The New Zealand government has released a NZ$12.1 billion ($7.5 billion) stimulus package to maintain jobs and boost the economy particularly to help the lower paid, beneficiaries and those whose jobs are at risk.
The Minister of Finance says a recession is now ‘inevitable’ and has flagged that further measures will be introduced later. The spend up is massive by local standards and economists calculate it is equivalent to four percent of GDP.
Employers with 20 or fewer employees whose revenue has dropped by 30 percent or more qualify for a wage subsidy of up to $585 per person per week for up to 12 weeks. The same level of assistance is also available to self employed and contractors with pro rata amounts for part timers. Total cost is estimated at $5.1 billion ($3.2 billion) enough to subsidy 750 000 workers which is about a third of the full time workforce.
A range of other tax measures covering depreciation, provisional tax and penalty interest payments will cost $2.8 billion ($1.74 billion).
The government is also spending a further $2.8 billion ($1.74 billion) on the health system to bring on more staff, upscale ICUs in hospitals, expand its healthline telephone service and to support those in voluntary isolation.
Unemployment, sickness and other benefits (but not superannuation) are being increased by $25 a week, a move that the government was planning to make in its annual budget in May but has now brought forward.