The most significant immediate item for SME is the extension of the wage subsidy scheme for a further 8 weeks for certain businesses. This extension will continue from the current scheme and is to be applicable to businesses that can show a 50% reduction in turnover for the 30 days prior to application.

This extension is part of the $50 billion COVID-19 Response and Recovery Fund (CRRF). Although, in Minister of Finance’s words, this is “not a target for spending,” it is intended to be a "fighting fund" that the government can use to implement further measures. This is in addition to the $12.1 billion Economic Response Package announced on 17 March 2020.

Of the $50 billion, over $20 billion is still be allocated and amounts to a ‘war chest’ to be used for targeted spending as the need arises.

Some of the main economic measures of the budget include:

  • $5.6 billion for health sector, mainly allocated to operating funding for DHBs in deficit
  • $3 billion of operating funding for core government services
  • $3 billion contingency fund for infrastructure investment, with new projects to be announced
  • $5 billion on 8,000 new housing places over the next 4-5 years
  • $1.1 billion investment in transport, including upgrading trains and ferries
  • $928 million of education sector funding, including $414 million in funding for the Early Learning sector

Of relevance to our Dunedin readers was that the budget did include $1.4 billion for the new Dunedin hospital.

As always, and more than ever, there will be a range of views on whether the government has got it right or not. Of course, come September, there may be a whole new plan.