Today, on Newshub Nation ` A deep dive with Finance Minister Grant Robertson on the biggest Budget of our lives, Simon Bridges on finding equilibrium as a COVID era opposition leader, and fears of a 10% unemployment rate. We talk welfare with Carmel Sepuloni. www.able.co.nz Copyright Able 2020 Kia ora, good morning. I'm Simon Shepherd and welcome to Newshub Nation. In this week's political news ` global cases of COVID-19 are approaching 4.5 million, while total deaths have passed 300,000. Despite the mounting death toll, many countries, including the United States, are moving to relax lockdown restrictions. Closer to home, New Zealanders have been enjoying near normality under level two, with restaurants, cafes and hairdressers now able to trade. Bars will not be able to open fully until next Thursday. And the government has unveiled an immense $50 billon recovery fund to combat the economic fallout of COVID-19 ` $20b of it, yet to be allocated. Treasury projects GDP will shrink by 4.6% by June and unemployment will peak just under 10% by September. He has splashed the cash more than expected by many economists, and there's more to come. But is the Finance Minister seizing a once in a century opportunity to reshape New Zealand into a modern, sustainable economy? I spoke to him earlier and asked will the $62 billion allocated transform the economy or just take us back to where we were? Oh, well, no, that's the full package of response, recovery and rebuild funding. It's designed, yes, to help New Zealanders survive this, to get through it, but it's also designed to help rebuild our economy and rebuild it better. It's going to be spent over a number of years, and it is not just about restoring exactly where we were. I think most New Zealanders would recognise that, you know, we're a great country, but we didn't have everything 100% right before Covid-19, and as we do that rebuild, we need to make sure we address some of those issues. OK, so you came in government promising transformation, but at the moment, in this particular Budget, there's none of that in terms of changes to tax or wealth taxes or Super changes. Why not? This Budget is focused on the recovery phase from Covid-19, and that means a focus on jobs. And we weren't talking about that before Covid-19. We had unemployment down at 4.2%. That's one of the lowest rates in a decade. But things have changed, and they've changed quickly, and we've needed to respond to that. So naturally the focus of the Budget is going to be on that recovery, but it does lay the foundations for rebuild in terms of addressing some of our long-run issues around low productivity and areas like skills and infrastructure and so on. So we are taking on those big issues, and we're laying the foundations for the transformations that we do need in our economy. Is this not the time, though? A crisis gives you a sense of opportunity and, perhaps, a sense of goodwill from the public to enact some broader transformational changes. Is this not the time? I think what the public want from the New Zealand Government is to be alongside them as we go through the response and recovery and to rebuild the economy so that there are jobs, good, decent-paying jobs, so that we are making advances on lowering our emissions, so that we are looking after those in need. We're doing all of those things, and we will continue to work on those changes and transformations that are needed. I've been making the point for some days now that the Budget's a bit different this year. It represents one further step in our recovery and rebuild, and there will be many more to come. In terms of rebuilding or changing the economy or the economic structure, what about making changes to Superannuation? Because that is a big cost, and we're going to have to find some money from somewhere in the future. We are committed to making sure that Superannuation remains universal. We think there are a lot of New Zealanders who will now be exiting the workforce as they reach 65, and we want to make sure that they are looked after. This is something that's an important part of our social security system in New Zealand. Yes, we do have an ageing population, but we simply have to budget to do that. In this Budget, the government's maintained its contributions to the Super Fund. That's an important part of ensuring we give people dignity in their retirement. So, for us, that's something that we've always stuck to. But is it fair, Minister, if the younger generation is going to have a whole lot of debt to pay off in the future that, say, wealthier superannuatants are still getting universal superannuation. Is that fair? I just don't see it as a useful conversation to try and set generations against one another like that. What we need to be doing at the moment is focusing on getting all New Zealanders through Covid-19 and thriving on the other side. And future generations, if you want to call them that, are the young people of today, and we want to make sure that they're growing up in households where their parents are working, where they can put food on the table, where there are opportunities to learn a trade or to go off to university. We want to be investing in them. That's our focus. Yes, there will be issues in the future in terms of how we pay down our debt, but we do that primarily by making sure the economy grows sustainably and we create the jobs that pay the wages that make sure that New Zealanders do well. So, National says that Covid debt's going to be $80,000 per household. Should we be scared by that? To start with, the debt's being taken on by the government, and the point is that the government's doing that so households don't have to bear the burden of that. We have the ability to borrow money at very, very low interest rates. And, in fact, the debt servicing costs of the government's borrowing, even though it's significantly larger, are very much the same as they were about three or four years ago. So we can manage this. Our economy is robust. But, again, we've just got to take a step back here. This is a one-in-100-year pandemic. It's affecting every country in the world to a huge extent. New Zealand is not going to be immune from that. The good news is we've come into it in a really strong position from a debt point of view and a also a really strong position in terms of our health response. So, looking to the future, then, if the Budget works, if we get through the immediate crisis, Treasury says in two years, the economy is going to bounce back and we're going to have growth of 8%. Does that mean we're going to have a more equal society in two years' time? It certainly means that the economy will be coming back, and it's our job to make sure that part of that is that we address some of those long-term issues of inequality. But certainly the New Zealand economy was