Covid 19 coronavirus: Mayor, Bridges call for lockdown lift next week: Businesses welcome $3.1b tax package

Tauranga mayor Tenby Powell is calling for the immediate staged reopening of small businesses to save thousands of jobs and livelihoods amid the Covid-19 lockdown.

Powell wants the Government to start the process of a staged move out of alert level 4 to help "save thousands of jobs and mitigate the potentially irreparable damage that will be sustained to our economy if we don't open New Zealand for business again quickly".

His calls are backed by Tauranga business leaders and Leader of the Opposition and Tauranga MP Simon Bridges.

But the Cabinet is firm on not making a decision about the lockdown any earlier than April 20.

Tauranga mayor Tenby Powell. Photo / File

The support comes after the Government yesterday announced new support measures for Small and medium-sized enterprises (SME), including a $3.1 billion tax relief package.

Powell commended the Government's business support packages and supported maintaining a continued lockdown approach to mass gatherings to stamp out contagion.

But he encouraged a move into level 3 post lockdown to allow small businesses to open under "controlled and disciplined" protocols.

"...Let's use this opportunity to re-open parts of our regional economy to SME businesses including roading and infrastructure sub-contractors while the traffic is at an all-time low, residential house builders, warehouse and distribution companies, the professional services sector, and key retailers, many of which are SMEs and all of whom can manage physical distancing in the workplace."

He described small businesses as the city's "economic backbone", saying sub-sectors of the SME economy would most quickly recover and lift the wider economy with it.

"We must support them urgently."

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National Party MP and Epidemic Response Committee chairman, Simon Bridges. Photo / NZME

Bridges, who is the Epidemic Response Committee chairman, told RNZ's Morning Report New Zealand should move out of alert level 4 next week with a safety-first system "to safely to get businesses and workers back".

"I do want to get to [alert level] 2 ... we are trying to get that business and work back, but ... I am realistic. I am not suggesting suddenly that we are going to be at 2 overnight. I do say though that we should be agile and trying to get there."

Tauranga Chamber of Commerce chief executive Matt Cowley applauded the mayor's leadership and said it was "great to have a leader at the helm of the largest council in the Bay of Plenty who supports our extensive small business community".

Downtown Tauranga spokeswoman Sally Cooke agreed and said while post-lockdown wouldn't return to traditional shopping and dining "we must seek ways for our city centre businesses to begin to trade again in various forms [that are safe for our community]".

• Covid19.govt.nz: The Government's official Covid-19 advisory website

Mainstreet organisation Downtown Tauranga's chairman, Brian Berry, said businesses needed to operate, with the obvious trade-off being the nation's health.

"I would like to see a move from level 4 to a mix of level 2 and 3, with our borders protected as they currently are for the foreseeable future.

"Consumers and businesses need to work together, without exception to ensure that the community spread of Covid-19 is non-existent."

Minister for Small Business Stuart Nash said Cabinet would decide the country's alert level on Monday using the most up to date health data and specialist advice.

He said the best economic support for businesses was to protect the health of their staff, customers, support services, and families and the best preparation small businesses could do to come out of alert level 4 was structuring to operate in levels 2 and 3.

Tax relief for small and medium-sized businesses

Meanwhile, the Government's $3.1b tax relief package included a tax loss carry-back scheme which Finance Minister Grant Robertson said "will allow a large number of businesses to access their previous tax payments as cash refunds".

"Essentially this means a forecast loss in the current financial year can be offset against the tax paid on a profit from last year."

Other measures included changes to the tax loss continuity rules and new rules allowing greater flexibility for affected businesses to meet their tax obligations.

Tauranga BDO managing director Fraser Lellman said the announcement would particularly benefit businesses that made a profit in the 2020 tax year and expected a Covid-19-related loss in 2021.
"This could mean that business could consider reducing provisional tax payments due on May 7, 2020, if they believe they will have a loss for the 2021 tax year due to the impact of Covid-19."

Lellman said the tax loss continuity changes would mean businesses could have a change of shareholding of more than 51 per cent without losing prior year losses. It meant potential scope for businesses to continue with new investors with the ability to maintain losses going forward.

Priority One chief executive Nigel Tutt. Photo / File

Priority One chief executive Nigel Tutt said the tax package was useful but small businesses needed "accessible and substantial" short-term assistance to pay overheads while they couldn't trade or were dealing with drastically reduced demand.

Tutt said the goal must be ensuring businesses could survive lockdown and beyond to keep people employed.

Tauranga Chamber of Commerce's Cowley said the Government should develop rules for alert level 3 so any business could operate in their bubbles.

Tauranga Chamber of Commerce chief executive Matt Cowley. Photo / File

Cowley applauded the new package allowing businesses to carry forward last year's profits against this year's losses but said a downside was it didn't apply to businesses operating for less than a year that had not submitted an end of year tax return yet.

Mainstreet organisation Downtown Tauranga's Berry said any assistance was welcomed.

"This additional tax take has enabled the Government to keep Government debt as a percentage of GDP at a level that is the envy of most countries globally.

Mainstreet organisation Downtown Tauranga's chairman, Brian Berry. Photo / File

Downtown Tauranga's Cooke said anything that provided "crucial" support to businesses dealing with the catastrophic impacts of Covid-19 was a positive.

Downtown Tauranga spokeswoman Sally Cooke. Photo / File

"Covid-19 was and is the pandemic we did not need, both in our communities, and in our city centre landscape.

"Our businesses now need to find a new way of doing business more deftly and adeptly and in a way that enables them to constantly shift to meet the new restriction levels, which we assume will shift and change over the coming weeks and months."