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New financial supports for Covid-19 announced

Feb 21, 2022

Targeted payments to businesses strugging in the red traffic light, an interest-free extension to small business loans, and flexibility on tax payment dates are being offered by the government.

Finance Minister Grant Robertson and Revenue Minister David Parker announced the new financial support measures this afternoon, saying they would support businesses that were struggling during the Omicron outbreak.

Covid Support Payment

Robertson announced the new Covid Support Payment of $4000 plus $400 per full-time employee - capped at 50 FTE positions, or $24,000 - would be made available to businesses.

To be eligible, they would have to show a 40 percent drop in revenue over seven consecutive days during the six weeks prior to 15 February, when the government shifted to phase two, Robertson said.

"We have set a higher threshold in terms of revenue loss than previous support in order to target those most affected," he said.

It would be paid on a fortnightly basis for six weeks, with the option to extend the duration if necessary.

"This reflects the international experience that the peak of the Omicron outbreak should pass after about six weeks. We will continue to closely monitor the situation," Robertson said.

He said the government had considered sector-specific packages, but "the need for cashflow to be provided quickly meant that was not a feasible option to reach the most affected".

Small Business Cashflow Loans Scheme to be partially interest free

Parker announced the Small Business Cashflow Loans Scheme was also being extended, allowing firms that had already accessed it an extra $10,000.

It would have a new repayment period of five years, with the first two years being interest free.

He said the interest already accrued from borrowers accessing the scheme would also be cancelled for the first two years of the loan.

"This change will mean interest will only start accruing at the beginning of year three," he said.

Flexibility on tax repayment timings

Parker also said Inland Revenue's ability to allow businesses to be flexible in their tax payment dates and terms was being extended.

He said any business struggling to pay tax because of Covid-19 should access their myIR account to see if they could delay starting payments, or if any part of the tax could be written off.

The department could help with GST as well as provisional tax due, he said.

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