NZ declares state of emergency as 50 new COVID-19 cases confirmed. Image Source: IANS News

Wellington, April 3 : The New Zealand government will introduce a legislation to make changes to the Companies Act to help firms facing insolvency due to COVID-19 to remain viable and save jobs.

The temporary changes include giving directors of companies facing significant liquidity problems because of COVID-19 a "safe harbour" from insolvency duties under the Companies Act, Xinhua news agency quotd Finance Minister Grant Robertson as saying in a statement on Friday.

The changes also include enabling businesses affected by COVID-19 to place existing debts into hibernation until they are able to start trading normally again.

"These measures will support the government's work to cushion the economic impact for New Zealand and to support businesses and protect jobs and incomes," Robertson said.

However, these changes will not mean that directors are free to disregard the consequences of their actions for the next six months.

Other protections in the Companies Act, such as those addressing serious breaches of the duty to act in good faith and punishing those who dishonestly incur debts, will remain in place, he said.

Consumer Affairs Minister Kris Faafoi said the changes would help retain jobs and support the New Zealand economy to recover as quickly as possible.

Faafoi urged businesses to talk to their creditors and banks, and also reminded them that the government had a Wage Subsidy scheme in place as well as a Business Finance Guarantee Scheme, which can offer loans up to NZ$500,000 ($295,683) over three years.

New Zealand has reported 868 coronavirus cases, with a single death.

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