A warning the government's wage subsidy scheme isn't providing enough job security

Researchers at think tank The New Zealand Initiative say the support scheme's good in theory, but too many businesses are still having to lay off staff.

The initiative's Chief economist Dr Eric Crampton says the Government could look at Germany's policy, where workers reduce hours and get a government top-up.

He says instead of laying off 80-percent of staff, employers could shift workers to 20-percent contracts, with the Government picking up some of the wage bill.

Researchers also suggest opening up the Student Loan scheme to non-students, and combining tax years to alleviate the effects on businesses and people.