Coronavirus in NZ: Jacinda Adern explains Government's $12 billion economy rescue package

The Government has unveiled a $12.1 billion support package to cushion the economic blow of coronavirus, with nearly half of the money going to a wage subsidy package for impacted businesses.

"The Government is pulling out all the stops to protect the health of New Zealanders and the health of our economy," Prime Minister Jacinda Ardern said earlier today.

Full time workers eligible for the package will receive the $585 per week amount in a lump sump package - just over $7000 - over a 12-week period.

Raising benefits to the tune of $25 a week is also on the cards from April 1, as is doubling the Winter Energy Payment.

A Covid-19 sick leave scheme has also been created and will be available for eight weeks at a cost of $126.5 million.

Some 27,000 workers every two weeks are expected to take advantage of this scheme.

Finance Minister Grant Robertson said the package is one of the largest in the world on a per capita basis.

"The global economic impact of Covid-19 on New Zealand's economy is going to be significant, so we are acting now to soften the impact."

But Robertson is forecasting the Government to be in deficit for the foreseeable future and will have to borrow billions of dollars to fund the spending package.

"This is the rainy day we have been planning for."

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The $12.1 billion spending package accounts for roughly 4 per cent of New Zealand's GDP and is comparatively bigger than the relief packages so far announced by Australia, the UK and the US.

Big-ticket items of the package include $5.1 billion for the wage subsidy package, $2.8b for benefit increases and the bolstered Winter Energy Payment and a further $2.8b for tax changes to free up cash flow.

The wage subsidy package is aimed at for any employer which has suffered, or is projected to suffer, a 30 per cent decline in revenue compared to any months between January and June the year prior.

But to be eligible employers must have taken active steps to mitigate the impact of Covid-19, for example engaging with their banks or financial advisors.

Employers also need to declare that they will continue to employ affected employees at a minimum of 80 per cent of their income over the 12 months period.

Some $585.80 a week will be available for full-time workers (20 hours a week or more) or $350 a week for part-time workers (20 hours or fewer a week.

"We're going hard with our health response," Ardern said, "and now we're going hard with our financial assistance".

The maximum amount any one employer can receive is $150,000.

Employers are encouraged to apply for the subsidies – which will be made available today – as soon as possible.