The government has lowered the threshold for businesses wanting to apply for its extended wage subsidy scheme.
Finance Minister Grant Robertson says changes to the wage subsidy scheme were made in response to feedback from businesses. Photo: Pool / Getty Images / Hagen Hopkins
Businesses that have seen their revenue drop by 40 per cent because of Covid-19 will now be eligible.
Originally, only businesses whose income had halved because of the pandemic could apply.
The government says the widened criteria means 40,000 more businesses will be eligible for the eight-week scheme from next week.
Small businesses have also been given an extension of more than a month to apply for the small business cashflow loan scheme.
Finance Minister Grant Robertson said the changes were made after feedback from businesses.
"While many New Zealanders are now back at work and our economy is one of the most open in the world, there are businesses that will feel the impact of this global pandemic for longer," Robertson said.
"The tourism, retail and hospitality sectors will in particular be supported by the extended wage subsidy and cashflow support."
Robertson said he doesn't plan on extending the wage subsidy scheme again, but hasn't ruled it out.
"Let's see how level one goes, let's see what the impact is. Obviously for those businesses most affected by the border closures we have other funding and other support in place in addition to the wage subsidy scheme."
Minister for Small Business Stuart Nash said many businesses are still planning their future and the extension to the small business cashflow loan scheme recognised that.
"The high level of demand we've seen for these interest-free loans to date shows we made the right decision to support SMEs with direct lending from the Government, through IRD. Extending the application date will give business owners the confidence that support is available if needed as the economy opens up."
So far more than $1.18 billion has been paid out to 70,000 small businesses under the cashflow scheme.
The government is forecast to spend up to $3.9 billion on the extended scheme, up from $3.2b under the old threshold.
