Coronavirus Government Global Briefing: May 15

By Chris Woods

May 15, 2020

Welcome to Coronavirus Government Global Briefing, Mandarin Premium’s morning update on everything in local and global government responses to the COVID-19 outbreak.

New Zealand goes all out in post-COVID budget

Yesterday, the New Zealand government announced a NZD$50 billion ‘COVID Response and Recovery Fund’ as the centrepiece of the 2020 budget, titled ‘Rebuilding Together‘.

According to Finance Minister Grant Robertson’s press release, the funding will include a targeted wage subsidy extension, free training and apprenticeships, an 8,000 state and transitional house build programme, $3 billion for infrastructure development, environmental projects aimed at creating 11,000 jobs, and support for SMEs, exporters, entrepreneurs and more.

What’s in the COVID-19 Response and Recovery Fund?

The package is focused on both supporting people through the pandemic and recession, as well as a direct stimulus planned aimed at creating “a path back to surplus similar to the previous government following the GFC and Canterbury earthquakes”.

Investments totalling $13.9 billion have already been made under the fund, while New Zealand’s cabinet has agreed a further $15.9 billion to continue the immediate response and kickstart the economy; this will leave $20.2 billion remaining for future investment.

According to Robertson, proposals for all funding requests must focus on at least of one of the following three criteria:

  • Fighting the virus and cushioning the blow – acting swiftly to contain the virus and avoid the extreme human and economic costs of an uncontrolled outbreak.
  • Kickstarting the recovery – continuing to support households and businesses and preparing to kickstart the economy in the medium term.
  • Resetting and rebuilding – taking the opportunity to reset our economy, address longstanding challenges and chart a course to return to a more sustainable fiscal position.

Well over a dozen packages were announced under the COVID-19 Response and Recovery Fund, so we’ll keep highlights as short as possible; be sure to check out the corresponding links for specifics.

Business and tourism support

Under a $4 billion business support package, $3.2 billion will go towards extending New Zealand’s existing wage subsidy scheme for another eight weeks, for companies that show more than 50 percent monthly revenue drop compared to 2019. Additional business initiatives support exporters, R&D-intensive businesses, entrepreneurs, consumer and business protection and more.

Separate to the business package, the government announced a $400 million Tourism Recovery Fund, to include a ‘Tourism Transitions Programme’ to deliver advice and support for either pivoting a business towards the domestic and Australian market, hibernating a firm, or other options.

Infrastructure, housing and postal services

Three billion dollars will go towards extend the $12b New Zealand Upgrade Programme and Provincial Growth Fund; ministers will soon decide which of the 1924 projects, $136b projects submitted to the Infrastructure Industry Reference Group to progress.

Additionally, the government plans to build 8,000 public houses to boost productivity and create jobs, and has committed $56 million to expand the insulation and heating programme across 9,000 homes.

Finally, an equity injection of $150 million from the Response and Recovery Fund will go towards helping New Zealand Post maintain service levels as it “positions itself for the future of mail;” this comes on top of $130 million already allocated in the 2020 budget.

Trades and apprenticeships, employment support, and environmental jobs

A $1.6 billion trades and apprenticeships package will include $320 million for free vocational courses in “critical industries” over the next two years. Other projects include new tertiary education enrolments, apprenticeship retainment scheme, and for “Workforce Development Councils and Regional Skills Leadership groups”, to be established to give industry and regions a greater voice and help them respond to COVID-19.

Separate to the trades package, $400 million will go towards employment support programs, $121 million for He Poutama Rangatahi — a pilot initiative that supports rangatahi people aged 15-24, who are most at risk of long-term unemployment — and $19.3 million to place 10,000 people into primary sector jobs.

Additionally, $1 billion will go towards creating almost 11,000 new environment jobs in regional New Zealand.

Social, cultural and education spending

A social services package aimed at supporting people recovering from the recession includes:

  • $79 million for social service providers, including $32 million for the growing need for food banks
  • $36 million in grants for community groups
  • $22 million for family violence services
  • $20 million to ease impacts of COVID-19 on rural and fishing communities
  • $20 million tertiary student hardship fund for 2020
  • $15 million boost to Fruit in Schools and digital sales platforms for food producers

The government has also pledged $220.6 million to ramp up the school lunch program, to expand the number of children coverer from 8,000 to about 200,000 children fed every day and create about 2000 jobs.

Culture and foreign aid

Over $900 million will go towards Māori groups, to assist with health, cultural and employment needs throughout recovery, while a $195 million Pacific package includes similar initiatives for New Zealand’s Pacific population.

Finally, the budget includes $55.6 million in foreign aid funding for Vote Official Development Assistance — bringing New Zealand’s overall ODA spend to almost .33 percent of forecasted Gross National Income in 2021 — to support Pacific neighbours throughout the pandemic and recession.

It should be noted that the budget includes other projects that do not exactly namecheck COVID-19 — i.e. over $1.2 billion for rail — but are tied to recovery; for more, check out the full budget 2020 website.

What’s in the modelling?

As Stuff reports, the New Zealand economy is expected to contract by 4.6% in the year to June 2020, a far greater fall than the GFC’s low-point 1.7%.

