Christchurch earthquake: Wage bill support package creeps towards $130m

Paula Bennett. Photo / Supplied

After just five days, the Government's financial support package to Christchurch's employers and employees appears likely to be more costly than first anticipated and points to a looming unemployment headache in the stricken city.

According to figures Social Development Minister Paula Bennett issued yesterday, more than 5000 employers had applied for subsidies of up to $500 a week for a fulltime employee to meet their wage bill for almost 30,000 workers while their businesses remain disrupted.

Applications of up to $400 a week for workers who had either been told their employer was unable to continue their business or where they simply hadn't been able to make contact with them were at just over 3000 late yesterday. Ms Bennett said applications had slowed considerably over the past 24 hours.

"We do think we've hit a peak but we still think we're going to receive quite a few more applications."

She said the number of workers who received the support was now likely to exceed the 42,000 or 20 per cent of Christchurch's workforce originally anticipated, and the total bill would go over the $120 million initial upper estimate.

"We would probably go over that judging on the numbers so far. We're looking at over $130 million depending on the take up."

She said it was too soon to say what would happen at the end of the package's initial six-week period.

"I'll be going back to Cabinet on Monday with a report on where we're at and I expect to take a paper to Cabinet within the next two to three weeks."

Based on the criteria for the Job Loss Cover, it is likely many of those seeking that assistance will eventually be added to 6189 people who were receiving the unemployment benefit in Canterbury before the quake.

Ms Bennett said the number of people leaving Christchurch suggested there would also be additional pressure on job markets elsewhere.

"But we are also seeing a lot of confidence in those areas outside of Christchurch, and certainly the numbers I have seen in the last three weeks as far as Work and Income and the unemployment benefit go, we do have people going into work.

"I remain optimistic but I'm not naive enough to think this won't be a blow to that."

Meanwhile, normal stand-down periods were being waived for people going on to benefits. More than $7 million had been paid out in emergency civil defence payments.