New Zealand announces a fresh financial aid scheme for businesses

New Zealand has announced a new targeted COVID-19 Support Payment for businesses that have been hit hard by the spread of the Omicron variant. Starting February 28, employers would be able to apply for a support payment worth $4,000 per business, with an additional $400 per full-time employee, capped at full-time equivalent or $24,000. Payment will start on March 1, with three payments across six weeks, according to Finance Minister Grant Robertson.

In order to be eligible for this financial aid, the government has placed a high threshold for revenue loss, a move which seeks to ensure the funds go out to those that have been hit the hardest by the Omicron variant and related restrictions.

‘Firms must show a 40% drop in seven consecutive days within the six weeks prior to the shift to Phase 2 of the Omicron response on February 15, compared to seven days after that date,’ says Robertson. The necessity of the support payment came after several sectors, including hospitality and events, saw a ‘significant drop-off’ in business.

Simultaneously, Revenue Minister David Parker announced that the government is introducing a ‘top up’ loan to increase the amount of funding available to businesses under the Small Business Cash Flow Loans Scheme.

‘The top up loan will allow those firms that have already accessed a loan to draw down an additional $10,000 with a new repayment period of five years and the first two years being interest free,’ explains Parker. "Cabinet has also agreed to remove the first two years of accrued base interest from all borrowers who have, or will, take out a loan under the scheme. This change will mean interest will only start accruing at the beginning of year three," he adds.

Parker also says that the government is extending the Commissioner of Inland Revenue's ability to apply flexibility for tax payment dates to help firms.