Coronavirus: Government's economic package five out of 10, cap limits support for businesses - Simon Bridges

National Party leader Simon Bridges rates the Government's emergency coronavirus economic package a five out of 10, blasting a cap on how much an employer can receive in wage subsidies. 

Coronavirus COVID-19 is ravaging economies globally by forcing many countries to essentially close their borders, disrupting key trade and travel routes. Economists, as well as New Zealand Finance Minister Grant Robertson, warn a recession is now all but certain.

In response, the Government has revealed a $12.1 billion economic package, which, among other measures, includes $500 million for the health sector and $5.1 billion in wage subsidies. 

Despite giving it only a five out of 10, Bridges says there are some "really good" aspects of the economic package.

"We have been calling for job support and there is some job support there at a level, so that is good. Here comes the other side and why it is five and not 10, effectively, there has been confused priorities," he told The AM Show.

"If we are in a COVID-19 crisis, and I think we absolutely are, both in health... and also in terms of keeping people in jobs, an economy in deep recession, they haven't hit the marks on those issues."

While suggesting more money should have been funnelled into health, one of Bridges' biggest frustrations was a cap on how much money an employer can receive in wage subsidies. The subsidies are aimed at businesses struggling to retain employees. 

All employers who can prove they have suffered, or are projected to suffer, an at least 30 percent decline in revenue compared to last year for any month between January and June 2020 are eligible for the subsidies. Successful businesses will receive $585.80 per week per full-time employee or $350 per week per part-time employee in a lump sum for a 12 week period. However, the maximum a single employer can receive is $150,000. 

Bridges says that cap means businesses with more than about 21 workers won't be able to cover all of their staff.

"If you are a business over 20, not a small business, effectively you are not covered per employee, and I am talking with quite a number of businesses who will start laying off quite aggressively pretty soon because they aren't getting the cover they should have got to cover their employees," he said.

He says more money should have been set aside to increase that cap rather than providing a $25 per week benefit increase. 

"I am certainly not suggesting it is a bad thing. I appreciate if you are on the benefit of any sort, it can be tough, really tough," Bridges said.

"The here-and-now urgent issues are the ones I have said, they are not this. They are those jobs and keeping people there so they don't end up on the dole queue... they didn't get the money and the funding that they deserved to do the job properly. Instead, we saw these confused priorities.

"This was something Jacinda Ardern and Grant Robertson were going to do anyway. They want to do it in the Budget is my clear sense of this. The Prime Minister said it was going to be the biggest package of her career, so they have quickly backloaded and filled up the stocking."

The National Party leader said businesses with only 100 or 200 people don't have the direct dial of the Beehive and can't plead for money or support from the Government. 

"You may say they are big businesses, actually, in global terms they are incredibly small and I think New Zealanders might be surprised about how difficult it will be for them and how they will have to lay off workers because the package didn't cover them."

The Finance Minister has said more economic measures will eventually be revealed to mitigate the coronavirus' effect. 

"I want to make it clear that this is not a one-off package, it is just the beginning. As we go through this crisis towards economic recovery the Government will be constantly monitoring the situation and adjusting its response," Robertson said on Tuesday.

"As with every action we have taken we will be constantly reviewing every measure to ensure it is getting to the people and businesses that need it the most.

"We are actively discussing working capital support for small and medium businesses and tailor-made support for larger and complex businesses.

The package includes:

  • $500 million boost for health sector

  • $5.1 billion in wage subsidies for affected businesses in all sectors, available immediately

  • $126 million in COVID-19 sick leave and self-isolation support

  • $2.8 billion for income support, including $25 per week benefit increase and a doubling of the Winter Energy Payment for 2020

  • $100 million redeployment package, to help employees train to work in other industries

  • $2.8 billion in business tax changes, including a provisional tax threshold increase, and writing off interest on some late payments of tax

  • $600 million initial aviation support package