This information is current as of the publish date, however due to the evolving response to the crisis, please refer to the latest articles here.
New Zealand will spend $8.7 billion to reduce the blow for businesses as part of its $12.1 billion Coronavirus economics stimulus package. The majority will go towards funding tax breaks and wage subsidies.
The package, which is around 4% of New Zealand’s GDP, also includes $500 million for health resourcing.
- For businesses experiencing more than a 30% decline in revenue year-on-year, the Government has pledged $5.1 billion to subsidise wages over the next 12 weeks, effective from 17 March 2020.
- For eligible businesses, employers will be paid $585.50 per week for full-time staff and $350 for part-time staff.
- The maximum each business can receive is capped at $150,000.
- To receive the subsidies, employers will be required to sign a declaration stating that they have actively tried to mitigate the impact of COVID-19 on their business.
- Effective for the 2020/2021 tax year, the provisional tax threshold will increase from $2500 to $5000 to reduce cash flow pressure on small businesses. Those eligible will have until 7 February 2022 to pay their taxes rather than having to pay in instalments throughout the year. Around 95,000 businesses are expected to benefit by deferring their tax payments.
- The Government will provide $2.1 billion to reinstate depreciation deductions for commercial and industrial buildings. The aim is to boost cashflow and encourage business investment.
- Interest will be waived on some late tax payments, subject to eligibility.
Instant asset-write off
- The Government will temporarily increase the low value asset write-off from $500 to $5000 for 12 months. After the initial 12 months it will be reduced to $1000. The Government expects the $667 million initiative to stimulate business purchases.
- The Government will allocate $100 million to support worker redeployment for those in the hardest hit regions, including the Tairāwhiti region which will be the first to receive assistance.
The Government said that officials are meeting with banks to discuss the potential for future working capital support, including in the form of loan guarantees for businesses that face temporary credit constraints. In addition, a range of measures to support the aviation sector are being considered. This will not include support for Air New Zealand which the Government is considering separately, as one of its largest shareholders.
To find out if you’re eligible for assistance as part of New Zealand’s fiscal stimulus package, please contact us to talk with one of our William Buck business advisors.