The government’s unveiling of a $12.1 billion Covid-19 relief package is a positive move for business, Buy NZ Made executive director Ryan Jennings says.
“This rescue plan is to save businesses and their employees in the face of significant economic uncertainty.
“At this time consumers also have a considerable role to play. Kiwis should be helping other Kiwis by shopping locally where it makes sense.”
Jennings says as New Zealanders spend more time at home to prevent the spread of Covid-19, businesses and employees that rely on normal routines and spending patterns get disrupted.
He is urging Kiwi consumers to support one of the more than 1200 New Zealand manufacturers who use the Kiwi trademark to differentiate their products and services in New Zealand.
“With 85 per cent of Air New Zealand’s international capacity cut, there’s going to be a domestic focus on activities over winter.
“Rather than shopping online at overseas retailers and facing lengthy delivery delays, check out what local businesses have to offer.
“The Covid-19 pandemic highlights the need to prioritise supporting businesses and New Zealanders. Buy NZ Made products online and help keep Kiwis in jobs.”
BusinessNZ chief executive Kirk Hope said the business continuity package announced by the Government will substantially help businesses keep operating through the period of the coronavirus outbreak.
He said the wage support and tax measures were well-focused on key areas of need:
Wage subsidies (applications via MSD) , $558 per week for full-time worker; $350 per week for part-time worker
Leave payment scheme (applications via MSD) – sick pay at $585 per week for full-time workers and $350 per week for part-time workers for those who contract Covid-19, for 14 days for those self-isolating, and for the entire period of sickness for those who contract Covid-19. This is for all employees, self-employed and contractors (but not for those who can work from home), if the business has had a 30 per cent or greater decline in revenue due to Covid-19 month-on-month for any month between January and June 2020.
Depreciation – reinstatement of depreciation deductions for commercial and industrial buildings (including for seismic strengthening) at 2 per cent (a permanent change).
Provisional tax – threshold increased from $2.5k to $5k (a permanent change).
Writing off interest on late payment of tax – IRD may remove use of money interest for any tax debts incurred after 14 February, including provisional, PAYE, GST, if the business has been significantly impacted by Covid-19 (for 2 years).
Immediate deductions for low-value assets up to $5000 (for a year, then $1000 thereafter).
Hope said the package would provide much-needed breathing space and support for all businesses.
“BusinessNZ will continue to represent the concerns and needs of business to the Government over this testing time,” he said.
Today’s announcement around the Government’s Economic Response Package will provide some comfort and assurance for both employers and employees, says Canterbury Employers’ Chamber of Commerce chief executive Leeann Watson.
The $12.1 billion package, which is four per cent of Aotearoa New Zealand’s GDP, is aimed at cushioning the impact of Covid-19, building business resilience, and maintaining connections between employers and employees. It includes wage subsidies, a fund for training and redeployment, and tax measures.
Ms Watson says this “will support cashflow and confidence” but cautions that there also needs to be ongoing targeted business advice and support available to help businesses remain sustainable long-term, “this is a marathon, not a sprint”.
“We have been advocating strongly on behalf of local business, directly and indirectly via BusinessNZ, with Government for direct cashflow support for business, and support for the livelihoods of New Zealanders, so we welcome today’s announcement and response to the business community.
“We are particularly pleased to see applications for the wage subsidies are available from today, with payments from five days’ time, particularly to those who have already faced significant impacts and more so following further travel restrictions over the weekend.”
Ms Watson says that businesses will welcome much-awaited certainty around available support, including clarity around leave payments.
“Unlike many of the other challenges we – as a nation and a region – have faced, the impact and complexities around Covid-19 differ from business to business dramatically. As well as the economic factors, there is also the underlying fact that at the heart of every business is people, so the health, safety and well–being of our community has to be forefront in our decision-making, while also balancing the need to keep workers in jobs and businesses afloat.
“We will continue to do whatever we can to support all businesses in addition to our membership base through this period. It’s times like this that we cannot underestimate the collective power of working together and supporting each other to get through.”
Businesses around the country impacted by corona-virus have been thrown a lifeline with a multi-billion dollar wage subsidy and tax cut package to help people stay in jobs, and stay at home, ease cash flow and buy hard hit sectors time to get fit for recession – and a progressive recovery in the future.
Auckland Business Chamber CEO Michael Barnett said the Government has shown courage and compassion with a total of $8.7 billion of the $12.1 billion rescue page directed at business to keep New Zealanders in jobs.
The $5.1b wage subsidy available immediately to eligible employers to pay full-time workers as well as tax relief will be critical in saving jobs, but not all jobs, and many businesses, but not all businesses, he said.
“We’re looking down the barrel of a recession. This package is the first tranche before a recovery budget in the middle of the year. It provides a breathing space, but business, government and agencies need to pull together and act just as decisively and swiftly to ensure the sustainability of the fittest and plan for a slowdown, not a terminal shutdown.”
Barnett said the Government has shown courage and compassion, recognising the desperate situation of some businesses, particularly SMEs, providing relief to the aviation sector, shown openness in finding a solution for larger and more complex businesses faced with mass redundancies and injecting $500 million into health to contain Covid-19. Beneficiaries, pensioners and low income sectors have also been given a helping hand.
The EMA (Employers & Manufacturers Association) says its members will be delighted to hear of immediate relief offered through the Government’s $12.1 billion business continuity package announced this afternoon.
Chief executive Brett O’Riley said as a first stage the package, at 4 per cent of Gross Domestic Product (GDP), is impressive and will significantly help with business confidence and cohesion in the short term.
“We’ve been engaged with officials providing input into this over the last few weeks and it looks like they’ve really been listening,” he says.
In particular, $5.1 billion in wage subsidies and the leave payment scheme for all kinds of workers will be most valuable for the EMA’s 7000 member businesses from Taupo north.
“We know many of our members are operating on small margins and facing some hard calls around downsizing, and this will help delay those decisions until the situation becomes clearer,” says Mr O’Riley.
“Our AdviceLine has been running red hot over the last few weeks and the biggest issue has been around leave. Employers certainly want to look after their people but it comes at a huge cost.”
Through the private Facebook group the EMA set up for its members and others in the Business NZ network, it has seen businesses banding together and sharing information and knowledge.
“Nationwide it’s about keeping the economy going and businesses intact and what we’ve seen firsthand is them collaborating to maximise the chances of everyone getting through this recession,” said O’Riley.
In addition to its AdviceLine on 0800 300 362, the EMA is also happy to be helping support the Government’s package by funneling employers through to the MSD where they can apply for this help.
“We’re hoping that with positive signs such as China opening back up we’ll be on the other side of this when this support runs out, but if now we’re happy to also be part of the solution for the second stage, including helping those who were displaced get back into employment where they’re needed,” he said.