Government needs to step up right now and deliver a comprehensive economic package to enable businesses across the spectrum to fight off the impacts of coronavirus, including cashflows, threatening job losses and the ongoing commercial sustainability of viable enterprises.
Finance Minister Grant Robertson, has reiterated the economy is in good shape, even as New Zealand descends into probable recession. But business is well and truly spooked as cases continue to grow outside of China and a global pandemic is announced. They need more than advice to talk to the IRD and the banks to extend credit and selective handouts to tide them over.
“Subsidies are needed to protect jobs and shore up enterprises across hospitality, tourism, tertiary, some export sectors and SMEs to ensure survival of the fittest,” says Auckland Business Chamber CEO Michael Barnett.
“The pain is shared across the economy from shareholders watching their nest eggs evaporate to hotels wondering how to keep on staff as bookings lag. Government can’t ignore the help needed now signs.”
Barnett says Government needs to devise a sensible model with clear criteria to implement an even-handed subsidy package, based on an enterprise’s performance history, forecasts, proven financial viability and a range of variables which would enable the aid to ebb and flow as the need arises.
“We can help with this modelling and any implementation,” he said. “Government can also consider staggering the introduction of the promised minimum wage increase which may be the trigger for mass layoffs for cash strapped businesses reeling from the shock of coronavirus on their daily turnover.
“Putting businesses into quarantine will cost the economy dearly. Businesses need cash flow today and knowledge of the certainty that Government recognises that if we are to survive and prosper in a brave new world, policies and support programmes will be needed to drive recovery,” he said.
“But businesses need to help themselves and look at their cost structures and strategies to replace markets and push into new frontiers.”