New Zealand businesses that can show a revenue drop due to COVID-19 of at least 40 percent will be able to apply for a new wage subsidy scheme forecast to cost the Government about $510 million.
The new wage subsidy, which will be available nationwide, is for two weeks of additional support at the same rate as the other wage subsidies, which paid out $585.80 for full-time workers and $350 for part-time workers.
For this new scheme, the 40 percent revenue drop applies for any consecutive period of at least 14 days within 12 August and 10 September compared to 2019.
Announcing the details on Monday, Finance Minister Grant Robertson said the Government expects the new wage subsidy to cover 470,000 jobs.
The first wage subsidy had already been extended and is still available for applications until September 1, and Robertson said combined with the new subsidy, an estimated 930,000 jobs will be covered by the two schemes.
"The new wage subsidy will help support cashflow and confidence. Along with the existing wage subsidy extension - which is open until 1 September for eligible businesses - the Treasury estimates that about 930,000 jobs will be covered by the two schemes," he said.
"We've seen the benefits to the economy by going hard and early to get on top of the virus, with activity in June and July running above levels seen last year as the economy reopened after lockdown and business got going again."
The Government last month set aside $14 billion from the $50 billion COVID Response and Recovery Fund announced in Budget 2020 in case New Zealand experienced a second wave of COVID-19.
But Robertson said the new wage subsidy scheme will not require money from that $14 billion - instead, the costs are expected to be covered by the previous underspend on the extended wage subsidy.
The Ministry of Social Development has advised the new wage subsidy scheme will be open for applications by the end of the week, Friday 21 August.
Robertson said making the scheme nationwide recognises the nature of the current outbreak and Auckland's position in the New Zealand economy - the super-city representing 40 percent of the country's GDP.
Tourism operators that had been expecting visitors from Auckland, companies that supply and trade with Auckland businesses and hospitality and retail businesses around the country are all affected by the measures to fight the virus.
Extended mortgage holidays
The Government is also extended mortgage holidays out until March 2021 from its current end-date of 27 September. Robertson said further details will be made available by the retail banks.
Reserve Bank general manager of financial stability Geoff Bascand said on Monday borrowers should be aware that interest will continue to accrue on their loan during a deferral, potentially prolonging the repayment period.
"We recommend that customers considering extending, or applying for a deferral, contact their banks to discuss the best solution for them."
Change to COVID-19 Leave Support Scheme
The Government has also made it easier for New Zealanders to take time off work to get tested or self-isolate if they need to by means of the COVID-19 Leave Support Scheme.
"To further support wide-scale testing, we've removed the revenue-drop and 'negatively impacted' tests for the COVID-19 Leave Support Scheme," Robertson said.
"This means businesses with workers who have been told by health officials or their medical practitioner to self-isolate will receive the equivalent of the wage subsidy to help cover that person's wages for the time they cannot be at work."
Robertson said the Government wanted to alleviate fears that testing positive for COVID-19 might risk a person's employment.
"Our focus is on doing everything we can to support our strong public health response. That means removing barriers to a person getting tested, including fears that a positive result would put their employment at risk or that they wouldn't receive income while they couldn't work because they had used up their sick leave."