After being told last week that level 2 would allow 100-person weddings, funerals and gatherings, the Prime Minister has ruled that those events can't happen for at least two more weeks.
And bars will have to remain closed until next Thursday, May 21, due to the risk of an outbreak from social mixing and mingling.
Jacinda Ardern and her Cabinet decided today that Covid-19 was sufficiently under control to move the country to alert level 2 on 11.59pm on Wednesday, meaning the "new safe normal" will effectively start on Thursday.
But as she had previously signalled as a possibility, Ardern said aspects of level 2 will be phased in.
Last week she told the country that a 100-person limit would apply to indoor and outdoor gatherings at level 2, but today she said only groups of up to 10 people could congregate from Thursday.
And they can only hang out for two hours, unless they were in a private residence.
"If something goes wrong with a group of 10, that's much easier to contain, much easier to contact trace, and much less likely that if something goes wrong that the whole country will have to experience more restrictions," she said at her post-Cabinet press conference.
"Parties, big social events or anything designed to be for mixing and mingling won't be allowed to happen for groups larger than 10 people. Gatherings at home ... church and religious events, weddings, funerals, stag-dos – all must be limited to 10 for now."
Asked about people's wedding plans, Ardern said: "Hold off."
The two-hour limit in a place of business is understood to have some flexibility, for example if the service in a restaurant is slow for some reason.
• Covid-19 coronavirus: Three new cases today, including two nurses, as Cabinet decides on level 2
• Covid 19 coronavirus: Auckland, bigger cities, at more risk of Covid-19 flare-up under alert level 2 - data modeller
• Covid 19 coronavirus: Level 2 unveiled - cafes open from Thursday, schools from Monday
• Covid 19 coronavirus: World Health Organisation denies report that China sought to delay global virus warning
Ardern said a 10-person limit was given "hard consideration" in light of the difficulties people have had with the limits on funerals and tangi, but the decision was balanced by safety concerns.
She clarified that restaurants could have more than 10 people inside, but a single group could be no bigger than 10.
"This, alongside social distancing, is our insurance policy," she said.
"That doesn't mean you won't see larger gatherings than this. People will be at the movies – but they'll be spaced out. They'll be watching sports, but spaced out. People might go to a show, but they'll be spaced out."
Bars have also been deemed too risky to open from Thursday.
They will have to remain closed to next Thursday, May 21, and when they reopen they will have to allow seating-only capacity, with separated tables and only one server per table.
"We have left bars till last because they do pose the most risk, as we can see from South Korea that recently opened up their bars, only to close them again after one person created an outbreak of 40 people and 1500 tests," Ardern said.
Asked about the likelihood of bars having to shut shop due to the extra time before they could open, Ardern said there would be more targeted business support outlined in Thursday's Budget.
Director general of health Ashley Bloomfield said that the only public health advice he provided that was rejected by Cabinet was to have bars remain closed for another two weeks.
Ardern said the 10-person restriction on group size will be reviewed in two weeks, and Bloomfield added that those sizes could be increased incrementally, for example from 10 to 20, then to 50, then to 100 - as was the plan in Australia.
The other aspects of level 2 remain as they were announced last week.
That means from Thursday this week, retail, malls, cafes, restaurants, cinemas and other public spaces including playgrounds and gyms will reopen - with strict physical distancing requirements.
Domestic travel will also be back on again, providing a lifeline to the tourism industry that has already seen the loss of thousands of jobs.
Schools and Early Childhood Education centres will open in a week, on Monday morning, May 18.
National Party leader Simon Bridges said the announcement was welcomed.
"New Zealand is ready to get back into a form of normality, and from Government to Opposition, Parliament's attention now really has to turn to how we can save jobs and get New Zealand working again."
Act leader David Seymour said alert level 2 should have happened sooner and today's decision will be particularly hard on bars.
"The wider uncertainty about rules for all kinds of businesses means they may be open, but not profitably."
Several businesses had been told that specific alert level 2 guidance was still being developed, he said.
"The Government needs to urgently clarify level 2 rules so the private sector can get back to work quickly and painlessly."
Ardern cited the 16 significant clusters as justification for limiting the size of gatherings.
"If you've followed their origin, you'll know that they are a slice of Kiwi life. They have started at wedding receptions, stag-dos, a conference in Queenstown that included drinks and socialising, a bar in Matamata.
"There is a theme – when we come together to socialise in large numbers with one another, there is risk. The best insurance policy we have for that risk, is to reduce the size of our socialising for now."
Ardern said she was most looking forward to hugging her sister at level 2: "That will be nice."
She said level 2 was not the same as life pre-Covid-19.
"We are in level 3 for just two more days. From Thursday when you wake up, play it safe.
"If we slacken up, we might move in the wrong direction."
The golden rules of level 2 are:
• Keep your distance from other people when you are out in public, including on public transport.
• If you're sick, stay home. Don't go to work or school. Don't socialise. This should be a really low bar.
• If you have symptoms of cold or flu call your doctor or Healthline immediately and get tested.
• Wash your hands. Wash your hands. Wash your hands. Do it properly.
• Don't get together socially or mix and mingle with more than 10 people at once.
• And keep a track of where you've been and who you've seen.