Wage subsidy scheme extension 'huge relief' for Bay businesses

Double Teaspoons cafe owner May Lau can't wait until the social distancing restrictions are lifted. Photo / File

Tauranga businesses are relishing the extension to the wage subsidy scheme and changes to its criteria as the first round of the Government's handout is due to come to an end this week. Bay business owners and community leaders said the extra financial support announced Friday came as a "huge relief".

They are also eagerly awaiting Prime Minister Jacinda Ardern's announcement today when the country can move to alert level 1.

Yesterday was the 16th consecutive day without any new Covid-19 cases. Only one case remains active.

Finance Minister Grant Robertson announced on Friday an extra 40,000 businesses would be eligible to access the new eight-week wage subsidy scheme, which begins on Wednesday.Lowering the revenue loss threshold from 50 per cent to 40 per cent will cost the government an extra $700m, he said.

The $700m is part of the $50b Budget 2020 Covid-19 rescue and recovery package.

Up to 230,000 businesses are now forecast to be eligible for the new eight-week scheme, giving up to 910,000 workers between $2.6b and $3.9b support.

The closing date for the Small Business Cashflow Loan Scheme is extended to July 24.

Double Teaspoons cafe owner May Lau said the lifting of the social distancing rules would be a "huge relief" for her stores at Bayfair and Papamoa Plaza.

"We have strictly adhered to the Government's rules and have done quite a bit to ensure our staff and customers are kept safe but that means extra staff time and extra costs.

"This includes removing tables from our cafes and having one server for per table and ensuring customers wanting to view our cabinets are doing so one at the time," she said.

"Unfortunately, not all our customers appreciated we were just doing what we told to do. It will be a huge relief once we can go back to our normal way of operating."

Lau said her revenue was down by 35 per cent on what it had been at the same time last year.

Lau said she was so thankful for the financial relief from the Government but anticipated she would not need to reapply for the subsidy or access the cashflow loan scheme.

Palmers Garden Centre owner Shane Smith. File / Photo

Palmers Garden Centre owner Shane Smith said he accessed the wage subsidy scheme during the first round but he would not be seeking an extension.

"It certainly helped get us through that early phase of getting up and running again, and we are so grateful for this much-needed financial relief," he said.

Smith said his centre and other garden centres around the country he had spoken to were all experiencing "strong" trading figures since moving to alert level two.

Lifting of the social distancing would not mean a big change to the way he was operating the garden centre, apart from people being more free to mingle with each other, he said.

But it will certainly make a big difference to the in-house cafe, Cafe Botannix, which is a separately owned business.

"The owners had to employ the same amount of staff despite having to limit the number of customers, which has obviously meant a reduction in revenue for them."

John Wilson, co-owner of Laser Plumbing in Te Puke, said he and his wife had accessed the wage subsidy during the early part of the lockdown.

"We were operating at only 20 per cent of our normal turnover so we definitely needed it."

He said they would seek an extension to the wage subsidy because he did not believe they would be eligible even though the loss threshold had dropped to 40 per cent.

It would be a" huge relief" to everyone once social distancing restrictions were lifted.

Wilson said the use of PPE gear to help keep staff and clients safe would continue during home visits when carrying out drainage and sewerage works.

Hospitality New Zealand Bay of Plenty manager Alan Sciascia. File / Photo

Hospitality New Zealand Bay of Plenty manager Alan Sciascia said businesses were slowly getting back to normal but it has been a "very slow start" in terms of their turnover.

Sciascia said the extension of the wage subsidy scheme and change to the income loss threshold from 50 per cent to 40 per cent would have a "big impact" on businesses.

"It does not sound much when you talk percentages. But it will make a significant difference for employers whether they can retain their staff and keep their doors open for the next couple of months at least."

He said the Government support also helped to keep the local economy ticking over.

"It is a welcome relief as we head into the winter months, which is traditionally a quieter trading period and businesses having to rely on the domestic market for their survival."

Sciascia said the Government's commercial rent support package, including $40m to cover arbitration costs, announced on Thursday would also a be a "big help".

Greerton Marist Recreation & Community Sports Club president Russell Smart said he and other members were looking forward to getting back to some degree of normality.

Smart said moving to alert level one could not come so enough as the lockdown had a huge impact on the club's 800 members and the club's finances took a big hit.

He said during the lockdown they could open the bar but had to cancel several booked functions meaning the loss of thousands of dollars, including a four-day wedding function.

"We have still had to pay insurances, building costs and all other overheads," he said.

Smart said ramifications of the lockdown would be felt by the club for some time.

"For the first time, our club was looking forward to having four senior netball teams enter the Harbourside Netball Competition but due to Covid-19 that can no longer happen.

"We're absolutely gutted," he said.

Tauranga Chamber of Commerce chief executive Matt Cowley said the eight-week extension to the wage subsidy scheme would help ease some of the financial pressure.

Cowley said there had been a "lot of anxiety' among business owners about what would happen once the first round of wage subsidy scheme came to an end on June 9.

He said the eight-week extension was "very much appreciated" as many businesses were operating at a much-reduced capacity yet had not previously qualified for the subsidy.

It would mean much-needed financial buffer for another eight weeks at least and it was particularly beneficial for struggling hospitality and entertainment businesses, he said.

Cowley said he would be "very surprised" if the Prime Minister did not announce the country was moving to alert level 1 this week.