A recent survey of businesses that have received the New Zealand Government’s wage subsidy showed it has played a significant role in saving jobs, and freed up cashflow to allow businesses to cover other costs.
Most businesses said the wage subsidy had a positive impact on cashflow, with nearly two thirds saying that support for wages has helped employers address other costs like rent.
Finance Minister Grant Robertson and Minister for Social Development Carmel Sepuloni both released results from the survey of more than 90,000 businesses that have received the wage subsidy.
“We moved fast to get support in place to protect jobs and help businesses through the lockdown,” said Minister Robertson. “The evidence shows the wage subsidy has helped cushion the blow of the global COVID-19 pandemic, and it is now giving businesses a leg-up as the economy reopens.
Minister Sepuloni added: “Time and again I have seen references to the Wage Subsidy as being a ‘lifeline’, which reassures us that for the vast majority of employers, the wage subsidy is achieving its purpose.
“Results from the survey showed 94% of businesses said the wage subsidy had a positive impact on cashflow; 62% said the targeted support for their wage bills meant they were better able to use other cashflow for non-staff overheads, like commercial rent; and 89% said the wage subsidy meant they would be able to keep operating for the foreseeable future.
“Many employers said that the pace at which agencies put the subsidy in place was vital, offered peace of mind, and meant they would keep their staff. Only 6% of respondents said they intended to make staff redundant in the next few months.
“The survey also showed there may be some room for improvement with some businesses not knowing the full range of support available to them. Over the coming months, we hope to learn everything we can from this feedback. This includes understanding how the wage subsidy has supported businesses of different sizes, regions, industries, and Māori or Pacific businesses.”
To-date, the wage subsidy has paid out $10.99 billion, covering 1.66 million workers. Other Government support for businesses includes the $3.1 billion tax-refund scheme, the Small Businesses Cashflow Loan Scheme, the Business Finance Guarantee, building depreciation tax deductions, commercial rent support and funding for business advice through local Chambers of Commerce.