Robertson GrantMINISTERIAL STATEMENTSCOVID-19—Emergency Economic PackageHon GRANT ROBERTSON (Minister of Finance): I know that every member of this House whatever our political differences is here because we believe in this country and in our people. Today we face a challenge that requires us to harness every bit of that spirit and give our total commitment to protecting the health and wellbeing of New Zealanders. That commitment is of the utmost importance as New Zealand faces its greatest health and economic challenge in over a generation. Our response in these times must be to put people first. This is a period of time that will test our resilience but also our commitment to each other. He waka eke noa—we are all in this together. Today's economic package is about cash flow and confidence. It is only the beginning of what this Government will do to support New Zealanders through this time of crisis and lead our recovery and rebuilding. We will fight the virus. We will cushion the blow for businesses and workers. We will position for recovery. We have been and we will be swift decisive and compassionate. The global COVID-19 pandemic is wreaking havoc around the world. The virus's exponential spread has seen whole countries shut down in their attempts to slow and contain the spread. The result has been unprecedented economic and social disruption across the globe and we are not immune of course—I cannot and must not sugar-coat this. A recession in New Zealand is now almost certain with the advice that we are receiving that the shock will be larger than that seen during the global financial crisis. This will affect every part of our economy now and for some time to come. We are going to see many New Zealanders lose their jobs and some businesses will fail. We will have an extended period of deficits and our debt as a country will have to substantially increase. Our package announced today and the support that will continue to come—we'll do our best to cushion that blow. It is heartening that we face this with our books in good shape. We have kept net debt low at 19.5 percent of GDP which is lower than we inherited. We have worked hard to be ready for the rainy day that has now arrived. There is no costless decision in this situation. The economic impacts of the spread of COVID-19 were clear before our decision to extend border restrictions. I stand by the wisdom and the courage of that decision. We are taking decisive action to avoid what we have seen overseas and to implement measures that give us a fighting chance of mitigating the worst here and I make no apologies for that. Whatever costs we are now dealing with pale in comparison to the loss of life and devastation that would come with inaction. Clearly there are tough times ahead. I acknowledge the uncertainty and anxiety many people will be feeling right now. I want to say directly to those people: we will get through this together. The Government's economic response package is the largest investment in our lifetimes designed for the unique nature of the disruption caused by COVID-19. It comes on top of the $12 billion New Zealand Upgrade Programme. I want to thank New Zealand First and the Green Party for their help in putting this package together. The overall investment in the economic response package is $12.1 billion across the forecast period—one of the largest responses in the world on a per capita basis. To give you an idea of the scale of the package I am announcing today it represents nearly 4 percent of GDP and more than the total of all of the new operating spending in the three Budgets in this term of Government put together. The package has three components: extra support for the health system to enable an increased public health response so New Zealand can slow any potential domestic outbreak a substantial package to cushion the impact of the economic shock on businesses and workers and to support confidence in the near term and the first phase of a broader recovery package to support household incomes through the shock and to spur our economic recovery. Obviously the ultimate recovery package will go well beyond the measures announced today and this year's Budget will be the second phase of our broader recovery package. Our first response is a public health one. It is our fundamental duty. It is also the first and best economic response. The hard work and dedication of our health workforce and the personal responsibility that New Zealanders are showing with regard to protecting themselves and others is a great line of first defence. We must continue that work to smooth the curve of the inevitable increase in infections. Today's package includes a commitment of an additional $500 million to support our Go hard Go early Contain COVID-19" strategy. There will be further support to come. Under this plan the health system is increasing capacity and capability. This will mean scaling up public communications to ensure people have practical advice and support to contain the virus and stay healthy and on how to self-isolate; ensuring continuity of care in the community; strengthening our ability to test and trace cases; and strengthening our ability to treat cases. To achieve this our actions in the next 30 days will be split into two phases. Immediate actions including a public information campaign upscaling testing boosting Healthline surging containment and isolation procedures establishing community-based assessment clinics and a whole-of-system focus on meeting workforce demand and personal protective equipment needs. Our medium-term actions include further support for hospitals and community providers to deal with a surge of patients and further advice for caring for people at home.I want to pay tribute to the health professionals and staff who are working around the clock to protect New Zealanders' wellbeing. We owe you so much. Today's package is a sign of our support for your work.In addition to the significant boost to the health system I have mentioned we are also introducing a COVID-19 leave payment scheme. This is to incentivise self-isolation by employees the self-employed and contractors. Self-isolation is critical to the success of our public health strategy and we know that some workers are facing barriers—financial ones—to self-isolation.The scheme will provide support through employers and to sole