Budget 2020: a roundup of business support

The New Zealand Government announced its Wellbeing Budget 2020 on 14 May, 2020. The Wellbeing Budget: Rebuilding Together establishes the $50 billion COVID-19 Response and Recovery Fund to support our economy and kick-start our recovery.

Below you will find a summary of some of the key funding decisions that will impact New Zealand business.

Business support - $4 billion

  • A targeted extension of the Wage Subsidy Scheme, available for a further eight-week period for those who have suffered a 50% reduction in turnover over the 30 days prior to application compared to last year. The extension will follow on directly from the end of the first twelve-week scheme. It is estimated to cost up to $3.2 billion.

  • $150 million short-term temporary loan scheme to incentivise businesses to continue R&D programmes that may be at risk due to COVID-19. The loans will provide one-off finance and will be administered by Callaghan Innovation.

  • $216 million boost to NZTE to expand the scope and intensity of support provided to exporting firms. This includes increasing activity for New Zealand firms in priority markets and expanding the digital services available for firms. More information in our press release here.

  • $10 million in funding to support small businesses to improve their e-commerce service offerings, and incentives/grants to encourage e-commerce adoption. This sits alongside further support for business advice, the e-invoicing project, Business Connect and the Better For Business programme.

R&D - $150 million

  • A fund to provide loans to R&D-intensive businesses, to complement the existing R&D Tax Incentive.

  • The scheme is intended to encourage R&D-intensive businesses to retain as much of their existing R&D programme as they are able to. It is expected that most R&D performing firms will be able to access repayable loans up to the equivalent of 50% of a business' annual R&D expenditure, up to a cap of $100,000.

  • The loans will be offered on favourable terms with the proviso that the money is used to conduct R&D.

  • The scheme will be up and running by early June. Further details will be announced in coming days.

  • Budget 2020 also sets aside $80 million to encourage entrepreneurs and businesses to develop new products by enabling them to claim tax deductions for unsuccessful or abandoned assets.

SME digital economy support

  • A $10 million fund is being set up to provide incentives and grants to encourage e-commerce, train more digital advisors and provide information and support for SMEs wanting to incorporate e-commerce into their business models.

  • $12.5 million to progress the trans-Tasman e-invoicing regime between New Zealand and Australia

  • $3 million to support the Business Connect platform to provide COVID-related support services where businesses need to register for support such as grants, the business hibernation scheme and location tracking.

  • $2.3 million to enable business. govt. nz to work with 200 partners to deliver tailored recovery guidance and advice to 600,000 small businesses. Resources will focus on how to: forecast and manage cash flow and adapt their businesses, obtain finance to meet needs now and for future growth, market their businesses here (especially tourism) and globally, adopt new digital technology, including e-commerce and productivity enhancing tools, and deal with isolation and mental health issues.

  • $9.7 million for the Better for Business programme, focussed on making it easier for businesses to deal with Government, particularly as business take-up of e-commerce increases.

Support by sector

  • $11.4 million to grow the agritech sector and improve environmental outcomes while boosting productivity in the primary sector. This includes funding the development of robotics in horticulture and helping commercialise innovative technologies.

  • $6.5 million toward helping develop the Māori economy in sectors such as forestry and food where there are already strong iwi businesses. This funding will also help Māori develop opportunities in other sectors such as the digital economy.

  • A new log registration scheme and practice standards for the forestry sector. This will require forestry advisers, log traders and exporters to register and work to nationally agreed practice standards.

  • $400 million to support the first stages of an action plan agreed with the industry as part of the Tourism Sector Recovery Plan. This will include a transitions programme, a fund to ensure key tourism assets survive, a domestic tourism marketing campaign and a public/private taskforce to shape the future of the industry.

  • $19.3 million to help attract and train recently unemployed New Zealanders and grow the primary sector workforce by 10,000 people.

  • $128 million for wilding pine and wallaby control.

  • $45.3m over four years to help horticulture seize opportunities for future growth.

  • $14.9 million to reduce food waste by redirecting food to people in need.

  • $20.2 million to help rural and fishing communities recover from COVID-19.

  • $5.4 million for critical resources to identify and manage animal welfare issues.

  • $3 billion contingency for additional infrastructure investment.

  • This will include projects that are identified through the Infrastructure Reference Group as well as bids received from individual departments and agencies. With a particular focus on regional infrastructure projects identified through the PGF, and on projects that advance other goals of the government.

  • It is likely that the government will fund further infrastructure projects beyond this initial allocation as we move on with our rebuild, including in areas such as our Three Waters Programme.

Environment Jobs Package - $1 billion

  • $433 million investment in regional environmental projects. To support economic and environmental recovery in partnership with local government and farmers. It will include restoring wetlands, stabilising riverbanks and removing sediment. There will be projects and jobs created across New Zealand, including in the Kaipara catchmenta.

  • $315 million package of pest eradication and pest control work, including advancing Predator Free New Zealand. This includes the work to get under control populations of wallabies and to help control wilding pines.

  • $200 million Jobs for Nature Fund to support job creation within the DOC estate, including through upgrading tracks, huts and other facilities.

Further reading

Contact NZTE

We're available to talk to you about any issues your export business is facing due to COVID-19.

For existing NZTE customers, please contact your New Zealand-based Customer Manager.

If you're unsure who to contact or haven't worked with us before, you can call NZTE on 0800 555 888 or email below and one of our Customer Advisors will help you.