SMEs set to make big cuts

Thirty-six per cent of small businesses are expected to cut almost a third of their workforce because of Covid-19.

Businesses will make the cuts by the end of June, according to a survey by business leader and entrepreneur Josh Comrie.

His survey was completed by 262 New Zealand businesses – representing $1 billion worth of revenue – with respondents saying they would cut, on average, five staff members.

Although 97 per cent of small and medium-sized enterprises (SMEs) surveyed have taken the wage subsidy, only 23 per cent are expected to have revenue growth in the April to June quarter, limiting income to pay staff.

Comrie said while it was encouraging that small businesses were taking up the Government’s wage subsidy offer, it was not enough and redundancies would have wider implications for the economy.

‘‘If we see this number of redundancies on a widespread basis, it means literally hundreds of thousands of new beneficiaries,’’ he said.

‘‘The economy cannot support this, the employees won’t want it, and it’s such a waste of human potential. If we support the actual business through every possible form they need, some of these jobs will be saved.’’

Tax support would also be beneficial for small businesses, with 38 per cent of survey respondents saying that would help during the pandemic. Thirty-four per cent said rent relief would also help in the current situation. Forty per cent needed a cash injection and 43 per cent required more wage support.

‘‘To date, we’ve come together to face this as a country, and will only see our way through the recession if we continue to do so,’’ Comrie said.

‘‘New Zealand is an export economy, which will obviously be negatively affected. So, we have an opportunity to turn our attention inwards.

‘‘We need to really focus on buying New Zealand made.’’