Wage subsidy scheme could be extended - PM

The emergency wage subsidy scheme to help workers caught up in the Canterbury earthquake could be extended to firms with more than 20 employees, Prime Minister John Key says.

Mr Key and Social Development Minister Paula Bennett announced the $350-a-week scheme in Christchurch yesterday, saying it was vital to try to keep businesses together while they get back on their feet.

The money will be given to employers whose businesses can't trade because of earthquake damage so they can pay workers who would otherwise have to go without wages.

Mr Key said that under the initial criteria of it applying to firms with fewer than 20 employees up to 5000 businesses could fit into the category and 77,000 workers could be eligible.

"It could cost anything between $15 million to $100m," he said.

The Government considers bigger businesses are better able to look after themselves but Mr Key isn't ruling out extending the scheme to cover some of them.

"We're not saying we won't alter the scheme but we need to get a sense of whether we would need to change it," he said.

"My message is go and see the Chamber of Commerce."

The chamber is organising the wage refunds with Work and Income and the Government says its focus is on helping people who could find themselves in serious financial difficulty.

"We certainly recognise the real and genuine hardship that people might go through," Mr Key said.

"They're under enough stress at the moment dealing with the aftershocks that are occurring on a regular basis, the last thing you need them worrying about is whether they can afford to pay their food bills or their rent bills."

As Mr Key and his senior ministers surveyed the wreckage of Christchurch's business district they were also counting the cost to the nation's economy.

Mr Key said the cost to GDP would clearly run into hundreds of millions.

"But in the long term, ironically, it's likely to be stimulatory to the economy because there's such a massive rebuilding programme that needs to take place."