Of course Death Cult Capitalism Treasury were critical of Labour’s Covid spending

Labour leader Chris Hipkins dismisses criticism of Covid-19 overspending as ‘Treasury spin’

Labour leader Chris Hipkins is dismissing what he calls “Treasury spin” after its analysts said the last government overspent during the Covid-19 pandemic against official advice.

Treasury’s 2025 Long Term Insights Briefing, released this week, calculated the total cost of the pandemic at about $66 billion, or roughly 20.4 percent of GDP.

The report said Treasury advocated for more targeted support in late 2020 into 2021 and explicitly warned “against any further stimulus” by Budget 2022.

But responding to questions from RNZ on Friday, Hipkins was unapologetic about his party’s economic response to Covid-19.

“We prioritised keeping people alive and keeping people in jobs,” he said.

“I’m never going to claim that we got everything perfect… but prioritising jobs and prioritising lives was the right thing to do.”

Hipkins claimed other countries also spent up large with the same objectives, but Treasury said New Zealand was near the top of the chart when considering spending as a percentage of GDP.

“If you listen to the Treasury spin, then you’re going to get one view,” Hipkins told RNZ. “If you speak to other economists, you’ll get a different view.

“Our job was to support New Zealanders through the global pandemic, making sure that we saved lives and kept people’s jobs, and we were very successful in doing that: one of the lowest death rates in the world, one of the lowest rates of unemployment in the world, and one of the fastest rates of economic growth in the world.”

About half of the total Covid-19 response cost was directly tied to the pandemic, such as the wage subsidy scheme, or health initiatives like vaccination, contact tracing and quarantine.

The remainder went to a wide range of initiatives like: “tax changes, training schemes, housing construction, shovel-ready infrastructure projects, increases to welfare benefits, the Small Business Cashflow Scheme, Jobs for Nature, additional public housing places and school lunches”.

Treasury said that had “a lagged impact on the economy and proved difficult to unwind in later years”.

But Hipkins said Treasury had mischaracterised some of that spending, such as the provision of distance-learning for school students.

“Making sure that kids could keep learning while they were at home during lockdown was an essential Covid-19 expense,” Hipkins said.

The report comes during a prolonged economic downturn, with both the government and opposition parties trading blame over its cause.

Doesn’t Treasury have an altar to Milton Friedman in their basement?

What a surprise that Death Cult Capitalism had a problem with a Labour Government putting public health before profit margins.

All those companies and agencies that took the wage subsidy and complain about it now.

All the major decisions had National Party support.

Playing Captain Hindsight is tedious.

 

 

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