Convid 19 Package worth $12.1 Billion from Withers Tsang
The government’s assistance package for businesses and individuals affected financially by Covid 19 is significant and substantial.
March, 2020
The mechanisms to access support may require applications to contain financial information about your business and the impacts on it.
At this time we are looking to reassure clients that Withers Tsang is well placed to assist you with any applications that may be required.
Throughout the last 12 months Withers Tsang has implemented both paperless and cloud systems, both of which have given the ability for our team to work from home, and increased capacity through the use of overseas satellite offices. Should it prove necessary these options will ensure that we can continue to support you.
If you are in need of assistance with support packages from the government or your bank you should not hesitate to contact us.
Even if the support you need is just a sounding board to discuss options, we are here to help you get through in any way we can.
Even property investors, who stand to benefit from lower interest rates, should begin planning for rental defaults as tenants begin to lose jobs. Being ready to support tenants with rent concessions so that they can get through their own recessionary impacts on benefits that mean lower incomes may be something landlords can consider now. Ask your tenants to communicate with you if they become financially impacted and reassure them that you will work with them if the need arises.
With respect to the support package, this is what we know now …
The Package is worth $12.1 Billion
It amounts to 4% of GDP making it one of the largest packages in the world per capita. It is three times the size of a normal budget spend. Will push the country into repeated deficits. It is the largest single spend of our lifetimes. It is in addition to the governments existing infrastructure spending.
$500M in new money for health initiatives
$8.7 Billion for business and wage support
$2.8 Billion for income support
A permanent increase in benefits of $25 / week from
1 April$126M for leave and lockdown isolation support.
$600M aviation support
• The winter energy subsidy will be doubled to $1400
$100M for worker re development and re deployment
The three focuses for rollout include.
Public health campaign
Cushioning of the impacts on businesses.
Broad package to support household incomes
Some specifics.
Phase 1 will include a leave payment scheme for employees that must self-isolate or face treatment for the virus. This will include contractors, self-employed and sole traders but will be limited to those who can’t continue to work from home.
Employers must first provide and exhaust all normal leave and sick pay entitlements.
Cashflow will be unlocked by the signing of a declaration that eligibility criteria are met. This is available from today on the work and income website. Untrue declarations will be treated as fraud.
Lump sum wage support up to a maximum of $150000 or 12 weeks per employer will be available with full time employees entitled to $585 / week and part time employees entitled to $385 / week.
The package will be available where firms can prove a 30% reduction in turnover in any months from Jan – June when benchmarked against the previous year.
Firms will be expected to have first consulted their banks.
Self-isolation payments not available to people who leave NZ after 16 March then return, this is an incentive to cancel travel plans.
Silent on minimum wage.
Tax
Depreciation on Commercial and Industrial buildings to be reinstated at 2% for 2021
Provisional tax thresholds lifted from $2500 to $5000 from 2021
Low value assets write-off’s allowed for assets up to $ 5000 in year 1 then reducing to
$1000 year 2.
IRD to be given discretion to waive UOMI when non-payment of tax caused by Virus related issues.
No removal of loss ring-fencing or Brightline or any other initiatives to support residential landlords.
Phase 2 of the package to be announced in the budget.
To read and learn more about the Governments
COVID-19 employer support
Please click here:
