Some earthquake-hit workers to get subsidy

Prime Minister John Key, flanked by Civil Defence Minister John Carter and local MP Gerry Brownlee. Photo / Mark Mitchell

The Government has stepped in with an emergency $350-a-week wage subsidy for workers who aren't being paid because of the Canterbury earthquake, a move Prime Minister John Key says could cost up to $100 million.

As buildings were being demolished and others condemned in Christchurch today, Mr Key said it was vital to try to ensure employees stayed with their companies during the crisis.

The wage subsidy is for businesses with fewer than 20 employees which can't trade or pay their workers because of earthquake damage.

It will initially last for four weeks and businesses can re-apply after that.

Mr Key told reporters up to 5000 businesses could fit into the category and up to 77,000 employees could be eligible for the subsidy.

It could end up costing the Government "anything from $15 million to $100m", he said.

Businesses with more than 20 employees haven't been entirely ruled out and Mr Key said the scheme was flexible.

"If they can't make payments (to their staff) they can come in and see us," he said.

"The most important thing is we're trying to make sure that employees stay with their companies, they won't have to register with Work and Income, and the relationship will be maintained."

Social Development Minister Paula Bennett was with Mr Key in Christchurch to announce the wage subsidy.

"This is a deliberately fast response because small businesses are particularly vulnerable at this time," she said.

"We are determined to help them get through the worst of it."

The Government is hoping employers will top up the subsidy to help their workers get through.

Earlier today Mr Key updated Parliament on the Christchurch situation before flying to the stricken city with senior ministers and Labour leader Phil Goff.

MPs from all parties were united as they pledged support for the people of Canterbury after Mr Key had told them words were "hopelessly inadequate" to reflect the pain, stress and suffering that had been caused by Saturday's quake.

"We are focused on solving their problems and putting party politics to one side," he said.

"In the end...what will be left are a lot of people who live in Canterbury who genuinely are fearful of the experience they've gone through.

"We must encourage all of them to recognise the trauma they are suffering and not be afraid to reach out and to seek support."

Mr Goff also said it was not a time for party politics.

"I think it's time for the whole country to pull together," he said.

"I think the authorities on the ground and the Government are taking the situation really seriously...what I have seen on the ground has been really good."

Earthquake Support Subsidy:

* $350 per week gross wage subsidy

* Advance lump sum paid to employer

* Employer can 'top up' subsidy

* Backdated to date of earthquake

* Firms holding insurance cover for loss of earnings will be expected to use this before accessing the wage subsidy.