The National Party says new unemployment figures paint a sad picture for New Zealand families and there needs to be more growth in the private sector.
Jacinda Ardern & Paul Goldsmith. Photo: RNZ
Ministry of Social Development figures show that more than 5000 New Zealanders applied for unemployment benefits in the last two weeks of August.
National Party finance spokesperson Paul Goldsmith said the figures are a result of the latest Auckland lockdown and the wind down of the wage subsidy.
Unemployment figures and the hit to the economy from Covid-19 and subsequent lockdowns are actually better than predicted by the likes of ASB and other banks, but Goldsmith said "it's all relative."
"At one point we thought we might be in double figures and back to Great Depression level figures, so hopefully we'll avoid the very worst but it is still very substantial."
"It is important to have a path back to prudent levels of debt" - Paul Goldsmith
Goldsmith said there is a "real sense" there will be more job losses and the critical thing now is to think about how to create new jobs. He said the government can't carry on doing stimulus.
"The best thing we can do is have an economy that's creating jobs so people can get back into work... if you want to have sustainable jobs, you really need private sector investment creating those jobs."
One of National's plans, if they were to get into government, would be the ability for business to write of new investments. Another is to get within "prudent" levels of debt within a decade in case of another crisis.
"The only reason we've been able to spend to the extent we have this time is because we started off with low levels of debt."
Goldsmith said a National government wouldn't cut services, but wouldn't fund them at the level the current government does.
The Reserve Bank has acknowledged low interest rates have bolstered house prices, which is good for confidence but not great for inequality.
Goldsmith said it's an "enormous problem" worldwide.
"We've had reserve banks lowering interest rates, watering the milk as I describe it, and that's led to asset price inflation everywhere.
"The biggest asset New Zealanders have is their house, so I think the best response is to make sure we can build new houses."
Labour leader Jacinda Ardern said the latest resurgence in cases has shown the government is willing to bring back economic support for people who might lose their jobs due to lockdown.
Ardern said the only way the government can make a difference to house prices in New Zealand is to increase supply.
"We are willing to bring support for business" - Jacinda Ardern
"This is a massively damaging economic event, however it's also an opportunity. As a part of our Covid response and recovery we've said we want another 8000 public houses.
"We also want to use, and KiwiBuild is still in operation, we want to use that as a tool to make sure private development is still happening so we don't see the collapse of our residential housing market.
Ardern said Labour will be releasing five policies this week.