Businesses seeking the latest round of Covid support payments from the Government can compare trading against a year ago after the Government said today it would tweak the scheme.
On Monday, Finance Minister Grant Robertson announced a new round of support payments, paying out businesses $4000 a fortnight plus $400 for each employee up to a maximum of 50 employees. There will be three payments.
But the test to receive the payments was tougher than previous rounds of support, with businesses needing to show a 40 per cent drop in revenue compared to the first six weeks of the year.
Hospitality groups warned that many businesses would simply not meet the test, especially in areas that do not see a busy trade in January, as trade at the start of the year was already weak.
After several days of warnings that the scheme would see little take-up, Robertson announced changes to the scheme on Friday.
"We are aware that there are a number of businesses which had a very quiet January/early February this year and believe that they will not be eligible under the criteria of the CSP, particularly those in the hospitality sector," Robertson said in a statement.
"We have responded by making changes to ensure we support viable but vulnerable businesses to get through this difficult situation."
Businesses can compare revenue drops to the period from January 5 to February 15, 2022, or the same period in 2021, a period when New Zealand was under alert level 1 under the past Covid settings.
"The comparator period is the same approach as used for the Resurgence Support Payment taken up by thousands of businesses last year. A business is eligible if they can show a 40 per cent or greater drop in a seven-day period since 16 February this year compared against a typical seven-day period in one of the timeframes above."
Applications for the payments open on Monday, however, the changes to the scheme - allowing businesses to compare revenue to the start of 2021 would be available for application from March 14, Revenue Minister David Parker said.
"Businesses will be able to use this option to apply for each of the three payments."
Hospitality NZ chief executive Julie White said the change to the business package would help more than half of hospitality businesses.
White said today's adjustment was a "victory for common sense".
"Hospitality has been badly hit for months, so the threshold was plain wrong.
"We're pleased we got it changed in the same week of the announcement, and before the programme starts on Monday," she said.
A survey of the sector in the past 24 hours indicated more than half of hospitality businesses would now be eligible, but the value of the grants was small compared to the current and past losses, White said.
"For most, the cash will be less than the cost of their rent for the period. It's probable we will need another round of this package after six weeks."
White said the sector would now shift to focus on "inequities" of the heath settings, including the "now redundant" isolation rules at the border, and a shift to the orange setting.
Restaurant Association of New Zealand national president Mike Egan said instead of taking the average revenue for just six weeks, the Government should have taken it for 10 weeks.
"It's quite a complex equation to have one solution to fit all business," he said.
Egan owns two branches of his Monsoon Poon restaurant, one in Wellington and in Auckland.
Restaurant Association chief executive Marisa Bidois said the Government's initial criteria was going to make it very challenging for many businesses given how quiet January was, but with the new changes to the CSP, she feels more confident.
"We're pleased to see the Government has taken some of our feedback on board and feel confident that this will mean many more businesses are able to access the funding they desperately need."
Hospitality NZ's White said while today's announcement was a welcomed revision to include two comparison periods (operators can choose either 2021 or 2022 dates), the key issue was the seasonality of the industry.
"Hospitality and accommodation operators will have to compare January figures (which is a low-season trading period) against February and March (which are high-season trading periods) and prove that the high-season trading period is 40 per cent lower than the low-season trading period, which will be a stretch too far for some.
"It's a case of comparing apples and oranges," White said.