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Stepping back into level four lockdown felt familiar for many New Zealand businesses (Photo: Getty Images)
Stepping back into level four lockdown felt familiar for many New Zealand businesses (Photo: Getty Images)

The BulletinSeptember 14, 2021

Business subsidies extended in Auckland for longest lockdown

Stepping back into level four lockdown felt familiar for many New Zealand businesses (Photo: Getty Images)
Stepping back into level four lockdown felt familiar for many New Zealand businesses (Photo: Getty Images)

With a record lockdown in the city, no new support programmes have been announced as some businesses call for permanent subsidies, Justin Giovannetti writes in The Bulletin.

Wage subsidies have been extended alongside Auckland’s lockdown, but they’re effectively over for most businesses outside the city. As Stuff reports, the extension is only available to businesses that can directly link a fall in revenues to Auckland’s lockdown and not to level two restrictions in the rest of the country. That’s a change from previous rounds of support payments that were available to any business impacted by the delta outbreak. The result is that ongoing subsidies will be quite limited in level two areas, the prime minister said yesterday.

The business sector has felt real pain in recent weeks and some leaders have called the lockdown extension devastating. The Auckland business chamber has accused the government of ignoring the economic and social costs of the lockdown with its decision to extend level four, according to the NZ Herald. “There has to be a better way,” the head of the chamber said. Retail NZ echoed the feeling, calling it “devastating”. Treasury has estimated that about a quarter of the city’s economic output is stalled during lockdown, meaning about $100 million in lost activity daily.

Many business owners are more optimistic, with ANZ saying that the economy is currently defined by resilience. There’s light at the end of the tunnel, even in Auckland, an ANZ survey of business has found. Interest reports that most businesses are confident in their long-term projections and most indicators are in the green. There is also another business subsidy, the resurgence support payment, being extended across the country to help pay for rent and other fixed costs. The government says it has paid out $1.8 billion so far in wage subsidies and another $531 million in resurgence payments.

Some industries have been hit far worse than others, including hospitality, hotels and South Auckland businesses. The Spinoff reports that a number of bar and restaurant owners are meeting virtually to come up with a strategy to survive. Other industries are making requests for cash. The country’s hotels have lost $1.5 billion since Covid-19 hit, according to the NZ Herald (paywalled). The hotel council says it now wants the wage subsidy at all alert levels until international tourism is restored, something it warns could be four or more years away. In South Auckland, some businesses might be able to adapt to level three click-and-collect, but it could be weeks or even months before a return to good levels of foot traffic, Stuff reports. Some have called for an extension of the wage subsidy for hospitality even at level two.

There’s been no indication of new financial support programmes, despite billions set aside for delta last week. For finance minister Grant Robertson, these requests could come with a large price tag at a time when other groups are also looking for help, from renters to students and organisations trying to combat poverty. Robertson got approval from parliament last week to spend up to $41 billion on unexpected expenses coming out of the delta outbreak, a massive amount of money that he said he doesn’t expect to spend in its entirety. Billions of what is effectively a government overdraft will need to be borrowed before it can be spent. Jenée Tibshraeny wrote for Interest about the new cash, which received surprisingly little attention when it was brought to parliament.

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