Back in Business - National's plan to save livelihoods and unleash our economy


Over the past 18 months, New Zealand’s economy has been hammered by Covid-19. Businesses in our largest city have suffered more than 18 weeks of lockdown. The closure of the border slashed $20 billion from our economy almost overnight with the loss of international tourists and students. Our agriculture sector lost access to seasonal workers and businesses were cut off from skilled migration. Our domestic tourism, hospitality, accommodation and events sectors have all been hit hard by regular restrictions on travel, distancing requirements and capacity limits.

As is too often the case, the economic damage has not been evenly felt.

Some of the economic damage has been masked by massive government borrowing and spending. In just 18 months New Zealand has doubled its debt. When public health restrictions are impacting people’s livelihoods, it is right the Government borrows to support the businesses impacted. But when our debt is rising so rapidly, it’s more important than ever that spending is well directed and not wasted.

New Zealand is shifting to a new period in our Covid response. We are no longer pursuing the elimination strategy. We need to focus on getting our vaccination rates up, suppressing cases and treating the sick.

We also need a new economic strategy. The Government cannot just continue to borrow while locking down our economy and hoping for the best.

Since the initial Covid outbreak, around 80,000 New Zealanders have been pushed onto welfare. There are now more than 190,000 working age Kiwis on the JobSeeker benefit. That’s about one in every nine. Many of these people are in our most vulnerable communities, precisely those we should be keeping in employment to support their whānau. 

In the two months before the latest outbreak, more than 11,000 businesses closed their doors for good. Without urgent action, this lockdown will see many more businesses and their workers go the same way. This can be avoided with the right plan and National has it.

We’ve been down the path before of big governments that borrow big and tax bigger. That’s not what New Zealand needs. We need to back business. Business is really just people. People with an idea, some capital, and the confidence, talent, drive, and courage to take a risk. People who back themselves. They need a government that backs them too.

Our economic team has developed this comprehensive plan that will save livelihoods and unleash our economy. We strongly urge the Government to adopt it immediately so New Zealanders can back our businesses to succeed. It’s what National would do.

→ You can read our full and comprehensive economic plan here or continue reading the summary below.

Our economic approach involves two phases:

Phase 1 - Respond to the immediate economic impact of Covid

Immediate support. This includes a raft of initiatives that National would implement to provide immediate support to struggling businesses, offer smarter rules for managing lockdowns, and make it easier for businesses to operate.

→ You can read more on these steps on Pages 11-22 of our full plan here.

Part A - Offer immediate support to save jobs and keep businesses afloat

  1. Fix the wage subsidy (pg. 11)
  2. Implement rental support (pg. 12)
  3. Extend the loss carry-back scheme (pg. 13)

Part B - Provide clarity around public health rules for business

  1. Give business legal certainty on vaccinations (pg. 14)
  2. Create smarter alert level rules (pg. 15)
  3. Fix alert level regional boundaries (pg. 16)

Part C - Reduce the burden on businesses and workers

  1. Cut taxes for small businesses (pg. 16)
  2. Cut taxes for workers (pg. 17)
  3. Freeze costly new regulations (pg. 18)
  4. Create incentives for business investment (pg. 18)
  5. Deliver mental health support for small businesses (pg. 19)

Part D - Deliver targeted support to save highly affected industries

  1. Distribute 'dine and discover' vouchers (pg. 20)
  2. Allow restaurants & bars to extend outdoor seating (pg. 21)
  3. Establish an insurance scheme for major events (pg. 22)

Phase 2 - Evolve our approach to reduce the cost of public health restrictions

Evolve our approach. National believes the business sector should play a much bigger role in our Covid response. As we head towards our 85-90% vaccination milestone, business needs a clear plan for moving away from blanket restrictions to a more sophisticated model based on trust and technology.

→ You can read more on these steps on Pages 23-29 of our full plan here.

Part A - Set a clear strategy and a date for reopening (pg. 23)

  1. Commit to ending lockdowns, reopening our economy, and reconnecting to the world when we hit 85-90% vaccination (along with DHB and age-based milestones), or on 1st December, whichever comes earlier.

Part B - Explain what it means for business when we get there (pg. 24-26)

→ Smarter public health rules

  1. Under Level 3 lockdown, allow fully vaccinated people to go to work, attend events, use gyms, or visit restaurants and bars showing proof of vaccination upon entry.

  2. Provide all businesses operating under these conditions with sufficient rapid antigen saliva tests free of charge to conduct regular twice-weekly tests of all staff.

→ Abolish regional boundaries

  1. At the 70-75% vaccination milestone, all fully vaccinated people who have undertaken a rapid antigen test at the border, or can provide evidence of a negative daily test, will be allowed to cross any regional lockdown boundary.

