Chartered Accountants are calling on the Government to move on from the high-trust model of universal support for Kiwi businesses in the wake of the COVID-19 pandemic. The next phase must take a more targeted evidence-based approach.
"Next week's Budget, which is a pivotal one for the country, must start the shift beyond trust-based universal delivery of economic stimulus packages," said Peter Vial FCA, New Zealand Country Head of Chartered Accountants Australia and New Zealand (CA ANZ).
"Sooner rather than later we have to move to a tighter and more evidence-based model, targeted carefully at areas of the economy which remain viable, but vulnerable. The results of targeted programmes must be measurable and the policy outcomes need to be sustainable and capable of being independently verified."
Much of the COVID-19 support for businesses, and Kiwis, delivered to date has, by necessity, been delivered through a high-trust model, Vial said.
"Getting billions of dollars out the door quickly, through programmes such as the wage subsidy, was necessary and right for its time, but now we need more robust evidence-based policy design that is carefully targeted and developed in conjunction with affected sectors."
"The bill for all this spending is going to land on future taxpayers. We need to ensure that bill is no larger than it needs to be."
Vial said infrastructure spend should have criteria beyond "shovel or hammer ready" – the focus should be on investment that meets future needs and responds to the way we live and work in the future.
"We are now in a very different world from when many projects, now being declared shovel or hammer ready, were actually signed off."
"One question that must be asked is: are these projects fit for 2025 and beyond?"
He said the Government is showing agility in its response to COVID-19.
"The interest-free loans for viable small businesses is an example of both targeting and the Government moving quickly when it realised something wasn't working as well as planned."