Two cheques are in the mail for New Zealand Post, allocated $130 million from the Budget to help it deliver a viable postal service and a $150 million cash injection from government's Covid Response and Recovery Fund.

The funding will allow the state-owned entity to maintain service levels as it adapts to the changing reality of mail, a reality that has seen postal services globally decline as post boxes remain empty.

Associate Minister of State Owned Enterprises Shane Jones said NZ Post was now at the stage where it was "no longer commercially viable for New Zealand Post to maintain current service levels and it needs government support."

He said the covid-19 crisis had demonstrated just how important the postal service was, with many New Zealanders and businesses relying on the service through lockdown. This was particularly the case for services provided by its courier businesses, under its Express Courier subsidiary, which includes Courier Post.

Broadcasting, Communications and Digital Media Minister Kris Kaafoi said while New Zealand Post had gone to considerable effort to absorb the decline in mail revenue, without government support it would face the prospect of drastic cuts to its mail business.

Kaafoi said revenue had fallen substantially but the costs of delivering the service New Zealanders expected had remained the same.

"The $150 million equity injection, along with the $130 million funding for mail services, means we avoid significant cuts to its service and workforce and big price increases for its customers.”

He said the pandemic has resulted in a further hit to New Zealand Post’s revenue due to factors such as a steep fall in international parcel volumes.

“Posties and couriers have been one of the most visible symbols of our response to the pandemic. As an essential service, they worked through lockdown and have continued to work tirelessly as level 3 saw a massive increase in demand for e-commerce.”