Budget 2020: Wage subsidy extension could save Rotorua jobs, Mayor

A wage subsidy extension as part of a $15.9 billion business package could help save jobs in the short term and could be the difference whether some survive or not, business leaders say.

One Rotorua business owner says the initial wage subsidy was a "lifesaver" and the extension will allow him to continue to pay rent and rebuild his clientele.

Finance Minister Grant Robertson announced as part of the $50b Budget 2020 Covid-19 response plan, $16b would go towards a jobs and business package.

That included a $3.2b targeted extension to the wage subsidy scheme for another eight weeks for companies that showed more than a 50 per cent monthly revenue drop compared with last year.

The package is estimated to save 140,000 jobs over two years, and create more than 370,000 new jobs.

Rotorua mayor Steve Chadwick was pleased with the focus on jobs.

"The wage subsidy extension will help save jobs in the short term, including in our hard-hit sectors.

"The pressure will increase when the subsidy extension ends so we would support that continuing as required."

Rotorua Chamber of Commerce chief executive Bryce Heard said it was difficult to determine the full impact of the Budget until more details emerged.

Overall, Heard said the Budget looked "a bit light" but the wage subsidy extension "will make all the difference for some between surviving and not surviving".

However, Heard said the good news was Rotorua looked busy on the first day of level 2.

"It is good to see people getting back out and money starting to go around again. That is what is needed to get the economy going again."

Owner of Zen Arcade Massage Grant Nicol said the wage subsidy extension was "good news".

"For me, I wouldn't still be in operation if it wasn't for the original scheme. I found it was a total lifesaver.

"I am probably going to need the extension and I am probably not the only one."

Nicol said the wage subsidy extension would allow him to be able to pay his rent while he had hot been at work and his Lynmore business had been closed for about two months.

"I closed down about a week before because I just noticed an enormous rush of cancellations as people became more and more nervous ... Two days later we were in lockdown.

"My income has dropped to zero. Without the wage subsidy I would have sunk by now I think. It has given me an opportunity to try to rebuild my clientele again."

Nicol said as businesses get back to work in level 2 it was now "super important" to support local companies.

"We need to reorientate the way we think and start to support Kiwi-owned businesses. It is going to be a matter of life or death for a lot of them. It is time to support our local businesses."

Andy's Marquee and Party Hire managing director Daniel Martin said the wage subsidy extension was good news for small businesses, particularly in the tourism and events industries.

He was grateful for what had been offered in Budget 2020 but said the events industry needed the number of people allowed at gatherings to expand before he was really able to get back to work.

$50b Covid-19 response package

Includes: $15.9b jobs and business package

$4b in business support – including $3.2b targeted extension to the wage subsidy scheme for another eight weeks. For companies which show more than 50 per cent monthly revenue drop compared with last year.

$3b more for infrastructure, including building 8000 state and social houses.

$1.6b free trades training and apprentice package

$1b on environmental jobs

$400m Tourism Recovery Fund – including a domestic tourism campaign

$900m for Māori, including training and employment and health measures. $195m for Pacific peoples

Covid-19 package estimated to save 140,000 jobs over two years, and create more than 370,000 new jobs.