NZ government extends wage subsidy scheme

young supermarket worker
Younger workers say their job confidence and mental health declined during the lockdown earlier this year.
young supermarket worker

The New Zealand government has extended its wage subsidy program as the second lockdown continues.

Prime minister Jacinda Ardern announced Friday that with the ongoing raised alert levels because of a fresh outbreak of Covid cases last week, the wage subsidy scheme will be extended until the end of the Level 3 restrictions. 

Auckland is under Level 3 restrictions at the moment and the rest of New Zealand is at Level 2 with restrictions ending on August 26. Settings will be reviewed on August 21.

The extended wage subsidy scheme will cost about $510 million and is expected to cover 470,000 jobs. All New Zealanders can apply for it, not just people in Auckland.

Industry body Retail NZ CEO Greg Harford said it is good news that the government is extending the wage subsidy across the country, but added that more support is required to help businesses manage fixed costs.

“Retail NZ estimates that the retail economy will suffer a 40 per cent hit over the next 12 days,” Harford said.

“The extension of Level 3 in Auckland means that many businesses will be struggling to make it through without new government support, and the chilling effect of Level 2 will also be impacting retail businesses across the country,” he said. “Retail NZ is pleased that the Government is extending the Wage Subsidy, but other support will be required to help manage fixed costs.”

Under Alert Level 3, most retail premises in Auckland must remain closed to the public, although supermarkets, dairies, petrol stations and pharmacies can remain open. All retailers can open their online stores, and are allowed to sell to the public through contactless click and collect.

But despite that, Harford said they still see a massive reduction in retail spending nationwide over the next 12 days.

“Retail businesses typically operate on very low margins, and are critically reliant on cashflow coming in the door,” he said.

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