Week in politics: Taking charge in a crisis

6:08 pm on 20 March 2020

By Peter Wilson*

This week in politics, the prime minister takes charge in a crisis, the government's response package is acknowledged as a good start to protecting the economy and the border is closed for the first time in New Zealand's history.

Jacinda Ardern, Winston Peters announce $12.1 billion economic relief package.

Photo: RNZ

A week of unprecedented political decisions began with the biggest peacetime economic support package in New Zealand's history and ended with the border closed for the first time ever.

Jacinda Ardern showed again what an effective crisis communicator she is.

One year after drawing the nation together in the aftermath of the Christchurch terror attack, she took charge of the government's response to the Covid-19 crisis.

As her finance minister Grant Robertson unwrapped a $12.1 billion economic support package, Ardern ended her announcement with a simple message: "Be strong but be kind. We will be OK."

Robertson presented the package to Parliament and opposition leader Simon Bridges responded.

The government's priorities seemed to be "confused and muddled", the $500 million for health was not nearly enough and raising benefits by $25 a week was wrong, he said.

"What we see in this package is money flowing faster into the hands of beneficiaries than the workers and their businesses... that to me is a crying tragedy," he said.

Ardern gave him the national unity message.

"There are moments in our history where it's not business as usual, when New Zealanders expect us to come together, when we need unity not politics as usual," she said. "And today, Mr Bridges, is one of those days."

Bridges justified his criticism as a constitutional right, and he was correct in that. He thought people would see it as constructive, which remains to be seen. Deputy Prime Minister Winston Peters described it as "shallow and graceless… and the people of New Zealand will judge him for it."

Robertson acknowledged at a press conference that raising benefits was a long-term government goal and was something that he had been looking at as he prepared the May budget.

The $25 a week increase was a separate decision.

ACT leader David Seymour took him up on that. "I think what they've done with benefits is right for the crisis but wrong on a permanent basis. Nobody should be using this crisis as an excuse to put through their policy agenda," he said.

He overlooked how difficult it would be to increase benefits and then cut them when the crisis is over.

National wanted the government to postpone the minimum wage increase that comes in on April 1. Bridges said he knew a Tauranga tourist operator with 40 employees who was laying off staff because of the increase. Ardern and Robertson rejected that. Their rationale for benefit increases and the minimum wage rise is that the people who will get the money are sure to spend it, which is what the economy needs.

Unusually, the business sector was more optimistic than the National Party about the support package. BusinessNZ's chief executive Kirk Hope said the package would deliver substantial help and Auckland Employers and Manufacturers Association chief executive Brett O'Reilly said members would be delighted to hear they were going to get immediate relief.

Kiwibank described it as "big, bold and beautiful in parts."

The government's challenge now is making it work and delivering the money to employers within the promised five working days. Choke points and bureaucratic muddles over who is illegible could see business enthusiasm quickly disappear.

  • If you have symptoms of the coronavirus, call the NZ Covid-19 Healthline on 0800 358 5453 (+64 9 358 5453 for international SIMs)

In the days following Tuesday's announcement, concerns began to emerge about the massive impact of what is sure to be a global economic recession which New Zealand won't escape. Robertson acknowledged that Treasury's worst-case scenario of an economic hit through to the end of the year was becoming a reality.

"We're clearly moving into what I called scenario three in earlier times," he said. Those earlier times were two weeks ago, that's how fast this is moving.

He was clear that his package, which he said was phase one of the government's response, wasn't going to save every job and every business.

Retail NZ warned that up to 10,000 jobs in the sector could be lost over the next few months.

During the week Robertson several times emphasised the important role banks will play in helping businesses remain viable. He urged firms to talk to their banks first - in fact having done so is a requirement for wage subsidy support.

To help banks and the country to cope with the crisis, the Reserve Bank cut the official cash rate from 1 percent to 0.25 per cent and postponed the requirements for banks to increase their capital holdings. Robertson said the postponement meant the banks had $48 billion they didn't have last week to help their customers. Reserve Bank governor Adrian Orr said they could use it to extend credit lines, and $48 billion represented 18 months of normal credit growth.

Late on Thursday Ardern called an emergency cabinet meeting. She wasn't satisfied the self-isolation border control strategy was working, she had decided to take the ultimate step and close the border to everyone who isn't a citizen or resident. "I have become increasingly concerned that visitors to the country either may not be able to adequately self-isolate for 14 days or choose not to, and that is an unacceptable risk that we must eliminate," she said.

The tourism market effectively dried up at midnight on Thursday and the government will be under intense pressure to save thousands of jobs.

The announcement came just hours after Health Minister David Clark had held a press conference to deliver the news that indoor meetings of more than 100 people were banned.

There were other developments this week, which didn't receive much attention.

Parliament passed the Abortion Legislation Bill by 68 votes to 51, a narrower margin that it received in earlier stages. Abortion will be removed from the Crimes Act. It was the only medical provision to be considered a crime under the Act.

There will no longer be any legal test for an abortion earlier than 20 weeks, leaving a pregnant person to decide for themself with the advice of a doctor. An abortion after 20 weeks can only be approved if it's deemed necessary to save a person's life or prevent serious injury.

An attempt by New Zealand First to put the legislation to a referendum before it could come into force was defeated by 100 votes to 19.

Cabinet approved funding for the Pike River mine recovery operation which brought the total to $47 million, double the initial estimate. Another $4 million has been allocated for contingencies.

The minister in charge, Andrew Little, said there was not going to be an assessment of whether it was possible to get into the mine workings after the drift, the entrance tunnel, had been secured. The bodies of the 29 men killed in the 2010 explosions are believed to be in the mine workings.

There is a rockfall at the end of the drift, and it was originally intended to assess the situation when the rockfall was reached. Little said the work would stop when the recovery teams reached the rockfall.

*Peter Wilson is a life member of Parliament's press gallery, 22 years as NZPA's political editor and seven as parliamentary bureau chief for NZ Newswire.

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