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Coronavirus: Businesses call for speed, clarity on Covid-19 assistance

Mar 10, 2020

The government is facing criticism for not moving fast enough on a package to help businesses affected by the Covid-19 coronavirus.

Cabinet yesterday approved the development of a business continuity package which will include a targeted wage subsidy scheme, training and re-deployment options, and the government working with banks on the potential of future working capital support.

Businesses welcomed the news, but some were disappointed in the lack of detail and how long the government had taken to respond.

If you have symptoms of the coronavirus, call the NZ Covid-19 Healthline on 0800 358 5453 (+64 9 358 5453 for international SIMs).

Forest Industry Contractors Association chief executive Prue Younger said she had been warning about the potentially devastating impact of Covid-19 for weeks.

"You know, we're another week in, we're another week of our contractors with no substance to staying in business," she said.

Younger said the industry had faced a lot of carnage already, and she suspected that even once the details of the assistance package were announced - it would not be enough.

She said the situation was too far gone for things like wage subsidies to turn the situation around.

"I kinda think for those contractors that are still going to be going but we've just lost 50 percent potentially of our industry.

"They'll basically be able to help those people that have had a bit of resilience up their sleeves.

"Put it this way, I think it's going to be almost too late," Younger said.

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Skyline Queenstown chief executive Geoff McDonald said he was pleased the government was working on an assistance package, but he would like more detail.

"Skyline is reasonably robust, it's a fairly large, successful organisation so we've got some degree of resilience.

"But some of the smaller tourism operators out there are going to be hurting right now and so the challenge is looking to the future and having at least some sort of milestones to say 'well, if I can make it there I can get access to X initiative and Y initiative'. That's what we really need," he said.

McDonald said Skyline so far had been able to manage the slowdown by reducing staff hours.

"We're yet to move into looking for people to take leave without pay but those are all sorts of things that we've got lined up if we need to react further."

McDonald said businesses were also being hit with the "double-whammy" of a minimum wage increase from next month.

"We've got this challenging environment and we've got this sort of ratcheting up of wage and salary bill, so it is difficult. Tourism industry is very labour intensive so your wage bill is such a large part of your overall expenses," McDonald said.

Rotorua Canopy Tours general manager Paul Button said he was really encouraged by the government's announcement and he understood they needed to take the time to work through it.

"I guess it is what it is, they've got a process that they have to follow and when they come out with the information they need to come out with exactly what it's going to be because they can't over-promise," he said.

Button said an increase in domestic bookings has softened the blow so far - and he was working hard to ensure things could keep ticking along.

He welcomed the idea of a targeted wage subsidy scheme.

"Our staff are really important to us and we know we're going to need them when all this bounces back. Something along those lines would be amazing," he said.

Restaurant Association chief executive Marisa Bidois said while she was really pleased to hear that help was on the way for businesses, it could have come much quicker.

Fin the mindset of adding costs to businesses.

"We've been talking about this for a number of weeks now" - Paul Goldsmith duration 3′ :45″ from Morning Report Add to playlistPlaylist Download as Ogg Download as MP3 Play Ogg in browser Play MP3 in browser

"We've got a lot of pressures on businesses now and that's one important factor we need to be considering," Goldsmith said.

Robertson said the government would not be shelving the minimum wage increase.

"That's something that's important for low and middle income people, to have money in their pockets so they can actually spend it in this situation."

ANZ also suggested yesterday that the government should shelve the fiscal responsibility rules and be prepared to borrow $60 billion and push the debt out to 40 percent of GDP.

Goldsmith said it's too early to say if we're at that stage yet.

"There are really disturbing signs internationally at the moment and, if the worst happens, then obviously some sort of stimulus is required. The size and the nature of it is something we have to work through over the next few months.

"Lets wait and see, but what we can do for now is try to reduce costs for businesses."

The Cabinet Covid-19 committee will discuss the business continuity package when it meets tomorrow, with more detailed announcements expected next week.

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