The Government has sought to ease financial pressure on businesses impacted by the Covid-19 outbreak by offering a package including a wage subsidy scheme, training and re-deployment options as well as the potential of capital support from banks.
Treasury and Inland Revenue have been asked to look at ways tax policy can reduce the impact to affected businesses and ‘‘maintain operational continuity’’.
Despite calls for a halt on an incoming minimum wage increase from $17.70 to $18.90 in April, Finance Minister Grant Robertson said that was not on the table.
The Otago Chamber of Commerce chief executive Dougal McGowan said while it was good to see the Government offering some support, it lacked detail.
He said the chamber was in discussions with the Government’s business development agency, New Zealand Trade and Enterprise [NZTE], about funding being offered through the business partnership programme.
‘‘From our perspective we’re hearing more and more . . . about the difficulties businesses are starting to face,’’ Mr McGowan said.
‘‘We do look forward to more of the detail behind it, what’s been announced, as we are with the funding from NZTE to support — through the regional business partnership programme — what that’s actually going to look like, where’s the funding coming from and what you can use it for.’’
The minimum wage increase would come at the worst time for businesses struggling with a downturn in revenue due to a dropoff in tourists, Mr McGowan said.
‘‘There are some that won’t survive that. Given that income is going down, so they’re getting a double whammy there and they know their rates are going to go up in the next year as well.’’
Mr McGowan said tax breaks for the struggling businesses would be a good tool the Government could use in the interim.
‘‘[Businesses are] going to have more money in their pocket, which is what we all want but it’s not going to mean that businesses are going to go broke and then you’ve got three people unemployed or more in some small businesses.’’
Craft Bar & Kitchen owner John MacDonald said it was hard to know what impact businesses like his would face in the next few months.
‘‘We are heading towards winter which is traditionally quieter anyway. There aren’t the number of visitors and tourists around.
‘‘It’s really hard to know what sort of impact it’s going to have.
‘‘If there are no cases in the South Island or no cases in Dunedin I don’t know that Dunedin people are going to go into lockdown.’’
He explained how the minimum wage increase would hurt his business.
‘‘Your head chef’s going to say ‘Well hang on. If your junior staff is going up $2, what’s happening with mine?’
‘‘You’ve got to look at everybody’s wages.
‘‘The only way to cover it is to put the prices up.’’
Mr MacDonald said his business would be able to ride out uncertain times and if necessary he would reduce opening hours to reduce costs.
