The nationwide wage subsidy will be extended for another two weeks, matching the duration of the alert level three restrictions, the government announced yesterday (Monday August 17).

“The new wage subsidy will help support cashflow and confidence,” minister of finance Grant Roberson said.

“Along with the existing wage subsidy extension – which is open until September 1 for eligible businesses – the Treasury estimates that about 930,000 jobs will be covered by the two schemes.”

Ignite Wanaka board vice chair Celia Crosbie said Ignite Wanaka welcomes the government’s latest wage subsidy extension.

“We know that the wage subsidy has been a lifeline to many local businesses, and with the latest COVID outbreak impacting domestic visitor numbers from Auckland, extra support for Wanaka tourism and hospitality businesses will be a welcome relief,” she said. 

“It also means that other companies and sectors in Wanaka that trade with Auckland will receive help, should they need it.”

The new wage subsidy is forecast to cost $510M and is expected to open for applications by this Friday (August 21).

Workers who must self-isolate will receive the equivalent of the wage subsidy while they cannot work. PHOTO: Wanaka App

The government has also removed the “revenue-drop test” for the Leave Support Scheme which has discouraged people from taking the COVID-19 test.

“That means removing barriers to a person getting tested, including fears that a positive result would put their employment at risk or that they wouldn’t receive income while they couldn’t work because they had used up their sick leave.”

Now, “workers who have been told by health officials or their medical practitioner to self-isolate will receive the equivalent of the wage subsidy to help cover that person’s wages for the time they cannot be at work”, Grant said.

This is the third time the subsidy has been extended and the criteria are similar to the current extension. That is, a business must have had, or is predicting to have, a revenue drop due to COVID-19 of at least 40 per cent. For this new scheme, the revenue drop applies for any consecutive period of at least 14 days within August 12 - September 10 compared to last year.

The wage subsidy scheme has been made available to all workers in recognition that even though the alert level three restrictions only apply to Auckland, the impact is felt throughout the country.

“Tourism operators that had been expecting visitors from Auckland, companies that supply and trade with Auckland businesses and hospitality and retail businesses around the country are all affected by the measures to fight the virus,” Grant said.

The mortgage deferral scheme is also being extended from its current end-date of 27 September, to 31 March 2021. Further details will be made available by the Reserve Bank and the retail banks.