On Tuesday, 17 March 2020 the Government announced its package in response to the economic impact of the ever-evolving COVID-19.
The package totaling $12.1b is aimed at providing financial relief to businesses in the most affected industries, along with vulnerable employees. The package provides $5.1b in wage subsidies to businesses (up to the value of $150k per business) and leave payment support to workers needing to self-isolate.
The package includes administering wage subsidies for employers of affected businesses, in order to provide financial relief, and support retainment of employees.
Employers, sole traders, self-employed, contractors and firms who are eligible for the subsidy will receive a lump sum payment of $585.80 per week for each eligible full-time employee, and $350.00 per week for each eligible part-time employee. The government subsidy is capped at $150,000.00 per employer, and at 12 weeks of subsidy.
To qualify businesses are required to establish a minimum 30% decline in revenue due to COVID -19, for any month between January and June 2020, in comparison to last year (2019). The subsidy will be administered by the Ministry of Social Development.
The Government is also providing support with respect to COVID-19 Leave Payments, in order to held people to self-isolate. This is crucial in delaying and slowing the spread of COVID-19.
The scheme is open to all workers in all firms, sectors, and regions, sole traders and self-employed, where there is a need to self-isolate or recover from COVID-19. The payment amount will be $585.50 per worker per week for each eligible full-time worker, and $350.00 per week for each eligible part-time worker.
The Leave Payment will be available for 8 weeks from 17 March 2020 and employers, and those eligible will be able to apply for this multiple times if required.
If eligible, then payment will be made to the employer, who is required to pass this onto the employee.
The package also includes four specific tax initiatives aimed at supporting businesses by relieving tax payables, including:
- Reintroducing depreciation on commercial and industrial buildings
- Immediate deductions for low value assets
- Fewer small businesses having to pay provisional tax
- Writing off interest on some late payment of tax
We will continue to provide you with regular updates and information as the Government continues to review its response to the impacts on businesses, and employees.