New law will ease the supply of state aid to firms floundering in lockdown – another funding option is to produce propaganda


Uh, oh.  More urgency is afoot in the law-making department.

But the latest one is not as egregious as the urgency given to the passage of legislation to facilitate the introduction of Maori wards in local government.

Legislation will be introduced under urgency today to set up a new Resurgence Support Payment for businesses affected by any resurgence of COVID-19.

There has been a resurgence of COVID-19.  There no longer is an issue around the under-representation of Maori on local authorities (although the facts are scandalously ignored by leftie MPs who parrot canards to the contrary).

The Resurgence Support Payment for businesses scheme was announced in December.

The government aims to reduce the time over which a revenue drop is assessed from 14 days to seven.

Among other new announcements from the Beehive:

  • Trade and Export Growth Minister Damien O’Connor has congratulated Nigeria’s Dr Ngozi Okonjo-Iweala on her “ground-breaking” selection as the next Director General of the World Trade Organisation.
  • From 1 April, people getting a benefit will be able to earn more through work before their benefit payments are affected. Around 82,900 low-income people and families will be better off by $18 a week on average.
  • The first batch of COVID-19 vaccine – around 60,000 doses – arrived as airfreight at Auckland International Airport yesterday.

With regard to the legislation to be given urgency, Robertson explained:

“We acknowledge the concerns of the business community about Alert Level rises and have made this change as we want to get money out the door quickly to affected businesses.”

Firms that experience a 30 per cent drop in revenue over a seven-day period will be eligible. The payment would include a core per business rate of $1500 plus $400 per employee up to a total of 50 FTEs ($21,500).

This payment recognises that some businesses face one-off costs or impacts to cashflow when the government stepped up an Alert Level to follow public health advice. The payment is structured to provide most support to smaller firms who are most likely to face cashflow issues but will be available to all businesses and sole traders.

“A decision on whether this support will come into effect will be made if there is an extension to the seventy-two hour increase in alert levels announced on Sunday night. If it does come into effect it will cover the initial 72 hour Alert Level rise as well,” Grant Robertson said.

The Government has a package of support available, in addition to this payment, including:

  • A new ShortTerm Absence Payment to cover eligible workers needing to stay at home while awaiting a COVID19 test result. This is a one-off payment of $350 to employers to pay workers who need to stay home while awaiting a test or while someone who is their dependent is doing so, in accordance with public health advice. Further information about this payment is available on the MSD website.
  • The Leave Support Scheme helps businesses to help pay workers (including selfemployed) told to self-isolate because of COVID-19. It’s paid as a lump sum and covers two weeks per eligible employee at the rates of $585.80 for each employee working 20 hours or more a week and $350 for each employee working less than 20 hours a week. Information is available here.
  • The Wage Subsidy Scheme will also be available nationally when there’s a regional or national move to Alert Levels three and four for a period of seven days. The support will be provided in two weekly payments for the duration of the alert level period, rounded to the nearest fortnight.  The Wage Subsidy Scheme has been very effective in keeping people in work so far with more than $14 billion paid out to protect 1.8 million jobs.

Other support includes the enhanced loan products Business Finance Guarantee Scheme, which is available to June 2021 and Small Business Cashflow Scheme.

More information can be found on the COVID-19 website:

And if you can’t get the money you need from those sources, you can always shut up shop as a business and turn to the art of propaganda.  Creative NZ is a generous funder, as the Taxpayers Union pointed out today after a play, named “Transmission”, received a $57,000 grant.  According to co-director Miranda Harcourt,

It is a verbatim stage-show drawn from our interviews with NZ Prime Minister Jacinda Ardern, Finance Minister Grant Robertson & leading epidemiologist Michael Baker around last year’s decision to lock down NZ in response to Covid-19 & its targeted elimination. It is a behind the scenes glimpse into how these remarkable people were thinking and feeling at the time. And into the life events that have shaped them as leaders.

Taxpayers Union spokesman Louis Houlbrooke says our  playwrights are welcome to produce obsequious propaganda, but taxpayers shouldn’t be forced to fund it.

He reckons this reeks of  a state-supported cult of personality that you’d expect in Kazakhstan or North Korea, not an egalitarian society like New Zealand.

He also notes that Creative NZ has previously handed out grants to commission poems on Newsroom attacking centre-right politicians, and opinion pieces on soft-socialist blogsite The Spinoff agitating for the Government’s Māori wards legislation. He is sure we have yet to see Creative NZ fund a single project that doesn’t fit “its politically correct, Wellington-centric, left-wing world view.”

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A moment of truth for the EU in the post-Brexit trade talks

Covid, summer holidays and the usual foreign policy rows have overshadowed the EU/UK post-Brexit trade talks.  A pity because this looks like a – perhaps the – key moment, as the ever astute Wolfgang Munchau points out in the Financial Times.

The issue is the EU’s insistence that the UK conform with the EU’s state aid and competition policy – in broad terms, the regime whereby the authorities arbitrate and ensure consistency between the member states’ freedom of action in industry regulation, promotion and subsidy. Continue reading “A moment of truth for the EU in the post-Brexit trade talks”

NZ’s David Walker is in the thick of it (but not as a candidate) as the WTO selects a new director-general

A New Zealander is in the thick of the campaign to select a new director-general of the World Trade Organisation in Geneva – but not as a candidate.   NZ’s WTO ambassador, David Walker, chairs the general council, the WTO’s highest-level decision-making body in Geneva, which will select the candidate.

