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Finance minister defends wage subsidy decision

Finance Minister Grant Robertson. Image: RNZ.

The Finance Minister has defended not extending the wage subsidy for the extra days of Auckland's level 3 restrictions.

The National Party has been calling for the government to extend the support for the extra four days of Covid-19 restrictions.

Finance Minister Grant Robertson told Morning Report there had been significant help for businesses and there needs to be a balance as the government is borrowing every dollar that is being paid out.

"We've already had about $108 million go out to about 30,000 businesses.

"It would be an entirely different process and different regime if we were to look to try to cover this."

"I think the context is important here. We've had 22 weeks worth of payment for some of these affected businesses.

"More than half of that - 12-and-a-half weeks if you're in Auckland - has been paid out when the country's been at level 2 or level 1.

"We are borrowing every single dollar that we are paying out, and we have delivered 22 weeks of payment... we know it's tough but you do have to look at this in the total level of support."

The government had talked about the possibility of tapping into the $14bn it had set aside for the pandemic response if there had been another two-week extension.

"We will always keep looking at that."

Treasury estimates the Auckland outbreak is costing the country about $500 million a week in lost economic activity.

National's Finance spokesperson Paul Goldsmith says the government is not taking responsibility for the economic fallout.

He says the cost did not take into account $1.6b in wage subsidies or the impact on jobs and families.

"It all comes back ultimately to failures at the border."

Robertson says the government took responsibility for its whole response to Covid-19, and that response allowed the economy to be operating in June, July and the beginning of August at a level far ahead of other countries.

"We have to keep our borders contained, we are doing our very very best, and I think overall New Zealand, when we look to the rest of the world, has done well in terms of our ability to get the economy going."

'We have the money available' - Collins

National Party leader Judith Collins told Morning Report it was not good enough of an excuse for the government to say they could not work out the admin, or to say the extended restrictions only affected two working days.

She says the reality for hospitality and retail businesses is that the impact would be for four working days.

"We've heard the government say it's too hard for them to work out the admin on it, well if it's that bad let's give it a week.

"If the government's only excuse as to why they're not paying those four extra days is because they can't work it out, well I've given them an alternative."

Asked where the money would come from if the scheme went beyond the restrictions period, Collins says it would be from the borrowed money.

"We have the money available because the government has been borrowing big on this, and we understand like every country in the world that we're having to borrow through this time."

Pushing out the scheme would help with only a fraction of the costs businesses were incurring anyway, she says, but it was better than having people unemployed.

"We have already heard from the Hospitality Association, and I don't think they're scaremongering where they've said 10 per cent of their businesses won't survive this weekend, I actually think that's true.

"We'd rather have people in work and for a little bit longer ... than to have them on the dole queue for possibly months, or in some cases longer than that."

While businesses were complying with public health measures, it would be unfair to make them pay the price for a "failure at the border", she says.

"It is very anti the New Zealand way."

Air New Zealand

Air New Zealand's chief executive Greg Foran said yesterday its fleet could not operate commercially under the current Covid restrictions.

He says physical distancing requirements meant they could only sell less than half of the available seats on turboprops and two thirds of the seats on jets.

If crews wore PPE and passengers wore masks, Greg says the airline could operate safely without distancing.

Robertson says he understood Covid-19 had been a challenge for airlines, but domestic travel had continued under level 2.

"Ultimately our response has always been if we can get on top of the virus we can then see the economy operating at a level that sustains New Zealand.

"Every airline in the world has been really hit by this."

Robertson says the government is committed to being a majority owner of Air New Zealand.

The airline has a $900 million facility from the Crown which it has yet to draw on.

RNZ.

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