The Government's COVID-19 wage subsidy scheme has been tweaked to allow more businesses to access the scheme which was extended in Budget 2020.
Businesses that can show a 40 percent revenue drop because of the impact of COVID-19 will now be eligible for the eight-week extension. The threshold had previously been set at 50 percent revenue loss.
Finance Minister Grant Robertson said the change will allow for an extra 40,000 businesses to be eligible for wage subsidy extension from 10 June, covering up to 910,000 workers.
Business must show 40 percent revenue loss for a 30-day period in the 40 days immediately prior to the application date – but beginning no earlier than 10 May – compared to the same time last year.
scheme will be welcomed by businesses - but he suggested it is misplaced.
"The focus has to be on opening up the economy so that fewer businesses need subsidies and a growth plan to get us back on track."
The Government is also giving businesses more time to apply for the Small Business Cashflow Loan Scheme, which enables businesses with 50 employees or less to get a Government-backed interest-free loan of $10,000.
Businesses now have until 24 July to apply for a loan, which had previously been set at 12 June. So far, more than $1.18 billion has been disbursed to more than 70,000 small businesses under the cashflow scheme.
The loans are interest-free if repaid within a year. Businesses have five years to pay the loans off, with no repayments required during the first two years.
The changes to the wage subsidy scheme criteria means it is now forecast to provide between $2.6 billion and $3.9 billion of support to businesses, up from a top estimate of $3.2 billion under the old threshold.
It will be funded through the Government's mammoth $50 billion COVID-19 Response and Recovery Fund unveiled in Budget 2020.
The wage subsidy scheme has so far paid out $10.997 billion, covering 1.66 million jobs.
"We've shown we will move quickly to make changes so support is targeted to where it is needed most, based on feedback from our regular engagement with the business community," Robertson said.
"While many New Zealanders are now back at work and our economy is one of the most open in the world, there are businesses that will feel the impact of this global pandemic for longer.
"The tourism, retail and hospitality sectors will in particular be supported by the extended wage subsidy and cashflow support."
It comes as the Ministry of Health reported no new cases of the coronavirus on Friday marking two weeks since a new case emerged.
But it's a grim picture for the business world, with ASB reporting on Friday that investor confidence has fallen to a four-year low, according to its latest survey.