The former owner of the Deck Café at Whangarei Heads made the painful decision to close due to Covid. Photo / Tania Whyte
Northland businesses are remaining optimistic in the face of an unforgiving Covid-19 pandemic. But many fear the worst is yet to come, as reporter Jenny Ling discovers.
Lee Azote's decision to close her Northland business, The Deck Cafe, was painful but necessary.
Not long after the Government announced the country was going into complete lockdown, she began to take stock of the business she'd run at McLeod Bay in Whangārei Heads for more than two years.
As the days dragged on and the commercial realities of Covid-19 sank in, Azote made the call to shut up shop and return home to Taranaki after level 2.
"I had fun up north but the business itself was a struggle," Azote said.
"With Covid-19 it was like it's time to let it go. There were no tourists, and it was quite hard to make ends meet."
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The Deck Cafe is among a number of mounting businesses forced to close as a result of the pandemic.
Though there are no comprehensive figures on just how many businesses have become Covid casualties, the Ministry of Business, Innovation and Employment says there were 13 liquidations in Northland between March and July.
There are also now 11,794 Northlanders on job seeker support benefits and Covid income relief payments.
That figure includes 3081 new beneficiaries from the start of this year.
The Northern Advocate recently counted about eight empty shops in Kaikohe, and is aware of several closures in Kerikeri, Waipapa and Whangārei. At least two have closed in Kaitaia as a direct result of Covid.
Azote also knows of "at least three good hospitality places between here and New Plymouth that closed post Covid". One Kaikohe shop owner said some of the failed businesses in town "were struggling anyway and Covid made it worse".
"It was pretty hard for them to continue on. It's a hard time for small businesses."
Kaikohe Business Association chairman Mike Kanji said none of the closures were directly related to Covid, but were simply "a sign of the times".
"It depends on people's situation; one person is selling because he's not well. A couple have been for sale for a long time.
"I've got 11 tenants in town who are all busy making money. A couple want to expand."
Northland Chamber of Commerce is unaware of any business closures because of Covid-19, chief executive Steve Smith said.
"The ones that have gone out of business are largely as a result of other factors, except hospitality and tourism areas.
"The biggest obstacle to us planning forward, in terms of commerce and industry, is what we don't know.
"There's a hump and you can't see what's on the other side. That's the thing that's causing the greatest concern."
Although the business community acknowledge the support they've received from the Government's wage subsidy scheme, there is still much apprehension about the future.
Waipapa Business Association chairman Tyler Bamber, who owns the Pioneer Bar and Restaurant, said feedback from local business was "surprisingly positive".
Locals seem to be taking the "buy local" mantra on board, he said.
But there is still a level of uncertainty.
"People generally feel that we're in a bubble because of the wage subsidy," Bamber said.
"The fear is that in 4-5 weeks when it runs out, people will start struggling for cash and the spend might drop a bit.
"It's just really unknown what's going to happen when the wage subsidy runs out and that's causing apprehension more than anything."
Bamber said the end of the wage subsidy will be a "double blow" for some businesses, who may be forced to lay off staff, who will then have less money to spend locally.
"It's going to be a double hit. Some people seem to think that the worst is still to come."
Kerikeri Business Association Chair Jason Vokes agrees.
Though tradies are busy and there's a buzz about town on weekends, no one knows what's around the corner.
"What we haven't seen yet is what happens when the last subsidy finishes for the wages and what happens to the businesses who can't afford to catch up," Vokes said.
"They're probably a bit invisible at the moment. When the wage subsidy finishes in September, we might see some more casualties."
The Ministry of Social Development couldn't supply regional figures for the wage subsidy or extension, which has so far cost around $12.3 billion, covering about 1.7 million employees in New Zealand.
Prime Minister Jacinda Ardern has ruled out extending the subsidy beyond September 1, saying it would delay "the critical work that businesses may need to do to pivot into the new Covid environment".
Russell's Duke of Marlborough Hotel co-owner Riki Kinnaird is grateful for the scheme.
"It helped ward off decisions around staff reductions and has given everyone time to look at the landscape."
But Kinnaird expects a spike in redundancies throughout New Zealand as "the economy will be stressed when the wage extension drops off".
A targeted wage subsidy should be available "for those that need it", he said.
"Come September it's going to be challenging. There's a massive level of uncertainty going forward. It would be helpful for the wage subsidy to be extended for our industry."
Infometrics senior economist Brad Olsen said further extensions to the wage subsidy is "not the right thing moving forward", but agreed targeted support was necessary to help businesses get to a more normal level of operation and "to allow them to pivot to new ways of doing business". "The current market is quite different to pre-Covid. Doing things in the exact way they were done before is not going to cut it anymore."
Olsen said businesses need to "sit down and take advice" from available resources over what their next move is, have a plan and adjust it according to how they're tracking, and be realistic.
"Northland already had a high number of people unemployed; that's already a tough sign for people in Northland.
"This [Covid] has exacerbated that high level of need. It reinforces why we need to see more Government support for some communities."
Smith agreed targeted help for some businesses would be essential.
"A sudden and dramatic end to the scheme is not the best way forward. Some sectors such as hospitality need to be carried a little bit further.
"Northland in terms of tourism, only has a season. If we can help those businesses get to that shoulder they've got so much more to look forward to.
"That period through Christmas will allow them to build up some small amount of resilience."
The future looks certain for Duke of Marlborough Hotel staff and other Northland workers thanks to a new $1.96m training scheme.
The Government's recently announced Northland Tourism retention and upskilling training programme was spearheaded by Duke of Marlborough co-owner Riki Kinnaird and will be run by Queenstown Resort College's Paihia campus.
It will help 250 tourism and hospitality staff from 22 businesses gain level 4 tourism operation qualifications while the borders remain closed.
Up to 100 of these employees will have the option of a pathway into an apprenticeship within their chosen field in the tourism industry.
It will also allow businesses to retain staff during winter instead of relying on overseas labour when summer rolls around.
Kinnaird said the Duke had to lay off 50 seasonal staff months earlier than planned because of cancelled bookings caused by lockdown, but the future of his 50 permanent workers is now secure.
"The training programme offers a wonderful measure of security," he said.
Queenstown Resort College chief executive Charlie Phillips said it's a great initiative for Northland workers, allowing them to pick up a subsidy while studying.
"The real beauty about it is it'll provide consistent and authentic experiences for visitors because local tourism workers will be so knowledgeable about their region," he said.
The company employed a lot of immigrant workers as contractors now owed money.