robust going into this. It's suffered a huge shock. We're doing everything we can to cushion the blow of that shock and support us to come out the other side. And I do have a lot of confidence in New Zealand businesses and New Zealand workers that we will come through the other side of this well. But what would you like to see more equal if we do indeed bounce back in a couple of years' time? What is it that you would like to see more equal when we come to that stage? I continue to want to see New Zealanders' wages lift. I think that's really important. The Government's done it bit in terms of lifting the minimum wage, and I think we do need to make sure we're investing in the jobs that are high-wage jobs that provide people with the means to live that they need. I also think it's really important we continue to focus on reducing child poverty. We've made good strides in that, and as part of our first response to the Covid-19 crisis, we did lift benefits, and we are continuing to work on housing issues. We've got the school lunches programme being expanded. One of the big things for this government has been reducing child poverty, and that continues to be our goal. You just mentioned the minimum wage. Are you sure that you want to go for the next stage of the minimum wage. It's just been raised coming into Covid-19, and Treasury documents back in February show that when the first wage rise came through, $17.70, about 6500 jobs were lost because of it. Can we afford to do any more of these? A lot more jobs were created in that time as well, and we always get those estimates from people about what they think the effects of minimum wage increases will be. What I know is that New Zealanders who go to work and work hard each day deserve to be paid well. We've lifted that minimum wage steadily. We've given clear signals of where it's going, and I think the increases we've made have actually been significant in lifting the well-being of New Zealanders. So there won't be any change to that in the future? There will be a raise next year? There are no changes planned to that, no. What about a greener economy? Do you think we're going to have a greener economy in two years' time? Because I wonder whether climate change has taken a back seat in this Budget. The things we've been working on before the Budget, we're not stopping working on in terms of climate change, and so we continue to be very focused on lowering our emissions across the economy ` looking at issues like energy production, looking at transport, looking at industrial heat, working on those through the Climate Commission. So all of that work carries on, Simon. It's still very important, and a low-emissions economy is definitely where this Government is going. OK, but are you doing enough for it in this Budget? There was the $1.1 billion for jobs to clean up the environment, but nothing to stimulate the green investment any more than what you've done previously. But, again, what we've done previously is signification. The creation of the Green Investment Fund, which is just getting going now, is a really important part` But that hasn't actually made any investments yet, has it? That's what I say. It's just getting going now, that work, so while each Budget will be focused on for particular things, we do have to see the whole three years when it comes to an issue like climate change, and I think we've made considerable advances there. Because I've been talking to the tech sector today, and they are sort of getting frustrated. They believe that tourism, our number one export industry, is in dire straits and won't be around for a couple of years We can't just rely on agriculture. We need to be putting more into that, which is our most rapidly growing sector. Yeah, and one of the parts of the Budget that perhaps hasn't had a lot of attention is the development of an industry transformation plan for the digital sector, along with agri-tech, which is another area where we think we can make great advances. This kind of work's going on in government working with industry, and it's going to carry on, just as the support we've been providing to NZTE to be able to lift our export performance, and more money has gone in there. Just as they investment we've made in research and development, firstly through the R&D tax credits and further support since then to lift our performance. All of that work goes on, and the tech sector is critical in all of that work. Do you see it becoming our number one export industry? It's certainly a growing industry. I mean, obviously we've got significant primary sector industries that New Zealand does well from, and we need to add value to those as well. But the tech sector will continue to grow. I absolutely support that. You've said that there are some more tough decisions coming up. First of all, what happens when they extra eight weeks of wage subsidy runs out? We've shown, I think, through this whole process that we've been flexible, that we've been prepared to shift and change our programmes as necessary. We've put that eight week extension in place because there are a number of businesses in areas like hospitality and retail and tourism who even under Level 2 aren't able to operate anything like their normal level. We'll continue to monitor where those businesses are at, where the economy's at, what alert level that we're at and make our further decisions on whether there'll be any more extensions. Do you need to get money from elsewhere, repurpose some more money, like KiwiBuild, for example? Would you cancel that? No, the KiwiBuild programme's been reshaped to be able to contribute to what is still one of our long-run issues around the availability of affordable housing. So we'll be continuing to pursue that. As part of the package yesterday, we obviously have got the commitment to build 8000 more public and transitional houses, and as part of our infrastructure proposals that we're looking at, I'm sure there'll be more in the construction market there too. So there's a range of options for us to invest, but the KiwiBuild programme, as it's been reset, is an important part of the residential construction market coming into a Covid-19 recovery. OK. So what is the toughest decision that's facing you as we run up to the election now? I mean, we continue to face a series of decisions every single day about how to support New Zealanders through this recovery, and obviously, you know, the thing that I'm most focused on here is ensuring we keep as many New Zealanders in work as possible, that we make sure that we're supporting the creation of new jobs, giving them training opportunities, making sure that, actually, every New Zealander gets that shot at work that is decent and well paid. So we'll make decisions on that as we go forward, just as we have for the last seven or eight