Business support package welcomed but stress remains

Hospitality Association of New Zealand’s Otago president Mark Scully. Photo: ODT files
Hospitality Association of New Zealand’s Otago president Mark Scully. Photo: ODT files
Reaction in the South to the Government’s new Covid-19 business support package has been mixed.

Some said yesterday it was a positive step, but others said it was confusing or not enough for businesses that had already given up hope.

A support payment of $4000 per business plus $400 per full-time worker would be made available for some businesses affected by the Omicron outbreak, the Government announced.

Finance Minister Grant Robertson said that to qualify for the payment, businesses must show a 40% drop in seven consecutive days within the six weeks prior to the shift to phase two of the Government’s Omicron response on February 15.

It would be available on a fortnightly basis for six weeks, reflecting the international experience of a peak in an Omicron outbreak.

The small business cashflow loans scheme was also being extended, allowing firms that had already accessed it an extra $10,000.

There will be a new repayment period of five years, the first two years interest-free.

Inland Revenue’s ability to apply flexibility for tax payment dates and terms to assist firms with cashflow had also been extended.

The Government would continue to monitor the situation and had the option to extend the payment if necessary, Mr Robertson said.

Queenstown Lakes Mayor Jim Boult said yesterday’s announcement was "quite positive" and while he was disappointed a wage subsidy and rent subsidy were not included, "in some ways [this] is another wage/rent subsidy dressed up".

Mr Boult believed "quite a few" Queenstown Lakes businesses would meet the requirements to qualify for the Covid support payment, and for them that would be "well-received".

Hospitality Association of New Zealand’s Otago president Mark Scully said the announcement was positive, but was confused about the revenue drop comparison.

Many businesses had already been struggling before Omicron hit so it did not make sense to compare the two periods.

"Are we meant to compare one disaster period with another disaster period?"

Republic Hospitality chief executive Blair Impey said it would depend on each business’ arrangements - particularly around rent relief - as to whether the announcement would be enough.

However, from a Queenstown hospitality perspective, "it feels like the absolute minimum", and he questioned how much hope those businesses had left.

"There has been no mention of borders opening, and for many businesses we need light at the end of the tunnel in order to make plans and budget."

The announcement only gave qualifying businesses confidence to budget for six weeks "... but then what do all the other months look like up until July?".

Sudima Hotels chief operating officer Les Morgan said the announcement would have no impact on the hotel group.

"I would suggest many tourism businesses have been on such marginal operating levels for so long that it would be challenging to demonstrate a 40% fall in revenue when those revenues haven’t existed for over two years," Mr Morgan said.

Dunedin Mayor Aaron Hawkins said the package was exactly what was needed to help businesses and workers who had been the worst affected by the current Covid protections.

The people Mr Hawkins had spoken to were happy to play their part in the public health response, but that contribution needed to be compensated.

He encouraged people to support local businesses where they could.

Applications for the first payment open on February 28, and payments start on March 1.


Hospitality Association of New Zealand’s Otago president Mark Scully. Photo: ODT files
Hospitality Association of New Zealand’s Otago president Mark Scully. Photo: ODT files