Government signals plans to pour billions more into COVID-19 response

The Finance Minister has signalled that he will significantly extend the COVID-19 business support package this week. 

So far $20 billion has been announced and Newshub understands that what is coming next is even more than that - more than $20 billion. That would more than double the support for businesses to date. 

Along with the human cost of the coronavirus comes enormous economic devastation, and every day large and small employers are announcing plans to cut jobs.

On Tuesday, it was news that Burger King New Zealand's owner is in receivership, while NZME, owner of the NZ Herald and Newstalk ZB, is also planning to lay off hundreds of staff.

Figures released by Treasury show the billions of dollars poured into supporting workers and businesses against the effects of COVID-19 and the lockdown are helping to cushion the blow.

And the Government is signalling it's about to pour in billions more, because an additional  significant cash injection could keep unemployment below 10 percent. 

Without it, and if we stay in lockdown for six months, more than a quarter of the workforce - nearly 700,000 people - could be jobless. 

With up to 200 jobs cut at NZME, journalist and managing editor of The Spinoff, Duncan Greive, says it's "not inconceivable that there is worse - potentially much worse - to come".

And that's industry wide.

Greive said if it persists much longer than this, "you're just going to see further huge rounds of redundancies and it's so hard to bring those jobs back once they're gone".

The Government is promising a lifeline to the media this week - an attempt to stop the haemorrhaging of jobs.

"The first stage will be triaging before we look to longer term solutions that take us beyond the COVID environment we're in right now," Prime Minister Jacinda Ardern said.

Industries like journalism that were already struggling pre-COVID-19 are being pummelled.

"Whilst COVID might not be entirely responsible for some of what we're seeing, in some places it's exacerbated existing issues," Ardern added.

Despite being a busy popular fast food joint, Burger King also had existing financial troubles, and being forced to shut its doors for a month was the final blow.

Finance Minister Grant Robertson says we should be careful about pointing blame.

"They even put it up for sale at one point - so I think we've got to be a little careful about ascribing everything to COVID-19," he told the Epidemic Response Committee.

The group is now in receivership - a bid to save its 2600 staff - but some jobs will go.

"They're scared because for a lot of them it's the only source of income for their families, so they have kids and things that they need to look after," said Burger King employee Halaena Mckeague. 

Far too many New Zealanders are staring down a similar fate, with Treasury analysis released on Tuesday showing the impact on the economy and jobs in various lockdown scenarios.

"They are extremely sobering," Robertson said.

In Treasury's toughest scenario, we're in lockdown for six months and level 3 for another six months, and unemployment shoots up to 26 percent - that's more than 700,000 Kiwis out of work.

Newshub asked what assurances Robertson can give New Zealanders that we won't see that scenario come true, and he said: "It's not a scenario that I foresee at all and certainly that level of unemployment would not be acceptable to me."

Instead, this is the scenario to pay attention too - it's most likely.

Lockdown lasts a month with level 3 for another month, then ten months in level 1 and 2, in which case unemployment would leap to 13.5 percent - that's 360,000 Kiwis (359,000) jobless.

But here's what happens if a further $20 billion is pumped into support: Unemployment stays below 10 percent (8.3 percent). That's 224,000 out of work but 135,000 jobs saved.

"It is a good indication of why it is so important to stick to the rules and we emerge out of alert level 3 as soon as we can," Robertson said.

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