There are two narratives on the economic impact of Covid-19 running through politics at the moment.
One narrative is that everything's fine, nothing to see here, everyone will be okay, move along. The other is about the real-life distress facing many small business owners and their staff – hardworking people who have spent years building up what they have buying the can for Delta restrictions.
When businesses fail through a lack of cash following Government-imposed lockdowns, thousands more people will inevitably go on to the Jobseeker (unemployment) benefit. Life savings will be lost, and homes sold in mortgagee sales. The dreadful social and health costs of these outcomes, together with the financial cost to the Government over the long term, means the Government should be doing everything in its power to stop this from ever occurring.
We were promised a roadmap out of the worst of the current restrictions. What we got instead resembled more like a maze, and one that's still under construction.
Businesses, not only in Auckland, but around the country, need certainty around when they will be able to operate or expect customers. This means targets and dates, goals and objectives.
The lack of certainty cuts to the core of confidence, and poor confidence is an economic killer.
The Government's myopic focus on managing health outcomes from Covid has led to a devastating impact on our economy. As an example, Retail New Zealand's quarterly report from September found that more than a third of retailers are unsure whether they will still be open in 12 months' time, thanks to the ongoing restrictions imposed by the Government in its response to Covid-19.
But the flow-on effects are even more insidious. This week we acknowledged the more than 600 New Zealanders who took their lives over the past year. It is estimated that 60,000 operations have been delayed as a result of Covid-19.
Given the extension of the lockdown in the Auckland region and the new lockdown in Hamilton, it is more important than ever that the Government moves quickly to better support our business community. Cash is king for businesses and always has been.
Our view is the Government should implement the following strategies.
First, in order to deal with the issue of cash, the Government should implement National's policy to pay 50 per cent of the rent of small businesses who meet the wage support subsidy criteria of having experienced a 40 per cent decline in revenue. This payment would be on the basis that the landlord agreeing to a 25 per cent reduction in the rent. In the event of there being a dispute, a "supercharged" binding arbitration process would deal with disputes promptly.
We would extend the Covid-19 temporary loss carry-back scheme to apply for the 2022 tax year. By reducing the future tax burden to businesses, this would be a further way of providing cashflow relief.
Second, the Government needs to learn to trust business owners and their staff. Roll out saliva testing now allow staff to test themselves easily and regularly.
The third strategy comes from my observations as a local MP in Port Waikato. Too many people are being refused an exemption to cross the border when their work is critical for businesses to operate at full capacity. For example, if concrete foundation specialists can't get to work, then all the subsequent building work can't commence. This means fewer houses will be built at a time when we have a desperate shortfall.
Officials need to take a more strategic approach to approving these exemptions, especially as the trades are able and willing to operate under strict Covid-19 separation and testing protocols. The flow-on effects of restrictions are not being fully realised.
The lack of confidence in the construction sector is reflected in the October NZIER Quarterly Survey of Business Opinion, which found the sector had gone from being most optimistic to most pessimistic.
Finally, and this is an impact often overlooked in the business world, there needs to be a plan to help business owners and their staff with mental health needs.
Small businesses do not have ready access to specialist mental health services. They should. The Business New Zealand network and regional chambers of commerce agencies should be brought on to coordinate this support nationally.
But what will be most upsetting to many is the glibness of the Minister of Finance last week when he said, yes, some businesses wouldn't make it through this, but the rebound on the other side would allow most to bounce back.
The problem is that businesses that fail won't be around to have a shot at bouncing back.
- Andrew Bayly is National's spokesman for revenue, infrastructure and statistics. He is the MP for Port Waikato.