Quake wage subsidy has to end - minister

11:49 am on 31 May 2011

Social Development Minister Paula Bennett says the Government's $200 million earthquake wage subsidy has been fair and generous, but has to come to an end.

State support for employers to retain workers and a supplement for people forced onto the unemployment benefit as a result of the Christchurch earthquake ended on Tuesday.

Ms Bennett told Morning Report the time had come to let businesses fend for themselves.

"What we have done is helped those employers who needed time to either find another market or relocate or work out how they get their business up and running again.

"We have done that now for something like 16 weeks so you have to say 'how much longer are you going to do that'.

"We can't still be doing this in six month's or a year's time."

Ms Bennett confirmed that 8000 employers supporting 47,000 employees took up the scheme at the start. The number had since fallen to 800 employers supporting some 4000 employees.

While it was difficult to know exactly what happened to all the employers who came off the scheme, Ms Bennett said many were up and running on their own and others had folded.

A number were turned down in the second round of the scheme in which firms had to have a plan for how their business would be sustainable after the scheme ended, she said.

Immediately after the 22 February quake, the Government gave eligible employers money to keep paying their staff - $500 a week for full time workers and $300 for part time staff.

People made redundant got state funding while they found another job or became eligible for a benefit - $400 a week for full time staff and $240 for part time.

Skills shortage looms

The president of the Canterbury Employers Chamber of Commerce says there is a real possibility of skill shortages during the Christchurch rebuild but the Government's Employer Support Subsidy would not have kept more workers in the city.

Peter Davie says Christchurch will be competing with Queensland, which is rebuilding from bad floods, for the same skills.

Mr Davie says there won't be the time to train people, so the Government is looking an employing tradesmen from offshore.

He says a trust fund from a mixture of Government and company donations has been set up to provide capital for small and medium-sized businesses needing a kick start.