Owners reacting with measured optimism

How have local businesses reacted to the Government’s stimulus package? Business reporter Jacob McSweeny asks some of them to reveal their responses.

Richard Trainor. Photo: Stephen Jaquiery
Richard Trainor. Photo: Stephen Jaquiery
Good Company tours owner Richard Trainor

‘‘I have to be honest ... it’s a lot more than I expected.

‘‘The thing for me is protecting the staff. That’s the one thing they’re really doing and they’re going to help with.

‘‘As far as trying to earn an income to pay company debts and overheads we’ll just have to work around that.’’

The last 24 hours had shown Mr Trainor the stark reality his business was facing.

‘‘We were busy this weekend coming and in the last day we’ve just about lost everything.

‘‘All the guys that were working - there’s no work for them now.

‘‘That’s our revenue as well ... revenue I was hoping to bring in to pay some of the overheads.’’

While the wage subsidies would help, and proving his revenue was down 30% was ‘‘not hard to do,’’ he was concerned about how he would meet other business costs.

‘‘We still have to face the fact we’ve still got overheads to cover. My next stage is go to the bank, talk to them and seek their advice.’’

It was not clear to him how he would access the financial support.

Mr Trainor said he was pleased money was specifically set aside for people who needed to self-isolate or take sick leave.

 

 

Craft Bar & Kitchen owner John MacDonald

‘‘The wage subsidies will be helpful, more than helpful for those that are covered by them.’’

He was confident he would be able to show a 30% drop in revenue.

But he was seeing a big drop in customers and no light at the end of the tunnel.

‘‘We could sustain quiet weeks and we’d know we’d get to Friday and the rugby would be on and we’d get a big crowd and the restaurant would fill up. We don’t know that’s going to happen this week, nor next week.

‘‘It’s an unknown — people are just unsure how this is going to pan out.

He was trimming back hours significantly after losing a lot of bookings.

One of Mr MacDonald’s biggest concerns was if he was to get sick and have to stay away for two weeks — he had no-one who could really fill his job doing tasks such as paying bills and managing rosters.

‘‘No-one knows as yet how long we’re going to be in the depths of this crisis.’’

Otago Southland Employers Association chief executive Virginia Nicholls

Virginia Nicholls. Photo: supplied
Virginia Nicholls. Photo: supplied
‘‘This will significantly help businesses to keep operating during the coronavirus outbreak.’’

Mrs Nicholls said she was particularly pleased the Government indicated this package was not just a one-off.

‘‘[It] gives businesses an opportunity to provide feedback to Government where they may need further support going ahead.’’

For some businesses, it would still not be enough, she said.

‘‘This will give the tourism and hospitality sectors some breathing space, but there are some concerns that this may not be enough for some in this sector.

‘‘Our lawyers have been busy for the past couple of weeks talking to businesses who are facing some challenging calls around downsizing, and this will give them some breathing space to consider all options.’’

Mrs Nicholls added that while big businesses were not totally left out — more support was needed for them to make a real difference.

‘‘The Government will need to increase the $150,000 payment cap to make any difference to these significant employers.’’

Norcombe Barker. Photo: Gregor Richardson
Norcombe Barker. Photo: Gregor Richardson

Larnach Castle director Norcombe Barker

‘‘I’ve been here 30-odd years and the company business is 50-odd years old and it could be lost, just like that.

‘‘It’s pretty scary, it’s bizarre and it’s pretty grim too.’’

He was grateful for the wage subsidies announced by the Government.

‘‘The wage subsidy — that’s the one most relevant to us because we’re going to get hit really hard with the loss of income, without doubt.’’

He laughed at the issue of being able to show evidence of a 30% downturn: ‘‘it’s very easy for us to measure that’’.

Larnach Castle’s board of directors planned to meet in coming days to work out a business plan for the near term.

‘‘We’re a family firm in some ways so we’ve got a responsibility to look after our staff. I’ve just been talking to our GM and trying to work out how it works,’’ Mr Barker said.