Keeping in mind the usual uncertainty, new Treasury forecasts incorporating all that fiscal stimulus predict:

  • Up to 140,000 jobs saved over the next two years, and employment growth of 370,000 supported over four years
  • Unemployment can be reduced from a peak of 9.6% in June 2020 to the current 4.2% rate within two years
  • The economy could start growing again in the year beginning 1 July 2020

The main forecast, outlined below, assumes that the virus is contained and the country remains at Levels 1 or 2 for at least 10 months.

New Zealand’s $50 billion stimulus is designed to create a four-year GDP turnaround. Graph: Stuff.

For more, see the government’s Budget Economic and Fiscal Update 2020.

Ministers to take a pay cut

Because they clearly didn’t have enough going on, the New Zealand government also introduced legislation that will empower the Remuneration Authority to make temporary reductions to the salaries of elected politicians and senior public officials. This comes after Ardern announced in April that all ministers will take a 20% pay cut for six months.

Geopolitics wrap

  • Human Rights Watch has called for the release of detained children left out of global COVID-19 responses; the body notes that only about 20 countries — such as Afghanistan, Chad, Indonesia, and South Sudan — are known to have released children from detention facilities, while multiple American states (and Australia) have not.
    • Check out The Intercept‘ for an update on the fairly dismal rate of release for prisoners in the US.
  • Forbes reports that demands from Democrats in the $3 trillion aid package — called the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, to potentially be tabled today — include further one-off payments, extended unemployment benefits, hazard pay for frontline workers, increased testing and rent assistance.
    • As NY Intelligencer reports, Republicans largely laughed off the proposal, and are expected to push for a) a litigation shield for businesses that reopen during the pandemic and b) a reduction of new unemployment benefits.
    • And while the devil will be in the detail, The Intercept reported earlier this month that Speaker Nancy Pelosi supported bailouts for the lobbying industry.
  • Science has unpacked new emails from whistleblower and immunologist Rick Bright, who was removed on 20 April as head of the Biomedical Advanced Research and Development Authority after filing a complaint of cronyism against Trump administration officials pressured him to rapidly approve funding to develop a still-experimental treatment.
  • As the BBC reports, Public Health England has approved an antibody test developed by Swiss pharmaceutical company Roche.
  • According to The Guardian, Japan saw a 20% fall in suicides relative to April 2019, which researchers suggest may be a result of delays to the school year, less commuting, and/or more time with family.

On the home front: ACT’s sport plans

From midnight tonight, the ACT will begin the first phase of gradual easing of restrictions on sport and recreation with the relaunching of informal outdoor, non-contact sport and commercial pools.

General principles include:

  • Outdoor sports only
  • Groups of a maximum of 10 people
  • Get in, train and get out
  • Practice good hand hygiene before and after training
  • Changerooms, canteens and kitchens remain closed – arrive dressed and ready to train
  • Stay home if you are unwell
  • Don’t share drinks or towels
  • Sharing of equipment such as balls and weights is allowed however should be kept to a minimum
  • Sportsgrounds must be booked prior to use
  • Follow the one person per 4 square metres rule to ensure sufficient physical distancing between participants

Additionally, sporting organisations will be asked to prepare a ‘Return to Play in a COVID safe environment’ plan to support the resumption of sporting activity in their specific context.

South Australia’s seasonal jobs campaign

Over in South Australia, the state government has launched a new campaign and website, ‘Seasonal Jobs SA‘, to help connect jobseekers with agricultural jobs and provide information on roles and requirements, places to stay, coronavirus restrictions, and more.

“This year around 24,000 workers are needed in South Australia in the horticulture sector alone, so I would strongly encourage anyone looking for work to consider seasonal roles,” Minister for Primary Industries and Regional Development Tim Whetstone.

“You could be pruning vines ahead of the 2021 vintage in the Barossa, or be picking premium citrus in Riverland orchards, or planting some of the thousands of trees we need to repopulate our forestry sectors after the recent bushfires.”

Tasmania’s library plan

With libraries set to slowly reopen across Tasmania on Monday, 18 May, the government has announced a trial, modified approach to borrowing at the Launceston Library. Using a “click and collect” service, members will be able to browse the online catalogue, place holds and collect items from the library during set hours.

Subject to the success of the trial, it will be extended as quickly as possible to other libraries around the state, with additional services being gradually introduced after that.

State wrap

  • From today, the Queensland government will allow digital prescriptions, so that vulnerable people can medicines prescribed by their usual doctor and delivered by their pharmacy without having to leave the home.
    • As the state prepares to ease restrictions from midnight tonight, Queensland has also announced that fossicking can resume across the state while barbecues, swimming areas, playgrounds and shower and toilet facilities will re-open at Seqwater and Sunwater dams, lakes, weirs and recreation areas.
  • The WA government has announced that all students will be required to return to school from next Monday, 18 May.
    • Separately, the government welcomed Rio Tinto Iron Ore $50,000 commitment to fund the up-skilling of apprentices displaced during the COVID-19 pandemic.
  • With Tasmania’s North West Regional Hospital fully commissioned from today, the state government has outlined a “reset” plan developed by the strained Mersey Community Hospital to ensure the continued safe delivery of services; this will include hygiene, training and wellbeing programs.

For health department updates: Federal, NSW, Victoria, QueenslandACTSouth AustraliaTasmaniaNorthern Territory and Western Australia.

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