Formats and related files
Staff and teams are writing in their individual capacity and the views in this paper are not necessarily a “Treasury” view. Please read Disclaimer for research and commentary publications.
Key Points#
- In April 2020, the New Zealand government established the COVID-19 Response and Recovery Fund (CRRF) in reaction to the COVID-19 pandemic and recession. The funds allocated from the CRRF totalled $70.4 billion dollars, when combined with an earlier fiscal support package. This amounted to 22% of 2019 GDP, although funds were allocated over a number of fiscal years.
- This analytical note presents a National Accounts categorisation of both the funding allocated to the COVID-19 response and the estimated expenditure. This will contribute to a macroeconomic understanding of the fiscal response to the COVID-19 pandemic in New Zealand and the recession that followed.
- We estimate that almost 80% of the funding allocated to the COVID-19 response over the first 3 fiscal years has actually been spent. Estimated COVID-19 expenditure over this period is equivalent to 16% of 2019 GDP.
- Wage subsidies make up the largest single component of both COVID-19 funding allocations and estimated expenditure.
- Government consumption makes up the second largest component. This expenditure is more backloaded, spread over a longer time horizon, and allocated across a large number of line items.
- Our National Accounts categorisation of COVID-19 funding allocations and estimated expenditure will be an important input in macroeconomic modelling analysis of the fiscal response to the COVID-19 pandemic.