Economic modelling from the Treasury has told us that we are better off, in the longer term, to move down progressively through alert levels and not yo-yo back and forth. If we think of ourselves as halfway down Everest, I think it's clear no one wants to hike back up that peak.
New Zealand is built on small business. Much of the country returned to work under alert level 3, and the economy is now running at about 75 per cent of normal levels of activity.
Alert level 2 will see significantly more economic activity open up across the country. It is a "safer normal" designed to get as many people back to work as possible and the economy back up and running in a safe way.
It will be possible only by our collective actions at levels 4 and 3 to beat the virus and break the chain of transmission.
Strong public health measures such as physical distancing, good hygiene and contact tracing will be essential to making level 2 work.
Even though the economy will be significantly opened up we still need everyone to remain vigilant and continue to act like you and those around you have the virus. There is a much higher level of individual responsibly required at level 2 to prevent the spread of the virus.
A move to alert level 2 will be even better news for business. The economic downturn caused by Covid-19 is hitting every nation hard because it is a global pandemic. We are a trading nation so even though we are faring better than many other countries, we will still face barriers to exports.
We've already moved to cushion the economic blow. The wage subsidy has been a vital factor in small-business survival. Around 97 per cent of businesses who received the subsidy are either sole traders or firms employing fewer than 20 staff.
More than $1.3 billion has been paid to about 198,000 sole traders. A further $4.4b has gone to 165,000 small businesses that employ between one and 19 staff. More than 9000 medium-sized firms, with 20-99 staff, have been paid more than $2.2b.
We have also broken records with the single biggest government support package to businesses via the tax system in modern New Zealand history. The $3b-plus tax refund scheme is already processing hundreds of applications after just a few days. The refunds will be a cash lifeline for businesses with non-wage fixed costs, like rent, interest and insurance.
Our interest-free loan scheme should be up and running via the IRD from May 12. It will loan up to $100,000 to firms employing 50 or fewer full-time equivalent employees.
Unfortunately the support available from banks was not meeting their needs nor our expectations as a government.
Small and medium enterprises can also call on government support for professional advice to plan for survival and recovery. A $25 million business consultancy fund will pay for tailored specialist support such as business continuity planning, finance and cash flow management, HR and staffing issues.
My strong advice to businesses is to talk to their accountant, bookkeeper or tax agent, or log onto the MyIR portal to ensure they take advantage of the government support.
Without this support, otherwise-viable SMEs may be forced to close. We will keep supporting business and jobs where we can to cushion the blow of the virus and ensure New Zealand is well positioned for economic recovery. See you all soon.
• Stuart Nash is the MP for Napier and Minister of Police