‘‘We do need to go into the nuts and bolts of it.’’

The Government’s pledge to have support money paid within five days would relieve cash-flow concerns, Mr Barker added.

 

Elm Wildlife Tours owner Brian Templeton

Brian Templeton. Photo: supplied
Brian Templeton. Photo: supplied
‘‘It gives us some wriggle room.

‘‘If it lasts for years it just means we’re prolonging the inevitable because it still requires us to put in a fair amount of cash.’’

Mr Templeton said it did mean he could keep his staff employed and doors open for the time being.

‘‘This gives us enough time to at least tell our employees we’ll keep them on.

‘‘I’d have to work it out.’’

Mr Templeton had some reason for optimism with bookings for the end of the year coming in.

‘‘We’ve already got suppliers that have come to us and said, ‘Look can we book for the end of the year and have the ability to shift the booking out’.

‘‘We’ve said yes, we’re quite happy to do that.

‘‘A lot of our suppliers are asking us to maintain our rates or even drop them — that will be happening to a lot of operators I imagine.’’

 

The Rocks Cafe and Shop 5 [Invercargill] owner Tony Chilton

Tony Chilton was worried his business would take a long time before it reached the 30% downturn in revenue needed for the wage subsidy.

‘‘We’re not actually in that position because we’ve been trucking along. Even today we had a fairly solid lunch, which I wasn’t expecting.

‘‘I think it would be good to have it done on a weekly basis for downturn.’’

He said his business was probably playing catch up with a lot of larger groups calling up to cancel bookings for later in the week.

‘‘It’s going to change pretty quickly because even accounting firms and banks and everyone I’m talking to, they’re just thinking about ways they can work from home.’’

Once he does qualify for a wage subsidy it would be a big help, Mr Chilton said.

‘‘[Staff] were looking for a contingency from me, which I couldn’t give them because obviously if I’ve got nothing to pay them, I can’t help them.

‘‘This helps them get on with their lives ... if we shut down at least they know they’ve got some form of income coming in.’’

Dunedin Palms Motel owner and Otago Motel Association president AlexGreenan

‘‘It is going to help — but is it enough? Time will tell. If you’ve got no bookings coming through ... is it going to be enough?’’

‘‘It’s a positive first step I guess. This is going to be a long haul but we’ve just got to keep the channels open for dialogue and hopefully understand going forward.’’

He said Government support was good but others such as the banks and the Dunedin City Council needed to offer support as well.

‘‘The debt that the business is in ... I could be in trouble.

‘‘It’s not just going to be the Government, it’s going to have to be banks and landlords and right across the board.’’

He said the Dunedin City Council needed to consider rates relief and banks needed to offer reduced interest rates or interest-only rates.

Mr Greenan said keeping staff on board was vital for when the economy picked up again.

‘‘At the end of the day there will be an end to this and we need staff.

‘‘The last thing we want to do is get rid of staff. At the same token, if we’re going to survive we’ve got to cut back all our costs.’’

‘‘The problem is that severe. We’re going into a depression and I think it’s really important we keep these businesses alive.’’

 

Dunedin pharmacy and cafe owner Chin Loh

‘‘[It’s] looking pretty good actually.

‘‘Announcements are always in the most positive light but the devil is in the detail.’’

Mr Loh said the wage subsidies would be good for his businesses but he had concerns about when that money would be available.

‘‘The wage stuff is going to be great, but how easy it is to get to is my concern. If it is something that is done at the end of the period ... or throughout the period.

‘‘The whole point of business continuation is actually keeping the regular staff in the job instead of laying them off.

‘‘If they were expecting the business to carry on trading until a point and then see if they can get the subsidy or not then that won’t be as viable.’’

‘‘I’m quite pleased to see the Government taking such a major step to get involved.’’

‘‘We can do this.’’

jacob.mcsweeny@odt.co.nz

 
 
 

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