New Zealand Government’s budgetary response to the COVID-19 pandemic

Abstract

Purpose This paper aims to provide a commentary on how well the New Zealand (NZ) Government has used the budget as a tool to tackle the social and economic problems associated with the COVID-19 pandemic. The role of public budgeting as a political instrument is also critiqued. Design/methodology/approach An analysis was carried out of relevant documents that included government policy statements, budgets, news articles and website information on the pandemic. Meaningful interpretation of information and reflections helped provide the basis of the commentary. Findings Public budgeting has a prominent role in addressing a major global crisis. Budgets need to quickly respond to the needs of the moment in saving lives and sustaining people’s well-being, businesses and the economy. In a crisis situation, the social, political and economic factors become crucial determinants of budgetary policy measures. Although strong political leadership is required to deliver budgets under unimaginable circumstances, the ideology of the political party in government can be a powerful predictor of fiscal policies. Crisis budgeting will result in mounting budget deficits and public debts that will take many years for future generations to pay back. Practical implications This paper provides a significant learning for other nations. These lessons will guide budget policymakers to prepare better for potential crisis in the future. Originality/value This paper is original and based on the NZ Government’s budgetary response to the COVID-19 pandemic. It will be valuable in formulating budget policies and public funding decisions in a major crisis.