The hospitality industry is set to meet Government ministers tomorrow to discuss its request for "targeted financial support" amid threats to stop paying GST as lockdowns hit hard.
Lobby group Hospitality New Zealand has set up a meeting with Finance Minister Grant Robertson, Small Business Minister Stuart Nash and Commerce and Consumer Affairs Minister David Clarke following Tuesday's video call with business owners discussing the implications of level 2 on the sector.
Several hospitality businesses have said they won't open under level 2 and are threatening to stop paying GST unless they get more support from the Government.
Under alert level 2, which many are calling level 2.5, the maximum number of people allowed at an indoor hospitality venue is 50 and customers and workers need to keep 1 metre apart. The whole country except for Auckland moved to level 2 at midnight on Tuesday.
The hospitality industry said it was impossible to operate under the new level 2.5 restrictions without additional targeted support to help them with their fixed costs.
Luke Dallow the owner of dumplings and beer restaurant Midnight Gardener said he would not pay GST if he didn't receive financial support from the Government.
Dallow, who chaired Tuesday's Zoom meeting with 35 other restaurant and bar owners, said: "It's not about profiteering, it's about supporting our employees, our suppliers, and people who clean the bars.
"If we don't get the financial support, we will not be paying the GST for level 2.5.
"We just can't operate on those conditions ... we can only open on level 1."
He said the Government hadn't planned for the latest lockdown in terms of the affect on small businesses.
"We would also like the options to not be able to open on level 2.5.
"This is not about this week or the next, we are worried about the next three to six weeks.
"It's about the survival of people within the hospitality industry."
Robertson said he was monitoring the situation closely.
"We recognise that times are tough for many industries, including hospitality, and we continue to monitor and assess the situation."
Hospitality New Zealand chief executive Julie White said during the meeting with the ministers the lobby group would be discussing the survival of the industry and the need for targeted sector support.
"The hospitality industry has been and continues to be hardest hit by the Covid-19 alert levels, the impact is immediate, and the recovery takes longer.
"The industry needs certainty. The Delta alert level 2 restrictions are like alert level 3 for larger operators, some of our members are telling us, with the level 2 limitation on numbers there's no point opening.
"It's better for them to remain in level 3 as they get access to the Wage Subsidy but get nothing at level 2," White said.
Restaurant Association chief executive Marisa Bidois said she was calling on the Treasury to come up with targeted financial assistance as many of the businesses aren't able to trade during the level 3 lockdown.
"Those that do [trade] are not necessarily set up to do so successfully. There are some that trade successfully but they are not the average business."
Bidois said, the Government's Covid-19 response has been largely employee-centric and now it was the owners who needed the targeted financial support to mitigate the fixed costs.