Wage subsidy and mortgage deferral scheme extended

Author
Newstalk ZB / NZ Herald,
Publish Date
Fri, 14 Aug 2020, 7:07PM
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Wage subsidy and mortgage deferral scheme extended

Author
Newstalk ZB / NZ Herald,
Publish Date
Fri, 14 Aug 2020, 7:07PM

Finance Minister Grant Robertson will work through details of a plan to extend the wage subsidy scheme after the Government announced the continuation of current Covid-19 lockdown settings for at least another 12 days.

The scheme will be extended nationwide to protect jobs, Prime Minister Jacinda Ardern said, adding that she was mindful of the "extraordinary disruption to business" from renewed lockdown restrictions.

Auckland will stay at alert level 3 restrictions, while the rest of the country remains at level 2, and the Government will review the settings again on August 21.

The Government had earlier put $14 billion of a Covid-19 fund aside in case there was a second wave of the virus.

The first subsidy was initially available for 12 weeks, but it was extended until September 1. To date some $13 billion has been handed out to businesses in need.

Ardern said details of the extension would be finalised over the weekend, but it will be nationwide and will cover the period of time that level 3 restrictions are in place.

According to economic consultancy NZIER, lockdown measures to date have knocked out three years' worth of GDP growth, wiping $21 billion off the size of the economy and bringing it back to 2016 levels.

Earlier today Westpac said a short period of lockdown at alert levels 2 and 3 "would have little lasting economic impact" to the economy.

However, a new level 4 lockdown would have "more severe" economic implications although "international experience shows that losing control of the virus would be much more damaging to the economy" than further lockdowns.

David Searle, National chairman of Baker Tilly Staples Rodway, said leaving Auckland in Level 3 and the rest of the country at Level 2 until 11.59pm on Wednesday 26th August seems an appropriate response.

"If things improve quicker than expected the Government should revisit when they review settings on August 21.

"The extension of the wage subsidy is welcomed especially for badly affected industries," he said.

Sick leave and mortgage deferral scheme

Robertson said Cabinet had also decided to modify the Covid-19 Sick Leave Scheme to make it more accessible.

Details of the "in principal decision" would be finalised over the weekend and announced on Monday.

An extension to the mortgage deferral scheme had also been agreed in-principle as part of the plan to support households, as the existing scheme expires on September 27.

Details, including the length of the extension, would be announced next week.

"The latest Covid-19 outbreak is obviously disappointing, especially for businesses that have just got up and running again," Robertson said.

"We have always said that the best economic response is a strong health response. We have moved quickly to identify cases and contact-trace as part of the resurgence plan announced by the Prime Minister in July."