Finance Minister Grant Robertson has fronted to the Finance and Expenditure Select Committee, defending the government's planning and use of the Covid-19 Response and Recovery fund.
Finance Minister Grant Robertson appears virtually before the Finance and Expenditure Select Committee. Photo: Screencap
With Parliament suspended for the week under alert level 4, the select committees are being used as the main source of scrutiny on the government's handling of the pandemic, and the Delta outbreak in particular.
Robertson told RNZ Political Editor Jane Patterson the government had enough in the Covid-19 fund to cover a nationwide alert level 4 for at least month, before having to top up through borrowing.
The cost of the wage subsidy was about $1.5 billion a week based on the previous lockdown, he said, but about $5bn remained in the fund and the government was seeing fewer applications for it from larger employers.
Speaking to the Finance and Expenditure committee this morning, Robertson said some of the funds that had been allocated had also not yet been spent and would be available to be used should it be needed.
"I think that overall the fund has done exactly what we wanted it to do," Robertson said.
"We have held money back in the event there was a resurgence ... but we also have to take a step back here and remember that the economy has gone extremely well, we have more fiscal headroom."
National economic spokesperson Andrew Bayly asked about whether there were vaccine assumptions built into the planning for the fund, but Robertson said at the time it was set up there was no Delta variant, and while the government could borrow more if it needed to that would not be necessary at this point.
ACT leader David Seymour asked about whether funding was spent on the free school lunches programme because they were not forseeing a further outbreak.
Robertson argued the planning for the fund was appropriate and matched its purpose.
"We were all thinking a bit differently at that time last year ... I know I'm sounding like a cracked record here ... we have the ability to manage this for any length of time that it goes for."
He said while there might be some reduction in demand in the economy during a lockdown, it was deferred demand, not disappearing demand.
"New Zealand businesses are relatively resilient and adaptable."
He stood by the decision to introduce stimulus projects, but said if the government was looking at similar projects now it might not necessarily do them.
He would not rule out having to go back to Parliament for a further imprest supply bill - seeking a top-up of immediate funding for the government to pay for unexpected things as it goes through its budget process - but told National economic spokesperson Michael Woodhouse that if that was needed it would be "merely a technical financial change".
Robertson said he had not spoken to officials about how much might be needed should that occur, but they did have the money to pay out the wage subsidy scheme for a significant amount of time.
He said the fund supported a wide range of appropriations, and Covid-19 Response and Recovery were the main purpose of the fund.
Woodhouse challenged him on whether all the programmes the budget had appropriated from the fund for - including funding for libraries, horticulture wellbeing or RNZ funding - were truly related to Covid-19 response and recovery.
Robertson said the vast bulk of the money had been spent on things like support schemes through the Ministry of Social Development and provision of vaccines and other things related to Covid-19 through Health.
Treasury expects house price growth to slow
Treasury Secretary Caralee McLeish told the Finance and Expenditure Select Committee this morning Treasury was expecting house price growth to slow further as interest rates rise.
She said the last time Treasury updated its house price forecasts was in the May Budget.
"Clearly since that time house price growth has not slowed as sharply as what we expected ... nonetheless growth is moderated from around 3 percent per month around the turn of the year to a slower rate of 2 percent now."
Dr Caralee McLiesh Photo: RNZ / Dom Thomas
She said there was still momentum in the market driven by low mortgage rates, but the Reserve Bank had signalled it intended to reduce monetary stimulus.
"Over time we are still of the view that house price inflation will slow," she said.
"The market slowdown will be reinforced by strong construction, a good pipeline of supply, slow population growth ... and ongoing policy reforms of government through the urban growth agenda, the RMA reforms, the tax changes that are progressively being implemented."
That would add to the moves on housing being made by the Reserve Bank including LVR ratios, debt-to-interest restrictions and interest rate floors.
Rental support not being considered for now
Robertson told the select committee the government was not at this point planning to institute rental payment freezes.
"We'll keep an eye on it," he said.
He said rents had been increasing and referred to support available through the Ministry of Social Development.
National's Nicola Willis asked if the government was considering a rental support scheme for businesses.
Photo: RNZ / Samuel Rillstone
Robertson said that was part of the reasoning behind the Resurgence Support Payment. He said work was also ongoing into the rental clause to allow negotiation if businesses were unable to pay rent for an extended period of time.
He said Kris Faafoi as Minister of Justice was considering a range of options about what further work could be done in that area.
Willis also asked about whether the government was concerned that the lack of butchers, bakers and greengrocers able to open at level 4 meant a lack of competition in the sector. Robertson repeated the government's position that it was too much of a risk to open so many extra businesses up.
Māori health providers missing out?
Te Pāti Māori co-leader Rawiri Waititi said they were hearing on the ground that Māori providers were not receiving as much support as non-Māori providers, and noted the most recent Budget had not increased funding to Whānau Ora.
Robertson said Ministers Chris Hipkins and Peeni Henare were the ones to ask about funding provision to Māori providers. He noted that Whānau Ora did receive a funding increase in the 2020 Budget, and said they also had extra funding for things like vaccination programmes, but he would not commit to recommending to Parliament a further increase.
Waititi asked whether the government would guarantee 25 percent of the Covid-19 Response and Recovery fund would go towards kaupapa Māori. Robertson said he could not promise that.
Waititi noted that 50 percent of those affected by the outbreak were Pacific Islanders, and asked whether there would be funding set aside for Pacific providers. Robertson said that was already happening.
Te Pāti Māori co-leader Rawiri Waititi (file photo) Photo: RNZ / Samuel Rillstone
