Some New Zealanders may not be sufficiently protected by the Government's multi-billion dollar COVID-19 wage subsidy scheme, according to a new report.
Think tank The New Zealand Initiative has compiled the report called Relief measures: comparing COVID-19 wage subsidy schemes - matching New Zealand's wage subsidy scheme against 26 other countries in the OECD.
"In this crisis, well-designed wage subsidy schemes are an important tool to minimise the economic consequences of the COVID-19 outbreak," said Dr David Law, the report's author. "New Zealand could be more flexible and generous in its wage subsidies, especially now that better information about how other countries are proceeding is available."
The report found New Zealand's package is lagging behind both Australia and Canada. In Canada, wage subsidies for companies of all sizes cover up to 75 percent of a worker's wage, or 80 percent of the average Canadian weekly wage. The subsidies are also backdated to March 15 and will apply for three months.
In Australia, its Government has a "Jobkeeper payment" which is equivalent to about 70 percent of the country's median wage.
"The primary policy objective of wage subsidy schemes is to encourage employers to keep staff on payroll to enable a rapid re-start when the pandemic eases," the report says.
"There can even be some advantages in having a lower wage subsidy if it simplifies ways for firms experiencing increases in demand to hire workers from firms with furloughed workers. But that may require considering other forms of support for workers experiencing substantial drops in income."
Prime Minister Jacinda Ardern confirmed on Tuesday that $6.6 billion had been paid out so far to 1,073,120 workers.
The scheme pays $585 a week per full-time worker and $350 a week per part-timer.
To be eligible, businesses have to demonstrate a 30 percent loss in revenue compared to year-on-year.