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COVID-19 Economic Response

Updated 31 March 2020

We're pulling out all the stops to protect the health of New Zealanders, and the health of our economy, against the impacts of COVID-19.

We've already gone hard with our health response, and now we're going hard with our financial response. We are taking bold and decisive actions to respond to uncertain and unprecedented times.

We’ve announced the most significant peace-time economic plan for New Zealand to help us weather the impact of COVID-19.

Our Economic Response Package is designed to keep Kiwis healthy, keep Kiwis in work, keep Kiwi businesses going, and position our country for recovery.

Package at a glance

On 17 March we announced an initial $12.1 billion COVID-19 Economic Response Package to protect the health and wellbeing of Kiwis as New Zealand faces an unprecedented health and economic challenge. The package has been expanded as the situation changed.

Our immediate goal is to support people and businesses as we weather the impact of COVID-19. We must then ready the economy to recover.

We are doing more than any New Zealand Government has ever done to keep as many Kiwis as possible in their jobs and support our businesses, while strengthening our health services to fight and contain COVID-19.

The package includes:

  • An estimated $8-12b in wage subsidies so affected businesses can keep their staff employed, through support received directly from the Government.
  • An initial $500m boost for health, because the best medicine for the economy is getting the virus under control.
  • $126m in COVID-19 leave and self-isolation support for people who are unable to work because they’re sick, self-isolating, or caring for dependants. Since being announced, this has been rolled into the Wage Subsidy Scheme.
  • A $2.8b income support package for our most vulnerable, including a permanent $25-per-week benefit increase and doubling the Winter Energy Payment for 2020.
  • A $100m redeployment package, to keep more New Zealanders in work.
  • $2.8b in business tax changes to reduce cashflow pressure, including a provisional tax threshold lift, the reinstatement of building depreciation, and writing off interest on the late payment of tax.
  • An initial $600m package to support the aviation sector and protect New Zealand’s supply chains.
  • A $6.25b Business Finance Guarantee scheme for small and medium-sized businesses, to protect jobs and support the economy.
  • A $27m package for social sector services and community groups so they can continue to provide essential support to communities.

Other measures we've taken include:

  • The Government, Reserve Bank and retail banks have agreed on a six-month mortgage principal and interest payment deferral for affected individuals and SMEs. Details will be announced by banks.
  • To protect renters during this difficult time, we’ve frozen all rent increases for six months, prohibited no-cause terminations for an initial period of three months, and evictions cannot occur for unpaid rent for up to 60 days.

We do not underestimate the challenge ahead. This is not a one-off package – it is just the beginning of our response. Our goal is to cushion the worst impacts and position the economy to recover.

We're backing health

We know the best protection for our economy is getting the virus under control, which is why we are investing half a billion dollars in frontline health services, specifically to fight COVID-19.

This package makes sure health services are there for those who need them most. We will be investing in more health staff, virus testing, medicines, personal protective equipment, intensive care capacity and equipment at hospitals, and funding for primary care providers.

This includes:

  • A dedicated $500 million fund to protect New Zealanders’ health;
  • Nearly doubling resources for Public Health Units, specifically to increase capacity for contact tracing;
  • $32 million for extra intensive care capacity and equipment at hospitals;
  • $50 million in support for GPs and primary care, and $20 million to improve video conferencing and telehealth consultations; and
  • $20 million for more Healthline capacity.

Read more about how we're backing our health services here

We're backing workers

We’re doing all we can to support New Zealand workers and their families. This package will help cushion the economic impact from COVID-19, so more Kiwis can keep their jobs, while supporting those who are out of work and assisting others to return to work.

The package includes:

COVID-19 Wage Subsidy Scheme which supports businesses that face laying off staff or reducing their hours because of COVID-19. It covers businesses in all regions - no matter how big or small they are.

