Focus: Kiwibank chief economist Jarrod Kerr weighs in on the economic crisis caused by coronavirus.
Thousands of Kiwis are at risk of losing their jobs in the coming weeks due to Covid-19, a chamber of commerce boss warns.
However business leaders have set out a raft of measures the Government could take to cushion the financial impact of the virus and protect many jobs.
NZ Chambers of Commerce and Industry chief executive Michael Barnett said the Government's fast-acting, multibillion-dollar relief package would save jobs, while shutting the country's borders may keep the domestic economy ticking as the coronavirus elsewhere brought countries grinding to a halt.
The crisis meant small businesses should communicate clearly with staff, identify their core earning areas and get professional help where needed, a leading mentor said.
Barnett also wanted further Government tax breaks as restaurants, cafes and retail and tourism businesses were already in hard times.
Air NZ was among those expected to slash its workforce by up to 30 per cent - or about 3750 jobs - while SkyCity Entertainment Group and others were likely to soon be forced into cuts also, Barnett said.
"The messages I'm hearing is that over the next few weeks we are likely to see thousands of people enter the unemployment market," Barnett said.
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Adding to the trouble ahead was the unprecedented nature of the coronavirus outbreak in the modern world.
Not only was the economic hit so sudden and severe, no one knew how long it would last, Barnett said.
"There wouldn't be anyone out there who has had to face this type of environment before," he said.
NZ Chambers of Commerce head Michael Barnett says he has been hearing from businesses that thousands of jobs are set to be cut. Photo / Natalie Slade
Big companies hit by the coronavirus were likely to make large staff cuts faster in a bid to balance their budget sheets as revenues plummeted, he said.
Employees of small-medium sized business might find some comfort knowing, these companies often tried harder to keep workers on during the downturn due to the huge cost of "rebuilding talent" afterwards, Barnett said.
These smaller companies were also acting quickly to try and tap into funds from the Government's $12.1 billion relief package, which Barnett described as "an exceptionally good" response to the crisis.
Among other measures this included a $5.1 billion wage subsidy package.
Full-time workers eligible for the package would receive $585 per week from the Government, paid in a lump sum of just over $7000 covering a 12-week period.
Nearly 30,0000 applications for the subsidies have already been made by Kiwi businesses.
Kirk Hope, chief executive of lobby group BusinessNZ, also praised the Government's decision to close New Zealand's borders to all foreign citizens as "absolutely the right thing to do".
Once the international community had dealt with the coronavirus and it was safe to travel again, tourist demand would return, he said.
But closing the borders in the meantime gave the Government a chance to get a handle on the coronavirus locally and keep schools and businesses and cafes open.
"If we can minimise the health effects, we can generate some sort of domestic demand back into the economy and some of those businesses could start to operate just from a domestic tourism perspective," Hope said.
Outside of hospitality and tourism, any business reliant on trade with countries now in coronavirus shutdowns would also be finding it tough, he said.
The Chamber of Commerce's Barnett also feared sectors outside those directly impacted might become overly spooked.
If some mid-sized construction companies postponed projects, for instance, this could leave other building companies with monthly wage bills into the hundreds-of-thousands of dollars sitting idle, he said.
Business Mentors NZ chief executive Craig Garner said companies needed to act fast to identify the areas critical to their business.
If that meant they had to let go staff, they should do that but remember to treat their workers like people.
"Communication is critical right now – it is everything."
Employees should be consulted in a redundancy process and their feedback considered along with possibilities for them to shift to new roles or work on reduced salaries.
Barnett said there were also bright spots with Kiwi food exporters in meat, fish, dairy and even Kiwi fruits, seeing lifts in sales again, while China was also back to manufacturing, Barnett said.
There was also more the Government could consider doing.
If the crisis becomes extended, it could look to further subsidise workers by paying them directly an amount of about 50-60 per cent of their salaries so long as they were kept in their jobs.
The Government could also look to lessen the goods and services tax rate and consider a provisional tax that taxed businesses on their projected future earnings rather their earnings last year.
It could also make cheaper loans available to eligible businesses, while local Governments could consider freezing rate rises and other costs, he said.
The Ministry of Social Development has also set up an emergency helpline open from 8am-1am every day on 0800 779 997 for businesses keen to access the Government's relief package.
Individuals needing Government help should call 0800 559 009 7am-6pm Monday to Friday and Saturday 8am-1pm, even if they don't think they qualify for help.
"There may be other options available and we can point you in the right direction," the Ministry said.
Business Mentor NZ chief executive Craig Garner's tips for small business on coronavirus
• Communication with staff is critical now more than ever.
• Identify the areas critical to your business.
• Visit the Government's Covid 19 website – covid19.govt.nz – for business information about health and financial relief packages.
• Engage a business mentor if you are feeling a bit overwhelmed. Business Mentors NZ has been mentoring small businesses for more than 30 years and they have about 2000 mentors ready to help. Mentors can help keep things in perspective for you and offer good, dispassionate advice or point you in the direction of good advice.
• "Don't delay, act now". Do what you can and engage a professional to do the things that are beyond your expertise. For instance, if you intend to gain access to the Government's financial relief package, you need to show you have taken a financial hit from the coronavirus downturn. Getting an accountant to help can speed up the process and get that relief money flowing in sooner.
