The Government has lifted the $150,000 wage subsidy cap in its economic response package to Covid-19 enabling large operators to keep more of their workers on.
Finance minister Grant Robertson made the announcement on Monday afternoon after prime minister Jacinda Ardern lifted the Covid-19 alert to level 3, and said it would rise to level 4 in 48 hours.
Level 4, the highest alert status, would require people to stay at home, schools to close, travel severely curtailed and all businesses except for essential services to close.
Robertson said all businesses and sole traders would be eligible for the capless wage subsidy, which had seen its estimated cost rise from $5.1bn to $9.3bn.
The subsidy, unveiled last Tuesday in the Government’s economic response package, had been welcomed by smaller businesses but criticised as insufficient support for larger operators because of the $150,000 cap. A cap set at that level meant only around 20 workers could be supported for the 12-week period of the scheme.
Industry groups have called for further support to help big employers through what is shaping up to be a sharp recession.
The decision comes as the country’s workforce is soon to be confined to their homes for four weeks after the Covid-19 alert moves to level 4 at one minute to midnight on Wednesday, 25 March.
Ardern said New Zealanders could stop the spread of the disease by staying at home and reducing contact.
“Now is the time to act,” said Ardern.
“These decisions will place the most significant restriction on New Zealanders’ movements in modern history. This is not a decision taken lightly. But this is our best chance to slow the virus and to save lives.”
Ardern said supermarkets, doctors, pharmacies, service stations, and access to essential banking services would be available at alert levels 3 and 4.
“If you do not have immediate needs, do not go to the supermarket. It will be there for you today, tomorrow, and the day after that. We must give time for supermarkets to restock their shelves, there will be enough for everyone if we shop normally,” she said.
“In the meantime, we will be working through practices like those used overseas to make sure that social distancing is maintained at supermarkets when people are undertaking essential shops.”
All non-essential businesses and places of congregation would now close to the public, including bars, restaurants, cafes, gyms, cinemas, pools, museums, libraries, and even playgrounds. All indoor and outdoor are to be cancelled.
“In short: we are all now preparing to go into self-isolation as a nation. Just as you’ve seen with other countries,” said Ardern.
“Staying at home is essential. It’s a simple but highly effective way to constrain the virus – it denies it places to go, and will help give our healthcare system a fighting chance.”
Failure to abide by the lockdown would put the lives of others at risk, said Ardern.
“There will be no tolerance for that and we will not hesitate in using enforcement powers if needed,” she said.
“We’re in this together and must unite against Covid-19. I am in no doubt that the measures I have announced today will cause unprecedented economic and social disruption. But they are necessary.”
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