Government's COVID-19 wage subsidy scheme claimed by 15 percent of the population

The Government's wage subsidy scheme has so far been claimed by 15 percent of the population, and the Prime Minister says new applications continue to be processed. 

Prime Minister Jacinda Ardern said on Thursday the wage subsidy scheme has seen $4.5 billion paid out since it was announced earlier this month, helping just over 750,000 New Zealanders, 115,000 of whom were self-employed. 

"To shine a light on the current daily scale, there were 13,000 new applications since yesterday and they continue to be processed in earnest by [Ministry of Social Development] staff," Ardern said at her daily COVID-19 press conference. 

When the scheme was first announced, the Government estimated it to cost $5.1 billion, but it has since been adjusted to have no cap - meaning all businesses can access it - and Treasury is now estimating the scheme's cost to balloon. 

The Government now expects it to cost between $8 billion and $12 billion, with the ultimate aim of keeping New Zealand businesses afloat for what's expected to be four weeks of lockdown to stop the spread of the virus. 

For those businesses that take up the scheme to support their staff, $585.80 a week is given to full-time workers who worked 20 hours or more per week before COVID-19 and $350 a week for part-time workers. 

The money is paid out in lump sums, meaning an employer should get $7029.60 for a period of 12 weeks - the time limit set by the Government - to pass on to their worker. 

Businesses accessing the wage subsidy scheme are required to do their best to pay employees 80 percent of their income before the coronavirus affected the economy.

Businesses that have no activity whatsoever because employees are not working any hours, must pass on at least the whole value of the wage subsidy scheme to each affected worker, if they're unable to match 80 percent of the worker's pre-COVID income. 

But $350 a week is more than what many part-time workers would have been earning before COVID-19, and with the Government telling businesses to pass on the full subsidy to workers, many part-time workers would essentially get a pay boost. 

So, Finance Minister Grant Robertson clarified over the weekend that if a person's income is normally less than the subsidy they can be paid their normal salary. 

The wage subsidy scheme has already sparked tensions, with media commentator and former Listener columnist Bill Ralston blamed the Government's ban on magazines during lockdown on publisher Bauer Media's closure during the lockdown. 

The Prime Minister pushed back, saying the notion that the Government's COVID-19 response caused the publisher's closure was unfair, because the wage subsidy scheme had been offered to the publisher but it did not take it up. 

The scheme has also now been expanded to ensure essential workers - such as supermarket staff and health professionals - can get paid if they need to take time off during the lockdown. 

The Government's original COVID-19 economic response package included a sick leave scheme, but it was eventually folded into the wage subsidy scheme to prevent double-dipping of Government money. 

The original sick leave scheme was designed when there were fewer people in self-isolation, which is not longer fit for purpose, because the whole country is now self-isolating in lockdown.