Budget 2020: Unlocking Covid 19 war chest needed but small business owner fears years of debt

Pete and Sonia Wakefield, who run Wakefield Electrical, with their three daughters - Maia, 9, Nina, 7, and Anna, 5 - at their home at Castle Hill, Canterbury. Photo / Kurt Bayer

The Government had no option but to borrow its way out of the Covid-19 economic crash, says one small business owner.

But Pete and Sonia Wakefield, who employ five staff at Wakefield Electrical in Canterbury, fear they'll be paying off the debt the rest of their working lives.

"It's pretty much what we expected," said Pete, who downed tools yesterday afternoon to give the Herald his reaction to Finance Minister Grant Robertson's "recovery Budget".

"We will be paying for it for a decade or two. Maybe the kids will benefit from it in their twenties."

The Wakefields, like many other Canterbury businesses, are no strangers to bracing for tough times ahead.

The devastating 2010 and 2011 earthquake sequence has seen a tough and competitive 10-year rebuild.

And now, they've been hammered by the Covid-19 global pandemic. They suffered a 95 per cent downturn in business during lockdown alert level 4.

They had wanted to see how the Government could stimulate the economy through yesterday's Budget, and provide incentives for both existing and new small businesses and help get Kiwis back spending.

"It's been 10 years of recovery from earthquakes, and I expected it to be 10 to 15 years to get past the worst of this, but polish your crystal ball ... how can anyone really tell that far ahead because so many other things can happen too," Pete Wakefield said.

In the short term, yesterday's announcement that the wage subsidy scheme will be extended by a further eight weeks will help retain staff.

But a real picture of where small businesses are at would not come until late winter, Pete Wakefield said, when the Government top-up dried out, and bosses could judge whether there was enough work to keep people on.

He was glad there were no tax cuts announced in Budget 2020 – and he saw no choice but for the Government to borrow heavily, especially given the low level of interest rates.

"At some stage, they're going to have to stop borrowing," he said. "Because the concerning thing is that the [interest] rates could go up before things are paid back."

Pledging $1.1 billion for 11,000 "green jobs" sounded like a nice idea, Pete said. But he worried whether New Zealand could afford such a scheme, which he said was reminiscent of the road crews which sprang from the Great Depression.

The Wakefields also wanted to see a Government commitment that future big projects are Kiwi-made, with contracts dished out to local businesses employing local people.

"We've seen far too many projects in the Christchurch rebuild given to foreign companies," Pete said.

"Keeping New Zealanders employed has got to be a big focus. If they are local and spend their money locally, it's going to be better for everyone."

• Covid19.govt.nz: The Government's official Covid-19 advisory website