The present director-general, Brazilian diplomat Ricardo Azevedo, leaves the WTO on August 31, a year before his mandate was due to expire. He cites personal reasons for leaving but also said it would be good for the organisation to have a different leader to face “the new post-Covid realities.”

Timing is critical as many question the future of the WTO as an advocate for international trade.  The WTO has been scarred by the United States’ decision in December to block the appointment of two new members to the appellate body. Continue reading “NZ’s David Walker is in the thick of it (but not as a candidate) as the WTO selects a new director-general”

Brexit: concerns about reduced economic openness and lessons from NZ’s terms of trade

LONDON CORRESPONDENT:  The UK’s central bank, the Bank of England, last Wednesday published a series of gloomy Brexit scenarios.  Supporters of Britain’s departure from the EU erupted in fury – but accusations of bias and bad faith miss the point. While civil servants do their utmost to avoid telling lies, ignoring, obscuring and arguing from carefully selected premises are part of the stock-in-trade.  Behind the politically chosen scenarios, the analysis is revealing and helpful to reasoned argument from all camps.

The scenarios modelled run from close economic partnerships (a version of which is currently before Britain’s parliament), through transition to World Trade Organisation trade terms, and on to a no-deal/no-transition ‘hard Brexit‘.  All of them suggest that the UK’s economy would be smaller over time than if the UK had remained in the EU, up to 10% smaller in the most dire, disorderly Brexit scenario.

The basis of the bank’s modelling (affirmed throughout the report’s 86 pages) is the assumption that all of the scenarios lead to a less open, and thus less productive, UK economy.   The economic literature is abundantly clear that openness to trade in goods and services and to foreign investment, facilitates competition, innovation and specialisation, and thus productivity.  QED one might say. Continue reading “Brexit: concerns about reduced economic openness and lessons from NZ’s terms of trade”

Brexit: it’s time to put up or …. ?

LONDON CORRESPONDENT:  So the UK cabinet resignations duly came and the EU duly rejected Theresa’s May’s latest Brexit plan.

What next? Those who really want to forget the whole thing think it’s time for another referendum (although it’s not obvious what the question(s) might be).  But given the EU’s implacable stance, it looks like the UK needs to prepare for, and show willingness to implement, hard Brexit.

Paradoxically, that gives it the best chance of achieving a satisfactory deal. In effect, UK leaders are coming to terms with their participation in a gigantic game of chicken.

Not least because the media are making good running with lurid end-of-the-UK stories. The truly silly ones can be handled briskly:  hospitals will run out of medicines (we have plans, says the NHS) or dairy products may become luxuries (because the UK for some unexplained reason will impose even higher tariffs than the EU does). Continue reading “Brexit: it’s time to put up or …. ?”

Kiwi trade expert plays key role in shaping UK’s post-EU trade policy

As PM Theresa May thrashes her way via narrow House of Commons votes towards Brexit, behind the scenes a former NZ diplomat and academic is shaping the UK’s post-EU trade relationships.  Crawford Falconer  is  chief  adviser  to  the  Secretary of  State  for International  Trade  Liam Fox  in London and   is  playing a  key role  in shaping  Britain’s new  trade policy.

When he  was appointed to the  role last year he was tasked with developing and negotiating free trade agreements and market access deals with non-EU countries and shaping trade deals on specific sectors or products.

Falconer  served in the trade policy engine room of the Ministry of Foreign  Affairs in Wellington  for many of the  25 years he spent in NZ’s public service and colleagues regarded  him as the brains  in the trade area, although he always operated in the lee of Tim Groser whose ebullience overshadowed Falconer’s quiet demeanour. Continue reading “Kiwi trade expert plays key role in shaping UK’s post-EU trade policy”

Not much fallout from Trump’s trade wars? Not yet – so be prepared

New Zealand has been braced for the economic fallout from the trade wars triggered by Donald Trump.  Worse, Trump’s disdain for the World Trade Organisation threatens to cripple the rules-based global trading system which enables small countries to get a fair deal from much bigger ones.

But so far the economic and financial fallout from the trade wars has been minor.

What’s going on?

Just wait, says American economist Barry Eichengreen, who warns we should expect a lagged effect. Continue reading “Not much fallout from Trump’s trade wars? Not yet – so be prepared”

The golden era of trade growth may already be over


A report by Chatham House, Trade Policy Under President Trump, points out that the rate of increase in global trade volumes has slowed to approximately 3% annually since 2012 – less than half the average trade growth rate over the three decades before the global financial crisis in 2007 – and while global trade grew twice as fast as world GDP in real terms between 1985 and 2007,  since 2012 it has roughly kept pace with GDP growth.

Trade bureaucrats are achieving less

While average tariffs applied by WTO members have fallen from about 12% in 1996 to around 9%  in 2013, the report also says that – as participation in GATT and membership in the WTO has expanded, and the less contentious ‘wins’ for liberalising trade have been achieved – each successive trade round has taken longer.  The current Doha Development Round – dealing with tricky areas like agriculture – has been going since 2001.

The report also identifies a pattern of new trade restrictions, despite the G20 commitment to open markets after the global financial crisis.   Continue reading “The golden era of trade growth may already be over”