Jobs rescue package extends wage subsidy

An extension of the wage subsidy, a bid to make trades education free, a boost for “shovel-ready” projects and environmental initiatives form the basis of the Government’s jobs budget.

There has been huge interest in the Government’s appeal for people to put forward shovel-ready infrastructure projects, but only a small fraction of them will be funded in the first round.

The Industry Infrastructure Reference Group (IRG) has received funding applications for $136b worth of “shovel-ready” projects, with 1924 applications in total.

Crown Infrastructure Partners CEO Mark Binns earlier told Newsroom the Government would not make enough money available to fund all of it.

The Government will set aside $3b to fund shovel-ready projects from the list. It is leaving open the possibility that $20.2b of unallocated Covid-19 spending could be used to fund more in the future.

Transport infrastructure will receive a $1.2b investment, the biggest chunk of which ($421m) will be used to buy new train wagons and locomotives.

Ferries and portside infrastructure will also receive a significant funding injection. Four hundred million will go towards new Interislander ferries and accompanying portside infrastructure.

The Government will build 8000 public and transitional houses. Housing Minister Megan Woods said the public investment would be the largest New Zealand had seen in decades.

It will be funded through $5b in off-the-books borrowing by Kāinga Ora.

Wage subsidies for the hardest hit

Industries hardest hit by Covid-19 will be granted a wage subsidy extension that will cost the taxpayer $3.2b.

Businesses significantly impacted by Covid-19 – defined as a 50 percent drop in year-on-year revenue across a 30-day period – will be able to apply for the new, more targeted eight-week wage subsidy.

The current scheme will expire on June 9 and has paid out more than $10b so far.

Many firms across the country have already restructured and issued redundancy notices.

Employers wouldn’t be able to apply for wage subsidies for employees they had already let go unless their redundancy notices could be rescinded.

Finance Minister Grant Robertson said firms recognised by Callaghan Innovation as “pre-revenue R&D start-up firms” would also be eligible for the subsidy.

“The inclusion of R&D start-ups in the scheme will provide support to firms which will be crucial for our economic recovery, and will help them retain their highly skilled personnel.”


Vocational and trades training will be made free with a $1.6b funding boost.

The Trades and Apprenticeships training package will make vocational training courses free for people of all ages, and fund other initiatives to funnel people into trades.

Education Minister Chris Hipkins said the initiative would help people who had lost their jobs retrain, and allow new employees in essential services to train on the job.

“It will include courses linked to industry skills needs, in building and construction, agriculture, and manufacturing, and also vocational courses like community health, counselling and care work.”

Workforce Development Councils will be created to allow industries to identify future skills and training needs.

An extra thousand Trades Academy places will be made available to high school students every year at a cost of $32m.

However, the Government is also foreseeing a spike in unemployment. Social Development Minister Carmel Sepuloni said the Government had set aside $250m for more frontline staff at MSD to cope with a likely surge.

“We know that our frontline staff will be integral to responding to the ongoing impacts of Covid-19 for some time to come,” Sepuloni said.

Environmental jobs boost

Overall $1.1b has been set aside for environmental projects.

Four hundred and thirty-three million set aside to generate 4000 environmental jobs through regional environmental projects, at a cost of over $100,000 per job.

Environment Minister David Parker said the news jobs would involve environmental initiatives like restoring mini wetlands, stabilising riverbanks, removing sediment, and enabling the passage of fish.

“This package allows businesses considering redundancies and downscaling to redeploy their staff on environmentally-focused activities in their home region. When those businesses are able to rehire again, workers can return to their previous roles,” Parker said.

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