COVID-19 Response in New Zealand (2020)
Introduction In March 2020 the New Zealand Government responded to the COVID-19 public health crisis by closing New Zealand’s borders to non-citizens and residents, and imposing a strict four-week lockdown period. These measures have worked to flatten the COVID-19 curve. Lockdown measures have gradually eased from the end of April 2020. Although the public health crisis, for the moment, has passed, the resulting economic consequences are dire. New Zealand and “[m]any countries … are expecting their largest economic downturns in living memory”, and the final impact on the New Zealand economy is “highly uncertain”. The Government has responded to the economic downturn with an unprecedented recovery package. This includes a wage subsidy scheme which at the time of writing was supporting around 40 percent of the New Zealand workforce. Other measures include a business finance guarantee scheme under which the Government will take on 80% of the default risk of new bank loans made to SMEs for up to a three year period, a temporary tax loss carry-back scheme, and amendments to the Property Law Act 2007 (NZ) to support commercial lessors and their lessees, and mortgagees and mortgagors. Nevertheless, many businesses, even with Government support, may not survive. The international tourism sector, for example, is shuttered as a result of the border closure. In a sign not only of business failure, but of restructuring to survive the downturn, reported job losses are a daily event. This note summarises the amendments made to New Zealand’s insolvency law framework by the COVID-19 Response (Further Management Measures) Legislation Act 2020 (NZ) in response to the economic effects of the COVID-19 crisis.
CitationTaylor L (2020). COVID-19 Response in New Zealand. Taxation Today. (141). 10-17.
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ANZSRC Fields of Research48 - Law and legal studies::4801 - Commercial law::480101 - Banking, finance and securities law
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