weeks. They've all been difficult decisions, but I think we've made them in a way that's been decisive, in a way that's made a real impact on New Zealanders' lives. Just quickly, Minister, if there's one thing that you would have loved to have put into the Budget that didn't get in there, what would it be? There are many things that in any Budget we don't always get to put in, but I'm actually very proud of this, and I think, Simon, when you look at a Budget that does put up $15.9 billion of spending and investment, I'm proud of that. I won't isolate anything. There's always more to do. That's the nature of the job I'm in. OK. Finance Minister Grant Robertson, thank you very much for your time. Thanks, Simon. Welcome back. It's been a rollercoaster year for National Party Leader Simon Bridges. In the face of a global pandemic, you could say he's had to reinvent the role of opposition. There's no National, or Labour or Green or Act, or New Zealand First. Just New Zealanders, and we should be going to Level 4. We are all in this together, and so I see our role is really to provide constructive scrutiny. And we've been waiting over two weeks for your department to answer written questions to this committee. You don't want to answer because you want to control the information flow, and do this in a time and a way convenient to you and the government. Simon Bridges opposing the extended lockdown and blaming the government for failing to prepare. He posted his view on Facebook and was personally eviscerated by National supporters. Do you recognise that that's falling flat with your supporters? Look, I think, you know, there'll be a bunch of different views. ...disappointed because I don't see a plan. I don't think what we need is perfect ` I think what we need is some pragmatic rules that as I've said to you time and again gets New Zealand working again. Having gone hard and early on lockdown, we've gone soft and slow on the economy. We've flattened the curve, let's not flatten our economy. That to me isn't a recipe for success, turning a $50b problem into an $180b one. Don't waste our money and ruin the legacy of a lifetime. Members time has expired. Simon Bridges there, and Simon Bridges joins us now live from his home in Tauranga. Thank you for your time this morning. Do you support the amount of money the government is borrowing to fight COVID-19? In short, no. I mean, there's some good things in this budget. You can look at the various initiatives and say this one is worthy, this one is perhaps a bit more nice to have. But ultimately it is a lot of money, and you heard on that clip, there's $140B more in debt. I think that turns a $50B problem into something more like, you know, in debt in total terms, a $200b problem. And that all needs to be paid back. If you take that debt, you're talking about 80,000 a household. And you know, sure as eggs it seems to me with a Labour-led Government, that inevitably means more tax. Can I just make this point that it seems to me we're like a rudderless ship in a sea of debt. And the reason we're rudderless is we don't have the plan, we didn't see the plan in the budget, for jobs and for growth. OK. Let's go through a few points there, Mr Bridges. This is a one-in-one-hundred-year situation, surely you need to have some flexibility. And that is what the government has done in a time when interest rates are at a record low. Yeah, and I mean, look, if you think about National, we've got that team and track record. We've done this before, whether it's the Canterbury Earthquakes or the GFC, you're right, there was $50B of additional debt taken on but we didn't need to do that with more taxes, we paid it back and we came out stronger. And so my point simply is, Simon, you're saying, 'Well, you know, you've gotta have some flexibility.' Well, yeah. No one is saying austerity. We understand the requirement for some debt to do some investment and to make New Zealand stronger. But you can have too much of a good thing. And if a $50b fund where, look, nearly half of it is not allocated. I think that's lazy and loose. All right, look, you say, and you keep saying this, on Twitter and Facebook, and your colleagues say this as well, that this is going to lead to higher taxes under Labour. Nothing so-far in the budget has indicated that there are gonna be any tax hikes. Yeah but it's simple as this ` it's not $50B in debt that Grant Robertson has taken on over the next four years, it's $140B in additional debt. But I think to put that in some context, Bill English never had more than $1B or so to play with. It's eye-watering amounts, it's $80,000 a household, as I say, and so I say to Grant Robertson and Jacinda Ardern, and I'll be asking these questions I'm sure in Parliament, how will New Zealand as a nation re-pay that debt. Now, sure, we all want, and I have plans for jobs and for growth. That will be part of the answer. But what is also true and what we know about Labour is they like instinctively tax. You mark my words, the kindness will be gone this time next year if Labour's the government, and there will be new taxes. So, Grant Robertson is asked about his plan, and his plan sounds the same as your plan. And that is grow the economy, he is not talking about tax. Well, I think what you've seen is a plan to spend. I don't think you've seen a plan for growth and for jobs. My view is we're like a rudderless ship, as I say, wallowing in that sea of debt. But that plan just isn't there. And there are big differences between National and Labour this election. I mean, let me give you a sense of that from the budget. What you do see is, yeah, some make work schemes. Some Government stuff. Whether that's pest-eradication, whether it's Kiwirail and the like, my point of view would be, and I think National's clearly, that's not truly sustainable jobs. OK. They come from the engine-room of growth, which is the private sector and small-through-large businesses. And by the way, there was really next to nothing for them to feel a sense of confidence and aspiration to do stuff. You say they don't have a plan, you say you have a plan but I asked Paul Goldsmith specifically about this during the budget special we had this week, and all he said was let's grow back the economy and bring back international students. Is that it? No, well, look, I mean, how long do you wanna give me? Like, I can start you with this ` a fortnight ago I gave a speech to business New Zealand where I'll outline $9.5B of initiatives for business. Effectively they were through a GST refund scheme, cash-flowing business for the here and now, which they are crying out for. The other $1.5B was expensing investments more quickly. So that those businesses that are confident, do have a sense of cash, can go out and buy the new tractor, the new piece of computing or whatever it is they want