traders and the self-employed for those people who are in self-isolation and unable to work or who are sick or caring for dependants who are in either of those situations. Employers will still be expected to meet all of their sick leave and other employment expectations. The key parameters for the scheme are an entitlement period of 14 days for those self-isolating and for the entire period of sickness for those who contract COVID-19. Eligibility is open to all firms the self-employed and for contractors but not for those who can work from home.Full-time workers will receive $585 per week under the scheme. The scheme will be in place for an initial eight-week period at which point the Government will reassess based on the health situation at the time. Employers will have to sign a declaration confirming that they meet the criteria for receiving this funding. Any false declaration would be committing fraud.Given the size and speed of the economic shock that we are facing we recognise the immediate need to support businesses and workers to cushion the economic impact on households and firms. We want to help boost cash flow and confidence in the economy through this uncertain period. It is why we are establishing a wage subsidy scheme. The scheme will help people stay attached to their workplace so that both workers and businesses are in a better position to adjust to the difficult prevailing conditions.The scheme will be available to all businesses in all sectors nationwide and will include the self-employed and sole traders. Eligible firms will be provided a lump sum payment of the equivalent of $585 per week per full-time employee and $350 per week per part-time employee for 12 weeks up to a cap of $150000. I want to reiterate that will be a lump sum payment.To qualify businesses must declare that they have had a 30 percent decline in revenue due to COVID-19 month on month for any month between January and June this year compared to last year and that they have talked to their bank about assistance. Employers can make applications for the scheme from today by filling out a simple form on the Work and Income website and making a declaration. The Ministry of Social Development have advised us that they will be able to make payments starting in five days' time.At this point I want to acknowledge the extraordinary work by the Ministry of Social Development and other public servants in pulling this package together under incredible time constraints. I ask everyone for patience in dealing with public servants at this time. Depending on the uptake this package could inject up to $5.1 billion into the economy over the next two months.Where possible we also want people to stay actively engaged with the labour market or in training. To support this we have established a $100 million fund to support worker redeployment and training. The first announcement on this will be a package for the Tai Rāwhiti region in the coming days. The Government is also undertaking work on how to support large and complex employers on a case by case basis and is working in partnership with banks to understand the impact of COVID-19 on access to working capital.I do want to say today that the decision of the Reserve Bank to cut the official cash rate and to delay the introduction of new capital requirements for banks frees up banks to further support customers. The Government and the Reserve Bank are coordinating our actions to support the overall stability of the economy.Today's package also contains an indicative investment for the aviation sector that will be finalised in the coming days. It is essential that we keep air routes open to support returning New Zealanders and to keep vital supply chains open and that we support essential services at our border.Today's package also implements a number of tax changes to increase businesses' cash flow and stimulate investment. These changes include the reinstatement of depreciation deductions for commercial and industrial buildings at 2 percent diminishing value applying from the 2021 tax year; increasing the threshold for provisional tax from $2500 to $5000 also applying from the 2021 tax year; increasing the threshold for writing off low-value assets to $5000 for the next tax year before reverting to $1000 in the long term; and giving a time-limited discretion to Inland Revenue to remit use of money interest—that's the interest on tax debt—if a taxpayer is unable to pay on time due to the impacts of COVID-19.We also recognise that the Government must provide further support to boost the economy to ensure that a recovery takes hold and that we support our most vulnerable. The first part of this part of the package comprises a $25 across-the-board permanent increase to main benefits from 1 April 2020; a doubling of the amount paid in 2020 through the winter energy payment; and removing the hours test from the in-work tax credit to assist those who may face variable hours.The ultimate recovery package will go well beyond these measures and I intend to re-orientate this year's Budget to be the second phase of a broader recovery package. Today is not the day to go into detail about the recovery and rebuilding phase. But for now let me say this: in New Zealand we have been here before with major economic and social crises. In my lifetime we have seen Governments respond with austerity—an ideology that has done enormous damage to the fabric of our society. We have also seen other examples such as the first Labour Government who responded with investment pragmatism optimism and kindness. It is from them that I take my lesson on how we recover and rebuild in a just fair and far-sighted manner.We are in for a fight—a fight against a virus an outside force beyond our control that is wreaking havoc around the globe. We are up for that fight. There is no better defensive line than the All Blacks and it is just the same with our people as we face this virus. We are in as good a position going into this as we can be with net debt so low. We are taking bold and decisive actions to respond to uncertain and unprecedented times. My message to New Zealanders is simple: look after yourself look after your family look after our elderly and look out for each other. There are tough days ahead but we will get through this together. Nō reira tēnā koutou tēnā koutou kia kaha tēnā koutou katoa."