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New Zealand’s Prime Minister Jacinda Ardern has announced that she and her cabinet will take a 20% pay cut lasting six months in solidarity with those affected by the coronavirus outbreak.
The Prime Minister said it was never as important to show support for those at the frontlines of the pandemic and those whose livelihoods have been hit hardest. Ardern as well as other ministers and public service chief executives will take the pay cut immediately, whilst the director-general of health leading the COVID-19 response confirmed he would also take a reduction in pay.
“If there was ever a time to close the gap between groups of people across New Zealand in different positions, it is now. I am responsible for the executive branch and this is where we can take action … it is about showing solidarity in New Zealand’s time of need,” Ardern said.
There are more than 1,300 positive cases of COVID-19 in New Zealand and nine related deaths, all elderly people with pre-existing conditions. The country has imposed full lockdown for the last three weeks, meaning no one is allowed out unless necessary.
A predictive model by Treasury as reported by the Guardian suggests that prolonged lockdown could result in one in four New Zealanders out of work, with 1.5 million already registered on the government’s wage subsidy plan. According to the model, quick and controlled easing of lockdown together with more government economic stimulus plans could maintain unemployment to 8.5%.
The International Monetary Fund predicts that New Zealand will see the biggest economic contraction outside of Europe and Venezuela, with a predicted contraction of 7.2% by the end of the year.