to grow New Zealand. Now, I could keep going, I could talk about our regulatory reform plans and so on. I think National has the team, the track-record, and the plan. Can I ask you though, is it hard for you as opposition leader ` You've had to contend with, in your time, with a popular Prime Minister, she's had a baby, she's won global praise, there's been March 15, Whakaari/White Island, now pandemic, this just makes your job really hard to get any oxygen. Have you been happy with the tone you've set during the pandemic? Yes, I have. And I think anyone who watched the COVID-19 committee throughout will have seen it's worth, through to my members of Parliament, from the small constituency work, if I can put it that way, through to the very large, where we pushed and saw borders and quarantining. To, you know, our work on funerals and I think an injust situation. We've done the work and the mahi New Zealanders want to see. Of course, we now are moving into a period of, relatively speaking at least, more normality. And I think what my colleagues and I know is, and let me just finish on this point, is it's one thing to have a Labour Government in the good times, it's quite a different thing in a deep recession. And so we feel strong and energised going into this election in, what is it, 4, 5 months? First of all, in terms of tone, yes, you had the epidemic review committee. But then again, you had the Facebook post which seemed to just not hit a great tone. It didn't go down that well, did it? Look, I make no excuses for those things. I think if you look at everything from his speeches in parliament, right through to that Facebook post to what I'm saying at the moment. I've said about the borders, I've said about the funerals. I'm saying now about our churches and our faith, institutions around New Zealand. Each and every time, the Government has moved. And they've moved quite quickly in response to what National has said. I would say that's an effective opposition. It's a constructive opposition, sometimes it's a forthright one, but I think in times like this that's been absolutely required. Have you been doing any internal polling during this crisis? Um, well, we don't talk about our polling publicly, and when, how often, so on. We just don't talk about those things. Have you shared it with your colleagues? If you have been doing it. I don't talk about what happens in Caucus. I mean the reality is what we know, Simon, is there's been a leaked, dodgy Labour party polls. National feels good about where we are, but what we know is there's two sides to the coin here. We've had a plan for lockdown from the Government. But no plan for jobs and growth. And now we move to a situation where people are gonna want answers on that, and I think that they know that National's got the team and the track-record, GFC, Canterbury earthquakes, plus our huge work in infrastructure, so we'll do what's required for New Zealand. So now we're in level 2, we're four months to the election, the gloves are off now, is that correct? I mean, at the beginning you were supporting the Government, and saying 'no campaigning'. But the ads are back out there, it's all on from now on. Well, I think we are in a sense of some normality. You know, there's still, and I don't mean to be glib about our restaurants, hospitality, tourism, and many other sectors and businesses where there are issues. I've mentioned the plight of our churches, our mosques and so on, who are restricted to 10 when movie theatres and parts of our commerce are not. But I do think, you know, your statement is in a sense, and I don't mean to be rude, but a statement of the obvious. We've got an election coming. And National wants to make sure New Zealanders know about our team, our track-record and our plan for growth and for jobs. Because it's a very real contrast with those things and the Government, where they're Phil Twyford, Carmel Sepuloni, Kelvin Davis, we've got the stronger team and track-record to perform in this tough time for our country. Yeah, OK, so, if you're in election campaign mode now, so what is your number one campaign promise. Well, I think it's the economy, stupid. I think it is a plan for growth and jobs. But I think it is what New Zealanders will want to see. It is also` It is also` You know, because it comes back to the economy, the things we are talking about is actually much less debt on your, your children and your grandchildren's future, and not a future of a whole lot more taxes. Because we haven't imposed that debt, some $80,000 on you. That's a hard message to say to people who are just about to lose their jobs in this post-pandemic time, when unemployment is gonna hit 10% Isn't that a hard message? Look, um, you know... We- We live in a country where I know, and believe and trust New Zealanders. We'll put in place the initiatives and the responses to back our businesses, to keep their people in jobs, and also to make sure they don't languish on the dole queue. I mean I think I'd come back to it, in the budget you just didn't get that. It was a massive opportunity for that. It was a plan for spending, but not for growth and jobs. I give New Zealanders credit. They understand in their own lives, in their businesses, the situation with debt. Sometimes it's necessary, sometimes you do have to spend and invest. But at the levels of this government, without the plan for jobs and growth. I come back to it, look, we are a ship that is rudderless wallowing on a sea of debt. All right. Simon Bridges, National Party Leader, live from Tauranga, thank you so much for your time this morning. Thanks very much, Simon. Well coming up, analysis from our panel, Matthew Hooton plus Laila Hare. Plus, Social Development Minister Carmel Sepuloni on leading a welfare system under stress. Welcome back. New Zealand's social welfare system was already under stress, and now it's preparing for the number of people on the benefit to double. Earlier, I spoke to the Minister for Social Development, Minister of Social Development Carmel Sepuloni, and I asked her whether she was disappointed there was nothing further in the budget for beneficiaries. I think there was a lot in the Budget that supports beneficiaries, and responds to the Welfare Expert Advisory Group's report, actually, Simon. The increase in public housing, the increased focus on upskilling and training, the absolute focus on jobs and employment. In fact, the expansion of MSD's employment service offerings. All of those things are in the Welfare Expert Advisory Group's report, and recommendations are made on those issues. OK, well, what about other things that were in the Welfare Export Advisory Report? You increased benefits by $25. That's only 10%. The WEAG Report said 12% to 47%. Why wasn't there a higher increase on that? Well, I will say that that was one