35% of Otago jobs subsidy supported

Molloy's bar staff are also turning away dozens of tourists who have been in the country for less...
As at September 3, about 35% or 43,000 of all jobs had been supported by the subsidy in Otago. Photo: Getty stock Images
More than a third of all jobs in Otago were supported by the wage subsidy scheme in Alert Level 4, latest figures reveal.

The subsidy was restarted following the latest outbreak of Covid-19 and the subsequent shift back to lockdown

It gave businesses which had a 40% drop in revenue over a two-week period a $600 payment for each full-time employee and $359 for part-time staff.

As at September 3, about 35% or 43,000 of all jobs had been supported by the subsidy in Otago.

In Southland, 29% or 15,000 jobs were supported.

That was an average increase of 8.5% across the two regions in that week, figures from the Ministry of Social Development showed.

A total of $20million was paid to Otago and Southland employers in the week ending September 3, $15million to Otago and $5million to Southland.

In total, $68million in the this year’s subsidy have gone to the two regions so far.

Prof Stephen Knowles, from the University of Otago’s business school, believed the payment was "pretty important" in cushioning the economic impact. Without it, some businesses could be forced to close.

"The big hope ... is for the reduction in business we have at the moment will be short-lived and having that subsidy there is a way to keep those businesses chugging along," Prof Knowles said.

The economic benefits of the subsidy would have different impacts depending on how each business operated, he said.

"Now we are back at Level 2, some businesses can operate easily but there are some who can’t and, without the subsidy, things would be pretty tough at the moment," he said.

Prof Knowles believed the impact of this year’s lockdown might not be as big as last year, because it was shorter.

"In saying that, a tourist centre like Queenstown is going to be finding things pretty tough at the moment," he said.

Tourism businesses would be the most reliant on the subsidy as the alert level restrictions eased, Prof Knowles said.

Major tourism business, Skyline Enterprises Ltd, has taken $189,570 for 164 staff, Wayfare Ltd has claimed $104,400 for 87 employees.

Real Journeys has claimed $231,796.00 for 202 staff.

Nationally more than 195,000 businesses had applied for the resurgence support payment, aimed at providing businesses with support for fixed costs such as rent.

As at 1pm yesterday, the Inland Revenue Department had paid $531million to 173,114 applicants.

The average amount applied for from the scheme was $2989.80.

Both schemes would be available for businesses to apply to while there were lockdown restrictions.



What an enormous waste created by something so unnecessary. A true own goal.