Govt supporting more workers

The number of people being supported by the Government’s wage subsidy is increasing again – but one economist says the outlook for unemployment may not be as bad as some feared.

Businesses that qualify are now being granted the second tranche of wage subsidy, which runs for eight weeks. Their revenue must be down 40 per cent due to Covid-19 to qualify.

In the week ending June 5, after the initial round of subsidy ran out but before the second began to flow through, there were 4191 workers added to the scheme.

That increased to a weekly addition of 13,064 in the week of June 12 and now to a rise of 17,727 in the week of June 19.

‘‘Ministry of Social Development reports that there are 205,243 people covered by the wage subsidy extension now, which points towards the tough economic conditions that businesses are still facing,’’ said Infometrics economist Brad Olsen.

‘‘Over the last two weeks, more than over 10,000 new workers have started to be covered by the wage subsidy or extension.

‘‘MSD has informed me that these worker numbers are unique people covered by a wage subsidy, either the original subsidy or the extension.

‘‘Workers who were already covered by the initial wage subsidy and are now on the extension are only counted once, meaning that the rise in worker numbers covered is new workers to the scheme.’’

Olsen said the rising number of workers receiving the subsidy reinforced the view that although unemployment was rising, it was more slowly than initially expected.

‘‘However, with considerable numbers of workers still supported by the Government, the outlook for employment remains uncertain. Businesses will either have to reduce their reliance on Government support over time and examine their workforces in the face of a tough economic climate, or the Government will have to raise its spending to support businesses for longer.’’