of our first steps, and we also, given the Covid environment that we're in, not only increased benefits, but doubled the Winter Energy Payment for this year as well, and that will support beneficiaries and superannuates. I've always said there's a lot to do. The income adequacy issue with respect to the welfare system is big. There are decades here that we are making up for, and we've always said that we're never going to be able to do it all in one go, and it would be a progressive change that we would be looking at. And I think we've been making very important steps. Sure. OK, can I just take you through a few other things briefly that you decided not to do? You didn't individualise benefits so when a partner loses a job, they can get a benefit. Why not? Well, Simon, we indicated that that wasn't going to be in our short-term plan anyway. The Cabinet paper that came out after we received the Welfare Expert Advisory Group's Report said that we would look at that in the medium to long term, and nothing's changed there. Okay. All right. What about extending the In-work tax credit that people get to beneficiaries? Some people are calling for that. Look, Working For Families ` there have already been changes in this space under us, but should there be more changes in the future? I think that's certainly something that we will be looking at. That's just not something that we saw here. OK, and the abatement threshold. I mean, this could have been another time to rejig that. You have increased it by $10. So you can currently earn $90 a week before your Jobseeker benefit starts reducing. Why not push that up? Because it hasn't really changed much since the mid '80s. I'd be interested in making another shift, Simon. We've only just got the first shift across the line, and that was the 1st of April, and that was, of course, alongside indexation and the removal of Section 192. Sure. When would you be interested in making that shift? I would be keen to look at another shift somewhere in the future, but clearly it wasn't on the table at this Budget. Surely this is the time to be able to do it. With Grant Robertson borrowing so much money, this is the time to put a focus on people who need the benefit. And I think we have done that. I mean, our first step was the wage subsidy, and that was put in place to try and keep people connected to their place of work so that they didn't lose jobs and that they were able to get some income over this really uncertain period. In a large part, it has realised its purpose, I guess. But just like the rest of the world, we are experiencing increased unemployment. So we're not alone. So our focus throughout this whole Budget has largely been on jobs, employment, upskilling and training, and I think that's a really sensible place for us to put our efforts. OK, but the MSD has been overlooking the wage subsidy and getting that money out the door quickly. It's been extended for another eight weeks. Are you ready for when that stops, or are you going to extend it again? Because when it does stop, there will be another wave of beneficiaries, won't there? Income support measures are an ongoing consideration. We've been very nimble, I think, given the context in being able to implement things like the wage subsidy very quickly. And we will as a government, continue to monitor this space and to keep an eye on what New Zealanders need during this time. But I will say that alongside the income support, the efforts in employment by MSD are equally as important. Lots of people coming on to benefit who have never been on benefit before, or have not been on benefit for a long time who want to be supported into employment opportunities that may still exist. And so we need to be working equally in both spaces. Sure. So, you mention the people that are coming on to the benefit now. Some of those or, in fact, perhaps the majority, are high earners who haven't really experienced being on a benefit before. What are they telling you about this system? Because there have been some stories in the last couple of weeks. Many of them are also quite young, and, as you said, Simon, some of them, many of them have not been on the benefit before or have not been on the benefit for quite some time. The reality is that the benefit is very difficult to live on, and we've always known that. That's why we made income adequacy part of the terms of reference for the Welfare Expert Advisory Group, and we have been incrementally making changes to try and improve that situation. But we do know it is difficult for New Zealanders to live off a benefit, and that's why there are still changes that will need to be made moving forward. That's right. And one thing I come back to the point is isn't the time now to do it? I mean, if we're willing to borrow so much money, now is the time to do it. This is when you're going to get a doubling of people on benefits, so why not now? Changes have been made and are being made, Simon. I guess what you are raising is whether or not we are moving quickly enough, and I accept that may be the criticism, and we will continue to work to make the changes to the welfare system that we need to. We're certainly heading in the right direction, and I think we have been during the duration of this whole three years that we have been in government. But we know that there's more to do, and I've never shied away from saying I accept that there is more to do, and that I am absolutely committed to doing that. If you're totally committed to doing that, there is another $20 billion in the coffers to help out New Zealand going through this. How much of that are you going to try get to remedy the situation? You say there is more work to do. We're committed, as a government, to continue to monitor the situation. And as I said, we have been nimble to date ` the Ministry for Social Development has ` and we will continue to be. Will there be more down the track? I think it is a case of needing to watch this space because this is unprecedented times, and it requires unprecedented actions. And so, we will continue to monitor what is happening to ensure that we can support New Zealanders. But with the Budget, our primary focus has been on upskilling, training jobs, employment, and making sure New Zealanders are looked after. And is the MSD going to be nimble enough? You talk about being nimble. Are you going to be nimble enough when that next wave of beneficiaries comes on? Does that mean you're going to have to employ more staff? Absolutely, and that was a consideration in the Budget, and that was responded to positively. So, we did get the money to do that to expand employment services, to expand focuses with respect to initiatives like Mana in Mahi, to also expand our internal offerings in terms of our work focus and also front-line case management. That is the reality