Grant Robertson: 'We're in a really good position here'

Wednesday, 21 September 2022

Deputy Prime Minister and Finance Minister Grant Robertson says tourists are back, the mask mandate is over, and people can look to the future with optimism for the economy.

Finance Minister Grant Robertson says there is “every reason to be optimistic” about the year ahead.

“I don’t want people to talk themselves into a negative frame of mind,” he said.

He was speaking to delegates at the Financial Services Council’s annual conference on Wednesday.

Some of our largest trading partners were experiencing tough times, with China’s zero-Covid policy damaging its growth, Europe experiencing an energy crisis, and the United Kingdom and the United States facing very high inflation, he said.

But New Zealand’s exporters were doing well, Robertson said. Tourists and international students were returning, the country’s debt was low compared to other OECD countries, and unemployment was low.

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In 2000 New Zealand hosted 30,000 visitors from China, and that had increased more than tenfold by the time the pandemic saw them shut out in 2020. Video first published in June 2022.

“It will be hard going, but we’ve got every reason to be optimistic over the 12 months,” Robertson said.

Some support programmes the Government had put in place were coming to an end.

The half-price public transport policy, and a temporary reduction in fuel excise tax, had done the job the Government wanted them to do, he said.

Both would be eased off at the end of January. “I don’t expect them to go on further than that,” he said.

The fuel price had settled faster than people had expected, he said.

There would be less money to spend for the Government as it moved to more “fiscal stability”, he said.

“We do need to be realistic that we need to move ourselves back to a more stable fiscal position,” he said.

“The worst thing I believe we could do now is austerity-level cuts to public services. That would get you into surplus quicker, but it would make the problems we are trying to solve even worse,” he said.

“That means choices will be tough in this next period,” he said. “[But] we are in a really good position here.”

Grant Robertson speaks via video link to the Financial Services Council conference in Auckland.

Most economists believed inflation had probably peaked, he said.

“Other countries are a quarter, or two quarters behind us in terms of both recovery, and then the tightening cycles their reserve banks are involved in,” he said.

International supply chains continued to improve, he said.

“I was waking up in the morning and checking our global shipping news. In particular, whether the port of Shanghai was open,” Robertson said.

He said the end of the mask mandate marked a “turning point” for people, and they could look to the summer with optimism.

The borders were opening again for workers, tourists and international students.

“I think we will reach the end of the year and think, ‘You know, New Zealand’s come through this from a growth perspective, from an inflation perspective, from a debt perspective better than pretty much any other country,” he said.

Robertson spoke about the planned income insurance scheme, which would replace a portion of people’s incomes, if they were made redundant.

The scheme would not come in until 2024, he said.

He said New Zealand remained an outlier internationally in not having some form of income insurance.

“There is a gap in New Zealand’s social security system,” he said.

The scheme would benefit middle and lower-income New Zealanders, he said, but National has dubbed it a “jobs tax” and pledged to shut it down, if they win power.