Govt poised for more business support
As media companies make job cuts and Treasury analysts produce doomsday scenarios, ministers say more help is on the way for Kiwi businesses
The Government is set to unveil further support for coronavirus-hit businesses later this week, in the wake of sobering Treasury scenarios showing the potential effects of a prolonged lockdown.
Foreshadowing the measures, Prime Minister Jacinda Ardern also defended the pace of its package for the media sector after NZ Herald publisher NZME announced a 12-week pay cut for all staff and up to 200 redundancies.
On Tuesday morning, the Treasury released a number of Covid-19 scenarios for the economy, including unemployment hitting 26 percent in the event of a six-month Level 4 lockdown and a further six months at Level 3.
Speaking to media at her post-Cabinet press conference, Ardern said while the worst-case scenarios were unlikely, they vindicated the Government’s approach to impose stringent restrictions on the country.
“The whole point of a strategy of going hard and going early is that we don’t have prolonged periods...of being in lockdown.”
Finance Minister Grant Robertson, who appeared alongside Ardern, said the scenario involving a 26 percent unemployment rate was one which would not be acceptable to him in his role or Ardern in hers.
“One of my main reasons for being in politics is keeping people in work and jobs.”
Robertson said the various scenarios showed the significant impact Covid-19 was having not just on New Zealand but the global economy, with sectors like tourism set to be “fundamentally changed”.
He would not comment on which modelled outcome he believed was most likely to occur, saying they were “stylised scenarios” and not Budget forecasts.
Robertson said he would this week announce further support for businesses, such as new changes to the tax system, while the Government was also looking at what would come after its wage subsidy scheme.
Asked if NZME’s job cuts were a sign the Government had taken too long to support the media industry, Ardern said Covid-19 was not entirely responsible for companies’ struggles but had exacerbated their pre-existing issues.
The Government’s plan involved initial “triaging” for the sector, before it developed longer-term solutions.
'Over the peak, not out of the woods'
Speaking after news of four new deaths from Covid-19, Ardern said the rising toll was a “sad and sobering reminder of the need to stay the course”.
She said this week was likely to be the toughest of the lockdown, as signs of progress in infection rates were tempered by more deaths
“As the director-general [Ashley Bloomfield] said today, we are over the peak - that is not the same as being out of the woods.”
Ardern said she supported Bloomfield’s decision to require all district health boards to carry out audits of their arrangements for aged care facilities, an area where every country has faced vulnerabilities.
Ardern also unveiled a $133 million support package for domestic tertiary students affected by the closure of universities and polytechnics, saying training and education would be key to the country’s economic recovery.
In a statement, Education Minister Chris Hipkins said students were facing extra costs linked to online or remote learning, while they had fewer opportunities to cover their fees through employment.
Hipkins said the Government wanted to provide students with certainty about their studies as soon as possible while tertiary education providers developed alternative ways of teaching.
The cap for course-related costs would be temporarily doubled to $2000, with support payments like student loans and allowances continuing for up to eight weeks for students who were unable to study online.
Technical changes had also been made to ensure students who received partial tuition refunds in 2020 due to a discontinued course would not have their future loan entitlements affected.
Those who were unable to complete a course this year due to Covid-19 would not have their access to fees-free study affected.
“These pragmatic measures, coupled with the support [the Ministry of Social Development] can already give, will provide an immediate response to the financial impact Covid-19 is having on tertiary students. It will support students to stay engaged in their education,” Hipkins said.
The Government was also working on a second package to prepare for “significant growth in participation in key strategic areas” as more Kiwis were forced to retrain and some industries required bigger workforces.
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