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Government strives to keep unemployment below 10%

Author: Newstalk ZB,
Publish Date: Fri, 15 May 2020, 9:18am

The wage subsidy scheme may be extended a third time as the Government strives to keep unemployment below 10 per cent following the ravages of the Covid crisis.

Finance Minister Grant Robertson said today Treasury had painted three scenarios for unemployment - including coming down to 8 per cent by the end of the year - but "I want to see it even lower".

"We have to make sure it stays below 10," he told Newstalk ZB's Mike Hosking.

The unemployment rate for the March quarter was 4.2 per cent - but that was before the full impact of Covid-19. One of Treasury's scenarios has it rising to 9.8 per cent, before coming back.

The Government yesterday unveiled an unprecedented $50 billion rescue and recovery Budget in a bid to save tens of thousands of jobs, as Covid-19 continues to wreak havoc on the world's economy.

As part of the Budget, the wage subsidy scheme has been extended for a second time - a further eight weeks to businesses who have lost at least 50 per cent of their revenue.

Asked by Hosking whether the scheme might be extended a third time, Robertson said: "We are going to be flexible. We will keep making sure it's fit for purpose."

He said the Government would be keeping an eye on specific sectors, including tourism and hospitality. "We are now targeting this to industries that are struggling to get out and trade."

While the tourism sector has been critical of the Budget, Robertson said details announced yesterday were only an initial contribution. Government would now be working with industry on future support packages and reimagination of the sector.

Meanwhile, he described the relationship with China as "very robust" following concerns it might retaliate over comments made by Deputy Prime Minister Winston Peters, who wants Taiwan to be represented at the World Health Organisation.