Govt plan brings some relief for businesses

Economic package welcome but Auckland leaders seek clarity on steps for reopening

Business organisations in Auckland have breathed a sigh of relief after the Government’s announcement on a new economic package, the vaccination passports, and the support for mental health.

But they remain concerned about the lack of an exact date for the transition into the new “traffic light system” and targeted support for the struggling hospitality industry.

Yesterday the Government announced a support package to provide up to $940 million to affected businesses including a boost to the Resurgence Support Payment and $60m for business advice and mental health support.

Restaurant Association chief executive Marisa Bidois said the announcement was exactly what was needed but the predicament they faced was around the clarity on the reopening date and a lack of targeted financial assistance.

“The easing of restrictions in line with vaccination rates alongside an enhanced business support package for Auckland businesses is a welcome relief for anxious hospitality business owners.

“A reopening framework coupled with clear targets and supported with the appropriate financial assistance is exactly what is needed to move forward and get our largest city moving again.

“[But] the predicament we have found ourselves in . . . is a lack of certainty, a lack of targeted financial assistance and a lack of clarity on our framework for reopening.”

Viv Beck, chief executive of Heart of the City, said the business group was relieved that the Government was increasing the financial support for businesses. But there was no confirmation of investment into stimulation initiatives.

“There is still a big challenge ahead for the city centre and we will need to do everything we can to support our businesses when they open in the red zone, ideally no later than December 1 to encourage people to visit,” Beck said.

“What we haven’t heard today is any confirmation of investment into stimulation initiatives — that’s needed to give a shot in the arm to attract people here to support our businesses,” she said.

Yesterday Prime Minister Jacinda Ardern announced that New Zealand will move to a new “traffic light” system to manage Covid-19 when district health boards have 90 per cent of their eligible populations vaccinated.

When each DHB hit this target, the new framework would come into effect.

The traffic light system also makes use of vaccine certificates.

Businesses will be able to continue to operate at each of the risk levels, and each setting can be used in a highly targeted and localised way, Ardern said.

Retail NZ chief executive Greg Harford said he welcomed the news of increased financial support to retailers but more support was needed and the disappointment was that the Government had still not given a firm transition date to the new traffic light system.

“Retail NZ is welcoming news that the Government is increasing financial support for businesses . . . and that retail will be able to open at all stages of the new Covid protection framework.

“The disappointing news is that there is still no firm date when we will transition to the new system, which makes it difficult for businesses to plan and stay afloat.

“Retail NZ is also really pleased that the resurgence support payment is being doubled. However, there is still a need for additional support and Retail NZ is keen to engage with Government on a sectorspecific support package.”

Finance Minister Grant Robertson announced the Resurgence Support Payment (RSP) rate was being doubled and would be paid fortnightly, the wage subsidy would continue through the transition period and a $60m package for the regional business partner programme and mental health support was also included.

“While the ongoing restrictions in Auckland are keeping people safe, we also know they have made life very tough for businesses in the region. In recognition of that ministers have agreed to significantly boost the Resurgence Support Payment,” Robertson said.

Currently, the RSP is paid at a base rate of $1500 per eligible business and $400 for each full-time employee up to a total of $21,500.

For the payments starting on November 12 this will be $3000 per business and $800 per FTE, up to 50 FTES. This will make the maximum fortnightly payment $43,000.

“The enhanced RSP will be available until Auckland moves into the new framework. The wage subsidy will continue to be available on the current criteria while areas of the country are still in alert level 3,” Robertson said.

“Final details of the support to be provided under the new framework will be agreed in November.

“My expectation is that because businesses will be able to operate at all levels of the framework, the wage subsidy and the RSP will be reworked to a new targeted payment at the Red level of the new framework.”

Ministers have agreed in principle that there will be a transition payment available to support businesses when they move into the new framework.

Businesses will be able to apply for up to $3000 worth of advice and planning support, and then receive up to $4000 to implement that advice through the established Regional Business Partners programme.

As part of the package, $10m is available for mental health and wellbeing support through a programme to be designed with the EMA and Auckland Business Chamber of Commerce.

Small Business Minister Stuart Nash said the measures were designed to support Auckland businesses to deal with the uncertainties caused by the Delta outbreak.

“This will help build more resilient businesses, improve the ability to operate when Covid-19 restrictions are in place and position businesses better to seize future opportunities.”

Auckland Business Chamber chief executive Michael Barnett said the package announced by the Government showed they had listened to the business organisations in Auckland and responded.

“The adjustment to the resurgence payment will mean that the businesses most in need of support will receive it,” he said. “The recognition by the Government [that] the human cost to business owners, their families and employees is a health and wellbeing issue shows they have listened.

“I would give an 8/10 for this package, I appreciate there will be some finessing to elements of it and there are some issues yet to be addressed for the hospitality sector in Auckland to improve their ability to operate but these should be sorted over the next few weeks,” Barnett said.