More support payments for struggling businesses 'not enough', restaurant owners say

Author
Rahul Bhattarai, NZ Herald,
Publish Date
Fri, 10 Sep 2021, 4:31PM
Finance Minister Grant Robertson. (Photo / Getty Images)
Finance Minister Grant Robertson. (Photo / Getty Images)

More support payments for struggling businesses 'not enough', restaurant owners say

Author
Rahul Bhattarai, NZ Herald,
Publish Date
Fri, 10 Sep 2021, 4:31PM

Businesses struggling through lockdown can apply for more one-off resurgence support payments, Finance Minister Grant Robertson said today.

Robertson said he was aware of the difficulties facing businesses currently. In particular, those in Auckland were "doing it tough" for the rest of the country, he said.

The second payment of the wage subsidy remained open, and if Auckland stayed at level 4 or 3 next week that would trigger another round of wage subsidies.

More than 400,000 wage subsidy applications had been approved, and more than $2 billion had been paid out under it.

A second round of resurgence support payments would also open, Robertson said.

Applications would begin next Friday, September 17, and be available until a month after the country returned to level 1.

Businesses need to demonstrate a 30 per cent drop in revenue over a seven-day period.

This could cost up to $430 million and there would be further assistance after that package too, Robertson said.

The payment is different to the wage subsidy scheme and is a grant to help cover fixed costs and overheads faced by businesses.

A further two rounds of the grant would be available - paid out every three weeks.
Robertson said overall there had been more assistance given this alert level 4 period compared to last time.

However, Robertson said the Government was not considering changing the criteria for the wage subsidy scheme and it will no longer be available once Auckland drops to level 2.

He said the government was not in a position to cover the wage bills for all businesses indefinitely - and offering the resurgence payment was a way to keep offering support.

The comments come ahead of a meeting with representatives of the Hospitality sector scheduled for 3pm today.

Luke Dallow the owner of dumplings and beer restaurant Midnight Gardener, said hospitality business are on their knees, and not extending the wage subsidy "will be a further dagger into the heart," Dallow said.

"We just can't operate on those conditions ... we can only open on level 1." Dallow said.

Dallow, who chaired Tuesday's Zoom meeting with 35 other restaurant and bar owners, said: "It's not about profiteering, it's about supporting our employees, our suppliers, and people who clean the bars."

Restaurant Association chief executive Marisa Bidois said resurgence payment was a good step ahead but the association will be pushing for further "targeted financial support" in today's meeting.

"The resurgence payment is welcome and helpful but it still won't be enough for many businesses.

"It has become clear that there should be a different level of government assistance for those businesses prevented by law from earning any income to those who are able to work from home and keep revenue coming in," Bidois said.

Act Party leader David Seymour said Robertson was "out of touch" with the impact that these level 2 restrictions are having on businesses.

Hospitality industry loses hundreds of thousands of dollars a week and the wage subsidy doesn't cover all of their wages, he said.

The owners will not only have to pay their staff but also to foot the bill for the fixed costs and the Government's wage subsidy scheme is not enough, they say.

But Auckland Business Chamber CEO Michael Barnett, who spearheaded a government petition to seek immediate relief for employers, said extending the resurgence payment support scheme has given desperate businesses a lifeline and would help them cover some recurring costs from rents to GST while they cannot operate due to Covid restrictions.

"This is great news all round with $430m injected into the NZ economy first up while some desperate businesses will be able to hold on until they can trade their way out of this dire situation," he said.

Working with other business chambers and associations from around the country, close to 60,000 small and medium enterprises supported a petition to extend the resurgence payment while trading conditions were limited.

"We were hearing stories of utter despair from business," Mr Barnett said. "We are delighted that Ministers Robertson and Nash gave us such a positive hearing and have backed employers with the promise of two further payments so long as the conditions that trigger the resurgent support payment still apply as a result of being at Alert Level 2 or higher."

He said the lockdown and restraints on all, but essential business was costing the country billions and the resurgence payments would return some of those lost dollars in earnings and productivity back into the economy.