The government is finalising details today on a multi-billion
dollar relief package in a bid to ease the economic gut-punch of the
global coronavirus pandemic.
Options the government may be considering are wage subsidies and a targeted response for the industries worst-hit like the tourism sector. Photo: 123RF
The tougher travel restrictions, which came into force at 1am today, are also expected to increase the pressure on businesses.
The government package will be announced tomorrow, with the aim of trying to keep as many people in their jobs as possible and to offer further support to the health system.
Options on the table include wage subsidies and a targeted response for the industries worst hit like the tourism sector.
Paul Goldsmith. Photo: RNZ / Rebekah Parsons-King
National's Finance spokesperson Paul Goldsmith said whatever the government decides on, it needs to happen quickly.
"It's a question of when the cash actually gets into the hands of the businesses affected and that may be some time off.
"We have heard a lot of talk about big infrastructure investment, but of course most of that is years away from being spent, what we need is rapid infusion of assistance," he said.
Business New Zealand chief executive Kirk Hope wanted to see wage support, especially for the tourism and hospitality industries and other businesses that rely on foot traffic.
"Similarly, if there's anything related to quarantine and self-isolation requirements that would be welcomed by business.
"In the longer term if this goes on for some time we would be looking at things like traditional stimulatory mechanisms such as tax cuts, [or] bringing forward some of the infrastructure projects already announced," he said.
But Hope said that will depend on there being a workforce by keeping the virus contained.
Shamubeel Eaqub Photo: RNZ
Economist Shamubeel Eaqub thought the government should be willing to essentially subsidise the two-week quarantine period.
"It sounds like it is going to cost a lot of money, but the reality is the alternative is so much worse," he said.
Eaqub said other countries have been investing half a percent to one and a half percent of GDP - equating to about $1.5 to $4.5 billion for New Zealand.
But he also notes it's not just up to the government to ward off the financial fall-out of coronavirus, but the Reserve Bank, which is set to reduce the official cash rate.
"If they don't lower the official cash rate then they are not doing their job. The outlook for the economy is not like a normal recession. We are looking at things essentially closing down around the world.
"This is way more frightening than the global financial crisis. If the Reserve Bank doesn't act now, what is the point of having a central bank?" he said.
Eaqub said the OCR should be lowered to zero and the Reserve Bank should be writing out significant lines of credit.
Options the government may be considering are wage subsidies and a targeted response for the industries worst-hit like the tourism sector. Photo: 123RF
The government package will be announced tomorrow, with the aim of trying to keep as many people in their jobs as possible and to offer further support to the health system.
Options on the table include wage subsidies and a targeted response for the industries worst hit like the tourism sector.
Paul Goldsmith. Photo: RNZ / Rebekah Parsons-King
"It's a question of when the cash actually gets into the hands of the businesses affected and that may be some time off.
"We have heard a lot of talk about big infrastructure investment, but of course most of that is years away from being spent, what we need is rapid infusion of assistance," he said.
Business New Zealand chief executive Kirk Hope wanted to see wage support, especially for the tourism and hospitality industries and other businesses that rely on foot traffic.
"Similarly, if there's anything related to quarantine and self-isolation requirements that would be welcomed by business.
"In the longer term if this goes on for some time we would be looking at things like traditional stimulatory mechanisms such as tax cuts, [or] bringing forward some of the infrastructure projects already announced," he said.
But Hope said that will depend on there being a workforce by keeping the virus contained.
Subsidy for quarantine period, Reserve Bank action - economist's call
Shamubeel Eaqub Photo: RNZ
"It sounds like it is going to cost a lot of money, but the reality is the alternative is so much worse," he said.
Eaqub said other countries have been investing half a percent to one and a half percent of GDP - equating to about $1.5 to $4.5 billion for New Zealand.
But he also notes it's not just up to the government to ward off the financial fall-out of coronavirus, but the Reserve Bank, which is set to reduce the official cash rate.
"If they don't lower the official cash rate then they are not doing their job. The outlook for the economy is not like a normal recession. We are looking at things essentially closing down around the world.
"This is way more frightening than the global financial crisis. If the Reserve Bank doesn't act now, what is the point of having a central bank?" he said.
Eaqub said the OCR should be lowered to zero and the Reserve Bank should be writing out significant lines of credit.
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