Just one corporate seeks wage subsidy so far

Finance minister Grant Robertson says just one big business has applied for the latest round of wage subsidies, which are covering more than 400,000 jobs so far.

Appearing before parliament’s finance and expenditure committee, Robertson told MPs about 128,000 applications have been approved for the latest wage subsidy, and $484.4 million has been paid since the country was put into lockdown last week. The minister’s office said those payments to 111,885 businesses are supporting 432,468 jobs. That’s almost 15% of the 2.89 million people employed.

Robertson told MPs just one firm with more than 100 full-time equivalent staff had applied for the latest lockdown.

“Corporates are comfortable where they are at the moment and are looking forward to us moving down the alert levels,” Robertson said.

While some firms, such as those in retail and hospitality, weren’t able to switch their services online as readily as others, Robertson said the adaptability of firms had been really good and their own books have been in better shape.

Much of the questioning focused on whether the government’s covid response and recovery fund would run out of money if the lockdown extended beyond four weeks.

Robertson pointed out that imprest legislation gives an envelope for funding, and while money was appropriated to specific projects, it could be reprioritised as had been done in this year’s budget which reallocated about $1 billion of unspent money.

“In terms of cash we have more than enough,” he said.

Big spenders

Robertson said New Zealand’s economy had been more robust than forecast, and that also provided greater fiscal headroom if needed.

Government data today showed robust consumer spending in the June quarter, with the volume of retail sales up 3.3%, which ANZ economist Miles Workman said showed strong momentum heading into the lockdown despite supply constraints.

Earlier today, Robertson and revenue minister David Parker said firms, organisations and the self-employed could apply for the covid resurgence payment if they could show they experienced at least a 30% revenue decline over seven days as a result of the higher alert levels.

The payment included a core per business rate of $1,500, plus $400 per employee up to a maximum of 50 full timers, or $21,500. Firms with more than 50 staff could apply, but still cap out at $21,500.