Thousands of small business will be sighing with relief following Government's announcement that it would provide struggling employers with $8.7 billion in support.
The hospitality and small business has welcomed the financial aid which will see $585 per full time employee and $350 per part time employee to employers who have seen a 30 per cent drop in turnover compared to this time last year following disruption from the global Covid-19 outbreak.
Government this afternoon announced a $12.1b rescue package, this included a $500 million injection for health resources, $2.8b in income support and the establishment of Covid-19 sick leave to cover.
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Restaurant Association chief executive Marisa Bidois said the industry was happy with the government's package - the employer wage subsidies were higher than the $500 per full time employee and $250 per part time employee it had initially lobbied.
Bidois said the 30 per cent drop in revenue compared to this time last year was a fair threshold. She said Finance Minister Grant Robertson had given her reassurance that the package for business would not be it and it would be reviewed as the outbreak spreads.
"I'm happy with the package, I think it addresses a lot of the points we lobbied for, they have come to the party on the wage subsidies, that's what we were looking at for a starting point, so overall we're happy with it," Bidois said.
Small business accounting software firm MYOB said how the package is streamlined would be vital to its success and therefore small businesses survival.
MYOB New Zealand country manager Ingrid Cronin-Knight said many small businesses would welcome the financial aid package, and the speed it has been able to respond to the crisis.
"Rapid, targeted delivery of this package is key," Cronin-Knight said. "This investment must be put into the hands of small businesses as quickly as possible, to help them pay staff and suppliers, and maintain cashflow.
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"Our experience over two decades of working with local businesses tells us that cashflow is going to be the biggest issue in ensuring the survival of SMEs. It's vital we get this process right so we can ensure businesses are getting the urgent help they need now."
Cronin-Knight urged small businesses to communicate their situations to their banks and financial advisors about how they could restructure debt and even out cashflow bumps.
They should also be looking at how they can reduce costs within the business, she said.