The Government's Response to COVID-19
The COVID-19 pandemic continues to evolve, but it has already caused enormous social and economic disruption across the country and around the world. Since the outbreak, the Government has implemented a range of response and recovery measures, which focus on supporting the health sector, cushioning the blow to our economy, protecting jobs and ensuring affected New Zealanders receive the financial and social assistance required to get through this extraordinary period.
We took bold and decisive action early as we saw the pandemic take hold overseas. We did this to protect our people, their jobs, and our economy. The moves we made were swift, but carefully considered - and our strong fiscal position set us up well.
On 17 March we announced a $12.1 billion package to support New Zealanders, including the Wage Subsidy Scheme which, as at 4 May, has helped 1.7 million employees and paid out $10.6 billion; a $2.8 billion income support package for our most vulnerable, including a permanent $25 per week benefit increase and a doubling of the Winter Energy Payment for 2020; and an initial $500 million boost for health services.
We have also introduced two schemes to provide direct financial support to businesses: the Business Finance Guarantee Scheme and the Small Business Cashflow Scheme. The Business Finance Guarantee Scheme provides short-term credit to cushion the financial stress on solvent small and medium-sized businesses affected by the COVID-19 crisis. The scheme provides up to $500,000 per loan and applies to businesses with a turnover up to $80 million per annum. This scheme will offer up to $6.25 billion in loans to New Zealand businesses.
The Small Business Cashflow Scheme provides low-cost loans to small businesses impacted by the COVID-19 crisis to support their immediate cashflow needs and help them meet fixed costs. The scheme will provide loans to eligible businesses of $10,000 plus an additional $1,800 per equivalent full time employee. Loans will be interest free if they are paid back within a year. The interest rate will be 3 per cent for a maximum term of five years. Repayments are not required for the first two years.