A National Accounts Categorisation of COVID-19 Funding Allocation and Expenditure

In April 2020, the New Zealand government established the COVID-19 Response and Recovery Fund (CRRF) in reaction to the COVID-19 pandemic and recession. The funds allocated from the CRRF totalled $70.4 billion dollars, when combined with an earlier fiscal support package. This amounted to 22% of 2019 GDP, although funds were allocated over a number of fiscal years. This analytical note presents a National Accounts categorisation of both the funding allocated to the COVID-19 response and the estimated expenditure. This will contribute to a macroeconomic understanding of the fiscal response to the COVID-19 pandemic in New Zealand and the recession that followed. We estimate that almost 80% of the funding allocated to the COVID-19 response over the first 3 fiscal years has actually been spent. Estimated COVID-19 expenditure over this period is equivalent to 16% of 2019 GDP. Wage subsidies make up the largest single component of both COVID-19 funding allocations and estimated expenditure. Government consumption makes up the second largest component. This expenditure is more backloaded, spread over a longer time horizon, and allocated across a large number of line items. Our National Accounts categorisation of COVID-19 funding allocations and estimated expenditure will be an important input in macroeconomic modelling analysis of the fiscal response to the COVID-19 pandemic.