  2. At the 85-90% vaccination milestone, all regional restrictions on travel will be abolished.

→ Lockdowns become a last resort

  1. At 85-90% move away from lockdowns in favour of less economically damaging public health measures like rapid testing, masking, surveillance testing, contact tracing, home isolation, tracer apps, and social distancing

  2. Make the use of lockdowns a last resort to protect our health system if other tools have failed to suppress an outbreak.

Part C - Reopen the border and reconnect to the world (pg. 26-29)

→ Implement a traffic light system

  1. Implement a traffic light system for travel to New Zealand once we achieve an 85-90% vaccination milestone.

  2. Allow fully vaccinated travellers with a negative pre-departure test arriving from low risk countries to enter New Zealand without needing to isolate.

  3. Allow fully vaccinated travellers with a negative pre-departure test arriving from medium risk countries to enter New Zealand and isolate at home for seven days.

→ Resume business travel, tourism and international education

  1. Allow international tourists from low and medium risk countries to enter New Zealand under the traffic light system protocols.

  2. Allow international students from low and medium risk countries to enter New Zealand under the traffic light system protocols.

  3. Allow business travel to resume under the traffic light system protocols.

→ Lift the RSE cap to support the agricultural sector and the Pacific

  1. Increase the cap on the number of workers who can come to New Zealand under the RSE scheme from 14,400 to 19,400 for the next two years.

→ Restore access to skilled and investor migrants

  1. Restore access to the immigration system for overseas applicants from low and medium risk countries.

  2. Urgently bring in the health care workers we need, including ICU nurses, to build resilience into our health system.

  3. Reinstate the Work to Residency pathway with a guarantee of processing their residence applications within six months.

  4. Restore the current Skilled Migrant Category (SMC) residency process, immediately restarting selections from the Expression of Interest (EOI) pool to give those arriving the ability to apply for residence with a guarantee of processing their residence applications within nine months.

  5. Instruct Immigration New Zealand to prioritise applications for work visa categories (Essential Skills, Work to Residency, Working Holiday) as well as variation of conditions for existing work visas, and reallocate resources to ensure processing times for these critical visas are cut in half.

  6. Allow split migrant families to apply for the 2021 Residence Visa in the priority intake in December 2021 to stop them leaving New Zealand.

  7. Instruct Immigration New Zealand to process the more than $2 billion currently on the Investor Visa application waitlist.

Fiscal Responsibility Rules, Principles & Cost Estimates

→ You can read more on the fiscal responsibility rules on Page 5, the principles to guide our plan on Page 8, and the cost estimates of our full plan on Page 30.

The current Government inherited a very strong fiscal position created by governments of various stripes over the last 25 years. But our economy now faces real risk. On the surface things might feel good, but in reality New Zealand is using the credit card just to pay for groceries, and a number of warning lights are starting to flash red.

Right now we are borrowing on average about $110 million every day. The Labour Government’s attempt to justify the most recent fiscal forecast as prudent, along with its willingness to borrow to fund costly new initiatives on top of that required for our response to Covid, threatens to undermine that inheritance.

In its most recent statement on our long-term fiscal position, He Tirohanga Mokopuna 2021, the Treasury warned starkly that “net debt is likely to be on an unsustainable trajectory if expenditure and revenue follow historical trends”. That’s Treasury speak for “stop the wasteful spending.”

Borrowing to respond to the significant economic impact of Covid-19 lockdowns on businesses and their staff was the right thing to do. But the Government has cynically used Covid-19 as an opportunity to abandon any semblance of fiscal responsibility.

The Covid-19 Response and Recovery Fund has been used for all sorts of projects which can in no measure be considered to have anything to do with Covid, including the Three Waters reforms, cameras on fishing boats and a baseline funding increase for the (non-commercial) Radio New Zealand.

At a time when the Government is borrowing so much on taxpayer’s behalf, there needs to be greater scrutiny than ever on where that money is being spent. Yet the Government has not published any reports on its additional spending since the Budget, over six months ago.

National is calling on the Government to adopt the following fiscal responsibility rules, and to stick to them:

  1. Reconfirm a commitment to the 15-25% range for debt-to-GDP, and be clear about how and when this is likely to be achieved (subject to the normal caveats). This is, after all, what the law requires.

  2. Ensure Covid-19 response funding is used only for direct Covid response measures.

  3. Commit to no use of in-between Budget processes to implement non-Covid spending initiatives.

  4. Guarantee greater transparency and timeliness of spending reports outside of the Budget.

  5. Bank any unexpected gains in tax revenue or reduced expenditures to the operating balance, so debt is reduced faster.

You can watch coverage of the Plan launch here:

You can find Press Statements from National's Spokespeople here:

Judith Collins - National sets targets to end lockdown limbo

Judith Collins - National launches Back in Business plan

Todd McClay - National's plan to support tourism, hospitality and events businesses

Michael Woodhouse - Fiscal discipline must underpin recovery

Andrew Bayly - National's plan will lift the burden on business