What business leaders want from the Govt's big announcement

Businesses want a roadmap to reopening. Photo / Getty Images

The consensus among business leaders is that they want a timeline on when and how the Government plans to relax restrictions.

The Prime Minister announced on Monday that the Government would announce an "enhanced business support package" tomorrow. Also expected is a new Covid-19 protection "framework" taking into account higher vaccination rates and will potentially signal the next phase away from using alert level restrictions.

The lack of detail offered led to further uncertainty for business owners who have been left hanging to hope every time the Government takes to the podium.

Business leaders who spoke to the Herald this week said that they would like the uncertainty to end and to see a clear path to opening their businesses to customers again.

Perpetual Guardian Group chief executive Patrick Gamble told the Herald that he'd like to see a clear plan that features firm dates and targets, which outline "precise steps the Government will take as each date or target is passed".

"In the absence of certainty, businesses and their employees will continue to suffer more than they need to," Gamble said.

Perpetual Guardian Group chief executive Patrick Gamble. Photo / Supplied

Gamble said that he hopes that plan will include a firm date for ending lockdown, an investment in ICU capacity, the introduction of rapid antigen testing, details on allowing businesses to hire overseas-based candidates to ease pressure on the job market, and shortening or eliminating MIQ for those who are double vaccinated and have a negative Covid test.

On the topic of financial support from the Government, Gamble said that the current system was no longer fit for purpose.

"The 'one-size fits all' approach of the stimulus is clearly not working in the current lockdown: an Auckland bar or barber with zero revenue for 10 weeks should not be getting the same support as a Dunedin café operating at 60 per cent," he said.

This corresponds with comments made by Parnell Business Association general manager Cheryl Adamson, who said that certain businesses were in desperate need of more focused support.

"One sector that's been missed out and needs specific assistance, is that of personal services - from hairdressers, to nail bars and physiotherapists," she said.

"This sector does not have the benefit of strong associations fighting for their needs and seem to be forgotten. But they are often the lifeblood of our town centres, promoting regular foot traffic and feeding other business sectors.

"These businesses have no way to recoup losses from months of lockdown, and while there may be an initial surge as soon as level 3 ends, there's no way of making up those lost appointments."

Parnell Business Association general manager Cheryl Adamson. Photo / Supplied

The Government has thus far been hesitant to reveal any specific dates, opting instead to extend lockdowns in response to the prevalence of Covid-19 in the community.

And while Prime Minister Jacinda Ardern did announce a three-stage roadmap to easing Covid restrictions on October 4, the business community has remained in the dark with each passing week.

The decision by the Government this week to delay the release of details of its "enhanced business support package" by five days also created a vacuum that was ultimately filled by the National Party. On Wednesday morning, Opposition leader Judith Collins and Covid-19 spokesperson Chris Bishop pounced on the opportunity by releasing a detailed plan for the country to move out of lockdown.

One idea that has been particularly well-received is the scheme that involves giving fully vaccinated Kiwis a $100 voucher to spend on hospitality and retail businesses. However, the boss of ad agency Federation would like to see that extended even further.

"I personally like the voucher idea rolled out in New South Wales and would like to see a $100 digital voucher attached to our digital vaccination passports which can be spent at GST registered businesses," Henderson said.

"It's a great incentive for the hold-outs to get vaccinated, and an easy way to rapidly build back business momentum and growth where it's most needed, while letting local businesses get up and running properly."

The release of National's plan has had the dual effect of adding pressure on the Government to deliver its own plan, while also setting a benchmark for expectations in the business community.

The business community has been largely supportive of the ideas presented, with many agreeing that any opening date should be linked to vaccination rates.

Adrian Turner, Group General Manager, Quest Apartment Hotels, told the Herald that he would like to see the Government confirm how much of the population needs to be fully vaccinated.

"[I'd like to see] a vaccination percentage that will trigger a move to level 2 including what date we will pivot away from restrictions if those vaccination targets are not met," Turner said.

Turner said that small-to-medium-sized businesses are the lifeblood of the New Zealand economy and that it was vital for their sacrifices to be acknowledged and for them to be given a roadmap toward reopening.

"Picnics and a 'vaxathon' are not a strategy that gives anyone certainty that they can plan around," Turner said.

Turner acknowledged that the public health crisis remained important, but that it was now time to balance the impact of lockdowns against the wider effects they will have in the longer term.

In terms of financial support for businesses, Turner suggested that all businesses with a turnover below $5 million should be allowed to keep their GST receipts for the first six months after restrictions are lifted, provided they can show revenue losses of greater than 30 per cent.

The pressure is on to keep small to medium-sized businesses from falling over.

A survey from the Auckland Business Chamber this week said that more than 20 per cent of SME business owners did not expect to survive the lockdown.

Adrienne Begbie, the managing director of small business lending specialist Prospa, says that we've reached the point where change is needed to keep Kiwi businesses alive.

"What we need from the Government tomorrow is a roadmap to get back on track," Begbie said.

"In particular, we want to see incentives for small business owners that reduce the burden of investing in their business, especially in the lead up to Christmas. We all know that capital is what drives economic growth, so this will be crucial to recovery and growth. This will allow Kiwis to rebuild their livelihoods and economy, together."

Adrienne Begbie, NZ Managing Director at Prospa. Photo / Supplied

Economists in this market have spoken about "creative destruction" and idea that weak businesses should be allowed to fail rather than being artificially popped up. The danger, however, is when creative destruction stretches too far and starts to unravel the foundations of otherwise solid businesses.

This is the careful balancing act the Government will have to play in addressing the economic woes across the market. What's become apparent during this part of the pandemic is that a single support package applied uniformly across the market is no longer fit for purpose.

As businessman and philanthropist Andrew Barnes explains the Government needs to look beyond the wage subsidy.

"What Government has done to date with the wage subsidy and business support packages is give money linked to employee numbers - but there are only 1,000 companies in New Zealand which employ more than 100 people, meaning some very large support packages are being provided to companies that can survive lockdowns," he told the Herald.

Barnes says that a better approach might be for the Government to offer interest-free grants linked to the amount of time a business has spent in lockdown rather than its number of employees.

"This type of support recognises that these companies have a broader impact than just the product or service they provide - if they can't pay rent, that affects the landlord; if they can't meet their obligations to suppliers, a whole value and supply chain is affected."

The sheer complexity of the issues and the array of viable options leaves the Government in a prickly position. No matter what the Government does, there will be some businesses that simply don't feel that it's enough given what they've been through.

Regardless, business can no longer afford to have these problems kicked further down the track in the hope that Covid numbers reduce dramatically.

Covid-19 is here to stay and the Government now needs to lay out a plan, commit to it and ensure every deadline is met so that Auckland can get back to work.

- Additional reporting Rahul Bhattarai