Grant Robertson to Business NZ on “Our Plan to Respond and Recover”

Minister of Finance Grant Robertson addressed Business NZ today, and ‘filled out further detail’ of: “…our plan for the response and recovery from COVID19, through the first wave of the immediate response, to the second wave of kickstarting the economy and the third wave where we reset and rebuild our nation from this once in a century shock.”

He also spoke on “the economic context… what our exit from Level 4 and moves through Level 3 and Level 2 look and feels like”.

The following has the Government self praise edited out.


Our Plan to Respond and Recover

Wave One: Fight The Virus and Cushion the Blow

Our initial $12 billion package included an initial $500 million boost for health, wage subsidies for affected businesses in all sectors and regions, a $2.8 billion income support package for our most vulnerable, a $100 million worker redeployment package, $2.8 billion in business tax changes to free up cashflow encourage investment, and support working from home, and a $600 million aviation support package.

We have continued to add to and modify the range of policies aimed at cushioning the blow of COVID-19 on New Zealanders.

We’ve put together the Business Finance Guarantee Scheme, alongside the Reserve Bank and retail banks. The Scheme is designed to help enable banks to provide credit to customers where otherwise the bank may not be willing to do so.

Nine banks have signed up to participate in the scheme including ANZ, ASB, BNZ, Heartland Bank, HSBC, Kiwibank, SBS Bank, TSB and Westpac. Over the weekend I signed the deed, executing the agreement between the Crown and the banks, with some banks now able to deliver on the scheme as of yesterday.

We’ve also recently announced changes to the Companies Act to help companies facing insolvency remain viable.

These changes include giving directors of companies a ‘safe harbour’ from insolvency duties under the Companies Act, enabling businesses to place existing debts into hibernation, allowing the use of electronic signatures, and giving temporary relief for entities that are unable to comply with requirements in their constitutions or rules because of COVID-19.

In addition to these changes, this morning we announced a suite of further support measures for Small and Medium Sized Enterprises.

Our tax loss carry-back scheme will allow a large number of businesses to access their previous tax payments as cash refunds, at an estimated benefit of $3.1 billion.

We are bringing forward the tax loss continuity rules to make it easier for firms to raise new capital without losing the tax benefit of their existing losses. This is a useful initiative particularly for start-up companies.

Using established services including the Regional Business Partner Network and the helplines run by the Employers and Manufacturers Association and Canterbury Chamber of Commerce, we are providing $25 million to fund specialist, tailored advice to where it is needed, fast. We have been getting clear feedback that particularly small and medium enterprises are asking for support on business continuity.

We have also introduced measures to support commercial tenants and landlords.

Many businesses may be finding it difficult or impossible to pay rent if they are no longer able to access their property, and if landlords are not receiving rent, they may not be able to meet their mortgage obligations.

As a result, the Government will extend the current 10 working day timeframe that commercial landlords may cancel the lease to 30 working days. This will be for both the period the tenant is in arrears before the notice is given, and for the period to remedy the breach.

The Government will also extend the timeframes for lenders from 20 to 40 working days for mortgaged land, and from 10 to 20 working days for mortgaged goods.

Wave Two: Kickstarting the Economy

The guidance we are releasing on Thursday for coming out of Level 4 will give businesses and workers a much better idea of what the more medium-term picture looks like for them, for the economy, and for society.

We have a range of workstreams well underway aimed at the medium term positioning for recovery.  I will mention some critical ones today.

  • We have established the Economically Significant Business Group inside the Treasury to guide our work with New Zealand’s major businesses.  We have brought in outside commercial expertise to support this, and have begun conversations with a range of network critical businesses.  There are a variety of options available should the Government need to support businesses that are essential to our recovery and our supply chains.  We showed with our $900 million package for Air New Zealand what we can do.
  • Phil Twyford and Shane Jones have tasked the Infrastructure Industry Reference Group to prepare a list of infrastructure projects and programmes from across central and local government, and the private sector, that are shovelready. These could be deployed as part of a stimulatory package as soon as the construction industry returns to normal.