More info  

The COVID-19 Wage Subsidy will be paid at a flat rate of:

  • $585.80 for people normally working 20 hours or more per week, and
  • $350.00 for people working less than 20 hours per week.

Cabinet has lifted the $150,000 cap on the wage subsidy, so that all employers affected by COVID-19 will now be able to apply for the subsidy to support the wages of all of their workers.

Click here for more information or to apply.

Redeployment & Training Package which will see workers who face unemployment redeployed into local alternative jobs, for the next three to six months.

Freezing rent increases and enabling a six-month mortgage payment deferral to help people during this financially difficult time.

We're backing business

We’re providing immediate and targeted support to help Kiwi businesses keep going and keep their people in work through this global economic shock. All businesses, no matter what their size, are eligible to apply.

The package includes:

COVID-19 Wage Subsidy Scheme which supports businesses that face laying off staff or reducing their hours because of COVID-19. It covers businesses in all regions - no matter how big or small they are.

More info  

The COVID-19 Wage Subsidy will be paid at a flat rate of:

  • $585.80 for people normally working 20 hours or more per week, and
  • $350.00 for people working less than 20 hours per week.

Cabinet has lifted the $150,000 cap on the wage subsidy, so that all employers affected by COVID-19 will now be able to apply for the subsidy to support the wages of all of their workers.

Click here for more information or to apply.

Business Finance Guarantee Scheme for small and medium-sized businesses, to protect jobs and support the economy. This will include a six-month principal and interest payment deferral for mortgage holders and SME customers whose incomes have been affected by the economic disruption from COVID-19.

More info  

The $6.25 billion Business Finance Guarantee Scheme will provide loans of up to $500,000 for businesses with annual revenues between $250,000 and $80 million. The loans will be for a maximum of three years, and the Government will carry 80% of the credit risk. For more information on this, contact your bank.

Tax changes to reduce cash flow pressure for businesses, including interest write-offs on some late tax payments, a provisional tax threshold lift, immediate deductions for low-value assets, and reintroducing depreciation on commercial and industrial buildings.

More info  

Business tax changes to free up cashflow include a provisional tax threshold lift, the reinstatement of building depreciation, and writing off interest on the late payment of tax.

A variety of tax relief and income assistance is available.

Click here for more information or to apply.

We're backing those who need support

Right now, it’s especially important that people on low incomes can afford to stay warm and healthy, and have enough to get by. That’s why we’re increasing benefits by $25 a week, doubling the Winter Energy Payment for 2020, and removing the hours test on the In Work Tax Credit for those who face variable hours.

More information at Work & Income

We're backing superannuitants

Staying warm and healthy is important as we try to tackle the impacts of COVID-19, especially for those who are most susceptible to the virus. This package doubles the Winter Energy Payment for 2020 so older New Zealanders can stay warm this winter without having to worry about the bill.

More information at Work & Income

We're backing homeowners

We are doing what we can to cushion the blow of COVID-19, and we know some homeowners are worried about what the current situation will mean for their mortgages. That’s why the Government, Reserve Bank, and retail banks have agreed on a 6-month deferred mortgage payment scheme to support mortgage holders whose incomes are impacted by COVID-19.

Banks will release details on the mortgage deferral.

We're backing renters

We know housing affordability is a fundamental need, and we want to support renters during this difficult time. That’s why we’re putting in place a freeze on all rent increases for the next six months, and have prohibited no-cause terminations, to protect people during the next few months of uncertainty. This is on top of existing support like the Accommodation Supplement and MSD grants.

More information at Work & Income

 

Image credits: Health - ©️ Briar Coleman; Workers - ©️ Lakeview Images; Business - ©️ Delphine Ducaruge / photonewzealand; Those who need support - ©️ Rafael Ben-Ari / Adobe Stock; Superannuitants - ©️ Colleen Tunnicliff / photonewzealand; Homeowners - ©️ Susanna Burton / photonewzealand; Renters - ©️ Miz Watanabe / photonewzealand