that we are going to have to beef up the support that we have to cater to the needs of New Zealanders who have lost jobs or find themselves unemployed because of Covid-19. How many new staff are you looking at employing? Front-line, we're looking at around between 550 and 600. Keeping in mind too that we also are still funding those that are working in the wage subsidy space as well. OK, when you came to office, you spoke about being empathetic and responsive. Do you think you are achieving that? Because we have had the reports out this week that the Ministry has spent decades telling people that they have to use their whole redundancies before they can access help. Yeah, so with respect to that case, in terms of the advice that I've been given, Simon, it is an operational issue, but I have asked for a fuller briefing ` a bit of an investigation ` into how some of these decisions have been made. I have been told that the cases are isolated cases, in that, there are people that may not have been practising according to the guidelines and legislation, and so, that is what I'm waiting for more information on. When will you have that back? I am sure, in the next week. In the next week. OK. Just finally, Minister, if there had been one extra thing that you could have slipped into the Budget without Grant Robertson noticing, what would it have been? (CHUCKLES) Look, there is lots more I want to do. There is a lot of recommendations in the Welfare Expert Advisory Group Report, and I agree with many of the recommendations that are in there, so I would not pick out one. I am just committed to making these changes over time. Carmel Sepuloni, thank you very much for your time. Thank you, Simon. OK, coming up, analysis from our political commentators Matthew Hooton and Laila Harre. Plus, when can we expect a trans-Tasman bubble, and what are we waiting for? Conor Whitten investigates. Welcome back. I'm joined now by our panel political commentators Matthew Hooton and Laila Harre. Thank you so much for coming, and it's great to have you both here in the studio under Level 2, so welcome. Matthew, first to you. $60 billion ` did you ever think of a` sort of, a Budget allocation like this in your lifetime? Did you ever think you'd see this? Well, not unless there was a war or a plague, and there has been. (LAUGHS) But we did see something similar after the Christchurch earthquakes. The response to that was for the government to borrow something like 20% of GDP, and debt went up significantly in that period, and this is obviously a bigger crisis than the Christchurch earthquakes and the Global Financial Crisis, and so it looks like the government ` if you believe the figures, which I think are too conservative ` is gonna borrow something like 30, 35% of GDP, so in that sense, yes. In response to a crisis, that's what governments do. Right, so this is a suitable response. Laila? Well, it's more than a suitable response. I mean, in my lifetime, I have never heard the repudiation by a Labour Finance Minister of the wreckage of the 1980s, and we heard that in the Budget speech on Thursday. I` I felt that we have begun to set the parameters for a very different kind of approach to the needs of people and the way that you manage a crisis or a massive change in a way that is protective of jobs. Right, so we're not talking` we're not talking austerity measures to pay all this back, is that what you're saying? Exactly. Do you think there should be austerity measures to pay all this back? Should they be flagging that kind of thing or...? No, look, I think this figure, $140 billion, is just a start. Oh, right. You look at the, um... I mean, you can read the Minister's speech, and that was a lot of platitudes that Laila's referring to, but in fact you read the Budget economic and fiscal update, and it is a completely mainstream and very conservative budget. Mm. It is based on the assumption that the global economy will decline by only 3% as a result of this crisis before roaring back at 6%. Yeah. It says that by April Fool's Day next year, New Zealand will be back to normal, including the border. These are heroic assumptions, and I don't understand why the National Party is attacking this $140 billion ` $80,000 per household ` because if there is a National government after this election, they are gonna be borrowing a lot more than $140 billion, as is Grant Robertson. So, I mean, Laila, is there any... I mean... Is there any... What's the point of attacking this if you are Simon Bridges, as Matthew's just talked about? He says, you know, they don't support this kind of borrowing. I mean, what is the point? Is there anything to gain? It just seems completely incoherent to me, and I mean, in the interview you just did with Simon Bridges, he implied that they were going to have a growth and jobs plan without spending money. There was no indication given whatsoever as to how a plan like that can be funded without borrowing, and I think it's patently clear to people and very widely accepted that this type of crisis investment has to be made. I think it's also appreciated that the investment is not just a short-term crisis response. I mean, we're looking at vast amounts of money going into areas of development that will be good and will help to lead what people like to call transformation. OK, to lead transformation. Would this` Another point on Simon bridges then, Matthew, since you raised it. I mean, it's hard for him to find a place to be in a pandemic response, is that right? So has he` has he had trouble with his tone? Well, he's making it very difficult, because he responds to the event of the day. So he hears a figure like $50 billion or $140 billion, and he says he's against it. But if he just breathed, if he considered the actual macro economic picture in the world and in New Zealand, he would probably have more sensible responses than the ones that we're hearing from him. So you're saying` I mean, he's not an economist. He is` He's an expert on law and order and gangs. This obviously isn't his area. Mm. So, um... So kneejerk reaction, is that what you're saying? Well, yes. I mean... they need to distinguish between good debt and bad debt, and forget about the figure. The figure's gonna be higher. Mm. And say, 'Look, we would invest this $140 billion this way rather than that way', and` and they should also point out that, yes ` and people like Amy Adams and Nikki Kaye ` in their caucus, they've got people who have spent a lot of money as ministers before. Amy Adams built the ultra-fast broadband network, and they should be contrasting that competency with Phil Twyford and Shane Jones and the rest of them. I mean, he does make the point that they have, you know, and Simon Bridges in that interview, to his credit, did point about their track record a lot. Sure, but he said that he's` he