Jacinda Ardern has laid out her Government’s priorities for the rest of 2020, with support for small businesses and unemployed Kiwis featuring heavily

Expanding the small business loan scheme and launching the flexi-wage subsidy programme are at the top of the Government’s to-do list before Christmas, Prime Minister Jacinda Ardern has announced.

Ardern laid out her Cabinet’s priorities for the rest of 2020 in a speech to a BusinessNZ audience in Auckland on Thursday afternoon, highlighting “encouraging signs” for the economy but warning New Zealand will not be spared from the longer-term effects of the Covid-19 pandemic.

The Prime Minister opened by alluding to the ongoing uncertainty caused by the United States presidential election, saying she was speaking “at a time when New Zealand feels like a calm oasis in a chaotic and difficult world”.

“No matter where you sit on the political spectrum, I’d like to think we can agree that a strong democracy requires a few pre-conditions. 

“Citizens that believe in their system, and participate in it; political parties that believe and support the system too; and, perhaps this last point is a little more debatable, but I’ve increasingly come to believe that we have to find ways that strong views can be held, and expressed, but without the accompanying partisanship that stops us from working to build consensus where it really matters.”

Ardern said New Zealand’s choices on Covid-19 had been based on the country’s demographic composition and its unique advantages as a remote island nation, allowing the country to forego free movement at the border in exchange for domestic health and economic advantages.

“It was a choice, but one that I strongly believe has served us well, and that New Zealanders have for the most part, supported. That support has also been key, and the importance of consensus building has only been reinforced for me as a leader through this experience.”

‘Encouraging signs’ for economy

While the pandemic was still ongoing, there were “encouraging signs that reinforce the choices we’ve made”, with the latest quarterly unemployment figures of 5.3 percent well below the projected nine percent rate at May’s Budget, and lower than both Australia and the OECD average.

But with second waves of infection taking place overseas, the coming years would be difficult for New Zealand given negative forecasts for global growth.

With little time to lose, Ardern said her new Cabinet’s first item of business would be improving the small business loan scheme, originally designed as a “stop-gap” for vulnerable Kiwi companies.

Given ongoing uncertainty and instability, the Government now proposed to extend the scheme for three years, also extending the interest-free period for loans from one year to two years.

Later in the month, ministers would put forward proposals to expand the potential purposes of the scheme, covering investments in new equipment or infrastructure.

Ardern said the Government also wanted to start work on new financial mechanisms to support small businesses, such as expanding the mandate of its Venture Investment Fund.

“We need to find long-term solutions to a problem that actually existed before Covid arrived on our doorstep,” she said.

The Government’s second priority was to start the roll-out of the flexi-wage job support scheme before Christmas, helping employers to hire Kiwis on a benefit and at risk of long-term unemployment.

“Our climate status has the potential to be an economic golden ticket for our products, if we get it right.”

An extra $311 million would be put into the programme to increase the average subsidy available to businesses and allow up to 40,000 more people to benefit from the scheme.

“Ultimately, by building on a proven programme we are able to offer additional support to struggling businesses and create a strong incentive to employ those who are most affected by the economic recession.”

Ardern said the Government would continue to approve fast-tracked Resource Management Act projects through to Christmas, with wider work on RMA reform a priority for the first half of 2021.

The next term would also see a focus on sustainability and carbon neutrality, with the public sector obliged to lead by example given the reductions it expected from private enterprise.

“Our climate status has the potential to be an economic golden ticket for our products, if we get it right,” Ardern said.

In another priority area, Labour’s pledge to expand sick leave, Cabinet would consider draft legislation before Christmas and intended to introduce it to Parliament before the end of the year, but with a full select committee process to build consensus.

In the longer term, Ardern said a trade mission would be “on the top of my list”, with key destinations including Europe, the UK, China and the US among those under consideration.

Sam Sachdeva is Newsroom's national affairs editor, covering foreign affairs and trade, housing, and other issues of national significance.

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