Financial support for virus-hit businesses a relief

Kerikeri Business Association chairman Jason Vokes is impressed at the level of government support offered and the focus on keeping people employed. Photo / Peter de Graaf

A multi-billion dollar financial package will help retain Northland businesses and enable workers pay their bills while the impact of coronavirus continues, business leaders say.

The government has unveiled a $12.1 billion support package, with almost half of the cash to be spent on a wage subsidy package for all coronavirus-affected businesses.

Under the government's economic package, full-time eligible workers will receive $585 per week from the government, paid in a lump sum of just over $7000 covering a 12-week period.

Employers need to show a 30 per cent decline in revenue and have to declare they will continue to employ affected employees at a minimum of 80 per cent of their income over the 12-month period.

Northland Chamber of Commerce chief executive Stephen Smith said it has to be a generous package and was better than not doing anything to help workers and their employers struggling financially or in any other way.

"Like it or not, there's going to be serious fallout in the business community and smaller businesses are the ones that won't be able to fully weather the storm.

"The amount in the package is not without end, you just can't pluck a figure out of the air.
Australia is giving $25,000 with respect to wage subsidy so ours is generous in that regard."

Smith said subsidies made an awful lot of sense and as far as the chamber was concerned, it was a matter of facilitating to ensure the money got to the right businesses to help support them and the affected workers.

"If you can keep the money flowing in a circular basis like the package the government has just announced, we'll look at a faster recovery. It can transcend any politics.

"If we sit down and not do anything, the world will come to a catastrophic end," he said.

Smith said if unconfirmed reports that the timeframe for major roading projects in Northland would be compressed significantly were true, that would mean a flood of jobs flowing in that would be great for the region.

Kerikeri Business Association chairman Jason Vokes is impressed at the level of support offered and the focus on keeping people employed.

"That's absolutely the right approach and a dollar invested now will be more than redeemed with a quicker economic recovery and return to normality as a result once the current hurdles are overcome whenever this is."

Whilst there was still concern over the potential outcome from an economic downturn, he said the government has taken a speedy and bold approach to the issues as they appeared.

Vokes said if the focus was to enable businesses to retain employees and pay their wages while we weathered both the economic storm and support people while recovering from infection, then we had a very good chance of the support package being effective.

Director General of Health Dr Ashley Bloomfield said the ministry was expecting more sporadic cases of Covid-19 as all the cases to date were associated with international travel.

New Zealand's current capacity is 770 tests for Covid-19 each day and the ministry expect that to be around 1500 later this week.

The ministry is also currently progressing plans to streamline the testing process to help manage the workloads both in primary care and public health.

The Ministry of Education is surveying schools to find out whether they could cope with teaching online if they have to close their buildings due to coronavirus.

Health officials are considering fining people or deporting overseas visitors who refuse to self-isolate for 14 days and large gatherings of more than 500 people have been banned throughout New Zealand.

Big ticket items in the government's financial package:

■ Wage subsidy for employers up to 12 weeks and up to $150,000 if they have suffered a 30 per cent decline in revenue compared to last year, $585 a week for full-timers, $350 a week for part-timers;

■ All main benefits will go up by $25 a week from April 1, and the Winter Energy Payment will be doubled to $1400 for couples and $900 for single people;

■ $600m to support the aviation sector, including government help for Air New Zealand;

■ Extra health funding of $500m for more intensive care capacity, $50m for GPs and primary care, and $20m to improve video conferencing and telehealth consultations;

■ $126m for those who are unable to work because they are in self-isolation, are sick with COVID-19, or are care for dependents who are sick or in self-isolation;

■ $100m to support worker redeployment.