The government is promising to keep spending as and when required to get New Zealand through a recession that's now almost certain.

Photo: RNZ / Jane Patterson

Yesterday Finance Minister Grant Robertson announced a $12.1 billion economic package to support businesses and workers during the Covid-19 crisis.

But Robertson said not every business and job would be saved and he wasn't sugar-coating anything.

"We are going to see many New Zealanders lose their jobs and some businesses will fail. We will have an extended period of deficits and our debt as a country will have to substantially increase.

"Our package announced today and the support that will continue to come will do our best to cushion that blow," he said.

The government's rollout includes wage subsidies, sick leave support, and an across-the-board boost in benefits.

This is just the initial response though and Robertson said the support will continue in what will be turbulent times ahead.

"We will fight the virus. We will cushion the blow for businesses and workers. We will position for recovery. We have been and we will be swift and decisive and compassionate.''

But while a time of crisis and tragedy usually brings Parliament together - like gun reforms in the immediate aftermath of 15 March - for National's Simon Bridges yesterday was an opportunity to take pot shots.

"Bluntly, what we see in this package today is money flowing faster into the hands of beneficiaries than the workers and the businesses that will lose their businesses and their jobs over coming weeks and months,'' he said.

"You know, that to me is a crying tragedy."

Photo: RNZ / Dom Thomas

However, Green Party co-leader James Shaw offered this critique.

"I thought that he was tone-deaf.''

But Bridges said the public will see his opposition as constructive criticism.

Yesterday's announcement sees $5.1 billion directly towards wage subsidies for affected businesses across the country - effective immediately.

There will be a cap of $150,000 per business for those who can show they've had a 30 percent decline in revenue in any one month in the first half of this year.

But Bridges said if he was running the show he'd be sinking a lot more money in than that.

"I'd potentially do much more, I might not have a limit. That said I don't have costings, I don't have Treasury at my disposal, I haven't worked those things out.

"But it demonstrates the confused priorities. We've got money here for beneficiaries and Winter Energy Payment, but not the money to keep those businesses in business and workers in jobs,'' he said.

Robertson told Morning Report he rejected Bridges' criticism and hoped money would start to flow to businesses within five to six days of yesterday's announcement.

"It is important that we got the balance of the package right, we want to support businesses and employees to stay attached to one another but we also recognise there are issues here for low-income people.

"They're also the people who will spend in those small businesses, we know if we give money to those on the lowest incomes it goes out the door in spending as well as supporting some of our more vulnerable people through this."

Businesses should also be talking to their banks about flexibility, he said.

"They're often a little scared of going to talk to the bank because ... a lot of businesses are one or two to three months away from significant issues, I would just say to both banks and customers; this is a time for us to come together, we're continuing to talk to the banks about what support we may able to provide for working capital in the future."

Banks could offer up solutions like moving to interest only payments or giving some form of repayment holiday, and some have already put those options on the table, Robertson said.

"It's in their interest that these medium and large-sized businesses continue, because we will get through this, there will be a time when we're on the other side."

Other measures in the package aimed at supporting medium and large businesses, include reinstatement of building depreciation, small asset write-offs, and provisional tax changes.

Robertson said he was also in active discussions with Air New Zealand, after the company placed itself in a share trading halt last week.

It was also announced that beneficiaries would get an immediate and permanent increase of $25 a week in the hand, and the Winter Energy Payment, which beneficiaries and superannuants receive, would be doubled this year.

Act leader David Seymour supported benefit increases but not long-term.

"Look, I think what they've done with benefits is right for the crisis but wrong on a permanent basis.

"Nobody should be using this crisis as an excuse to get through their policy agenda,'' he said.

Seymour would also like to see politicians take a 20 percent hit in their back pocket and for public sector chief executives to be encouraged to do the same.

The Green Party agreed.

Deputy Prime Minister Winston Peters didn't attend yesterday's announcement and was more an observer during a press conference with the prime minister.

But it was in the House that he launched his attack.

Photo: RNZ/Dom Thomas

"But I want to refer to the speech we heard from the leader of the opposition - frankly, I do have to because it was shallow and it was graceless and the New Zealand people will judge him for it.''

He wasn't alone with Jacinda Ardern joining in too.

"There are moments in our history where it's not business as usual. Where New Zealanders expect us to come together. Where we need unity - not politics as usual.

"And today Mr Bridges is one of those days,'' she said.

But with Treasury forecasting this crisis to cause a bigger downturn than the global financial crisis - it's still rough seas ahead for all New Zealanders.

Today on Morning Report, Bridges said he commended the subsidy package and acknowledged the support it would give to businesses. But he said the problem was it would not cover larger businesses laying off staff.

He said he would have used the money put into beneficiaries to raise the $150,000 cap on businesses.

"We should be keeping workers in jobs, and it's not much relief for a worker who's going on the dole to know that's gone up $25," he said.

Another concern he had was in regards to working capital support and business loan guarantees.

"There will still be clearly cases where there will need to be guarantees in capital support and I think that could and should have been part of the package."

As for the Budget, Robertson told Morning Report that core elements - like health and education - would continue to be funded, while new initiatives would be reviewed given the constraints put on by the coronavirus.

"We'll continue to review all that ... we're heading into an extended period of deficits that's because we have to do the right thing by our people."

The Covid-19 package would also be focused on fighting the virus, cushioning the blow on businesses and workers, and positioning people for recovery, he said.

Robertson conceded that the coming period would be challenging for society and the economy but said that the implemented border restrictions would help flatten the curve of new cases and therefore the impact.

He said he was also in discussions with the sports and arts sectors to understand their needs for support.

"All of that is what we want to pull together looking towards the Budget but I would hasten to add that it would be every sector in the economy that will look that way, but I'm particularly feeling for our artists and for also for some of the people in the sport sector as well."