Strict level-2 rules for funerals, including a 10-person limit, are being urgently reviewed after heated public criticism of the Government and health officials.
The review comes as the country records zero new Covid cases for the second day in a row.
Prime Minister Jacinda Ardern announced that the planned funeral rules, which kick in when level 2 officially starts at 11.59pm tonight - were being reviewed today by the Ministry of Health, with the help of funeral directors and church leaders.
She did not say what new rules might look like, but it appears the maximum number of funeral attendees is likely to be lifted. An announcement is expected from the Minister of Health today.
Ardern has been under fire from grieving families and the National Party over the past several days.
National leader Simon Bridges has described the funeral rules as "inhumane", questioning how the 10-person limit can be reconciled with a 100-person limit for cinemas.
Ardern's comments came as she and health chief Ashley Bloomfield gave their final update during alert level 3.
The "encouraging news" of zero cases meant the country had a combined confirmed or probable 1497 cases. Ninety-four per cent were recovered, said Bloomfield.
Only 74 active cases were active.
Two people remained in hospital - neither in ICU. There were 5961 tests yesterday.
"We've reached the milestone of more than 200,000 tests, which is just over 4 per cent of the population and is a significant achievement," Bloomfield said.
He said the sense of anticipation for level 2 was palpable and understandable.
He reiterated the golden rules:
• Keep your distance from other people when you're in public, including on transport.
• If you're sick, stay home. Don't go to work or school. Don't socialise.
• If you have symptoms of cold or flu call your doctor or Healthline immediately and get tested.
• Good hand hygiene will continue to be the simplest and most effective tool we have to keep Covid-19 at bay.
• Keep your social gatherings to a maximum of 10 people.
• Keep track of where you've been and who you've seen to help with contact tracing if we need it.
Bloomfield said the numbers showed again "we're on the right path" and we couldn't afford to give our gains away so had to remain vigilant.
This evening at 11.59pm, New Zealand will move into alert level 2.
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Announcement on funerals and tangi
Ardern said "the hardest parts" of the alert level framework were funerals and tangi.
There is a 10-person limit under alert level 2.
But she has instigated calls between church leaders, funeral directors and iwi leaders to see if they could find a way to address legitimate health concerns while recognising funerals and tangi couldn't be postponed.
They were "well on their way" to finding a solution and the Health Minister would have more information this afternoon, before the country moves alert levels.
The Government was still working through the details. Ardern said they had always been agile and acknowledged the difficult times Kiwis were going through. She said "there will still be restrictions".
They were seeing whether there'd be "checks and balances", involving funeral directors and the Ministry of Health.
Other areas in their response had also been changed after consultation "and I don't shy away from that".
She accepted there'd been consequences of the restrictions - she's had friends who'd had funerals and tangi during lockdown and alert level 3.
"But ultimately we've always said we'd want to work through issues where they arose."
But New Zealand would have to exercise caution because "we're not out of the woods yet".
Bloomfield said the consistency around the public health advice was around group size and the purpose of the gathering, especially where there would be mixing and mingling.
The public health advice was focused on balancing health risks but had engaged and listened to the specific concerns about funerals and tangi.
Ardern said no one wanted to see police break up funerals - but enforcement was ultimately up to police.
"I don't think anyone in New Zealand wants to see a scene like that."
Ardern said social gatherings had the biggest risk factors and countries were now having second waves, which she called "a warning shot to us".
This morning, relatives of a young butcher who died suddenly at the weekend made a heartfelt plea to the Prime Minister to allow them to attend his funeral.
Roy Green, 38, died at the weekend after his business went into liquidation a week ago.
One of Green's cousins, Bianca Rhind, has sent a letter to PM Jacinda Ardern pleading for the rules to be relaxed and to allow more than 10 people to attend his funeral service.
The Ministry of Health has told hairdressers the most important element of PPE was a mask, if they wanted to wear it.
Bloomfield said New Zealand's situation was different to most other countries where restrictions were being relaxed because of low levels of Covid-19.
And it was up to hairdressers and other hands-on sectors if they wore PPE.
Viaduct bar owner Leo Molloy confirmed this week he still planned to hold a party with 100 of his "friends" during the first weekend of level 2.
When asked about it at the press conference, Ardern said New Zealand would be acting under the Anzac provisions this weekend and there couldn't be groups of more than 10.
She wasn't sure what involvement Molloy had with police.
Ardern said the Covid-19 bill allowed police to enforce the rules but in a narrower way than under a State of Emergency.
The powers would be made in the orders, which could be quite narrow.
Ardern was also asked about Destiny Church leader Brian Tamaki intending to hold a church service this weekend. He should listen to health advice, she said.
