The Government will end up using tax money to fund workers on the dole if it stops helping earthquake-hit businesses, the Labour Party says.
Christchurch was severely damaged in a 6.3-magnitude quake on 22 February, including the central business district where many buildings have collapsed or will have to be demolished.
On Tuesday Prime Minister John Key announced the structure and head of a new authority to oversee recovery effort. It will co-ordinate rebuilding efforts in the city in conjunction with local government.
The process for setting up the authority has already been criticised by Labour which says the Government has not consulted with the people of Canterbury.
Some businesses are accusing the Government of winding down its quake assistance programme too soon. They will start losing subsidies from 18 April and all entitlements will be cut completely in late May.
The Government has extended its Earthquake Support Subsidy for employers and Job Loss Cover for workers for another two weeks until 18 April with tighter conditions.
The second round of subsidies will stay at $500 a week for fulltime workers for the first fortnight and fall to $375 a week in the second two weeks. The amount then drops further to $250 a week the fortnight after that. Part-time workers will receive less.
Labour's earthquake recovery spokesperson Clayton Cosgrove told Morning Report on Tuesday the 12-week funding period is not enough for many central city businesses.
"If a business has not got access and nothing has changed for that business, no one can say whether it can restart or not - so the Government's answer is, 'You're chopped'.
"If that business has three or four people it's employing, then there are premature redundancy decisions that will be made - and then what happens? Then (people) still keep paying through taxpayers for the dole."
Union and business views
The Council of Trade Unions says the assistance scheme for employees lacks respect and compassion.
People who have lost their jobs have been receiving $400 a week but from 18 April they will receive the standard unemployment benefit plus a top-up of up to $110.
CTU earthquake co-ordinator Marty Braithwaite says there has been no discussion with unions over the fate of workers made redundant.
Mr Braithwaite says there will be significant demand for trade skills in Christchurch shortly and he would have expected some sort of transition training package to meet demand.
He believes businesses will not get the assistance they need under the Government's new package, saying it is unfair and premature to be trimming back the assistance.
Mr Braithwaite says it is "completely unrealistic" to expect businesses to get back on their feet so soon.
The chief executive of the Canterbury Chamber of Commerce, Peter Townsend, says 60,000 people are dependent on the Government's emergency welfare scheme and any changes will need to be monitored carefully.
"We're going to have to be prepared to turn the dial back up if we need to because it could be that this problem is just too big to be managed in the way that this scheme will manage it."
Funding will 'buy time' for workers
A inner-city businessman says the continued government assistance will help him find alternative jobs for remaining workers.
Paul Leonard has not yet been able to visit his seafood market on Manchester Street. He says the assistance will buy more time for his staff, but they will still have to be made redundant.
Mr Leonard believes the subsidies should continue until he is more certain about the future of his business.