Thousands of jobs on line
Cafes, tourism operators, and retail stores are readying to lay off thousands of employees as the Government wage subsidy dries up, according to industry chiefs.
Industry associations are asking the Government extend the $10 billion wage subsidy scheme, which has helped employers retain more than a million workers through six weeks of heavy coronavirus restrictions that have left businesses cash stricken.
The wage support will end in June after 12 weeks. Considerable uncertainty surrounding any move to the more permissive Covid-19 alert level 2 next week, and any further support to come, has many businesses preparing to pull the trigger on staff cuts.
Prime Minister Jacinda Ardern has signalled that more ‘‘targeted’’ support may come, and the Government is due to announce some spending in the Budget next week.
But Ardern yesterday was unwilling to detail the kind of support being considered, or when it might come.
‘‘Obviously we are thinking on the timeframes around when the wage subsidy phases out and what we look to do next for those hardest hit sectors.
‘‘At the moment we’re focused very, very much on getting to a position where they can start trading again — which is our immediate focus this week, providing some framework for them to prepare.’’
Hospitality NZ chief executive Julie White said many cafes and restaurants would fail without further support, and more detail about how they will safely serve customers under alert level 2.
‘‘Where I’m frustrated is the lack of correspondence coming back from Government.’’
The Government’s response to hospitality’s needs had been ‘‘piecemeal’’ and letters to ministers have gone unanswered.
A small-medium business loan scheme was welcomed but had not been built with hospitality businesses in mind.
White said some hospitality companies had multiple venues – cafes, bars and takeaways – under one entity and therefore were only possibly eligible for one loan, when smaller loans for each business were needed.
White said a survey of Hospitality NZ’s members showed businesses had to cut 30 per cent of the sector’s 170,000 workers during lockdown.
With the move to alert level 3 only allowing some businesses to partially function, ‘‘there has been another wave, and it looks like another 20 per cent have been laid off’’.
A decision to restrict domestic travel under level 2 would see maybe another 20 per cent of jobs go.
Tourism Industry Aotearoa chief executive Chris Roberts said tourism operators urgently needed the wage subsidy extended, needed help with fixed costs such as rent and government fees like ACC levies, and needed domestic tourism to restart.
‘‘Businesses, looking forward, have to make a hard call on their staff come mid-June on what they do at the end of the 12 weeks [wage subsidy] and they’re looking for a signal.
‘‘They would’ve liked to have had a signal already, it now looks like we might not get that to the Budget, that’s another nine days wait. The trigger point is rapidly approaching for many businesses.’’
Retail NZ chief executive Greg Harford said employment would not hold without an extension of the wage subsidy, and an estimated 7000 retail workers who lost their jobs during lockdown would be the ‘‘tip of the iceberg’’.
There had been an ‘‘upsurge’’ in retail businesses seeking advice on restructuring, showing many were preparing to make redundancies.