Despite lockdown restrictions easing yesterday and the country moving into lockdown level 3, many businesses are struggling to see any light at the end of the tunnel.
More than 500,000 small and medium enterprises operate in New Zealand and many believe more support outside of the Government's wage subsidy scheme is needed if they are to survive the economic downturn brought about by Covid-19.
• Covid 19 coronavirus: Small businesses will brief the Epidemic Response Committee
• Let's Talk Law: Hammering for small businesses has not started yet
• Covid 19 coronavirus: Government small business tax relief package criticised as 'insufficient' and confusing
• Covid 19 coronavirus: Billboards across NZ to feature small business in 'no strings' free initiative to boost post-lockdown restart
The Epidemic Response Committee, chaired by National leader Simon Bridges, took feedback from a handful of small businesses and industry leaders yesterday. The take away message was clear: more needed to be done if SMEs were to make it through the pandemic.
About 75 per cent of the economy is back operating at level 3, with about 1 million New Zealanders back at work, Prime Minister Jacinda Ardern said during a press conference.
After more than four weeks in level 4, the country will stay at level 3 for at least another two weeks, before the Government decides if the country is ready to move back to level 2.
Ardern acknowledged that small businesses were feeling the pain, but she warned that having to go back into lockdown would be worse for the economy.
While Level 4 put the economy on pause, with all but essential businesses able to operate, for many businesses the real hard work begins now, said MYOB country manager Ingrid Cronin-Knight.
Moving into level 3 will mean key changes for many businesses – adapting systems, evolving the way they work and planning to ensure the safety of their customers and staff.
According to the latest MYOB Business Monitor survey, by the end of March nearly all SME operators expected the economy to decline over the next 12 months, and over half were expecting their own revenues to fall in the year to March 2021.
Louise Blair, owner of a chiropractor practice in Wellington, told the Epidemic Response Committee that she was grateful for the wage subsidy scheme but it did not go far enough to cover 80 per cent of her staffs' wages.
She also said the subsidy did nothing in the way to help he cover her overheads: rent, power, insurances, telecommunications bills, software and electronic fees, lease payments, vehicle fess, the water-cooler, among others.
Blair said young businesses did not have the reserves to survive - and that the Government was expecting small businesses to carry "a disproportionate load".
And because many SMEs signed personal guarantees on rental agreements, Blair said if owners' businesses failed they would have to personally continue paying.
She would like to see a cash injection from the Government to all SMEs and action on commercial rents.
While there was a need to save lives through the lockdown, businesses also needed to survive, said the owner of a cleaning service in Dunedin.
Ally Kelleher said his business had been depending on reserves to stay afloat but many other SMEs did not have that option.
Grants for working capital, interest-free loans, rates and rent relief were needed to survive the next six months, Kelleher said.
That would prevent businesses from going under and would lessen the pain in the long term and could be part of the solution, she said.
Despite cleaning being an essential service, Kelleher said this clients weren't essential so 100 per cent of their income had been affected by the lockdown.
"As a business owner I am asking the Government to help all businesses to get back on track."
Andy Gray, the owner of three bars in Wellington, said his venues would not be able to open until lockdown was moved back into level 2.
He said the wage subsidy was useful to keep their staff connected to his business but it did not go that far. Across his three bars, Gray has 17 staff and when the wage subsidy dried up he said it would be hard to know what would happen.
He knew of other businesses which would be laying off staff after the 12 weeks of the wage subsidy scheme finished.
The unknown was one of the hardest things besides the cash flow issues, he said.
His top priority for a response package from the Government was cash flow in the short-term to get the wheels moving again.
Auckland Chamber of Commerce chief executive Michael Barnett said the cost to the economy could have been better mitigated by if the Government had worked with SMEs to understand how they could have continued operating under lockdown.
Barnett said the contribution of the country's sum 500,000 SMEs to the economy was as large as that of the companies deemed "too big to fail".
He said the largest cost to businesses besides staffing was rent which had not been addressed.
Opposition leader Simon Bridges said many of businesses were on the brink so it was crucial the Government navigated the level 3 period tactfully and provide ample financial support, given thousands of jobs are still at risk.
"Small-to-medium businesses have felt the brunt of the economic fallout from going into lockdown and still face the daunting prospect of at least another fortnight of harsh restrictions," Bridges said.