50,000 firms apply for Govt loans; $10.9b paid out in wage subsidies

Author
NZ Herald,
Publish Date
Fri, 22 May 2020, 12:37PM
Photo / Supplied
Photo / Supplied

50,000 firms apply for Govt loans; $10.9b paid out in wage subsidies

Author
NZ Herald,
Publish Date
Fri, 22 May 2020, 12:37PM

Finance Minister Grant Robertson told reporters that there had been almost 50,000 applications for the small business loan scheme already, a number he expected to grow.

Robertson said economic activity was picking up, with retail spending down around 11 per cent in the latest figures available, which was below the same time last year but significantly ahead of what it was earlier in the lockdown.

In the last week 1606 people had applied for the job seeker benefit, which was "distressing" for the people involved, but there were signs that the rise was slowing compared to earlier weeks. Since the start of lockdown around 43,000 people had signed up for job seeker. MSD had told him that the number of people seeking food grants was falling.

$10.9b paid out in wage subsidies

The amount paid out through the wage subsidy had reached $10.9 billion.

Robertson said he had not had particular advice about what would happen when the wage subsidy came to an end.

Rules for churches

Asked about church services, Robertson said the rules had not changed. Church services would be treated as gatherings, with no more than 10 people in one gathering.

Robertson said it was "not the intent of the change" that church services take place with larger gatherings and social distancing.

He expected religious leaders would "behave responsibly" when asked about the risk of clashes at church services this week. Cabinet would discuss whether to allow larger gatherings in the future on Monday.

Just over a week ago Robertson revealed his Government's Covid-19 crisis Budget and a $50 billion spend up to try to help New Zealand's economy recover.

A key question for Robertson is how the country will pay for the increased spending.

The Finance Minister believes New Zealanders will pay down its increased debt level over time as a result of the economy growing.

He won't be putting a capital gains tax back on the agenda.

"Absolutely there are some tough decisions to be made in the future around the New Zealand economy, just as there are tough decisions to be made right now," he said.

But Robertson said he would not be going down the austerity route.

"When I look back to the late 80s and early 90s when I saw a different kind of approach to recovery from a downturn, one that was more of an austerity based one, it was absolutely those young people who bore a lot of the brunt of that.

"I am determined we won't allow that to happen to young people."

He said the Government's approach was to invest in those young people now through training and job support.

"We will pay that debt down over time, that will be as a result of the economy growing and growing sustainably."

The Government's move to take on high debt levels to cope with Covid-19 has prompted fears of higher taxes and a burden being placed on future generations.

Very little mention was made of tax in the Budget. Robertson said tax would likely be a hot topic heading into the election.

"In terms of things around the tax system ... that is no doubt going to be a significant debate in the election campaign."