The $12.1 billion Economic Response Package
Posted: 18-Mar-2020 |
The Government has released an economic response package to help cushion the impact of COVID-19 and support the economy during the COVID-19 crisis, here's what's on offer...
Wage subsidy scheme - Wage subsidies will be available for all employers that are significantly impacted by COVID-19 and are struggling to retain employees as a result. The scheme will be open to all businesses, including sole traders and the self-employed.
Wage subsidies will be available for businesses in all sectors and all regions that can show a 30 per cent decline in revenue for any month between January and June 2020 compared to the year before (including projected revenue).
The subsidy will be $585.80 per week for a full-time employee (20 hrs or more) or $350.00 per week for a part-time employee (less than 20 hrs). The payment will be made as a lump sum for a period covering 12 weeks. This means employers will receive a payment of $7,029.60 for a full-time employee and $4,200 for a part-time employee. The maximum amount any one employer can receive is $150,000.
Leave and self-isolation support - Workers and businesses have responsibilities to prevent the spread of COVID-19. The purpose of the COVID-19 leave and self-isolation scheme is to support workers financially to self-isolate, or while ill with COVID-19, where this is required so that all businesses and workers can do the right thing.
From 17 March 2020, the COVID-19 Leave Payment will be available to support people financially if they need to self-isolate, cannot work because they are sick with COVID-19 or cannot work because they are caring for dependents who are required to self-isolate or who are sick with COVID-19.
The payments will be $585.80 per week for full time and $350 per week for part-time workers. The COVID-19 Leave Payment will be available for eight weeks from 17 March 2020. Employers will be able to apply for this more than once.
Business cash flow and tax measures - There are a number of business cash flow and tax measures that have been announced, including: Giving Inland Revenue the discretion to remit use-of-money interest (UOMI) for customers significantly adversely affected by COVID-19. Increasing the provisional tax threshold from $2,500 to $5,000 from 2020/2021.
Increasing the small asset depreciation threshold from $500 to $1,000 — and to $5,000 for the 2020/21 tax year. Allowing depreciation on commercial and industrial buildings from 2020/2021. Removing the hours test from the In-Work Tax Credit (IWTC) from 1 July 2020.
Wider $12.1 billion package - There are further parts to the wider $12.1 billion package that you may be interested in, including income support, and further investment in the health response.
Exporters and importers - If you are an exporter or importer, New Zealand Trade and Enterprise (NZTE) has set up a page on their website which brings together information from NZTE, the Ministry for Primary Industries, the Ministry for Foreign Affairs and Trade, and Customs. Information on the page is reviewed daily. It also includes contact details for the relevant agencies for you to get in touch with depending on your situation.
Tax and cash flow - If you are having difficulties or concerns about meeting your normal tax obligations due to the effects of COVID-19, Inland Revenue has a range of ways to help depending on your circumstances.
Employers - If you have employees, Employment New Zealand has specific guidance in response to COVID-19 including how to handle self-isolation and sick leave.