Covid 19 coronavirus: Lockdown costs for Auckland businesses expected to be 'heavy' – can Government help?

Finance Minister Grant Robertson during his Crown Accounts announcement at the Treasury in Wellington last year. Photo / Mark Mitchell

The cost of Auckland's lockdown is expected to be "heavy" but at this stage, it will be too short for the Government to offer its full suite of financial support to businesses.

But one business leader is calling on the Government to re-examine its business resurgence plan so struggling businesses can get financial help.

Last night, Prime Minister Jacinda Ardern said the higher alert levels – 3 for Auckland and 2 for the rest of the country – were only expected to be in place for three days.

But for the Government's business support resurgence plan to kick in, Auckland – and the rest of the country – needs to be at alert level 2 or higher for at least seven days.

BusinessNZ chief executive Kirk Hope said the Government needs to consider changing these rules.

"There could be cases where businesses had invested significantly in activities due to fall within the short lockdown period, for example, investment in Chinese New Year celebrations timed for the period of 15-17 February."

Auckland Business Chamber chief executive Michael Barnett said the cost of the three-day lockdown for some businesses "is going to be heavy".

"I think the Government should send a signal to businesses that they are going to look after them."

Speaking to the AM Show this morning, Ardern said that if the lockdown is extended to more than seven days, businesses will be back paid.

"If we're in a situation [where] we tip into restrictions that take us past seven days, that's when we kick in the business support – that will be retrospective."

What's the plan for businesses if the lockdown is extended?

In December, Finance Minister Grant Robertson unveiled the Government's plan for business support if the country was again plunged into lockdown.

"We want to provide certainty to businesses and workers about what support will be available in the event of a resurgence of Covid-19," Robertson said at the time.

But that plan only kicks in if the country – or a region – is at level 2 or above for a week or more.

At level 2, eligible businesses would be entitled to the resurgence support payment – a one-off cash injection to help businesses impacted by the lockdown.

The payment consists of a $1500 lump sum, plus $400 per employee, up to a total of 50 full-time equivalent staff.

For example, a business with 10 full-time staff would get $5500 – $4000 for its 10 staff plus the $1500 lump sum.

To get the payment, businesses would need to have had a 30 per cent or more drop in revenue over a 14-day period.

Businesses which need additional support can apply for the small business cashflow and the business finance guarantee schemes.

At level 3, the wage subsidy scheme is back but, again, only if the lockdown is seven or more days.

That means businesses will get $585.80 per week per full-time employees and $350 per part-time employees.

But, as it was in previous lockdowns, the payment is only available if businesses retain their staff.

And to get the payment, businesses must have suffered a 40 per cent drop in revenue due to the lockdown.

A short-term absence payment will also be made available for any employers to support those who cannot work from home during the lockdown.

This is a one-off, flat-rate payment of $350 a week and supplements the leave support scheme.

It's also available to self-employed workers, as well as parents and caregivers who are required to stay home and await a Covid-19 test result.