In response to COVID-19, the New Zealand government is acting to support people and the economy with a $12.1 billion support package. The New Zealand financial support includes:
Business Finance Guarantee Scheme
The government has launched a Business Finance Guarantee Scheme for small and medium-sized businesses, to protect jobs and support the economy. The Crown in partnership with participating approved banks will support targeted new loans (including increases to existing limits) to eligible businesses, as a response to difficulties caused by COVID-19.
Under the scheme, businesses with annual revenue between $250,000 and $80 million can apply to their banks for loans up to $500,000, for up to three years. The scheme will offer a total of $6.25 billion in loans to New Zealand businesses.
The government is guaranteeing 80% of the risk, while the banks are covering the remaining 20%. A normal lending process will be followed by the banks, which will make the lending decisions. Further details can be found on the banks' websites.
Employer wage subsidy scheme
The wage subsidy is to help keep your businesses going if you face laying off staff or reducing their hours because of COVID-19. If you're an employer, contractor, sole trader or are self-employed, you may qualify. The subsidy is a lump sum payment for the employer to pass on to employees and covers 12 weeks per employee.
If you've lost your job or are a business faced with laying off your employees, there may be support options available to you.
Business cash flow and tax measures
Business cash flow and tax measures include:
- Increasing the provisional tax threshold from $2,500 to $5,000 from 2020-21.
- Increasing the small asset depreciation threshold from $500 to $1,000 -- and to $5,000 for the 2020-21 tax year.
- Allowing depreciation on commercial and industrial buildings from 2020-21.
- Removing the hours test from the In-Work Tax Credit from 1 July 2020.
AEA COMMENTARY:The AEA team is actively researching and identifying resources to support the membership, their business and their employees. More information can be found on the AEA COVID-19 resource page available to all members.
FOR MORE INFORMATION:
Contact Ric Peri, vice president of government & industry affairs for AEA, by email at email@example.com or by phone at 202-589-1144.