The Reference Group is headed by the Chair of Crown Infrastructure Partners, Mark Binns.  It is supported by the work David Parker is doing in terms of changes to the RMA and consenting process to move things forward as quickly as possible.

Phil Twyford and Shane Jones have also continued to work on redeployment support, especially in our regions and they will have more announcements to make about that in the near future.

  • Megan Woods as Housing Minister is working to bring forward projects that will drive not only jobs, but also deal with our long term housing issues.
  • I have asked Chris Hipkins to lead the work on the critical training and employment support programme that has to take place from here.  Thousands of New Zealanders are going to need to retrain, gain new skills and support the kickstarting of our economy.  This work is in partnership with business, with unions and with training providers.
  • The Prime Minister, drawing on advice from her Business Advisory Group, has called for the creation of the world’s smartest border.  Using technology and our ‘natural moat’ as she calls it, to give us not just protection against the virus but a window to a future where we can move people and goods safely again.
  • Winston Peters and David Parker are charting a new course for trade and diplomacy in a radically changed world.  We need to continue to trade, and look again at our relationships to see how we can leverage our natural advantages and excellent progress on controlling the virus.

In every sector of our economy and society we have a need, and an opportunity, to come through the other side of this with a strong recovery plan. We have tasked all Ministers with reaching out to their sector to help develop these plans.

The Budget will be a Recovery Budget. It will include funding for the cost pressures that are necessary part of keeping our country ticking over.  But we will devote much of our resources to kickstarting this recovery.

Wave Three:  Reset and Rebuild

We have formed a core Ministerial Oversight Group for this work with the Prime Minister, the Deputy Prime Minister, myself and Minister Parker.  We will soon be reaching out to both Ministerial colleagues but also the private sector, unions and more to have input into this work.

Climate Change will continue to be a major challenge long after the effects of this pandemic have been mitigated. As Rod Carr raised yesterday, our economic recovery needs to be one where emissions continue to reduce and more sustainable technologies are invested in and taken up.

New Zealand has had a long-run problem of low productivity. We need to look at our uptake of new technology and new ways of working to ensure that this problem does not again become baked into the New Zealand economy through our recovery.

We’ve seen through this virus what happens when sectors and industries are overly reliant on certain markets for their export revenue. New Zealand must always remain a trading nation, but we will need to look at greater diversification of our export markets to make sure we are prepared for any future shocks to trade networks.

The importance of the role of the state has been underlined by this crisis.

I believe it is of the utmost importance that the state continues to play an active part in the economic recovery, providing leadership and direction as we move forward through the challenging times ahead.

Economic context

This is largely a preamble to the announcement being made tomorrow “guidance for how businesses could operate under reduced alert levels and what measures need to be taken for them to do so” so we might as well wait for what is released tomorrow.

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5 Comments

  1. Duker

     /  15th April 2020

    I can see comments here reflecting what ‘rich pricks think’, that there was ‘nothing for business’ apart from a $3.1 bill tax loss carry back .- that was instead a nefarious plot by Robertson.
    How quickly they forget about the commercial building depreciation restoration that was announced a few weeks back – same time as the $25 pw benefit increase.

    Its the mentality that every benefit – whether lower interest rates or building depreciation is “ours to keep” while any negatives like rent deferment – ‘tenants will be made to pay for it’

    Reply
  2. David

     /  15th April 2020

    This is great news, I am delighted and thank god Jones and Twyford are running things with oversight from the dynamic Peters.
    Hopefully this will work like Kiwibuild, light rail and the provincial growth fund and billions and billions of taxpayer dollars wont be spent but there will be deluges of press releases and photo opportunities.
    It allows Labour to look like it is doing something with lots of glossy brochures and working groups while business can just get on with business without the meddling incompetents regulating everything into oblivion.
    Labour cant execute anything, they cant even get down a coal mine with a 35 million dollar budget..long may they remain in power.

    Reply
  3. Blazer

     /  15th April 2020

    the Fed to the rescue in the U.S..’https://www.livewiremarkets.com/wires/fed-s-dirty-harry-moment

    Reply

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