would borrow less than $80,000 per household, When everybody knows that that's just the start. We may have a second wave of this. But it's` it's an impossible situation for him, though, isn't it, Laila, because, I mean, he's saying` he's gotta find some oxygen somewhere when everybody around the world is going into higher debt levels than New Zealand. I mean, where can he find that oxygen? Oh, I think it's an impossible situation for him, because he has no control at all over the landscape or the playing field that he's on, and he is not a player who is able to play on the field that is now absolutely being defined by the government. I mean, we have all... I think there's been a significant shift in the kind of values that people are applying to their political decision-making, and he has simply missed that shift. I mean, you can't spend eight weeks seeing signs all around you saying, 'Be Kind', the kind of community initiatives and neighbourhood programmes that have developed, and continue this kind of mealy-mouthed, mean-minded, and, you know,... (LAUGHS) OK. ...fundamentally austerity-driven ethos. It's not gonna work. All right. Matthew, so` Given that, Matthew, do you think that Simon Bridge's leadership is safe? Well, it is this week. There's no caucus meeting this week. (LAUGHS) So, you know, nothing will happen in the next few days. It really depends on whether Mediaworks and TVNZ can afford to do polls, because the caucus will look for that. He has` As he` he didn't answer your question, but he is doing private polling, but there has been no polling presented to the caucus since February. And why is that? He does not wish to share the polling that he is doing... Do you know what that polling says? ...with the rest of his colleagues. No, I don't. His criticism of UMR Research's poll is ridiculous. Yes, they are the Labour Party's pollster, but they are a highly reputable polling company, and the poll that he referred to, that showed National on 29, was one that they did for all their corporate clients, and that is not a company which is going to send the big corporates of this country inaccurate polling for political purposes. He is in big trouble. He needs to share the polling with his caucus` on Tuesday-week at caucus, and if it is below 33, 32, 31, he should resign. OK. Because he cannot win. It's the same situation. Look, it's not fair. Life's not fair. It wasn't fair on Andrew Little. I don't see why Andrew Little was such a horrible person. I've met him a few` he's a perfectly nice person, same with Simon Bridges. So it's not fair. But if you're down` for whatever reason, the public did not like Andrew Little. They don't like Simon Bridges. And if the polls are as low as below 35, then National faces catastrophe at this next election. I'm gonna leave it there for the moment. Laila and Matthew, thank you very much for your time. OK, stay with us. We'll be back after the break. Welcome back. We're back with our panel, Laila Harre and Matthew Hooton. Just before we continue on to other topics, Matthew, do you have any idea who would possibly replace Simon Bridges as leader? Oh, if there was a vacancy, there'd be two candidates ` the first would be Judith Collins, obviously, probably running with Mark Mitchell from Rodney. And the other one would be Todd Muller from the Bay of Plenty, running with Nikki Kaye of Auckland Central. And they would want the job, would they? (CHUCKLES) (CHUCKLES) I don't know if anyone wants to be Prime Minister in the current situation. Fair enough. Let's talk about the current situation. In the Budget, Laila, there was no extra money for beneficiaries. Now, was that a missed opportunity? I think the biggest disappointment for people from the left looking at the Budget has been the lack of new progress on implementing the Welfare Expert Advisory Group recommendations. But I do think that Carmel undersold what has been done in this Budget. I mean, let's remember there was a significant increase at the beginning of the pandemic` You're talking about the $25? The $25 a week. The Budget includes a huge expansion of the pre-school lunch programme, the state house-building doubling ` more than doubling ` over the next few years. A lot of the money and resources that are going into job creation and trade training will be a direct benefit to people who are currently in that hard` She did talk about those incentives` sorry, those schemes. But I wonder, the point was, with so much money being borrowed, is this not now the time` She talks about income adequacy, is now not the time to do that? Yeah, this is definitely the time to. And it is always the time to address income adequacy. Right. And the question is how you do that. I don't think that you can say you borrow a whole lot of money to deal with long-term issues income adequacy and the benefit system. It's time that people who talk about increasing benefits, which I do freely, are also talking about redistribution through the tax system to ensure that those benefits can be kept at that level over the long term. So I don't think this was the Budget to completely transform our tax and benefit system. So that's gonna come? Well, I think this government is giving themselves space to win a mandate for redistribution. OK, well, they might do that. And the challenge over the four months of the election campaign for Labour will be whether or not they put a policy package together that brings that middle group of New Zealanders in favour of greater redistribution. I want to talk about that middle group of New Zealanders, because the majority of the new beneficiaries, Matthew, are gonna be higher earners, people that had no experience of the benefit before. And so they're going to be experiencing this for the first time. Is that gonna be a bit of a backlash there, or... It does look as if the unemployment that we're seeing is white and relatively young. I think the data says that it's people returning from overseas who haven't been working. 12% of the new applicants. So that is unusual. Interesting enough, again, you go through the Treasury documents, the Budget documents, they're thinking that unemployment will stay below 10%, which is lower than it was in 1992. And going back to 4%. And going back to 4% in a couple of years. I'd like that to happen. I'm struggling to think it's credible, which again puts more pressure on the National Party to admit that the 140 billion is conservative. Do you think, Laila` you're talking about a plan. They'd have to sell a plan leading up to the election. But they've got unallocated $20b. Is that the plan there for the future? Well, they've got an unallocated $20b. They also have Winston Peters, who is going to be a handbrake on any initiatives to improve the plight of people who have experienced life on benefits, often through multiple generations. So I think the prospects of getting something through this parliament are very, very minimal. That change will rely on an election campaign and on the goodwill that's been... pocketed by Jacinda and Grant to be used up a little in persuading the whole nation ` the team of five million ` that it's time we shared things a bit more fairly. Well, the Prime Minister has ruled out campaigning on tax increases, so her ability to campaign for significant redistribution is quite restrained by that latest promise... Right. ...from her. 