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Economic Bulletin: The COVID-19 lockdown edition

I very nearly didn’t write this. All month I have been thinking of angles or important things to discuss – only to find a day later – events had overtaken. Anyone remember the call to suspend the minimum wage increase?

No? Great. Keep moving.

And the other thing I would be doing normally would be graphing and analysing the data that comes out from Stats NZ in the month. But is anyone interested in a discussion of how the increase in GDP in the year to the December 19 quarter was 2.3% while at the September 19 it was 2.75%? No one? Even though it was a decline?

Ok. Moving on.

The big story in town is of the wage subsidy to help businesses be able to keep staff connected to the workplace. With the payment of $585.50 being that for paid parental leave which also has a similar aim. But unlike paid parental leave this is paid out by the employer rather than Inland Revenue.

And in the space of 10 days or so, the wage subsidy has moved from – essentially – capped business support based on headcount to the government underwriting and providing an income floor for workers but administered by their employers.

That is it has moved from a best endeavours high trust model which helps employers keep on staff through additional assistance to one involving publication of company names, explicit requirements that employment law must be followed and funds paid to employees as well as acknowledgement that audit action could follow.

This change is welcome as the CTU was seeing too much abuse.

And with all dollar value caps removed – both an out of work contractor and an NZX 10 company are now eligible if they have experienced or will experience a substantial fall in revenue.

Download the full bulletin: CTU Economic Bulletin 218 -March 2020