'Better vocational pathways' to be included in NCEA overhaul
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RNZ News
3 hours ago
- RNZ News
Treasury briefing points finger at government spending during Covid-19 pandemic
The Treasury briefing said the Covid-19 response showed the challenges of using fiscal policy to respond to shocks and cycles. Photo: FANATIC STUDIO / SCIENCE PHOTO L The previous government spent too much during the Covid-19 pandemic, despite warnings from officials, according to a briefing released by the Treasury. The Treasury's 2025 Long Term Insights Briefing said debt had risen in recent decades, partly because responses to adverse shocks were not met by savings between those shocks. The higher debt meant less capacity to respond to future shocks, like natural hazards, weather-related risks and biosecurity risks. Treasury estimated the total cost of the pandemic was $66 billion over the 2020-26 financial years and about 20.4 percent of GDP. The IMF and OECD estimated it was among the largest Covid-19 responses globally. The agency releases a briefing every three years, with this one looking at the role of fiscal policy through shocks and business cycles. The briefing said the Covid-19 response showed the challenges of using fiscal policy to respond to shocks and cycles. Initially, Treasury recommended "strong fiscal stimulus" at the start of the pandemic, which was cited as "perhaps" causing the economy to be much stronger than expected by the end of 2020. The wage-subsidy scheme in particular was seen as making an important contribution to the strong initial recovery, limiting the increase in the unemployment rate and enabling economic activity to resume when restrictions relaxed. Treasury then moved away from recommending broad-based stimulus, preferring more targeted and moderate support. Its post-election advice to the then-Finance Minister in late 2020 highlighted "the importance of controlling ongoing spending and ensuring it was high value to meet the medium-term fiscal challenge." By August 2021, with the Delta lockdowns coming in, Treasury recommended any decisions to provide support to businesses "should take account of macroeconomic trade-offs". It recommended against any further stimulus from Budget 2022 onwards. Wage subsidies and similar schemes during lockdowns made up about 35 percent of the costs of the response. A further 18 percent came from health-system costs, like vaccination, contact tracing, and managed isolation and quarantine. The remaining "nearly half" was made up of a wide range of initiatives that Treasury said had "varied objectives". Some were aimed at directly responding to the impacts of Covid-19, others were aimed at providing fiscal stimulus or "achieving social or environmental objectives". They included "tax changes, training schemes, housing construction, shovel-ready infrastructure projects, increases to welfare benefits, the Small Business Cashflow Scheme, Jobs for Nature, additional public housing places and school lunches". Programmes within the fiscal response that were not tied to the shock were seen as having "a lagged impact on the economy and proved difficult to unwind in later years". The report suggested cyclical management was best left to monetary policy, run by an independent central bank. It also suggested governments set out clearly when fiscal policy will be used ahead of time, including pre-defining responses. Ideally, this would have cross-party agreement. An independent fiscal institution, which could scrutinise and report on the sustainability of fiscal policy, was also suggested. The previous government had considered setting up a watchdog to cost election policies, but it could not get cross-party support. National then changed its tune, with current Finance Minister Nicola Willis supporting such a measure, but New Zealand First and ACT were opposed to the idea. Willis jumped on the report's release, saying Treasury's language was "spare and polite", but its conclusions were "damning". She said the briefing showed the challenges of using "big spending measures" to respond to one-off shocks. Willis singled out the briefing's focus on the money spent on initiatives not directly tied to the Covid-19 response. "That is a very diplomatic way of saying New Zealanders are still paying the price of the previous government extending a big-spending approach, initially intended for a pandemic response," she said. RNZ has approached Labour for comment. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
NZ Herald
4 hours ago
- NZ Herald
NZX steady as Eroad rallies on road user charge changes
'Of course, we have an earnings season starting next week, so you tend to see volumes a little lighter as people await the company announcements and guidance especially,' Sullivan said. 'US markets were positive, even though India has been hit with a higher tariff level than initially quoted. Our interest rates are buoying the market more than geopolitical instability and tariffs.' On the NZX, Eroad rallied by 26.42% today after the Government unveiled a raft of changes to the country's Road User Charges system in preparation for 3.5 million vehicles becoming liable for the charges. As has previously been signalled, the current Fuel Excise Duty is expected to be abolished in the coming years, with all vehicles moving to Road User Charges (RUCs). Eroad's share price lifted 42c to $2.01 after 3.1 million shares changed hands on turnover of $5.9m. 'Obviously they're seen as a potential frontrunner for being able to offer a solution in that area. Material uplift in volume and share price and their market cap would put them up as a NZX 50 constituent as well, so the potential to eventually be included in NZX indices.' Elsewhere, Radius Healthcare shares rose 3.90% to $0.40 on high volume of 10.4 million shares after it announced an upgrade to its projected underlying earnings before interest and tax. Sullivan said Radius doesn't seem to be able to put a foot wrong at the moment, noting its share price rose 22% in July, 22% in June and 25% in April. Chorus also had another positive day, with its share price lifting 1.21% or 11c to $9.20. Contact Energy, meanwhile, fell 0.76% to $9.10 after $11.1m in turnover was traded. US markets Wall Street stocks rose on Wednesday local time, with Apple and most other large tech companies rallying as markets largely shrugged off US President Donald Trump's latest tariff hikes. Apple piled on more than 5% after White House officials said the tech giant plans an additional US$100 billion ($168b) in capital spending in the United States. Amazon and Google parent Alphabet were among the other large tech names that also rose. 'By standing up and publicly announcing a domestic investment with President Trump, it reduces the likelihood of Trump imposing new tariff burdens on Apple,' said FHN Financial's Chris Low. The Dow Jones Industrial Average finished up 0.2% at 44,193.12. The broad-based S&P 500 gained 0.7% to 6,345.06, while the tech-rich Nasdaq Composite Index climbed 1.2% to 21,169.42, less than 10 points from an all-time record. Trump ordered an additional 25% tariff on Indian goods. The levy, which is expected to come into force in three weeks, is due to New Delhi's continued purchase of Russian oil. – Additional reporting AFP Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
RNZ News
5 hours ago
- RNZ News
Review ordered into product labels
The government has officially labelled product labels a problem and ordered a review. It said we currently have 30 codes, standards and regulations, and that is too many, with the current requirements costly, frustrating, complex and outdated. Commerce and Consumer Affairs Minister Scott Simpson spoke to Lisa Owen. To embed this content on your own webpage, cut and paste the following: See terms of use.
