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Workers, businesses and government agencies are bracing for a spike in unemployment. But how bad could it get? Carmen Parahi and John Anthony report.

Dire warnings are being made by a range of employment leaders and economists from across the country, as the Government gears up to deal with an unemployment shock triggered by the coronavirus response.

On April 1, the Ministry of Social Development processed around 100,000 applications for employment benefits including wage subsidies.

Deputy chief executive service delivery Viv Rickard said MSD had paid wage subsidies to over 500,000 employees so far. A total of $3.7 billion of the Government’s business package scheme has already been spent, he said.

Rickard was forced to apologise last week about the delays to the Work and Income call centre.

On average callers are waiting around 34 minutes, but it can take up to 70-80 minutes. To help with the load, 400 staff have been moved to the frontline services.

The move has increased to 3000 the number of staff who are working to process income support, wage subsidies and emergency grants.

‘‘We are working through a number of steps to further respond to the high demand for our services – we have hired 84 new staff, and will be hiring another 200,’’ said Rickard.

‘‘Our staff are working hard, and long hours to meet these high levels of demand.

‘‘On average, our call centres are answering more than 20,000 calls a day, which is around double what we normally see.’’

On Wednesday, Finance Minister Grant Robertson was criticised by the Epidemic Response Committee for not having up-to-date unemployment data available.

In response, the MSD said

Council of Trade Unions president it expected to start releasing monthly unemployment benefit numbers this week.

The Government is forecasting a hit from its Covid-19 response that significantly exceeds the Global Financial Crisis, with unemployment possibly hitting double digits.

Prior to the 2008 crisis, the unemployment rate was 3.8 per cent. Two years later, the unemployment rate had risen to 6.8 per cent, the highest rate in over 10 years.

The current unemployment rate, from December 2019, was 4 per cent or 111,000 people. Many are predicting that number to skyrocket.

Manukau Urban Ma¯ ori Authority chief executive Wyn Osborne said the indicators are beginning to show that a significant unemployment shock is unfolding as thousands upon thousands lose their jobs.

‘‘History shows that urban Ma¯ ori will feel this shock up to twice that of the wider population,’’ said Osborne.

‘‘So many in our community are employed by the hospitality and tourism industries which are being hit hard.’’

Osborne said that in the past week its Ma¯ ngere drive-through

‘‘We shouldn’t really be seeing a massive growth in unemployment. We should see massive growth on the business support package.’’ Richard Wagstaff