Lady Marmalade Eatery owners Donna Seal and Tennessee Teddy. Photo / George Novak
Bay business owners say the $3.2 billion targeted extension to the wage subsidy for another 8 weeks is "lifesaving".
Business leaders say the total $15.9bn package to support businesses survive Covid-19 offered support for the immediate crisis and made "an ugly situation a little less ugly".
But some say it is unclear what the Government's long-term spending plan is and how much funding there is for regional infrastructure, which is a key way to create jobs.
Finance Minister Grant Robertson announced a $15.9bn jobs and business package as part of the $50b Budget 2020 Covid-19 response plan. It was estimated to save 140,000 jobs over two years, and create more than 370,000 new jobs.
Co-owner of Lady Marmalade Eatery, Tennessee Teddy, said her business partner Donna Seal had not yet been paid the initial wage subsidy but hoped the extension would be easier to get.
"At the moment it is lifesaving. We have been funding this business during this break through our own pockets.
"We didn't have much behind us. We only opened in November last year and had to close in lockdown in March."
Teddy said the pair had been open for takeaways in level 3 and will open fully in level 2 on Monday. As businesses began to open, it was important to support them, she said.
"To have our small business cut off completely it is our way we make a living. That money will come directly to us in keeping our little dream alive."
Teddy said she did not want to have to close the business.
"We have been thrown a little lifesaving device but it is still going to be hard for a while. All the support is going to be very much appreciated."
Owner of Zen Arcade Massage Grant Nicol said the wage subsidy extension was "good news".
"For me, I wouldn't still be in operation if it wasn't for the original scheme. I found it was a total lifesaver.
"I am probably going to need the extension and I am probably not the only one."
Nicol said the wage subsidy extension would allow him to be able to pay his rent while he had not been at work and his Lynmore business had been closed for about two months.
"I closed down about a week before because I just noticed an enormous rush of cancellations as people became more and more nervous... Two days later we were in lockdown.
"My income has dropped to zero. Without the wage subsidy I would have sunk by now I think. It has given me an opportunity to try and rebuild my clientele again."
Nicol said as businesses get back to work in level 2 it was now "super important" to support local companies.
"We need to re-orientate the way we think and start to support Kiwi-owned businesses. It is going to be a matter of life or death for a lot of them. It is time to support our local businesses."
Tauranga chamber of commerce chief executive Matt Cowley said $14bn already spent, $16bn this year, $20bn in the next 4 years were "eye-watering" figures, which taxpayers would have to pay back over many decades.
"We're lucky we're in a period of long-term low-interest rates."
Cowley said the $16b package for this year meant there will be a lot of fine print but the eight-week wage subsidy extension was "very much appreciated".
"I see support for the immediate crisis, but I am unclear on the Government's long-term plan with this level of spending.
"I'm surprised there was not more relief for business overheads or tax. Government is relying on businesses taking up loans to finance their fixed costs over the next few months."
Priority One chief executive Nigel Tutt said the $50b total Budget 2020 spend will go a long way towards offsetting the economic and social damage of Covid-19 and should keep unemployment to manageable levels if wielded in the right way.
"There are some obvious and good things in the package with the extension of the wage subsidy and investments in vocational training and social housing.
"What we don't know right now is the level of infrastructure spend in general, or tagged for this area – that is crucial because it will be the main way to create the jobs we'll need."
Mark Lister, head of private wealth research at Craigs Investment Partners, said the "stimulatory Budget" was bold and more generous than he was expecting in terms of the business support package and the wage subsidy extension.
He was pleased to see investment in education and trades for retraining purposes and overall said it could "have a bigger impact potentially on the economy", which was positive.
However, unemployment will drop and with an about 10 per cent decline in house prices, he said there would be a significant drop in wealth in Tauranga.
"It makes an ugly situation a little less ugly."
Tauranga mayor Tenby Powell said this was a budget that needed to happen, particularly the extension of the wage subsidy scheme.
"I am also very pleased by the infrastructure projects investment and the investment or the trades and apprenticeship training and the $400m targeted support for tourism."
Western Bay of Plenty mayor Garry Webber said he applauded the Government for extending the wage subsidy to help keep people in jobs and said the investment for trades training was "a step in the right direction".
$50 billion Covid-19 response package:
Includes: $15.9 billion jobs and business package:
$4 billion in business support – including $3.2 billion targeted extension to the Wage Subsidy Scheme for another 8 weeks. For companies which show more than 50 per cent monthly revenue drop compared to last year.
$3 billion more for infrastructure, including building 8000 state and social houses.
$1.6 billion free trades training and apprentice package
$1 billion on environmental jobs
$400 million Tourism Recovery Fund – including a domestic tourism campaign.
$900 million for Māori, including training and employment and health measures. $195m for Pacific peoples
Covid-19 package estimated to save 140,000 jobs over two years, and create more than 370,000 new jobs.
