National says the remaining $645m left in the PGF kitty should go towards Covid-19 response

National Leader Simon Bridges.

National is calling on the Government to urgently reprioritise more than half a billion dollars' worth of Provincial Growth Fund (PGF) spending towards supporting small businesses.

This comes as Finance Minister Grant Robertson warns that the economic impact of the Covid-19 virus will be worse than what the Government had initially expected.

The World Health Organisation this morning (NZ time) declared the virus a pandemic – something markets around the world reacted strongly to.

ANZ, New Zealand's largest bank, said in a statement today that New Zealand would probably go into a recession – its first since the global financial crisis of 2008/09.

To counter the impending economic fall-out on small Kiwi businesses, National wants the Government to use the last of the PGF money for job support and other initiatives.

The Government has so far signed off on $2.35b of the $3b allocated to the PGF to stimulate regional growth.

The remaining $645 million, according to National leader Simon Bridges, should be put aside to help reduce the economic impact of Covid-19.

"This outbreak is becoming increasingly serious," he said.

But it seems Regional Economic Development Minister Shane Jones – the Minister in charge of the PGF – is one step ahead of Bridges.

Speaking to media on Tuesday, he said the Government was already in the process of using the remaining PGF cash for Covid-19 response.

"As I speak, the PGF [officials] are looking to see if they can expedite projects that we have already funded.

Regional Development Minister Shane Jones says the reallocation was something Grant Robertson had already flagged. Photo / Tania Whyte

"We're looking also to whether or not we re-badge some of the money to help those regions which are in strugglers' gully."

Jones said the reallocation was something Robertson had already flagged – "now officials are working out how to do it".

He cited roading developments as an example of projects which could be expedited.

"Roading projects are held captive, unfortunately, by reams of red-tape so we have to look at that."

Despite this, Bridges has called on the Government to be responding faster to the Covid-19 pandemic.

"As other countries have, we should implement travel bans on South Korea and Italy and we need to have reassurance [as to] why large events are going ahead when other countries have cancelled theirs."

Prime Minister Jacinda Ardern said the Government was consistently reviewing travel restrictions but pointed out that New Zealand has some of the strictest travel restrictions in the world.