4 Mar 2020

Covid-19: Simon Bridges says middle income earners deserve tax relief

9:42 am on 4 March 2020

National Party leader Simon Bridges has criticised the government's response to Covid-19, saying the economic response to the outbreak has been subpar.

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Simon Bridges. Photo: RNZ /Dom Thomas

He said businesses deserve a signal on where the Budget 2020 is headed so they have confidence the government has a plan if things get worse.

Bridges told Morning Report that middle income earners deserve tax relief as the outbreak persists.

"I think there's a very strong case for tax relief for middle income earners, those households I've said were struggling."

Bridges wouldn't say whether he would consider benefit increases to help low-income families in case of an economic downturn.

Bridges said Finance Minister Grant Robertson hasn't been giving people a clear enough view of the economic outlook.

"At least, they should be signalling and should be clear about the direction of travel. I think what we know now is that this is very serious internationally and economically. I think we've got low to slow to no growth actually for the next several months, potentially worse following that depending on what happens worldwide."

"If the government can't see that, and doesn't acknowledge where we are and they say 'look, everything's actually okay', that suggests to me they won't be able to solve this and have the remedy."

A Covid-19 survey by the New Zealand Business Roundtable in China has found 81 percent of respondents expect China export revenue to be down at least 10 percent this year.

But while there was significant uncertainty around the containment of the virus, most respondents expected the issue to clear up within the next six months.

Mark Tanner, managing director of Shanghai-based China Skinny, a marketing and research agency, told Morning Report that there are some signs China is getting back to normal.

"Traffic on the roads is improving, the cinemas are even opening. The bigger risk now is what's happening outside of China and even China is concerned about people coming back and spreading the virus."

Read more about the Covid-19 coronavirus:

Kiwibank's chief economist yesterday told Morning Report the government must use its "huge fiscal war chest" in the battle to secure jobs and keep businesses from falling over amid the Covid-19 outbreak.

Jarrod Kerr said struggling businesses should either be provided with money or tax breaks as exporters and importers, as well as tourism, agriculture and education industries continued to be hit by severe disruption caused by the coronavirus.

Kerr said companies were running low in cash and inventory and the government should get on the front foot and back them.

His comments came amid talk of the Reserve Bank cutting the official cash rate, following a downturn in the economy in the first quarter of the year and a bleak outlook going forward.

The US Federal Reserve today slashed interest rates in response to mounting concerns about the impact of the virus.

The Federal Reserve lowered its benchmark rate by 50 basis points to a range of 1 percent to 1.25 percent.

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