2020 Budget: The government’s Covid 19 wage subsidy scheme spanned 8 weeks, now up to $ 14b

The wage subsidy scheme has been extended for another eight weeks, as the Government seeks to limit the economic damage caused by Covid-19.

More than $ 3.2 billion has been invested in the scheme, bringing total government spending on the program to nearly $ 14 billion.

But there are some significant changes, including an eligibility modification.

Today’s Budget also supports struggling small businesses to “prosper in the digital economy,” as well as government-backed loans for research and development.

But the centerpiece of today’s Budget was the extension of the wage subsidy scheme.

2020 BUDGET: THE COMPLETE PACKAGE AND WHAT IT MEANS TO YOU
• Government Reveals $ 50 Billion Covid Response And Extends Wage Subsidy Scheme
• The budget at a glance
• The wage subsidy scheme was extended for 8 weeks, now up to $ 14b
• The devastated tourism sector receives $ 400 million but details are scarce
• School lunch program driven to feed 200,000 children every day
• Audrey Young: Robertson’s Covid Recovery Fund has political advantages

Starting June 10, companies that have suffered or expect to suffer a 50 percent loss of revenue, compared to the same period last year, will be eligible for the subsidy extension.

That’s higher than the current 30 percent figure announced when the plan was launched in March.

And the scheme has also been opened to more companies.

Robertson said the government was “very aware” of the damage Covid-19 was causing to workers and companies across the country.

“Many New Zealanders will go back to work now, but we know there will be some companies that are still struggling.”

He reviewed the tourism, hotel and retail sectors as those that especially feel the pain of the pandemic.

The application for the expanded scheme is open for eight weeks and will be paid as a lump sum of eight weeks to employers at $ 585 per week, for full-time workers.

The Government has also allocated $ 230 million to promote entrepreneurship and “risk taking”.

This includes $ 150 million for a fund to provide loans to R&D intensive companies: there is a limit of $ 100,000.

Finance Minister Stuart Nash said the government expected most R&D reform companies to be able to access loans, up to the equivalent of 50 percent of a company’s annual R&D spending.

There are no details on interest rates, only that the loans will be offered on “favorable terms.”

The scheme will be operational in early June, with more details to come.

Today’s Budget also sets aside $ 80 million to encourage entrepreneurs and businesses to develop new products by allowing them to claim tax deductions for failed or abandoned assets.

Nash said this was an important way to encourage investment as it gave companies the confidence to take risks.