across 2020. We now have an opportunity, through our better than expected recovery and fiscal position, to address some of our long-standing challenges,” Mr Robertson said.

“At Budget 2021 I will continue my focus on making sure spending is targeted at the areas and people that need it the most. We will manage the books carefully including ensuring we are getting value for money in all areas of Government spending and reprioritising spending where appropriate,” he said.

“We will also continue the balanced approach to invest in strong public services and addressing issues like housing, while keeping a lid on debt.

“New numbers released today using Treasury’s Fiscal Strategy model show that our better than expected recovery means net debt is now forecast to reduce to 36.5% of GDP by 2034/35. While these are only projections they show the progress that we are making.

“New Zealanders trusted us to keep them safe last year, and we will continue to make the tough decisions required to do that, while also keeping the economy moving in the right direction.”

The Budget allowances for 2021 are unchanged from those announced in December, though they are subject to change depending on economic conditions. 

Budget 2021 will focus on the Government’s overarching objectives for this Parliamentary term which are: continuing to keep New Zealand safe from COVID-19, accelerating the recovery and rebuild and addressing key issues like climate change, housing affordability and child poverty.

Specific Budget 2021 investments will fall under four high-level priorities: continuing the COVID-19 response, delivering priority and time-sensitive manifesto commitments, supporting core public services through managing critical cost pressures and continuing to deliver on existing investments.

These are underpinned by the Wellbeing Objectives, which are now a requirement under changes made to the Public Finance Act. These objectives continue the evidence based focus started in the Wellbeing Budget. The 2021 Wellbeing Objectives are:

  • Just Transition to a Low Carbon Economy
  • Future of Work: Lifting Productivity and Innovation
  • Lifting Maori and Pacific Incomes and Opportunities
  • Reducing Child Poverty and Improving Child Wellbeing
  • Improved Mental and Physical Health Outcomes

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