Beehive bulletin briefs us on how Govt is backing businesses but is a bit barren on the borrowing

Latest from the Beehive

Finance Minister Grant Robertson hadn’t finished, when he brandished a bundle of Budget documents to assure us they highlight his Government’s strong focus on keeping the balance between responding to COVID-19 and careful economic management.

After Point of Order had posted an item which recorded this assurance yesterday, he doubled up on his good news with a statement (along with two other Ministers) to say the Government’s support for businesses and jobs continues to roll out at pace:  payments of the new wage subsidy already have been made to nearly 50,000 business bank accounts.

Robertson doubled up on a figure we consider somewhat dubious, too:

Finance Minister Grant Robertson said the Government is standing beside businesses and households to cushion the blow of the 1-in-100 year shock caused by the global COVID-19 pandemic.

How has that been calculated?

Putting that aside, let the record show Robertson’s eagerness to tell us (along with Social Development Minister Carmel Sepuloni and Revenue and Small Business Minister Stuart Nash):

  • Economic activity in June and July was higher than in the same months last year, “which shows how important it is to go hard and early against this virus, stamp it out and then safely re-open the economy”.
  • The Government’s new wage subsidy to support businesses under the latest Level 3 restrictions opened for applications last Friday. It is already getting support into the economy, with $167.5 million paid to 46,920 businesses, protecting 156,741 jobs.
  • The existing extended wage subsidy has attracted an increase in applications, with more than 24,366 businesses approved since August 12 as they became eligible for this eight week payment.
  • The latest two-week wage subsidy brings the total time covered by the wage subsidies to 22 weeks. A business that was eligible for the full 22 weeks will have received total cash grants of $12,887.60 per full time worker, meaning payments worth more than $128,000 for a business with 10 full time workers, payments over $322,000 for a business with 25 staff and over $515,000 for a business with 40 staff.”
  • New Zealand has been at Alert Levels 3 and 4 for seven weeks of that 22 week period, with Auckland at just over nine weeks. In total, the wage subsidies and leave support schemes have paid out more than $13.6 billion to businesses to support them for nearly half a year.

Fair to say, there was something about debt in the statement, too.

Not much – but enough to suggest there is an awareness in the Beehive that each beneficial buck is being borrowed.

Grant Robertson said the Government is mindful of concerns that New Zealanders and business leaders have about the levels of debt required to make these significant payments, while also making sure public services like health are properly funded during the pandemic.

“People know that every request for extra support represents another dollar that has to be borrowed. My focus on keeping debt under control is why we analyse each request for the Government to increase borrowing extremely carefully.”

The Government’s support for businesses through the tax system is also rolling out.  The Small Business Cashflow Loan Scheme is supporting nearly 100,000 SMEs with interest-free loans for a year.

At Point of Order, we think this means nearly 100,000 businesses are borrowing from a government which is borrowing.

But many businesses have started repaying their loans – 3,585 SMEs have repaid $15.6 million so far.

A second initiative to get cash out the door to businesses through tax refunds has helped more than 2,000 recipients with $110.8 million of tax refunded under the tax loss carry back scheme.

There are plenty more numbers in the press statement. Enjoy.

Nash was busy on another front, as Minister of Police.

He announced the appointment of the Chair and four independent members to the Next Generation Critical Communications Executive Governance Board.

The what?

The Next Generation Critical Communications (inevitably reduced to NGCC for shorthand purposes) is a new government organisation responsible for replacing Emergency Services critical communications.

The country is to benefit from a new Public Safety Network for Fire and Emergency New Zealand, New Zealand Police, St John and Wellington Free Ambulance.

Budget 20 confirmed an investment of $47.8m across five years for this network, which will replace emergency services radio networks that are up to 30 years old and rely heavily on voice communications, with limited national coverage.

Rob Fyfe has landed the job of NGCC Board Chair whose job (says Nash)

“ … is vital for maintaining an objective balance between the interests of the participating Emergency Services agencies’ and ensuring transparency for the four Ministers with oversight of this project.” 

For the record, here’s we got out information:

29 AUGUST 2020

116 community conservation projects to get extra support to back nature

Minister of Conservation Eugenie Sage today announced that 116 community conservation projects have been granted $5.44 million from the Department of Conservation’s Community Fund/ Pūtea Tautia

28 AUGUST 2020

Govt supporting businesses and protecting jobs

The Government’s support for businesses and jobs continues to roll out at pace, with payments of the new wage subsidy already in nearly 50,000 business bank accounts.

 Independent oversight of emergency services communications project

The Minister of Police Stuart Nash has appointed the Chair and four independent members to the Next Generation Critical Communications Executive Governance Board.

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