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The funding is part of a $36.72 million Government funding package that has been allocated to regions most affected by the pandemic.
Mayor Jim Boult said Queenstown Lakes welcomed the additional support.
"It’s great Queenstown Lakes has been acknowledged as a district in need of additional support. The funding will be used to support many of our people directly affected by Covid-19 to move forward," Mr Boult said.
The funding would be used by the Queenstown Lakes District Council (QLDC) recovery team in its efforts to support both community and economic recovery, with a focus on redeployment and retraining opportunities.
QLDC Economic Development Manager Peter Harris said the primary focus would be redeploying or retraining for people who had lost their jobs or had hours reduced as a result of Covid-19,
"For example, QLDC is working with the Department of Conservation (DOC) and the Otago Regional Council (ORC) to help secure new conservation-related jobs.
"We are also working alongside the agricultural industry which is seeking dairy farm workers and drivers.
"However, the process to set up these initiatives will take time and information will be provided publicly as details are confirmed."
The Ministry of Business, Innovation and Employment (MBIE) also recognised a lot of the work in establishing these programs required analysis, collection of data, information and coordination; because of this, a portion of the funding would go to helping the QLDC recovery team undertake these actions.
The recovery team was also developing a retention programme and supporting businesses and community leaders as they manage their way through a retrenchment and rebuild phase.
"As well as helping those that have lost work move forward, we need to support those who will lead us out of this crisis," Mr Harris said.