How Budget 2020 is backing businesses

Many businesses are finding new, creative ways to keep operating within new safety guidelines, but we know it’s not going to be easy to get moving again. That’s why from the outset, we went hard and early to support New Zealand businesses, rolling out the $10.7 billion wage subsidy, a $3 billion tax refund scheme, interest-free loans for small businesses, and the Business Finance Guarantee. All of these helped keep businesses going and saved hundreds of thousands of jobs. Now, many New Zealanders are back at work, but many businesses will still be struggling. We’re moving forward with the next steps in our plan to get them back on their feet and kickstart our economy.

Budget 2020 is a key part of this. It builds on our initial response with a major boost for businesses, including additional measures to protect jobs and incomes, tailored support for businesses in key sectors, and a $4 billion business support package.

Here are five ways we’re backing Kiwi businesses through Budget 2020:

We’re extending the wage subsidy

A key feature of our business support package is the targeted extension of our Wage Subsidy Scheme.

We introduced the wage subsidy as part of our immediate response to COVID-19, to support businesses and keep as many New Zealanders as possible in work. We have now paid out more than $10.7 billion to businesses across the country, supporting more than 1.6 million jobs and helping 390,000 businesses stay afloat.

Through Budget 2020, we’re extending the scheme, providing extra support for businesses and workers in the hardest-hit industries, like tourism. This scheme will give businesses a greater chance to succeed and help people hold on to their jobs and incomes.

We’re providing targeted support to key sectors

Key sectors such as construction, tourism, digital and agritech are getting a funding boost through Budget 2020, to help protect jobs and keep businesses operating.

We’re accelerating the public house building programme, building an extra 6,000 public houses and 2,000 transitional homes to support jobs and get our construction sector moving.

We’re working with the tourism industry to protect important sites, provide practical support to help operators shift to the domestic market, and get the industry back on its feet through our Tourism Recovery Fund.

We’re also focused on the environment and getting people into green jobs. Through Budget 2020, we’re creating almost 11,000 new jobs in our regions, boosting regional economies and getting people into work. From upgrading walking tracks to getting rid of costly pests, these local jobs will help protect our environment and clean up waterways, while boosting regional economies and getting people into work.

Finally, we’re boosting employment in the regions by investing in infrastructure projects across the country. This is on top of the $12 billion already invested in infrastructure through the New Zealand Upgrade Programme.

There’ll be more support to come for different sectors, so look out for further announcements soon.

We’re training and upskilling people

We’re helping New Zealanders get the skills they need to get into work, with free trades and apprenticeships training.

With our $1.6 billion Trades and Apprenticeships Training Package, we’re supporting people of all ages into trades training in the industries critical to our rebuild. This includes dedicated support for Māori trades training.

We’re also providing continuity for businesses, with funding to help employers retain and keep training their apprentices.

We’re boosting trade

Supporting Kiwi exporters is an essential part of New Zealand’s economic recovery. We’re investing in practical measures to help our exporters re-engage with our global partners, and support firms looking to export for the first time.

New Zealand’s export products have a world-leading reputation, and we’re making sure our Kiwi businesses can use that to their full advantage overseas - in turn, creating jobs and lifting wages at home.

We’ve set aside a $216 million package to revitalise the international business sector, ramping up support for our exporters and help connect companies with international markets and supply chains. This is part of a broader trade recovery plan led by MFAT and NZTE.

We’re helping SMEs go digital, and encouraging entrepreneurship

As recommended by the Small Business Advisory Council, we’re setting up a $10 million fund to fund e-commerce grants, train more digital advisors, and provide support for SMEs wanting to incorporate e-commerce into their business models.

The time, investment, and research required to get an e-commerce platform up and running has put many businesses off in the past. By working with small business owners, we can bring together expertise and information for an easy transition to e-commerce. The investment is supported by $12.5 million to progress the trans-Tasman e-invoicing regime, agreed by Prime Ministers Jacinda Ardern and Scott Morrison.

We also know from the Global Financial Crisis that many businesses will look to cut investment in research and development in the current climate. We don’t want that to happen this time around, which is why we’re encouraging businesses to innovate, reducing their risk by putting aside $150 million for loans to R&D-intensive businesses, complementing the existing R&D Tax Incentive.

Together, these measures will give businesses the confidence to have a go and take the risk, encouraging investment, creating jobs and helping to bolster economic activity and growth.

We’re doing a lot to back business in Budget 2020, and these measures are just the start. To find out more about Budget 2020 and all we’re doing to rebuild New Zealand, head here.