'No new taxes.' 'No new taxes.' Well,... OK. That's a debate for another day and we're gonna have those leading up to the election. Laila and Matthew, thank you so much for your time today. All right, we got beaten to it. The European Union has its first travel bubble with Baltic countries Lithuania, Latvia and Estonia opening their common borders on the stroke of midnight on Friday. Closer to home, plans for a trans-Tasman bubble could be in place by the end of the month. Air Force and airlines are planning to test new safety measures in the next few weeks, and many Kiwis are desperate for the borders to open, as Conor Whitten explains. For families stuck either side of the Tasman, this as close as connection gets. How's Moo? Show me Moo. Moo moo. (LAUGHS) Hannah Ellison's calling her mother from Sydney. Her plans to visit are now on hold. It means much of her family still hasn't met her husband after they married three months ago. We planned the party, it was scheduled a week after your lockdown started and the travel ban got put in place Air New Zealand now flies between Sydney and Auckland just three times every week. The international terminal is eerie and empty. More than 100 flights a day was normal, but today there are only four. What was once a short flight is now a marathon journey with a 14-day quarantine either side... ANNOUNCEMENT: One metre with the person next to you. ...leaving Kiwi families stranded, separated ` searching for a sign of when it will end. If it was in the next month, two months, that'd be amazing. When people start saying things like, 'Oh, maybe the end of the year,' or September, that ` yeah, that scares me a little. Hope is now pinned on a trans-Tasman bubble. And behind the scenes of deserted airports, the industry is making plans. Auckland Airport's CEO helping spearhead an effort to reopen borders as soon as it's safe. New Zealand and Australia have a great opportunity to really set some potential standards for travel restarting around the world. 18 organisations are trying to solve it. The Australia New Zealand Leadership Forum's high-powered Trans-Tasman Safe Border Group. It brings together Government, Air New Zealand, Qantas and the three biggest airports each side of the ditch. They're tasked with designing a new way to travel. The flying experience has to change Allowing for flights between New Zealand and Australia without putting travellers into quarantine. Try to prototype what a future border process might look like, so that we can then test that to ensure that meets both airport and aviation requirements, as well as new health requirements, as we understand what they might be. The exact safety measures are still in development, but temperature checks are being considered and are already in place at airports overseas. Masks could be used with strong contact tracing, and the plan could be ready in the next few weeks. A working strategy by the beginning of June ` and the plan with this is, although we know that it would take governments longer than that to make a decision about opening the borders, we need to be able show them the industry is ready. It can't come soon enough for New Zealand tourism, which has ground to a halt in the past two months. At Cardrona Alpine Resort near Queenstown, they're preparing for a winter season without a huge part of their regular crowd. That Australian market is a big portion of half of our business, so without that, it means that we're going to see around about 50% of what we'd normally see here this winter. The hope is that Kiwis will flock to the mountains. And $400m from this week's Budget will be spent encouraging domestic travel to resume. But many will need Australian tourists for business this season to really rebound. The difference between having just a domestic market and having an Australia-New Zealand bubble is going to be about 30 or 40% of our revenue, so it's really important to us to try and get this. It's even more important in the Pacific where tourism makes economies tick. Normally, pristine Treasure Island, Fiji is bustling with families at this time of year. Now the beach and resort lie empty. Right now we're sitting on zero occupancy. As you seen behind me... there's no one to serve here in the island. 120 staff aren't working, and locals are desperate for tourists to return. Our only wish now is for the borders to be reopened again, and operations here in the tourism industry in Fiji are back to normal. Fiji has lobbied New Zealand and Australia to be part of the trans-Tasman Bubble. Their last confirmed case was three weeks ago, and other Pacific nations haven't had one at all. We can test and trial a new process working with Australia and see if that can work for both countries. I think naturally that can give us some clues in to what might work for other countries, and yes, the Pacific Islands has come up. First, we have to beat the virus. Slowly Australia is lifting restrictions. New cases there have fallen sharply to around a dozen every day. But infectious diseases specialist Professor Nick Wilson says both countries need elimination. And so far we haven't defined what it is. It would probably be something like a 28-day period ` or maybe a bit longer ` in which no new cases had emerged, and the definition would probably exclude detected arriving travellers with the infection, because they can be properly managed in isolation. Once we agree to a definition, achieving it could be close behind. It may only be a matter of a few weeks before those countries start to see zero cases, if the clock started ticking in a few weeks' time for that 28-day period, it could conceivably be within two months. In the meantime, airports and airlines are racing to be ready so that Government acts. Our task is to put something forward something credible they can test, and then it's about political will on both sides of the Tasman. And for many, the sooner the better... The next week would be great, but... (CHUCKLES) ...to bring countries and families together again. Conor Whitten reporting there. And that's all from us for now. Enjoy your level two weekend. Thanks for watching and we'll see you again next weekend. Captions by Joshua Tait, Annie Curtis and John Gibbs. Captions were made with the support of NZ On Air. www.able.co.nz Copyright Able 2020