In the wake of yesterday's new community transmission case and the return to a day of remote work for most of the Auckland CBD today, it is timely to review the new Labour Government's response to COVID-19. The Government has made it clear from the outset that economic recovery from COVID-19 is a top priority. Below we traverse the actions that have been taken over the last few weeks.
Small Business Cashflow Loan Scheme
The new Government's first Cabinet decision was a three-year extension of the Small Business Cashflow Loan Scheme, which was due to expire at the end of the year, and an extension of the interest free period from one to two years. The Prime Minister has indicated that the purpose of the scheme will be broadened to allow businesses to borrow to invest in capital infrastructure such as new equipment and digital infrastructure. The intention is to provide small businesses with certainty that there will be support over the longer term, and to promote confidence in the sector to accelerate economic recovery. Almost 100,000 businesses have received the loan to date, with total lending at $1.6 billion. The average value of each loan is around $17,000.
The press release is available here.
Flexi-Wage Job Support Programme
The Government also intends to initiate the roll out of the Flexi-Wage job support programme before Christmas. Flexi-Wage is a wage subsidy programme, where employers receive a subsidy to hire people who may require extra training or support. The Prime Minister confirmed the Government will invest an additional $311 million into the programme to increase the average subsidy paid to employers to take on a worker and enable an additional 40,000 unemployed people to become employed through the programme.
The press release is available here.
Fast-tracking infrastructure
Additionally, Cabinet intends to confirm more infrastructure projects to go through the fast-track consenting process before Christmas, with the aim of accelerating New Zealand's economic recovery from COVID-19. Last week, the Northland Water Storage Project was the first project approved by an Expert Consenting Panel under the Covid-19 Recovery (Fast-Track Consenting) Act 2020. The Matawii Water Storage Reservoir will provide drinking water for Kaikohe, and support Northland's horticulture and agriculture sectors.
More information, including links to the Matawii decision, and applications for fast-tracking, is available here.
Boosting Export Markets
The Prime Minister has instructed officials to begin preparations on options to boost exports to key markets including the US, China, and the UK and EU, who New Zealand is currently in free trade talks with. Once border settings change, the Prime Minister plans to lead a business delegation to such key trading partners. In doing so, the Government is seeking to improve market access to assist an export-led recovery. The Prime Minister has stated that "telling our story of how we have successfully managed Covid to date can help to attract international investment in to productive aspects of the New Zealand economy to assist the recovery".
Government Investment in Decarbonising Industry Fund
Part of the Government's plan for economic recovery from COVID-19 centres on addressing climate change. The Government has recently launched a new $70 million fund, which is targeted at New Zealand's largest energy users, and intended to reduce carbon emissions from coal and gas. The fund will allow businesses and industries to access financial support to switch away from boilers run on gas and coal, to biomass options and cleaner electricity. The Government intends for the fund to further stimulate the economy while also future proofing the recovery – allowing New Zealand to "build back better from Covid".
Applications for the first round of funding ($15 million) opened on 11 November, and close on 14 December. Decisions on the first round will be made early in the new year.
The press release is available here, and information on the GIDI fund is available here.
A vaccine
Finally, for the first time since the pandemic began it looks as though there is a vaccine on the horizon. In October, the Government signed an agreement to purchase 1.5 million COVID-19 vaccines (enough for 750,000 people) from Pfizer and BioNTech, subject to the vaccine completing all regulatory approvals in New Zealand and successfully completing clinical trials. Both pharmaceutical companies have released promising results from their clinical trials. Provided the vaccine is approved for use in New Zealand by Medsafe, the Government has advised that it is possible that some doses will be available as early as the first quarter of 2021.
Hon Dr Megan Woods, the Minister for Research, Science and Innovation, has advised that the Covid-19 Vaccine Strategy Taskforce, led by the Ministry of Business, Innovation and Employment, is currently negotiating with other pharmaceutical companies, and further announcements are expected this month.
The Minister's press release is available here.
We will keep you updated as further decisions are made, but feel free to reach out in the meantime if we can assist in any way.
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