Covid-19 coronavirus: Jacinda Ardern announces mortgage holiday for affected workers in scheme with banks

The Government has announced a six-month mortgage holiday for those whose incomes have been affected by Covid-19.

The Finance Minister Grant Robertson and Prime Minister Jacinda Ardern have this afternoon given an update on Covid-19 as the country prepares to go into lockdown at 11.59pm tomorrow.

The Government, retail banks and the Reserve Bank announced a major financial support package for homeowners and businesses affected.

The $6.25 billion Business Finance Guarantee Scheme will provide short-term credit to cushion the financial distress on solvent small and medium-sized firms affected by the Covid-19 crisis.

The package will include a six-month principal and interest payment holiday for mortgage holders and SME customers whose incomes have been affected.

The scheme will include a limit of $500,000 per loan and will apply to firms with a turnover of between $250,000 and $80 million per annum. The loans will be for a maximum of three years and expected to be provided by the banks at competitive, transparent rates.

The Government will carry 80 per cent of the credit risk, with the other 20 per cent to be carried by the banks.

"We are acting quickly to get these schemes in place to cushion the impact on New Zealanders and businesses from this global pandemic," said Robertson.

"These actions between the Government, banks and the Reserve Bank show how we are all uniting against Covid-19. We will get through this if we all continue to work together.

"A six-month mortgage holiday for people whose incomes have been affected by Covid-19 will mean people won't lose their homes as a result of the economic disruption caused by this virus."

The specific details of the initiative are being finalised and agreed urgently and banks will make these public in the coming days.

The Reserve Bank has agreed to help banks put this in place with appropriate capital rules. In addition, it has decided to reduce banks "core funding ratios" from 75 per cent to 50 percent, further helping banks to make credit available.

The Government, Reserve Bank and the Treasury continued to work on further tailor-made support for larger, more complex businesses, Robertson said.

But the Government needs to establish how many people will still be coming back.

Robertson said they needed to ensure the financing would get to the people who needed

He didn't have a projection about how many businesses would collapse if they didn't provide financing.

"Our goal is to cushion the blow."

He believed the "significant" move would help a lot of businesses.

Reserve Bank Governor Adrian Orr said: "Banks remain well capitalised and liquid. They also remain highly connected to New Zealand's business sector and almost every household in New Zealand. Their ability to extend credit to firms to bridge the difficult times created by Covid-19 is critical and made more possible with today's announcements. We will monitor banks' behaviour over coming months to assess the effectiveness of the risk-sharing scheme."

Robertson is expecting businesses to top-up an employee's wage to their regular amount after the $585 per week allowance.

For renters, Robertson said they're looking to adapt their scheme for those worried they can't meet their rent.

There are no plans to change the rules about repaying student loans, Robertson said.

'Stay in your bubble' - PM

New Zealand's number of cases would continue to grow as there is a lag on cases, Ardern said. She expected the numbers to keep increasing for the next 10 to 15 days.

New Zealand has a good supply of PPE and Ardern said it would be distributed to essential services.

She said it was positive news that 12 people with coronavirus have fully recovered.

"I obviously expect that number to continue to increase."

If someone has recovered from Covid-19, Ardern understands they're now considered as "immune". She said she expected most people to recover the virus.

Six people are in hospital with Covid-19 but none require ICU care.

For families who don't live together, whatever your bubble is for the month - that's the bubble you must maintain.

Ardern said couples who don't live together or parents with shared custody could be in the same bubble.

But it was important not to expand that bubble beyond that, Ardern said.

Part of her own bubble included Grant Robertson.

The underlying principal for alert level 4 is to reduce contact to people to the "bare minimum" so the simplest thing Kiwis can do is stay home.

"That's how we will save lives."

When asked about going to a non-staffed public golf course, Ardern said people had to stay in their bubble.

And anytime you come into contact with surface was a risk as Covid-19 could survive for 72 hours. That includes things like banisters, so Ardern urged everyone to be conscious of that.

"Our citizens coming home are the ones carrying Covid-19."

She said we needed to pay gratitude to those working in essential businesses, "the necessities of life", and we can show that by staying home now.

"You are literally putting those at risk who have to be there, like our hospital workers."

You will be able to leave your house for a walk, but don't congregate, the Prime Minister said.

If you live alone, you can have contact with someone outside of your home but limit that.

When you do "essential errands", keep your distance from those working.

"This is life that won't be normal."

Food preparation is a particular area of risk which is why takeaways were closing, as while people collecting the food might not make contact, those in the kitchen would be, Ardern said.

When asked how a Wellington cafe was still able to be open, Ardern asked for the name of it as it shouldn't have been open and the medical officer of health would be making a visit.

Ardern said people shouldn't expect to be able to go to their local Warehouse.

The Covid-19 committee is working to provide more updates on what are essential services and the starting point is closing as many businesses as possible. If they find others need to be open, they will do that.

"We will be ready to be responsive ... We have never shut down our country before."

If you are not providing a necessity of life, you should close, the PM said.

Travel and visas

The Government is trying to be flexible with visas, Ardern said.

Ardern said there had been a range of decisions made for people on temporary and student visas.

"This event is unprecedented in New Zealand - we have never shut down our country in 48 hours before."

For anyone who is stuck around the country, they will be able to get home and arrangements can be made.

Ardern said she simply wasn't willing to wait for answers to logistical questions before shutting the country down.

There are now 155 confirmed or probable cases in New Zealand, 12 of whom have recovered. Six are in hospital but have not needed ICU treatment.

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Every day since March 16 has seen the single biggest rise in the number of confirmed cases, and today was no different with 40 new cases as of 10am this morning.

The number of cases of community transmission has doubled, from two to four - three in Auckland - including one in Orewa - and one in the Wairarapa.

Ardern said for many Kiwis overseas, it just won't be possible to get back to New Zealand.

Countries shutting down transit hubs made it extremely difficult for the Government to organise mercy flights.

Once the Government knows how many people will still be coming into New Zealand, they can work through quarantine options.

"If we have no ability to transit through a country, it makes it very difficult to get back to New Zealand," Ardern said.

She has asked Scott Morrison for a short exemption to allow Kiwis in Australia to access welfare.

For people trying to move domestically, the Government has committed to work through those issues.

"We will allow people to get home."

But the links won't remain open for the full four weeks.

"We accept we've got to get people back to their place of residence."

They have been working with Air New Zealand to support people getting back to where they're meant to be and what that demand is.

It's too early to say when the availability for flights would cease, said Ardern.

For international travellers who are stuck in New Zealand, they should also try to get home now.

• Covid19.govt.nz: The Government's official Covid-19 advisory website.

If New Zealand happened to have another natural disaster, like an earthquake, the Government was planning for those secenarios.

Ardern said as the Prime Minister of "the shaky isles" she was constantly aware and preparing for an earthquake.