Covid 19 coronavirus: Rotorua event, tourism and hospitality sectors beg for wage subsidy extension

Jacqui and Jeff Alexander at the Event Impressions warehouse in Rotorua. Photo / Andrew Warner

Jobs are hanging in the balance for the Rotorua event, tourism and hospitality sectors and they need a wage subsidy extension to prevent further carnage. Journalist Kelly Makiha reports.

Rotorua's once thriving event, tourism and hospitality sectors are begging the Government to extend the wage subsidy scheme for them, saying they need it to stay afloat.

The organisation that represents tourism and hospitality businesses has written to the Prime Minister asking for the extension and others say without another 12 weeks' help paying staff, there will be "carnage".

Prime Minister Jacinda Ardern indicated yesterday the wage subsidy scheme would extend for some sectors after the 12-week period expired in June.

However, she said it would be more targeted. She said larger events, conferences and music events were in a particularly difficult position.

"We are looking to target more directly those in that category of not being able to operate in the same way," Ardern said.

Destination Rotorua chief executive Michelle Templer said Rotorua's tourism and hospitality businesses were asking the Government to confirm as soon as possible that the wage subsidy scheme would be extended.

"Local business owners are telling us that until they are able to open again, the wage subsidy is the only way that they can continue to pay and retain staff.

"We have written a letter to the Prime Minister on behalf of the Rotorua Inc Whakahouhia Te Whare Ohanga Build Back Better Steering Group to ask for an extension of the subsidy scheme and for more clarity around what travel will be permitted in levels 1 and 2, to ensure the feedback from our local businesses is helping to shape the Government's response."

Rotorua-based company Event Impressions has spent 18 years building its business throughout the country but now it's come to a grinding halt.

Director Jacqui Alexander said with no business on the horizon and seven weeks already without revenue, an extension to the wage subsidy was absolutely needed.

"We simply need help to get to the start line of business again - in an unknown number of months. The 12 weeks was a good start. More is very welcome."

She said levels 1 and 2 still restricted event movement and confidence around large gatherings would take time to recover.

She said wage subsidies only covered a small portion of each wage and businesses' fixed expenses were taking a toll.

"We are hopeful further assistance may just be enough to keep supporting our valued team and retain the experience and knowledge for our business at the same time."

She said businesses were having to pay expenses such as rent, rates, insurance, vehicle compliance costs and other business expenses out of savings.

"Right now we should be writing and securing our business for the end of this year and into next. Venues should be securing events for two to three years from now. Business and people are not making any decisions regarding events in an unknown future.

"Clients may be loyal and bring you back in for 2021 but we have lost an entire year of income."

She said some biannual events were jumping two years and some others were going ahead online, which meant the revenue was lost for event businesses.

Rotorua publican Reg Hennessy said hospitality had to be one of the first cabs off the rank for a wage subsidy extension.

Publican Reg Hennessy says there will be more carnage without a wage subsidy extension. Photo / File

"If we don't hear that we're going to get it soon, there will be carnage. There's going to be carnage anyway."

He said he had been able to keep his staff on so far but he needed to know soon to plan ahead.

"Once the wage subsidy ends, we will have to let staff go."

Hennessy was critical of the Government not giving more than wage subsidies to small businesses.

"They keep saying it's a $10.4 billion package for small businesses but we have actually got nothing except telling us to borrow more money."

He said while wage subsidy extensions were necessary, so too were cash injections to keep the businesses they worked for afloat.

"We are still paying liquor licences, rates, insurance. Anyone with half a brain knows we can't keep paying this money out without getting money coming in."

Pig and Whistle and Capers Epicurean owner Gregg Brown said "surely" the hospitality sector would get a wage subsidy extension.

"We are in the firing line, there is no denying that."

Brown said the Government should make an announcement soon for the sake of workers' mental health and wellbeing so they knew what their futures held.

"It is for the benefit of the staff to give them some comfort so they will not be in the dole line in week 13."

He said the difficulty was the varying opinions about what lay ahead.

"I have seen a million opinions on the future from doom and gloom to people not thinking it will be so bad. The problem is I can't tell today what it'll be like next week."

Brown said both his businesses had opened for takeaway meals and so far had done really well, but it was nowhere near the turnover they were used to.

"But it's better than nothing."

Waiariki MP Tāmati Coffey said the Wairariki region was based on hard-hit industries like events and tourism and the subsidy had been crucial.

"We need to continue to ensure at risk workers can get by after the initial wage subsidy scheme has ended if needed."

He said any extension needed to be balanced with the fact that to date, it had cost New Zealand more than $10 billion which needed to be paid back.

"We have a responsibility to New Zealanders now and in the future to borrow and act responsibly."

He said the Government had just announced $10,000 to $100,000 interest-free loans for all small businesses in New Zealand and what he called a "landmark tax relief package" for the business sector.

"I am confident many businesses will be more financially independent again, as the initial wage subsidy timeframe closes."

Coffey, who runs two hospitality businesses in Rotorua - Our House and Ponsonby Rd Lounge Bar - said if hospitality were to be given an extension, many more jobs would be saved.

He said his businesses employed 23 staff who were all still employed thanks to the wage subsidy scheme.

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