Auckland’s Chamber of Commerce is scrambling to support business owners as New Zealand prepares for a nationwide lockdown amid the escalating outbreak of COVID-19.
The Chamber of Commerce is offering support and guidance for the vast amount of businesses impacted by the imminent lockdown, which was announced by Prime Minister Jacinda Ardern on Monday.
CEO Michael Barnett acknowledged that businesses and business owners are facing a turbulent period of uncertainty, despite the Government’s wage subsidy scheme.
“There’s a huge amount of uncertainty as the packages of support unroll – how do you deal with isolation, how do you maintain your global supply chains… people are looking for answers,” Barnett told The AM Show on Tuesday morning.
The Chamber of Commerce can offer support and advice to affected businesses and is working closely alongside the Ministry of Social Development (MSD), the agency in charge of distributing subsidies.
Barnett says employers should not be intimidated by the process.
“It’s very easy. On our website we put up a form – even if you go to the MSD portal, it’s a three step process, it’s not difficult… within days the money has been in their bank account, the process is simple. The support from the MSD so far has been superb and efficient.”
On Monday, the Government lifted the cap on how much each business could claim. Although Barnett applauds the move, he says more needs to be done to keep New Zealand’s businesses alive throughout the lockdown period and broader pandemic.
“The simple way of looking at something like this is – take a brand or business we know, say Gallagher [a Hamilton-based technology company] – it’s an international brand, they’ve probably got a wage bill of $2 million to $3 million a month. Do they want to be there when the economy starts up again, do we want them there as part of our export and supply chain? Of course we do,” Barnett explained.
“Expanding that wage support to be able to go to those firms, our big exporters and big employers, is absolutely crucial…. it allows them to go into hibernation and then be ready to come out of it.
“The next thing the Government may need to look at is they’ve looked after the employees – now what about the businesses? A line of credit available to them, interest rates at something like the price they’re paying for money on the world markets.
“We need to keep New Zealand businesses alive so we’re ready to employ, export and roll this economy when we open the doors again.”
Wage subsidies cap lifted, all businesses eligible for package
All businesses, contractors and self-employed people are now eligible for the Government’s COVID-19 wage subsidies package, Finance Minister Grant Robertson announced on Monday.
The $12 billion COVID-19 package was revealed on March 17, initially including $5.1 billion in wage subsidies available immediately for affected businesses in all sectors.
Businesses were eligible to apply for wage subsidies if they could show a 30 percent decline in revenue for any month between January and June 2020 compared to the year before – including projected revenue.
If approved, employers would be paid $585.80 per week for full time staff and $350 for part time staff.
The payments initially had a limit of $150,000 per business – now however, “all businesses, self employed, contractors and other organisations will be eligible”.
Businesses that are less than one-year-old and firms with a significant increase in revenue in the past year are also eligible, but will need to demonstrate a 30 percent loss of income as a result of COVID-19 in March 2020 compared to January 2020, for example.
Self-employed people with variable monthly incomes are also eligible if they can show loss of revenue against the previous year’s monthly income.
The updated scheme also covers registered charities, non-Governmental organisations, incorporated societies and post-settlement governance entities.
“The expansion of the scheme outlined today takes the estimated cost of the wage subsidies scheme from $5.1 billion to $9.3 billion,” Robertson said.