Wage subsidies and resurgence support payments will not be available to businesses in the event of an Omicron outbreak, but that could change, Finance Minister Grant Robertson said.
At the Labor Party caucus retreat in Taranaki on Thursday, Prime Minister Jacinda Ardern said all of New Zealand would go through a “red” light if Omicron leaked into the community.
Robertson told reporters that on the same day “rather than offering a general wage-subsidy type program” the government would focus on supporting businesses through the furlough assistance scheme.
He said it was because the Covid-19 Shield Framework, also known as the Traffic Light System, allowed businesses to operate with few restrictions at each setting (if using passes for vaccines).
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The Leave Assistance Scheme is available to employers, including the self-employed, to help pay staff who have been asked to self-isolate due to Covid-19 and cannot work from home.
It is paid at a flat rate of $600 per week for full-time workers who worked 20 hours or more per week or $359 per week for part-time workers who worked less than 20 hours per week.
There is also short-term absence payment available to businesses, to help pay staff who cannot work from home while awaiting a test result.
Robertson said the government would monitor the impacts of an outbreak to see if more support measures were needed for businesses.
“If the impacts were more severe, we may need to look at some measures that we have already used, but that is not our plan.”
Under the old Alert Level system, the Resurgence Support Payment was originally designed as a one-time payment for businesses in Alert Level 2 or higher for seven days or more. But it has been extended to allow multiple payments for businesses that have suffered a loss of revenue.
The wage subsidy was a weekly payment to help employers and the self-employed continue to pay staff and protect jobs affected by alert level changes.
BusinessNZ chief executive Kirk Hope said it was important the government set clear rules on who would be considered a close contact and what triggered self-isolation.
“Given the pace and scale at which Omicron transmits, you could see a good chunk of the workforce going into isolation if the rules are extremely strict,” Hope said.
If so, the government should provide broader financial support to businesses, he said.
“They don’t really want to create anything new.”
He said the renamed Resurgence Support Payment would be a suitable way to inject cash into businesses that still had expenses but no revenue as they had no staff or customers due to the demands of ‘isolation.
“It will be necessary to provide support to companies that are simply not able to operate because they find themselves in a situation where all their staff are isolated.”
He said the government should also subsidize rapid antigen testing for businesses and the public.
“There are strong arguments for some form of subsidy. It’s a healthcare tool designed to really reduce healthcare system costs.
Deloitte tax partner Robyn Walker said a key thing the government needs to consider is making sure employers understand when they can claim the furlough aid schemes.
“Plans are generally more flexible than the wage subsidy because they relate to the position of individual employees rather than the amount of revenue loss an employer experiences,” Walker said.
It was also possible to apply at any time rather than being subject to strict deadlines like the wage subsidy, she said.
She said businesses with 50 or fewer employees can also access the Small Business Cash Loan Scheme through Inland Revenue.
The scheme allows certain businesses to apply for a loan of up to $100,000. Loans are interest-free for up to two years, if fully repaid within that time.
A spokeswoman for the Department of Business Innovation and Employment said it has advice for businesses on the business.govt.nz page, including how businesses can prepare for Omicron .
The business.govt.nz newsletter which reaches more than 800,000 businesses was sent out on Thursday containing information for businesses on how to prepare for Omicron, she said.
MBIE has engaged with critical infrastructure and services, as well as business groups, regarding outbreak preparedness and understanding their needs.
“MBIE will continue to engage with businesses and provide business continuity support through its business channels in the days and weeks ahead.”