The wage subsidy scheme will end some three weeks before the election, Prime Minister Jacinda Ardern confirmed today.
"We have clearly signalled the wage subsidy is not something can go on for the never-never," she told journalists after a rousing speech to around 600 Labour Party faithful and an online audience of thousands for the party's traditional election-year Congress.
Extending the wage subsidy beyond its current cut-off of September 1 risked delaying "the critical work that businesses may need to do to pivot into the new Covid environment."
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"Businesses themselves have said that continuing for too long could run the risk of being harmful to the long-term resilience of some of those businesses," she said.
The subsidy scheme has so far cost some $12.3 billion, according to the Ministry of Social Development's June 26 update, covering some 1.7 million employees.
Ardern pointed to the $400 million tourism recovery package the government is starting to enact and the existence of a covid-related employment loss benefit that is equivalent to the minimum wage, which is now available for people whose jobs no longer exist because of Covid-19.
Her comments came as the government today announced the extension of one-off loans to small businesses, administered by the Inland Revenue Department, through to the end of the year.
Ardern used her speech to the Labour Party Congress both to lay out what she called a five-point plan for recovery and to argue the government's previous commitment to low levels of debt was justified because it made the response to Covid-19 possible.
"New Zealand is a place where the unexpected can happen," she said. "That's why, when we were criticised for being focused on getting debt down to under 20 per cent of GDP, we steadfastly argued that it was necessary – it was for a rainy day.
"Thank you for your foresight Grant Robertson," she said. "You have been the Finance Minister New Zealand needed at this time because that rainy day has arrived. Now is the time to put the umbrella up, to provide support to those who need it."
Responding to calls for a strategy for reopening NZ's borders, including from former Labour Prime Minister Helen Clark, Ardern said the government had established a framework and that it would be proactively releasing Cabinet papers to outline its thinking.
She pointed to her answers in Parliament last week for guidance on the basic outline of an approach to allowing people to come to NZ without requiring current levels of quarantine.
• No community transmission in the country concerned;
• Testing and contact tracing systems that were consistent with NZ's;
• Sufficient testing capacity in NZ to meet demand; and
• An over-riding principle of "keeping NZers safe".
"There is no playbook for what the world is going through, no rules on what we should or shouldn't be doing. That means we won't always get it right, but it also means we can make our own choices, and have our own plan," she said, acknowledging recent controversies and a case over the weekend of a woman quarantined in Auckland being arrested after absconding.
She defended the government's elimination strategy and national lockdown.
"Had we chosen another path, if we'd chosen to have an ongoing tolerance of covid and cases all around us in the community, I have no doubt we would still have restrictions in place that would be costing us in many, many ways.
"The health response has not ended. It will need to be ongoing as the pandemic surges around us," she said.
Unofficial campaign start
In a speech that effectively marks the start of Labour's campaign for the September 19 election, Ardern took the most subtle of digs at her coalition partner, NZ First, which has styled itself a 'handbrake' on the government's agenda.
"Don't put on the brakes when now more than ever is the time that we need to speed up," she said, before invoking Labour's campaign slogan for this year: "Let's keep moving."
National Party leader Todd Muller scorned Ardern's vision.
"Labour promised three years ago to 'Let's do this' and hasn't done any of it," he said. "Three years later, Labour has nothing left to say for itself except to keep moving, on a road to nowhere.
"Today's so-called economic plan will go in the same rubbish bin as its KiwiBuild plan, its light rail plan, its mental health plan and its child poverty plan."