How is the NZ government Tackling COVID-19?

  • Apr 16, 2020 NZST
  • Team Kalkine
How is the NZ government Tackling COVID-19?

New Zealand has been in alert level 4 lockdown for just a few days short of a month, and the alert level was supposed to remain in place till 22 April 20202. In the latest move, the government plans to move to a level 3 of lockdown as the country continues its fight to leave lesser breathing space for coronavirus in the country.

The country has endured three and half weeks long lockdown of level 4, and the current indications at this stage are promising and reflect the decisive, pre-emptive action that took the country into early lockdown to stop the spread of the infectious disease early in its tracks.

Are we there yet?

The government of New Zealand has already garnered praise from across the globe in curbing the spread of the coronavirus with only 1,081 confirmed cases of coronavirus reported across the country till date, and 15 new cases reported on 16 April 2020. The 15 new cases comprise of six new confirmed cases, and nine new probable cases and no deaths were reported on the day.

However, the government has not finalised its move to step down from level 4 and move to level 3, and the official decision remains pending, most likely till Monday, 20 April 2020.

The New Zealand Prime Minister indicated the country’s readiness to transition to Alert Level 3. However, the decision is pending to transmission under control and ability to tolerate a little more risk, avoiding the risk of going to Alert Level 3 too early. The four criteria that need to be fulfilled before going to alert level 3 include the government’s assessment in ensuring that:

  • Community transmission is under control, and the transmission rate is very low
  • Robust measures at the border stopping new infection
  • Tracing and testing capacity to shut down any new outbreak
  • Supplies for, and capacity, in the health system


What would life in alert level 3 be like?

The government has reserved substantial restrictions on movements in New Zealand. Still, it shall allow parts of the economy to reopen in a safe manner that shall facilitate in the commencement of economic recovery.

Some of the changes in alert level 3 shall include:

  • Sticking to existing bubbles with some expansion allowed
  • Some people can return to work and business reopens if they comply with health and safety requirements around physical distancing and contactless engagement with customers
  • Early childhood centres and schools will be available up to Year 10 only with pure voluntary attendance
  • Tertiary education will mostly be through distance learning
  • Travel restrictions remain but move from local to regional like travel to work, or to take children to school
  • Funerals and weddings will be able to go ahead but limited to 10 people, with only services and no meals, food, or receptions


The NZ government has shown the utmost vigilance and preparedness in curbing the COVID-19. An equally important task, not only for the NZ government but the governments across the globe, is to limit the impact of the COVID-19 on the business and economy.

Support Package for SMEs

To assist the small and medium-sized businesses during the COVID-19 pandemic, the NZ government has announced a fresh set of measures, with around $20 billion in support announced earlier in a swift response to the coronavirus crisis.

The government acknowledges additional need required in the matter and announced the new measures, including:

  • $3.1 billion tax loss carry-back scheme (estimated cost over the next two years)
  • $60 million estimated annual savings to business each year from changes to the tax loss continuity rules
  • $25 million in the next 12 months for further business consultancy support
  • Greater flexibility for affected companies to meet their tax obligations
  • Measures to support commercial tenants and landlords


The above measures announced by the government focus on cushioning the blow for its businesses and workers and ensuring liquidity in the businesses. The steps taken would contribute to the economic development while the country revives from the pandemic.

The tax loss carry-back scheme approved by the government is anticipated to allow many businesses to access their earlier tax payments as cash refunds. This translates that a forecast loss in the current financial year can be offset against the tax paid on a profit earned last year.

In addition to this, a change in the tax loss continuity rules is also progressing in order to ease the raising of new capital for firms without losing the benefit of their existing tax losses.

The relief from the government comes in a time when small businesses are struggling to discharge their non-wage fixed costs, like interest, rent and insurance and their inability to procure further debt. Moreover, increasing burden of debt and inadequate liquidity might force these businesses towards a closure.

The stability in commercial property transactions is another major concern that is being addressed in times when companies are unable to pay rent. The government looks forward to extending the existing timeframe of 10 working days that commercial landlords may cancel the lease to 30 working days.

In addition to this, the government has also announced an extension in the timeframes

  • For lenders from 20 to 40 working days for mortgaged land
  • From 10 to 20 working days for mortgaged goods


The measures shall apply to commercial mortgages and home loans and shall ensure an orderly process to deal with commercial lease disputes caused by COVID-19. However, the earlier announced mortgage deferrals are expected to be the first port of call for residential borrowers.

A noteworthy move has been the Business Finance Guarantee Scheme, for which the Reserve Bank and nine banks have signed up to participate and help enable banks to provide credit to customers where otherwise the bank may not be willing to do so.

Overall, the response of the New Zealand government has been unprecedented and rapidly deployed to support the businesses like the initial $12 billion package for boosting health, wage subsidies, and income support package, among others.

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