Covid-19 Delta outbreak: Tax cuts, dinner vouchers, open borders: National's Covid-19 economic plan

National has called for an immediate boost in support for smaller businesses and for every vaccinated person to be given a $100 voucher to spend tourism venues or eateries, as well as temporary tax cuts for workers and for small businesses in its Covid-19 economic plan.

The party also wants an end to lockdowns and the alert level system from December 1, and an immediate move to level 1 for all places without any cases and 70 per cent of the eligible population double dosed - which would include almost every urban centre except for Auckland and Hamilton.

Asked about the low vaccination levels for young Māori in particular, who are about 30 per cent double dosed right now, party leader Judith Collins said the Government had six weeks until December 1 to fix what it should have fixed a long time ago.

"Six weeks can definitely get those numbers right up."

She and finance spokesmen Andrew Bayly and Michael Woodhouse set out National's economic plan in Wellington today, as well as its reopening targets of either 85-90 per cent vaccination rates or December 1.

The short term measures are designed to ensure businesses, especially those most affected by the lockdowns in Auckland and the ongoing border closures, can survive until that post-Covid world arrives rather than falling at the final hurdle.

They include proposals for more generous wage subsidy and rental support, and giving businesses more legal certainty around mandating vaccinations in their workforces. National's plan would allow businesses with a fully vaccinated workforce to operate as normal at alert level 2, and to drop capacity constraints if only vaccinated customers were allowed in.

The policies also include temporary tax cuts for both small businesses and workers for the next two years.

National's plan would target those on lower incomes in particular, by moving the threshold for paying the 10.5 per cent income tax rate up from $14,000 to $17,000 – a step it estimates would cost $560m a year and give every worker a bit more cash in their pocket to spend.

National said a 24 month tax cut to 17.5 per cent for small businesses will help the 163,000 small businesses in New Zealand recover.

There are also targeted proposals for industries such as hospitality, including "dine and discover" vouchers worth $100 for every vaccinated adult to spend at a local eatery or tourism venue. It estimated that would cost $170m.

The cost of all these proposals would vary depending on how much more the wage subsidy would be needed and for who, but shadow Treasurer Andrew Bayly said the other measures would cost about $2 billion a year, which would be paid for by scrapping "wasteful" Government spending.

He said the impact of the whole package on inflation - which at 4.9 per cent is the highest it has been in decades - would be negligible because most of the inflationary pressure was doe to squeezed supply chains.

National also proposed extending outdoor seating at bars and restaurants, and an insurance scheme for major events.

The longer term measures include letting vaccinated people work, and visit places such as gyms and restaurants even at alert level 3, combined with rapid antigen tests twice a week for all staff.

It also proposes letting all fully vaccinated people cross regional lockdown boundaries once the 70-75 per cent vaccination milestone has been met, and removing all regional boundaries at the 85-90 per cent milestones.

It says lockdowns should be a last resort only after vaccinations surpass 85 to 90 per cent, and instead measures such as rapid testing, masks, contact tracing should be used to try to control outbreaks.

But Collins said the alert level system would be goneburger after December 1.

"We can't stay in a situation as a country where we're spending all our time working out which particular rule we're supposed to be meeting today."

At 85 per cent coverage, a traffic light system for reopening the border would kick in, allowing fully vaccinated travellers from low-risk countries with negative pre-departure testing into the country without isolating. Travellers from medium risk countries would isolated for seven days at home.

That would allow business travel, tourism and international education to begin again.

Bayly said it was critical once New Zealand did reopen it still had a foundation to build the economy on. "It's about acting now before it's too late."

National has also called on the Government to adopt fiscal responsibility rules again for the longer term to ensure debt did not spiral.

Woodhouse said that should see a return of a target date to get debt back down to 15-25 per cent of GDP, as well as a commitment to only use Covid-19 response funding for direct Covid-19 related measures.

The Government has come under fire for using the Covid-19 funding for other policy initiatives.

Income tax cuts for workers: Move the threshold for the 10.5 per cent income tax rate from $14,000 to $17,000 for the next two years. Cost $560m a year.

Short term tax cuts for small business: National is proposing a temporary 24 month tax cut for businesses with fewer than 19 employees, down to 17.5 per cent. Small businesses should also be given longer to meet their tax obligations. Cost: $750m-$800m a year.

The Wage Subsidy: National's proposal included continuing to pay the wage subsidy at Delta Level 2, and dropping the revenue loss criteria from 40 per cent to 30 per cent after a business had received it for eight weeks.

After eight weeks, the payments should also increase from $600 to $800 for full-time employees, and from $359 to $480 for part time staff. National said the scheme was initially set up to help businesses through shorter periods of lockdown, and had not been adjusted to cater for the longer-term such as the current lockdowns in Auckland.

Business rental support: National has proposed the Government foot the bill for 50 per cent of a business' rent if that business could show a 40 per cent reduction in revenue under level 3 or 4. The landlord would have to offer a 25 per cent discount for the period the rental subsidy was paid – leaving the tenant to pay the remaining 25 per cent.

Other measures:

A two year moratorium on changes to regulations that add to the cost of businesses.

Incentives to invest in new productive assets such as machinery and equipment.

A Small Business mental health programme.

"We would put an end to lockdowns, reopen our economy and reconnect to the world when we hit 85-90 per cent vaccination, along with district health board and age-based milestones, or on December 1, whichever comes earlier," Collins said.

"The undeniable fact is that we cannot allow things to continue as they are. Our largest city has been in lockdown for almost 10 weeks and there's still no end in sight."

Setting a firm date at which the borders would reopen was one of Sir John Key's ideas for the Covid-19 response, saying it was one way to encourage people to get vaccinated rather than wait.

Prime Minister Jacinda Ardern has resisted the idea of a date but has promised to set a vaccinations percentage target for when a new "traffic lights" system would kick in instead of the current alert levels system.

She will set out that new system and the target on Friday, and has said it will include vaccination passes.

Collins has questioned the need for the delay before announcing it, saying setting targets would give people something to strive for: and hope that things would ease.

Collins said re-opening after the target would be bolstered by public health efforts.

"We would boost ICU capacity, put rapid antigen testing and saliva testing in place, and step up vaccination of people in vulnerable communities. We will purchase and rollout vaccine boosters, as well as secure effective therapeutic treatments."

This morning on Newstalk ZB, Covid-19 Response Minister Chris Hipkins said the case numbers today could be close to 100 after yesterday's 91.

However, he said there were signs that the vaccination rates in Auckland were starting to make a difference.

Later today he is expected to set out the expected timeframe for schools to reopen in Auckland. He has signalled that senior students could return to school ahead of junior and primary students. He has also urged parents to get children aged 12 and over vaccinated before schools return.

Hipkins is also expected to unveil new proposals for MIQ this week – the Government has said it is considering shorter stays or home isolation for vaccinated travellers.