Covid 19 coronavirus: Where has the Covid fund gone – $5b left in $62b recovery fund

A total of $5.1 billion is all that remains from the $62.1b Covid-19 Response and
Recovery Fund.

The $5b total is what’s left after more than $4.5b was doled out to various recipients in Thursday’s 2021 Budget announcement.

Treasury documents showed the chief withdrawal from the fund in this year’s Budget was $3.8b into the Housing Acceleration Fund – the centrepiece of the Budget, which would increase supply of houses by accelerating the pace and scale of construction to ease the struggle of first-home buyers to enter the market.

Immigration received the next highest contribution with $173m to enable the continuation of core immigration services that have been impacted by Covid-19.

Also among the recipients were the New Zealand Symphony Orchestra and the Royal New Zealand Ballet, which received 3.2m and 1.1m respectively.

Asked if $5.1b was enough to withstand the wage subsidies and business support that might be needed if another lockdown occurred, Covid 19 minister Chris Hipkins said,”We’ll cross that bridge, if we get to it”.

In Treasury’s 2021 Budget economic and fiscal update, it referenced the uncertainty about the level of funding that may be required for future costs of recovery and fighting any further outbreaks.

National Covid-19 spokesman Chris Bishop said he supported keeping some funds aside if any unexpected Covid events occurred.

However, he objected to operating it similar to a “slush fund”, by spending that money on initiatives such as the Housing Acceleration Fund.

“That’s just not an appropriate use of the [Covid] fund.”

Also spent from the fund was almost $140m reinstating the Training Incentive Allowance, which was part of the $21b social development package.

The allowance would support about 16,000 sole parents, disabled people and carers with an allowance of up to $114 a week which could be used for study costs such as fees, books, transport or childcare costs.

The allowance for training and education for single parents and those on disability allowances was controversially scaled right back by the National Government, and Labour had promised to restore it.

As reported by the NZ Herald, Social Development Minister Carmel Sepuloni said she was glad to further support people who had been among those hardest hit by the effects of Covid-19.

“I remember thinking at the time how little sense it made [when National downscaled it]. I know how much difference it makes,” she said.

“Now is the right time to reinstate this allowance and help them reach their full potential.”

Further social development spending was also committed – almost $100m into supporting people to obtain and sustain employment.

Since the fund was established last year, social development spending has been the chief drain on the fund with $21.2b, which largely consisted of the wage subsidy scheme.

Following social development, revenue spending came in second with $8.6b, health at $5.1b and business, science and innovation at $4.9b.

Sector breakdown of Covid fund withdrawals (in billions):

• Social Development: 21.2

• Revenue: 8.6

• Health: 5.1

• Business, Science and Innovation: 4.9

• Housing and Urban Development: 4.7

• Education: 2.2

• Transport: 2

• Building and Construction: 1.6

• Tertiary Education: 1.4

• Finance: 1

• Other: 4.3

• Unallocated: 5.1

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