The Government is reducing the threshold for the wage subsidy extension, with an expected 40,000 additional businesses now eligible for the support amid the Covid-19 pandemic.
From June 10, businesses that have lost or expected to lose at least half of their revenue in the 30 days prior would be eligible for the wage subsidy extension.
Today, that criteria has been loosened, meaning businesses that have lost only 40 per cent of revenue, instead of 50, can apply for the extension.
It is forecast that 230,000 businesses could be able to access the wage subsidy extension now. The wage subsidy extension is expected to cost between $2.6 billion to $3.9 billion.
Last week, Finance Minister Grant Robertson reported almost $11 billion had been spent on the wage subsidy overall.
Budget 2020 saw the wage subsidy extended for an extra eight weeks to the businesses most hard hit by Covid-19.
Mr Robertson said the move to make businesses that lost 40 per cent revenue eligible for the wage subsidy extension came after feedback from businesses.
"There are businesses that will feel the impact of this global pandemic for longer," Mr Robertson said. "The tourism, retail and hospitality sectors will in particular be supported by the extended wage subsidy and cashflow support."
Mr Robertson said after talking with organisations like Retail New Zealand about how businesses were still being impacted by the aftermath of the Covid-19 lockdown "we felt 40 per cent was a better figure" than 50.
"Capturing around 40,000 businesses, those are the ones that are still doing it tough and I think probably have a lag effect from before."
National's Paul Goldsmith said he was sure the extended subsidy would be welcomed by struggling businesses.
"But the focus has to be on opening up the economy so that fewer businesses need subsidies and a growth plan to get us back on track."
The time given for applications to the small business cashflow loan scheme has also been extended.
Last week, the scheme had about 60,000 small to medium businesses take out the interest free loans, with $1 billion spent overall.
That had increased to $1.2 billion today, as more than 70,000 businesses accessed the loans.
The loans are interest free if paid back within a year and will provide $10,000 to every firm, in addition to $1800 per equivalent full time employee. The passing of the law was the result of an administration error, Interest reported.
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