The NZ government is walking the talk. The new rescue package is $12.1 billion which is larger than either the Australian or UK government response. There is an extra $500 million for the health system, an increase in benefits of $25 per week, a support package for aviation of $600 million and extra money for winter heating bills.
There is $5.1 billion available for business are as follows:
Wages subsidies as follows:
- $585 per week for each full time employee and $350 per week for each part time employee as long as sales have fallen by more than 30% (or are forecast to fall by more than 30%).
- This subsidy is available for the next 8 weeks and can be claimed as a lump sum by registering on the WINZ website. This subsidy is capped at $150,000 per business. Any false declarations will be prosecuted.
- Employers must attempt to employ their employees up to 80%.
- The subsidy is available to all businesses and self employed contractors as long as they cannot work from home.
Payments will commence in 5 days.
- Employers must attempt to Retain their employees up to 80%.
There is $126 million available for people needing to take a 14 self isolation period or if you are off sick although all businesses must still fulfil their sick pay obligations.
There are some tax changes to also support confidence and cash flow in the economy:
- Reinstatement of depreciation for commercial and industrial buildings of 2% from the 2021 tax year.
- Increase in the provisional tax threshold from $2,500 to $5,000.
- Write-off of low value assets
- The IRD can remit use of money interest
- Remove the hours requirement in the in work tax credit
As Grant Robertson says “We will get through this together. We must look after the vulnerable members of our society”
These are significant measures. Let’s hope it’s enough to insulate our economy from the worst impacts of Coronavirus.