New Zealand Funds 2021: Financial Development, Covid Restoration
Deputy Prime Minister Grant Robertson speaks to the media during a post-cabinet press conference on November 9, 2020 in Wellington, New Zealand.
Hagen Hopkins | Getty Images News | Getty Images
New Zealand’s economic recovery from the Covid-19 pandemic has been “much better than expected,” Deputy Prime Minister Grant Robertson told CNBC on Thursday.
This has allowed New Zealand to “spend large sums of money” on helping its low-income population while still keeping net debt in check, Robertson told CNBC’s Will Koulouris.
Robertson presented New Zealand’s latest national budget on Thursday.
A high point of the budget was to increase weekly welfare benefits by up to 55 New Zealand dollars (approximately US $ 39.50) per adult to tackle inequality and child poverty. Robertson said in his budget speech that the planned increase will be the largest in “more than a generation”.
The budget also included spending on Covid-19 vaccines, infrastructure, education and welfare of the indigenous Maori people.
The planned spending is expected to increase the budget deficit to $ 18.4 billion ($ 13.2 billion) in the fiscal year through June 2022 before declining in subsequent years, according to New Zealand Treasury.
The deficit for the current fiscal year ending June 2021 is projected to be $ 15.1 billion in New Zealand.
Net debt is expected to increase from 34% in the current fiscal year by June 2021 to 43.8% in the following fiscal year.
Compared to many other countries, New Zealand has been relatively successful in containing the spread of the coronavirus locally. This allowed most of the economy to work normally.
The New Zealand Treasury Department has forecast a strong economic recovery in the coming years.
The economy is projected to grow 2.9% in the fiscal year through June 2021, before hitting 3.2% and 4.4% over the next two years, according to the Treasury Department.
Health ministry data showed that as of Thursday morning, the country’s cumulative confirmed and probable Covid infections were 2,659, with 26 deaths.
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