Robertson GrantTAXATION (COVID-19 RESURGENCE SUPPORT PAYMENTS AND OTHER MATTERS) BILLFirst ReadingHon GRANT ROBERTSON (Minister of Finance) on behalf of the Minister of Revenue: I present a legislative statement on the Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill.DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon GRANT ROBERTSON: I move That the Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill be now read a first time.All New Zealanders will know that the resurgence of COVID-19 in our country is a real and constant threat and the recent community cases in Auckland highlight this risk. Every day we are reminded that some countries are having further waves of the virus and no one wants to see this take hold in New Zealand. So far we have kept COVID-19 at bay by and large by carefully managing our isolation and quarantine arrangements—as well as every single New Zealander doing their bit by following public health guidelines: scanning using the COVID-19 tracer app hand-washing wearing masks physical distancing when required staying home if they're sick and getting tested and I thank all New Zealanders for that. As a country we have done well with our response to COVID-19 and in fact we are regarded among the world's leading countries in terms of that response. We have also seen a strong economic response and a rebound in the New Zealand economy including the unemployment rate being at 4.9 percent for the last quarter and also the recovery we've seen in GDP. All of this is good news but we cannot be complacent. Our aim remains to keep New Zealanders safe from COVID-19 and that includes protecting jobs and livelihoods as well as strengthening the economy.This bill proposes to put in place support for affected businesses in the case that there is a resurgence of COVID-19. Late last year I announced the Government's package to support businesses and individuals in the event of a change in alert levels. In that December statement we talked about this proposed resurgence support payment for businesses and today we are delivering on that. This is a one-off payment in the form of a grant to help eligible businesses directly affected when there is a move to alert level 2 or above for a week or more. It will particularly help sectors like hospitality and events. During the last round of restrictions that we had there were calls from the business community for a payment that was not directly linked to wages: something that could deal with fixed costs something that could deal with more immediate needs that get created. That is what this payment is designed to do. It will provide certainty to businesses and workers because they will know that it will be triggered if we go into a higher alert level alert level 2 or above for more than seven days. It is available to anyone in New Zealand in the event of that occurring. The payment comprises a base amount of $1500 per applicant—per firm—plus $400 per fulltime-equivalent (FTE) employee up to a cap of 50 FTEs. Although the payment is capped at 50 FTEs businesses with more than 50 FTEs can still apply. The amount an applicant may receive under the scheme is further capped by the amount that their revenue has declined. The amount an applicant may receive therefore will be the lower amount calculating using either the formula $1500 per firm plus $400 per FTE or four times the amount their revenue has declined as declared by the applicant in their application. That is because very small firms could disproportionately benefit if we simply applied the formula that is in this legislation.The scheme may be activated when there is an increase in alert levels and it will be available to businesses each time we do a new activation. The scheme is not restricted to a particular region even in the event of regional increases in alert levels because we have learnt that the New Zealand economy is truly interconnected. For example I received correspondence when we did the alert level increase for Auckland to level 3 from a tourism operator in Nelson saying that they had been impacted by the fact that people couldn't travel to Nelson. So making this a nationwide scheme is the most responsible thing that we can do. The payment will be paid by the Government to businesses that have a revenue drop of 30 percent or more. This will be calculated by comparing a seven-day period at alert level 2 or higher with the typical weekly revenue in the six weeks before the move from alert level 1. In addition applicants must have been in business for at least six months. Our small and medium enterprises our sole traders will be the main beneficiaries of this scheme as reflected in the payment cap. They are the businesses who are likely to be less resilient to these moves than our larger businesses who hopefully will have had resources to cope with the shift in alert levels. Inland Revenue will make the payments under this scheme and I'm very grateful to Inland Revenue for taking on another scheme along with the Small Business Cashflow (Loan) Scheme. The Ministry of Social Development continues obviously to be the people who run the wage subsidy scheme. I also want to make clear that this works with the wage subsidy scheme. That continues so if we go to alert level 3 or alert level 4 for seven days the wage subsidy scheme kicks in. That continues to be tied to people staying in work. It is a scheme designed to promote the attachment of people to their workplaces. That wage subsidy scheme continues; this scheme is to deal with those fixed-cost issues that arise. I'm sure during the debate we will get into some more details about the scheme and the costs of it and so on but I want to reiterate: this is a contribution from the Government to support businesses in the face of a lift in alert levels. We have to share the burden of this and I recognise that for many businesses even the three days that we are now spending in elevated alert levels are putting pressure on them. As a Government we have to strike a balance with providing support along with making sure that we fulfil our obligations to New Zealand taxpayers. We believe we've got that balance about right here with a seven-day trigger for the scheme to start. I also want to make one thing very clear that's spread around—one of those pieces of fake news that occasionally spreads around. The clock has started ticking for the seven days. It started ticking at midnight when we brought in the restrictions; we don't start once we get to the three days. So a seven-day period is already under way if we need to go there. Just finally the bill also makes another change that's needed to come into force before 1 April and that is an increase to the minimum family tax credit threshold to reflect the increases to benefit abatement thresholds. The minimum family tax credit tops up the incomes of working families to an amount that is more than they could potentially receive on a benefit. Therefore when benefit rates and thresholds are increased the tax credit is adjusted to ensure working families continue to be better off in work and receiving the minimum family tax credit rather than remaining on the benefit. The bill proposes an increase to the minimum family tax credit threshold from $29432 per year after tax to $30576 per year after tax a $22 increase in weekly income. The increased minimum family tax credit threshold will apply as I said from 1 October 2021. This is an important piece of legislation; I hope it will be supported around the House. It is another sign of this House's support for New Zealanders as we deal with COVID19 just as we have as a House in the past in bringing through the wage subsidy scheme the Small Business Cashflow (Loan) Scheme and other forms of support. We do so in the knowledge that New Zealanders are sacrificing a great deal as we deal with COVID19. We need to support one another to get through this. The minimum family tax credit threshold is also a sign that we want to support people to stay in work as well and it is timely to pass it in order that is in place by the 1 April deadline.DEPUTY SPEAKER: The question is that the motion be agreed to.