Grant Robertson: No accounting tricks in $3.2 billion Covid fund allocation

Finance Minister Grant Robertson. Photo / Mark Mitchell

By Finance Minister Grant Robertson

I was extremely disappointed to read Kate MacNamara’s November 26 article regarding the Covid Response and Recovery Fund (CRRF). To my mind, it did not give an accurate picture of the closing of the fund prior to Budget 2022, nor to how the remaining money was reprioritised.

First a bit of background. The CRRF was created in 2020 in the midst of the uncertainty of global pandemic.

We knew there were going to be both significant immediate responses required, as well as the likelihood of significant economic impacts that would need to be mitigated against and recovered from.

Around $26 billion was spent supporting businesses to be able to keep their staff on including through the Wage Subsidy Scheme, $13 billion supporting small businesses with low-cost loans, $10 billion for the health sector to be able to respond to COVID, $5 billion for business and science and innovation support, $4.7 billion to support people in housing, $2.85 billion to support the education sector, and $1.85 billion to support the transport sector.

The final size of the CRRF was $61.6 billion, of which $58.4 billion was allocated to response and recovery initiatives, leaving a remaining balance of $3.2 billion. This was what was reprioritised in the Budget in May.

In the article, a former Treasury official states that reprioritising the money from the fund was “an abuse of the process” and the redirection of some of that money to support the Budget 2022 new spending allowance was an “accounting trick.”

I totally reject these statements.

Prior to the Budget in May we took the decision to close the fund and reprioritise the remaining funding. This was something I specifically covered in my speech in Parliament on Budget Day.

Ms MacNamara’s article fails to make this point, and paints a picture of the fund being “raided”.

There can always be an argument about what reprioritised money should be used for, but that does not amount to the raiding of the fund or an abuse of process.

In terms of the accusation of an “accounting trick” the Budget new spending allowance is a net number, that is taking into account any savings or reprioritisation of expenditure that has already been budgeted for. This is not a trick, it is simply part of the process. If money that has already been budgeted for is redirected it does not add to the total spending of the government and therefore can be counted against new spending.

To reiterate, this has always been the case, and calling it a trick would mean every Budget where the new spending allowance includes savings or reprioritisation has been a feature would have that label.

I accept that there are different views of what the government should spend its resources on including within the CRRF, but what occurred at Budget 2022 is not, in my view, as was presented in the article.