Finance Minister gives pre-budget speech

Minister of Finance Grant Robertson. Photo: RNZ / Samuel Rillstone.

Not all money set aside for the Covid Response and Recovery Fund has been spent, and $926 million of savings can used to help the recovery from the pandemic, Finance Minister Grant Robertson says.

Robertson is giving his annual pre-Budget speech to a business audience in Wellington.

"As part of Budget preparation I asked each Minister to look again at the areas of the Covid spending for which they were responsible to see if it was still required or still a priority, and whether underspends could be reprioritised," Robertson says.

"This exercise has yielded around $926 million worth of savings.

"We have committed to only spending what we need to in terms of our response and recovery. I am pleased that we have found these savings, and that they can be returned to the fund to aid our recovery from Covid-19 and targeted to where it is needed the most."

The Budget would outline details of the reprioritisation and how the Covid-19 Response and Recovery Fund was being managed, Robertson says.

Budget 2021 would be a "recovery Budget" and the government would strike a "careful balance" between continuing to invest in the recovery and beginning to reduce debt taken on during the pandemic.

Robertson says the prime minister has tasked him to lead a new implementation unit to ensure the government is tackling its core priorities; housing affordability, climate change and child wellbeing.

"The Unit will be funded through Budget 2021 and will monitor and support implementation of a small number of critical initiatives, particularly where multiple agencies are involved in the work."

The economy had proved resilient, and though sectors such as tourism, events, international education and hospitality had "done it tough", New Zealand was strongly positioned in terms of unemployment and GDP.

"But for all of this resilience, we are still at a difficult period in the recovery from Covid-19," he says, with devastating impacts of the pandemic all too real in India and other nations around the world

Most forecasts continued to emphasise the likelihood of continued volatility, and supply chain issues were set to affect the economy for much of the rest of this year and potentially into next year, says Robertson.

"It's essential to stick to our plan of keeping New Zealanders safe from Covid-19, continuing the focus on keeping borders secure while opening up carefully, and rolling out the Covid-19 vaccine.

"In addition to its importance in keeping New Zealanders safe, the vaccine is an important part of our economic strategy," he says.

Details of this year's Budget will be revealed on May 20.

Official figures released last month showed a deficit of $4.5 billion for the eight months ended February - $3.7b less than forecast.

Treasury says the strength of consumer spending, company profits, and the labour market delivered an unexpected $2.2b extra tax revenue.


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