Govt pledges initial $120 million to save Christchurch jobs

Article – BusinessDesk

Feb. 28 (BusinessDesk) – The Government expects to spend between $100 million and $120 million in six weeks of emergency payments to help Christchurch businesses survive and workers keep their jobs while it constructs longer term plans to deal with last …

Govt pledges initial $120 million to save Christchurch jobs

By Pattrick Smellie

Feb. 28 (BusinessDesk) – The Government expects to spend between $100 million and $120 million in six weeks of emergency payments to help Christchurch businesses survive and workers keep their jobs while it constructs longer term plans to deal with last week’s earthquake destruction.

Prime Minister John Key put a new figure of as much as $20 billion to rebuild Christchurch after two devastating earthquakes, one on Sept. 4 and the other on Tuesday last week, describing it as “seven times worse than Hurricane Katrina” in the United States, in terms of its economic impact.

The hurricane that devastated New Orleans in 2005 claimed more than 1,800 lives, far more than the likely final total in Christchurch, but its impact was equivalent to only about 1% of gross domestic product, said Key.

By comparison, a $20 billion cost for the Christchurch earthquake was equivalent to around 7% of New Zealand’s GDP.

As a first step to assist Christchurch, Key announced an Earthquake Support Subsidy to help employers keep paying wages, and an Earthquake Job Loss Cover scheme to support employees whose employer believes their business is no longer viable.

Eligible employers will receive $500 gross per week per full-time employee and $300 a week for part-time employees under the support subsidy, while eligible employees will receive $400 in the hand, or $240 for part-time workers where they cannot return to work or are unable to contact their employer.

Only Christchurch-based businesses who do not have business interruption insurance will be eligible. Multi-nationals, companies with national operations headquartered outside Christchurch, and government agencies will not be eligible for payments under the scheme, which Key indicated was likely to be extended “in some form” once more detailed recovery plans were laid.

The compensation can also be claimed by the self-employed, sole traders or contractors who are unable to access their workplace because of damage, cordons, the absence of essential services, or who are suffering significant loss of trade.

People who have left Christchurch will be able to claim the subsidies, which will not be means-tested. Key estimated as many as 60,000 people had left Christchurch since last Tuesday’s quake, 14,000 of them on Air New Zealand flights alone.

Key will hit the international radio and television talkshow circuit tomorrow to raise funds for the global appeal being launched by the New Zealand Government.

He urged people who could return to work to do so, saying this was the single most useful thing they could do to assist the city’s recovery.

Key was reluctant to put a target on the appeal, but said “the ANZAC spirit is alive and well” and would be sure to result in substantial donations from Australia. American and British media will also be targeted, along with expatriate networks and wealthy individuals who may have reasons to be supportive to New Zealand.

(BusinessDesk)

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