CTU welcomes Government investment into infrastructure

“The Government’s announcement that anadditional $12 billion capital will be available to address backlogs in ourdeteriorating schools, hospitals and rail infrastructure and for regionaldevelopment is welcome news and sensible policy”, says CTU Economist andPolicy Director Bill Rosenberg. “This increase is greatly needed. After along period of neglect we have fallen well behind and this investment issignificant. It makes sense given government debt levels are low and itsborrowing is currently very cheap.”

“We also welcome the emphasis in the 2020Budget on Just Transition and Future of Work. The priorities of the Future ofWork Tripartite Forum led by the Government, CTU and Business NZ have thepotential to bring significant long term improvements to working people’slives, to productivity and to the sustainability of a higher standard ofliving. We hope they will be funded in the way they deserve. We also supportthe indication of further focus on health, lifting Māori and Pacific incomes,and child wellbeing.”

Treasury forecasts that average wage increaseswill rise to 3.7% a year by 2024 are welcome. It has recognised the importantcontribution unions are making to support wage rises by saying that theseincreases over the next two years are driven by minimum wage increases, payequity settlements and other collective bargaining.

“A significant increase in operatingspending is needed too. There is an urgent need to fund our health, educationand other public services properly after many years and billions of dollars ofunderfunding by the previous Government.”

“It is critical that the Governmentcontinues to develop and implement the wellbeing framework and a broaderperspective on how best to allocate our resources. Spending must reflectwellbeing needs rather than arbitrary budget rules.”

“Significant public service funding isrequired to make New Zealand a fairer society and for that to occur theGovernment will need more revenue. The allowance for new spending in the 2020Budget is $3.0 billion compared to $3.8 billion in the 2019 Budget. This willneed to be increased substantially if we are to make the inroads into providingthe public services that New Zealanders need.”

“While we welcome the forecast increase inoperational spending in 2020/21 to 29.4% of GDP it falls below Budget 2019forecasts in the following years. Even 29.4% is still low by historicalcomparisons, and low by international standards, particularly compared tocountries which are much less unequal than New Zealand and have fit-for-purposesupport for people facing job loss and other changes which New Zealand notablylacks,” Rosenberg said.

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