Market Watch: Coping with the coronavirus correction.
The Government's next injection into the economy to ease the fallout from the spread of Covid-19 will be discussed in Cabinet today and rolled out this week.
Business representatives and industry leaders from the tourism and forestry sectors have been calling for more help as early figures, released last week, showed New Zealand exports may have taken a $300 million hit due to the global Covid-19 outbreak.
Business NZ, the hospitality sector and the National Party have all been pressuring the Government for targeted wage subsidies similar to what was provided after the Kaikoura earthquake, when a $7.5 million package was offered covering eight weeks of wages - $500 a week per fulltime workers, $300 for part-time.
National Party leader Simon Bridges has also called for immediate tax relief, and tomorrow he will outline the first part of National's election-year economic plan in a speech in Auckland.
Bridges said the fallout from the spread of Covid-19 had put renewed impetus on releasing National's economic plan, so tomorrow's speech had been brought forward.
The Government has already announced $11 million for tourism marketing and $4 million for more advisors on the ground through its Regional Business Partner Network, as well as tax and income assistance through the Inland Revenue Department and the Ministry of Social Development.
Finance Minister Grant Robertson said Cabinet will discuss the next step on Monday and announcements would follow during the week.
"Ministers are actively considering a range of options in response to the impact of Covid-19, and Cabinet will discuss these tomorrow," he said in a statement.
"We have already taken steps to implement the immediate measures suggested by Business New Zealand and the CTU at our meeting with them last week, including the request that Government departments and agencies pay their bills within 10 days."
Robertson said that the export shock appeared to be different to others in recent years, and across-the board tax cuts was not what was needed.
"A tailor-made response is required. Industry representatives are telling us they are seeing different effects on different industries in different regions. A one-size-fits-all approach is not what is needed."
Prime Minister Jacinda Ardern and Finance Minister Grant Robertson will discuss the next economic support measures with Cabinet before making an announcement. Photo / Mark Mitchell
He said low debt relative to GDP gave the Government a strong hand to play with, and the already-announced $12 billion infrastructure programme would help stimulate the economy.
Cabinet will also discuss waiving the stand-down period for those moving to benefits because of Covid-19, which the Government has already agreed to in principle.
Robertson has met with business leaders throughout last week, and tomorrow is meeting with the heads of New Zealand's major banks.
"It's important that New Zealand works as one to respond to this rapidly-changing situation."
The Finance Minister will also deliver a speech on Thursday to the Wellington Chamber of Commerce Business Summit where further updates on the Government's economic response will be provided.