Bloomfield said dogs can get together and it's safe to pat dogs at alert level 2.
Bloomfield said he had received a copy of the Waitematā DHB review of the experience around Covid-19 staff infections at Waitakere Hospital and the St Margaret's cluster.
"It's a really good example of rapid and transparent reviewing of our response to Covid-19 in a very particular setting. We can learn and then translate those learnings into our advice nationally so all DHBs can benefit."
The review panel of four included a representative from the New Zealand Nurses Organisation, the chief nursing and midwifery officer from Waikato DHB and senior Waitematā DHB executives.
Waitematā DHB was to have released the report at 2pm today.
According to official advice to Cabinet released in Friday's document dump, there's potentially 380,000 foreigners and migrant workers in New Zealand.
The advice said "repatriation of foreign nationals at such a scale is unlikely to be possible" and they would have to shelter in place in New Zealand.
Deputy Prime Minister Winston Peters said yesterday Civil Defence had "done their best" to help them out.
"But that said, if you're here with no long-term legal authority or right to be here then perhaps you should go home."
Ardern said they would need a longer-term framework for migrant workers but said she didn't want to get ahead of any decision-making.
When asked about Peters' comments, she said in her view many foreigners wouldn't have had a chance to get home, which was why the Government had a compassionate response.
Ardern acknowledged that as New Zealand moved out of the emergency response, that group of people would need a more tailored response.
She rejected that the Government hadn't supported people in need.
Ardern said they provided tens of millions to make sure needs were met, including accommodation and food.
When asked about China blocking meat exports from Australia, Ardern said New Zealand had its own relationship with China, independent of Australia.
A 'jobs Budget'
Ardern said tomorrow's "jobs Budget" would signal how the Government intends to tackle the virus economically.
"Our number one priority is jobs. That means doing all we can to support people staying in their current job or move to a new job if needed.
"And the reason for that is simple. It harks back to the sentiment of Norman Kirk, that all anyone ever needs is something to do, somewhere to live, someone to love and something to hope for. Employment helps form a foundation. It supports families, pays the bills, helps provide self-value and worth and when times are tough like this workplaces can provide an important support network."
She said she wouldn't pre-empt anything Finance Minister Grant Robertson has to say tomorrow, but could set out what the Government was trying to achieve, and the values to make it work.
The Government's plan was to invest.
"The first thing you will notice, is that we believe when times are hard, you don't cut – you invest.
"We will run the ruler over every line of expenditure, no question - we need to ensure our expenditure provides value for money and supports our primary goal of jobs."
The notion that the Government would make cuts to essential services New Zealanders needed more than ever was "not only immoral, it is economically wrong".
That was why yesterday the biggest investment in health funding in two decades was made.
"It's why on Monday we delivered pay equity for early childhood teachers. It's why one of the first things we did when the virus hit was to increase benefit rates to ensure those who lost their job had more to help them through.
"Now more than ever we need our schools and hospitals, our public houses and roads and railways. We need our police and our nurses, and we need our welfare safety net. We will not let our team of 5 million fall when the times get tough, instead we will strengthen the blanket of support the Government can provide. We are rebuilding together, not apart.
"These foundations are essential. They are our base. But on top of them we must build the things that accelerate employment, empower businesses, and stimulate our productive economy. A relentless focus on jobs, economy and businesses is what's required now for the wellbeing of all New Zealanders."
In the coming month the Government would also launch a "comprehensive engagement programme" that will pose a simple proposition – look what our team of 5 million achieved together in beating the virus, now what can we do together to get our economy moving again, to look after our people, and rebuild in a way that make things better than they were before.
"That will of course include the business community, but it will be broader too.
"Prior to the virus we faced serious long-term challenges – persistent inequality and poverty, the threat of climate change, the need to diversify the economy, low productivity, limited domestic manufacturing and an abundance of low-paid jobs. Do we return to those settings or is now the time to find a better way?"
New Zealand to enter 'a very tough winter'
Ardern said the Budget "will be delivered within the most challenging economic conditions faced by any Government since the Great Depression".
"The global Covid-19 pandemic has triggered a global economic shock not of our making, but like every country in the world, we are also not immune to its fallout.
"Let me be clear, the coming months and years will be some of the most challenging our country has faced in a very, very long time."
She said the International Monetary Fund predicts the global economy will contract by 3 per cent in 2020, much worse than during the global financial crisis.
Around the world, unemployment will rise significantly, businesses will close and Government revenue will decline.
"And we will feel the pain here too. New Zealand is about to enter a very tough winter.
"But every winter is followed by spring, and if we make the right choices we can get New Zealanders back to work and our economy moving again quickly."