The coalition Government is going to commit to a 12 billion dollar support package. The details will come through from 2pm and will be live streamed at TVNZ here. Radio NZ’s coverage is here.
Update: The first details are through, via Radio NZ.
- Beneficiaries and superannuitants will also get a cash bonus with a permanent increase to main benefit rates and a one-off doubling of the Winter Energy Payment this year.
- The biggest boost is $5.1 billion towards wage subsidies for affected businesses in all sectors and regions, which kicks in today.
- Beneficiaries will also get an immediate and permanent increase of $25 a week in the hand, and the Winter Energy Payment, which beneficiaries and superannuants receive, will be doubled this year.
Together that will cost $2.8 billion while another $2.8b is being invested in business tax changes to free up cashflow.
That will include a provisional tax threshold life, the reinstatement of building depreciation and writing off interest on the late payment of tax.
Finance Minister Grant Robertson said this package is about “cashflow and confidence” and is only the beginning of the support that will be rolled out to help New Zealanders through this crisis and to recover from it.
“We will fight this virus. We will cushion the blow for businesses and workers. We will position for recovery. We have been and we will be swift, decisive and compassionate.”
Update: The package represents 4 percent of GDP and is, according to Minister Robertson “more than the total of all three Budgets’ new operating spending in this term of Government put together.”
Robertson said latest Treasury forecasts show New Zealand’s fiscals will be impacted and there will be higher debt, deficits and unemployment. “This is the rainy day that we have been planning for,” he said.
- Wage subsidies will be available for businesses in all parts of the country that can show they’ve had a 30 percent decline in revenue for any month between January and June 2020 compared to the year before.
- For eligible businesses, employers will be paid $585.50 per week for full-time staff, and $350 for part-time staff.
- Payments will be capped at $150,000 per business and will be paid in one lump sum for up to 12 weeks.
- An increase of $25 a week for all main benefits starts on 1 April and the Ministry of Social Development estimates about 350,000 low-income families will benefit.
A support package estimated to cost $126 million will be made available for those people unable to work because they’re either in quarantine, sick from Covid-19, or caring for family in either of those situations.
These payments will be the same as the wage subsidy amounts but are only available for eight weeks and employers will be expected to meet all of their requirements in terms of sick leave.
An increase of $25 a week for all main benefits starts on 1 April and the Ministry of Social Development estimates about 350,000 low-income families will benefit.
- A dedicated $500 million fund for health has been announced. This includes extra intensive care capacity and equipment for hospitals, support for GPs and primary care and improving video conferencing and e-consultations.
- Healthline will also receive a $20 million boost for more staff.
Health Minister David Clark said so far the medical response has been world-leading. “We know we will see more cases of Covid-19 arrive here. So we must plan and prepare for that reality,” he said.
Update: Some quick responses from the business sector, who seem very supportive.
Employers and Manufacturers Association CEO Brett O’Riley said it was pleasing to see the government was trying to encourage spending.
“On the face of it, with limited time to digest it, it looks pretty comprehensive.”
O’Riley also said the biggest issue the EMA had been dealing with was leave.
“One of the things we had already seen is businesses responding as a community … and I think with the clarity we have got today … it will maximise our ability to get through this as a recession rather than a depression.”
Economist Shamubeel Equab call the package “absolutely extraordinary” and “fantastic”.
He said a recession was definitely going to happen, though he said package would go a long way towards preserving jobs and staving off business failures.
Thanks for reading the post and updates. Last word to the PM:
“Be strong, be kind, we will be ok”