Businesses are being told they need to be proactive when the wage subsidy extension ends.

Jacinda Ardern has confirmed that the wage subsidy scheme will end some three weeks before the election.

"We have clearly signalled the wage subsidy is not something can go on for the never-never," she told journalists after a rousing speech to around 600 Labour Party faithful and an online audience of thousands for the party's traditional election-year Congress.

Extending the wage subsidy beyond its current cut-off of September 1 risked delaying "the critical work that businesses may need to do to pivot into the new Covid environment."

Infometrics Senior Economist Brad Olsen says the wage subsidy was always going to come to an end at some point.

"As the New Zealand economy continues to figure out where it is going toe establish itself in a post-pandemic environment, we do have to wind down what always was going to be temporary."

He says it will mean a period of readjustment for some businesses.

"They will have to figure out what the new market looks like, are they still viable, do they need to downsize, do they need to consider their business operations further."