Bruce Bisset: Small business owners face ruin

Bruce Bisset.

In this amazing money-go-round the coronavirus pandemic has set off it's not difficult to decipher whose fortunes benefit most outrageously and whose are hardest hit, as with all crises one thing is constant: big money will get bigger.

That's because a crisis magnifies inequality. When resources are stretched and choices need to be made about who gets help and who doesn't, inevitably the poor and under-educated will be at the bottom of the list – because they are least able to make a case for themselves.

Progressive governments with a socialist bent, such as New Zealand's, recognise this and make allowance. That's why a specific Māori and Pasifika response to Covid-19 was mapped and actioned.

So far it seems to be working, as far as infection rates are concerned. Those communities have fewer cases than their percentage of the population would indicate they should.

Contrast that with the US, where infection rates in predominantly black communities are three times, and death rates six times, those in predominantly white areas.

Why? Because the US poor can't afford medical insurance, and federal resources are flowing to white areas more inclined to vote – and vote for the incumbent political regime.

That's also why, despite the train wreck marking President Trump's response to the pandemic so far, his popularity has actually gone up.

Whether that will change when the US public wises up to the manipulation of medical supplies and protection equipment that Trump and his allies are overseeing is moot. Their profiteering will not be.

Here, rorting of the system is on a much smaller and less-connected scale, though no less disgusting: businesses claiming subsidies for workers they've fired, or holding staff to ransom over reduced rates of pay in return for keeping their jobs.

Thankfully it seems such examples are rare.

Indeed, many corporate-folk are responding by taking voluntary pay cuts or even, in direct contrast to the US experience, helping meet the country's needs by sourcing and supplying equipment at cost. Mowbray family, of toymaker Zuru fame, take a bow!

But other mostly smaller business owners are facing ruin, especially those in hospitality and tourism - two sectors perhaps being irrevocably savaged by the nature of the crisis and the government's response.

And, as for the poor individual renters, so far there's no real relief from commercial rent demands – an overhead that traditionally makes up about a third of costs.

Sure, banks are offering mortgage "holidays", but that only increases the amount of interest borrowers will, for the benefit of pausing repayments for a short time, later have to repay.

Which actually makes the banks more profitable – at everyone else's expense.

They may have to keep their investors happy, but those investors are not the "mum and dad" stereotype but the multi-billion managed fund and trust scheme and large corporate shareholders; the devices of the very wealthy, in short.

Banks, and their super-rich owners, could afford to give everyone a real holiday, and at least write down the penalty interest so no-one bears more financial pain from this crisis than they've already signed up for.

Besides, there'll be plenty of upside in forced sales of securities arising from this pandemic, holidays or no; the banking industry could curb itself just a little.

But they won't, because that's what inequality is all about. Taking advantage, whenever you can, to get more of the pie than the other guy.

It's worth reflecting that the pie, in this case, is a socialist response to a capitalist problem. Perhaps we could go all the way, and socialise the banks.

Bruce Bisset is a freelance writer and poet. Views expressed are the writer's opinion and not the newspaper's.