• Extra spending of $12.1 billion for businesses, beneficiaries, pensioners and the health system.
• $8.7 billion in support for businesses and jobs.
• $2.8 billion for incomes support.
• $500 million for health.
• Wage subsidy for employers up to 12 weeks and up to $150,000 if they have suffered a 30 per cent decline in revenue compared to last year, $585 a week for full-timers, $350 a week for part-timers, available to all employers and self-employed.
• Leave and self-isolation support for eight weeks people with Covid-19, caring for people with it or people in self-isolation up to eight weeks at same rates as wage subsidy but not for those who can work from home.
• Self-isolation payments not available to people who leave NZ after March 16 and return.
• Permanent increase of $25 a week in main social welfare benefits after increases from indexation on April 1, likely to affect 350,000 low income families.
• One-off doubling of winter energy payment to $1400 for couples and $900 for singles, likely to affect 850,000 people.
• Families with children not receiving a main benefit but are in work will no longer have to satisfy the work test of 20 hours a week for sole parents or 30 hours for couples, likely to benefit about 19,000 low-income families.
• $50 million extra for GP and primary care and $20 million for videoconferencing consultations.
• $32 million for extra intensive care capacity and equipment in hospitals.
• $40 million for public health units mainly for contact tracing.
• $100 million set aside to support work deployment.
• Provisional tax threshold will lift from April 1 from $2500 to $5000 allowing an estimated 95,000 business to defer tax payments and possible waiving of interest on late payments.
• Reinstatement of depreciation deductions for commercial and industrial buildings at an estimated cost of $2.1 billion to 2024.
This is, like the curate’s egg, good in parts:
The boost in health funding, assistance for business and payment for leave for self-isolation and sickness are welcome.
However, the wage subsidies only apply to businesses with 20 or fewer staff. Businesses with more than that are still vulnerable. Jobs, and those businesses themselves are at risk.
The risks are greater because the government mandated increase to the minimum wage is till going ahead.
And what’s what’s the rationale for permanent increases in benefit payments?
There is a case for a temporary increase but if a permanent increase has nothing to do with covid-19 and should have been left for the Budget.
As Jordan Williams from the Taxpayers’ Unions says:
. . .“However, it’s disingenuous for the Government to use this crisis as an excuse to make a permanent increases in benefit rates, which are automatically ratcheted up for wages and inflation. This looks like ideological opportunism at a time when no one knows whether higher benefits will be affordable in years to come.”
“We’re open to increasing benefits for duration of the pandemic, but it’s not an excuse for locking it in. For context, the cost of the benefit hike is around $2.3 billion – almost five times as much as the boost to the health system. Every extra dollar means less for the productive sector and frontline health services.”
What would do more good – more than $2 billion for health or the increase in benefits?
Three more cases of Covid-19 have been confirmed.
So far none of the cases has been fatal and none has required prolonged hospital care.
But that may not last and equipping the health system should be the priority.
The $500m is welcome but it may only be the start of what is needed.