Budget kicks recovery heavy lifting to Covid fund

LGNZ has welcomed Budget 2020, which allocated significant funding to a number of important initiatives from a local government perspective.  However many of the questions related to how the Government will kick start economic activity and address major challenges like climate change and housing affordability remain unanswered.

The announcement of a $1.1 billion investment to create 11,000 environment jobs in the regions was singled out by LGNZ as an important initiative that would support employment in the regions while also delivering a conservation dividend.

The additional allocations to health, social services and wage subsidies were also welcomed, recognising that these investments would go a long way to help alleviate the pressure placed on communities by the Covid-19 shutdown and the resulting economic shock.

LGNZ however noted that in many key areas Budget 2020 appeared to be missing in action, particularly stimulus related recovery investments, climate change and housing, choosing instead to leave these until later.

“I congratulate the Government on delivering a budget that will provide critical support to many New Zealanders struggling with the effects of the Covid-19 shutdown – the measures outlined today will help households stay afloat in difficult times,” said LGNZ President Dave Cull.

“However it leaves those looking for further detail on how the Government intends to get the country truly back onto the road to recovery wanting. We anticipate that those announcements will be made in due course, but we would urge the Government to do so quickly.”

“Without certainty, households, businesses and other organisations, like local government, are likely to hold back from making investments that could aid the pace of our economic recovery.”

In making these future investment announcements, Mr Cull said the Government would have to carefully consider how the COVID-19 Response and Recovery Fund (CRRF) is spent.

“This budget is largely silent on how we are going to address climate change mitigation and adaptation.  We know these existential challenges are heading our way, and communities want to see public money spent on initiatives that better prepare us to meet them.”

“We also know that our housing affordability problem hasn’t disappeared, and critical investment in infrastructure will be needed to unlock land for development.”

“These are areas where councils have a significant role to play, because ultimately the effects of climate change and housing unaffordability occur locally.  And to really move the dial on the infrastructure led recovery will require a much closer working partnership between central and local government and a willingness to try new ways of doing things.”

“We fully acknowledge that this is a challenge, but for our part the local government sector is fully committed to doing whatever it can to help restore our country’s economic footing in a way that makes us more resilient and robust to future shocks.”