The jobs budget

The focus is on sustaining existing jobs, job creation, job training and retraining.  To support this, Budget 2020 allocates funds to infrastructure investment, business support, housing development and construction, an environmental jobs package, and a trades and apprentices package.

Sustaining existing businesses

The economic response to COVID-19 from March forms a backdrop to the Budget.  Although the Budget doesn’t introduce any new tax measures, it builds on the business support strategies:

• a $3.2b extension to the Wage Subsidy for a further 8-weeks (further to the 12-week period of the existing scheme) for those who, in the 30 days before application, suffered a 50% reduction in turnover compared with 2019
• broader refundability for Research and Development (R&D) tax credits is followed up with a $150m short-term temporary loan scheme for R&D.  As incentive to businesses to continue investment for future growth, the loans provide one-off finance
• assistance to exporting firms in a $216m boost to New Zealand Trade and Enterprise
• lockdown spurred businesses to add or grow online operations.  $10m is earmarked for small businesses to improve e-commerce capability.

Job creation, training and retraining

In some sectors, it is hoped to generate activity creating new jobs.  Other sectors will see a jobs exodus. People will need to retrain, either for restructured businesses or moves to other sectors.  Budget 2020 addresses this with:

• $5b for construction activity on 8,000 additional public and transitional homes.  Public confidence in the Government’s capability in this area has taken a hit. It’s yet to be seen whether they can meet this goal
• $1b to create 11,000 environment jobs (including regional projects, biosecurity, weed and pest control, and additional DOC jobs)
• a $1.6b trades and apprentices package (including support for businesses to keep their apprentices, free apprenticeships and training in critical industries, increased enrolments in tertiary education and $50m for Maori Apprentices and Trades Training)
• $400m for a Tourism Sector Recovery Plan, recognising this is the first stage for a sector deeply affected by COVID-19 with a lot of uncertainty ahead
• a $3b contingency boost for additional infrastructure, specific projects to be identified via the Infrastructure Reference Group, in partnership with local bodies and the Provincial Growth Fund.