More than a quarter of the country's employees are being propped up by the latest Covid-19 wage subsidy round, with just over $876 million paid out so far.
Finance Minister Grant Robertson says there is about $5 billion left in the Covid-19 Response and Recovery Fund. Photo: RNZ / Samuel Rillstone
As of Monday evening the Ministry of Social Development (MSD) had received 301,862 applications for the scheme and had approved 218,122 of them.
Of the 781,364 jobs being supported by the scheme so far, 14 percent were for self-employed workers.
Applications have been lodged to support 997,466 employees and sole traders.
By far the majority of workers that application covered belonged to small firms. Only 2.1 percent were employed by firms with more than 500 staff members.
Air New Zealand, which has received almost $113m through the wage subsidy, the wage subsidy extension and the resurgence wage subsidy, according to MSD's employer search tool, has confirmed it would be applying for the subsidy. However, whether other large listed companies would remained to be seen.
Large firms came under fire for applying for the original subsidy and then reporting large profits or paying shareholder dividends.
Many returned the subsidy, with about $440m of the $14 billion fund paid back.
MSD data showed 58 pct of jobs (excluding sole-traders) received support from the original wage subsidy and Stats NZ data from earlier this year showed three out of four firms received Covid-19-related financial support from the government at some point in 2020.
Massey University Economics and Finance head, Martin Berka, said while the lifted threshold from a 30 percent revenue drop to 40 percent, was one reason, there were a number of others as to why the scheme was not as popular this time.
"Lots of companies have adjusted ... so this is not the first time we're doing this gig. A lot of people are online ... it's second nature now so that's a big chunk of it, I would say.
"And then people expected this lockdown to last a shorter period of time, so [businesses] might have said we're not going to bother, because there are certainly costs for applying."
Professor Berka said firms had a much better idea of forecasting their revenue as well, and had not applied because the dire predictions last time did not eventuate.
He also said there would be a number of firms that had gone out of business since the first lockdown, which would have reduced applicant numbers.
He said larger firms would likely be taking any application very carefully due to the kickback they faced last time.
"That's PR you don't want ... whether it's correct or incorrect, that doesn't really matter.
"So I think a lot of these larger companies would be thinking twice and would avoid the subsidy unless their survival really depended on it."
He said the government could not continue to put the country into lockdown and businesses deserved more clarity about the long-term plan.
"My point is, this is borrowed money, right? So it's not unlikely that the laws will need to change, the taxes will have to go up, and our children will need to pay this thing back.
"So let's think twice about exactly what we are throwing it at."
Finance Minister Grant Robertson said there was about $5 billion left in the Covid-19 Response and Recovery Fund.
There as also an additional $2.1b that was not used in the small business cashflow scheme and another $1b in other support schemes.
Applications for the initial two-week wage subsidy August 2021, which opened on 20 August, close at midnight on 2 September.
Applications for a second round - to be known as Wage Subsidy August 2021 #2 - open at 9am on 3 September.
