Government announces extra financial support
IN a suite of announcements that establish a pathway out of Covid19 restrictions, the Government is providing up to $940 million per fortnight to support businesses through the challenging period, particularly those in Auckland.
Finance Minister Grant Robertson yesterday said the Government was boosting payments to businesses affected by the higher alert levels as the country transitioned to the new Covid19 protection framework.
The Government announced a new traffic light system that will come into effect when district health boards have 90% of their eligible population vaccinated.
Because of the continued strain that would place on businesses, it outlined broader support.
It includes a boost in the existing resurgence support payment (RSP) package.
At present, the RSP is paid at a base rate of $1500 per eligible business and $400 for each fulltime 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.
‘‘In effect, this means the RSP will be a weekly rather than threeweekly payment as it is now, but for ease of application and administration it will be available in fortnightly instalments,’’ Mr Robertson said.
The enhanced package will be available until Auckland moves into the new framework.
In addition, ministers have agreed a $60 million package for business advice and mental health support will be made available to help Auckland firms.
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.
The support package has previously been applied to help businesses improve their digital capabilities and adapt during periods of disruption.
As part of the package, $10 million is available for mental health and wellbeing support in a programme to be designed with the Employers and Manufacturers Association and the Auckland Business Chamber of Commerce.
BusinessNZ welcomed yesterday’s news, chief executive Kirk Hope saying the framework would provide muchneeded clarity on moving beyond lockdowns and enable the reopening of the economy.
‘‘It is encouraging to see further support being offered to Auckland businesses currently struggling under Level 4 . . .
‘‘Higher payments for businesses impacted by higher alert levels — doubling the resurgence support payment until the new framework becomes operational, paying it fortnightly and offering transition payments for businesses when they move into the new framework — will help support those businesses until they can fully open,’’ Mr Hope said.
Research from accounting firm MYOB has revealed confidence among small and medium businesses plummeted as revenue and profits took a hit from the latest restrictions, labour shortages and the supply chain crisis.
MYOB’s October Economic Snapshot, conducted October 116, found SME revenue had taken its biggest hit since the 2008 Global Financial Crisis.
Head of customer service Jo Tozer said the impact of Covid19 restrictions and pressure from disrupted supply chains, rising production costs and skills shortages were hitting home now.
‘‘While in early 2020 we saw a short, sharp shock in terms of business performance, prior to the pandemic, we hadn’t seen these levels of revenue declines over 13 years of our SME surveys.
‘‘In fact, SMEs reported a more significant fall in revenue for the 12 months to October 2021 than they did in the aftermath of the GFC.’’
The economic survey — conducted with 500 SMEs — found 55% of SMEs expected the economy to decline in the next 12 months, and 24% expected that decline to be significant.
That compared with 38% that expected the economy to decline in the year ahead in July.
The trend was more noticeable in Auckland where businesses have borne the brunt of restrictions, with 57% of businesses in the region seeing their annual revenue fall.
Nationwide, 60% of retail businesses reported a decline in their revenue. —