The Government's 2020 Budget is following a "borrow and hope" approach to helping New Zealand emerge from the financial hit of Covid-19, according to economist Cameron Bagrie.
Announced today, Finance Minister Grant Robertson's Budget 2020 has seen a large focus on economic recovery after the havoc caused by the global outbreak of the coronavirus. It includes a $50 billion Covid-19 response and recovery fund, consisting of a $4 billion business support package that includes a targeted $3.2 billion to extend the wage subsidy scheme.
Elsewhere, $1.4 billion will go towards a free trades training package, a $1 billion environmental jobs package, $3.3 billion for health and education, as well as $3 billion for infrastructure and 8000 public house build programmes.
Speaking to 1 NEWS after the Budget was announced, though, Mr Bagrie said that there are flaws in the Government's heavy spending approach.
"Credit where credit is due for them being bold and leveraging off the Crown balance sheet," Mr Bagrie said.
"We are borrowing big to get ourselves out of a financial jam. If I look at the spirit of what this Budget is all about it looks to me like it's borrow and hope.
"I would of liked to see a lot more strategy or a little bit more of a narrative to see where New Zealand is going instead of throwing money around like confetti."
Mr Bagrie was also critical of the level of borrowing on show from the Government, set to see national debt skyrocket.
"People went into this Budget hoping to see a little bit more strategy. Hope of borrowing and spending is not what we call strategy.
“So ticks for what they've done in regards to deploying the balance sheet, but I would've like to have seen a lot more in the strategy side in regard to the glue that's going to hold the economy together, what the economic future is going to entail.
"At the moment, we are just spending money to put people into paid work. Now credit where credit is due, that's a plus."
Also, while the focus on recovery from Covid-19 will be an important focus in the immediate future, the Government should also be preparing for what comes next, Mr Bagrie added.
"This is not just about responding to Covid-19. There's a whole lot of other big major tectonic shots that are going on around the globe.
"Globalisation is reversing, obviously sustainability environmentally focused. We have ridden a wave of surging asset prices for 30 years. I don't think that is going to continue going forward.
"We need to set for a fundamentally different future.
"Was there really anything in that Budget that sort of tried to realign for sectors to think about what the future is going to look like? Yes, we are seeing a bit of movement. It's money orientated but sending money out the door is not a strategy."
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