Govt loans programme extended

Small businesses will have access until end of year

Prime Minister Jacinda Ardern says opening up Government loans for small businesses until the end of the year will provide a bigger safety net in uncertain Covid-hit times.

The loans are interest-free if repaid within a year, and firms on the original wage subsidy and with 50 or fewer staff can apply. The scheme was meant to finish on July 24, but Ardern said at the Labour congress yesterday it would now be available until the end of the year.

“This means those businesses who are doing okay now, but who may experience cash-flow difficulties further down the track, will still have access to it,” Ardern told more than 500 of the party faithful in Te Papa.

Ardern also announced a $162 million package to clean up waterways and create about 2000 green jobs in the next six years.

The loans were set up to help

businesses deal with the economic fallout of Covid-19 after banks failed to fill the space in a way that satisfied the Government.

The eligibility criteria will not change so there is no need to extend the $5.2 billion set aside for it.

Small Business Minister Stuart Nash has said he does not expect take-up to come close to $5.2b because that figure was based on every eligible company applying.

More than 90,000 small businesses had applied for more than

$1.51b in loans since May 12, mostly firms involved in construction, accommodation, restaurants and cafes, retail trade, transport and manufacturing. About 80 per cent that applied had one to five employees, and just over 90 per cent had 10 or fewer.

“The average value of each loan is modest, around $16,700. But it is much-needed working capital to help in a tight spot,” Nash said.

Ardern told media after her congress speech that the loans were a better way to help than cash grants, which had been recommended by Treasury and previously pushed by the National Party.

“Sometimes they’ve drawn it down, not necessarily needing it straight away, but being concerned they wouldn’t be able to access it down the track. What this does is say that if you don’t need it, you don’t have to apply but it will be there for several more months.”

National finance spokesman Paul Goldsmith said the extension to the loan scheme was “modest”.

“I’m sure it will be welcomed, but we haven’t got a commercial rent solution, which the Government has promised — but we’re still waiting.”

He said the green jobs announcement was a sign of a Government big on promises but short on delivery.

In her speech, Ardern said she was aware of how economic recoveries had left some people behind.

“I am a child of the 80s and 90s. I have seen responses to troubled times that have failed to take this into account, and have left people behind. We see the impacts of that still. Poverty, inequality, persistent unemployment. It does not have to be this way, and under Labour, it won’t.”