The wage subsidy initiative which was supposed to end on September 30 will continue until the end of December this year.
Deputy Prime Minister Brown said the wage subsidy would be extended on the same terms and conditions – $320 per week per full-time employee and half that for part-time employees.
The extension comes as employers and employees grapple with an uncertain future after talks on a travel bubble with New Zealand got delayed further following new Covid-19 community cases in Auckland.
Liana Scott, the acting president of the Tourism Industry Council, welcomed the wage subsidy extension.
“This is certainly a relief for both employers and employees and it is to be hoped that we can look forward to similar relief from Te Aponga and Vodafone,” said Scott, who is also the general manager of Muri Beach Club Hotel.
“We are grateful for the early announcement as it vitally important for planning ahead.”
Fletcher Melvin, the chair of the Private Sector Taskforce, also said the extension was “excellent news and will definitely be welcomed by the private sector.”
“We are supportive of keeping the border secured until New Zealand has no community transmission.”
DPM Mark Brown said this extension will remain in place regardless of whether quarantine free-travel with New Zealand is established earlier.
“I still hope that will be the case,” he added.
“I trust that this announcement will provide some certainty to businesses, to better enable them to plan until the end of the year, and to their employees, to provide them with assurance that Government wage support will continue and that hardship will be reduced.”
Businesses will no longer be eligible for the subsidy if at any time their turnover increases to more than 50 per cent of the turnover in the same month last year, Brown said.
He said the Government will also provide another sole trader business grant in October of $3000 to current recipients to ensure that they receive continued support.
Brown said this extension announcement will come as a surprise to those who believe that the Government is about to run out of money.
“However, let me assure you of two things. First, we expect the wage subsidy extension to fall within our current 2020/21 budget appropriation, that means that all of the budget fiscal forecasts remain the same – as a Government we are not proposing to spend more money, rather we are prioritising within our appropriated expenditure and are now better able to forecast the total spend.
“Second, we are closely monitoring our fiscal position and forecasts within this ever-changing environment, our officials are again running the numbers and looking at both best and worst case scenarios and the Government’s required response. I want to reassure you that we will take the necessary steps to ensure that we remain financially sustainable as we navigate our way through this pandemic.”
Brown said while they don’t yet have the economic data from April, “I can tell you that our revenue to July has held up a little better than we had anticipated, with above forecast tax collections”.
He said they believe that this is evidence that the Economic Response Plan is working.
“People are spending their money and economic activity is taking place, we also know that this is in part due to the strict tax compliance requirements built into the Economic Response Plan.
“That means, if you want to receive the government support package then register yourself or your company, this makes sure that everyone receives their fair share and everyone pays their fair share of tax. By doing this more of our people will receive more of our support.”
Brown said the news from New Zealand has however made things that little more uncertain impeding their ability to develop a strong picture of the economy – for now.
In the coming weeks he said they will get more data and the situation will become clearer.
“In the meantime, our Government will continue to support our economy, through the Economic Response Plan, and through the numerous infrastructure projects taking place around our islands.
“We continue to work together, Government, private sector and the community, to ensure that our country gets through this pandemic together, as one.
“Many of you will recall the talk I gave back in March when we first closed our borders. My message to us was simple, let us all do what is possible, let God do what is impossible. That message still stands today. May God continue to bless our people and our country.”