Stronger dose of rescue remedy needed for SMEs


The Jacinda Ardern-led Government's business rescue package was a good start says says Auckland Business Chamber CEO, Michael Barnett - but SMEs are still struggling. Photo TVNZ
The Jacinda Ardern-led Government’s business rescue package was a good start says Auckland Business Chamber CEO, Michael Barnett – but SMEs are still struggling. Photo TVNZ

Hundreds of thousands of small to medium enterprises (SMEs) are fighting for survival, reeling in shock and bewilderment from the plunge in incomes due to Covid-19 says the Auckland Business Chamber.

“(SMEs face an incredible) disruption to life as we know it and the gravity of our national economic situation from coronavirus. Intensive care is needed now,” Auckland Business Chamber CEO, Michael Barnett says.

“The $12.1 billion government rescue package pitched at saving jobs and businesses with wage and some tax relief, contain the spread of the contagion, and give us legs to stand on when recovery comes, was courageous and compassionate, a good start, but SMEs need more,” says  Barnett.

“Many are struggling to meet their obligations, not just keeping staff on, but servicing debt, paying suppliers and rent to just keep business operating.

“Government can do more for the sector by way of adjustments to provisional tax to reflect the cold, new reality of diminished revenues, deferment of GST, relaxation of overdue penalties and introducing subsidies to help laid off workers find alternative employment and cover travel to different centres to take up opportunities like fruit picking,” he said.

“Banks need to step up to the plate and support the business sector, not just home owners, by passing on the benefits they received from postponement of introducing new capital requirements and the significant reduction in the Reserve Bank’s emergency official cash rate which was slashed from 1 per cent to 0.25 per cent.

“We’re all in this together remember and meeting the cost of loans, overdrafts and mortgages are a huge anxiety to businesses on the brink. It’s in the national interest for our SMEs, the lifeblood of our communities, to not just survive but be fit for recovery,” Mr Barnett said.

“Politics, promises and self-interest must be cast aside. This is the time for negotiation, common sense and national unity. The time to save jobs and viable businesses so that we still have an economy that sustains a nation when the pandemic dies away.”