Covid-19 coronavirus: Rent relief package for struggling businesses in Government's sights

The Finance Minister has provided his most overt hint yet of what businesses can expect in the Government's next round of Covid-19 subsidies, telling MPs this morning to expect moves around commercial rents.

Speaking via video link to the Epidemic Response Committee this morning, Robertson made it clear this was an area the Government was closely looking into.

"We are very aware that, beyond wages, [rent] is the big issue for businesses."

In fact, it was an area that officials were working on "right now" and the Government would have an announcement on this within the coming days, he confirmed.

"We have been talking to the Property Council to develop a package that will help us get through this," he said, in relation to commercial rents.

The Government has so far provided more than $23 billion in support through its Covid-19 relief package.

Up to almost half of that has been earmarked for wage subsidies.

But, as Economist Shamubeel Equab pointed out this morning during the committee meeting, many businesses are still hurting.

He said more support would be needed for businesses from the Government to cover some of their costs.

"We are going to see many more businesses fail … unless there are many more generous [Government] provisions."

Despite the fact the physical location of the vast majority of businesses have shut up shop over the lockdown period, most still need to pay rent.

But reports are emerging of some businesses refusing to pay rent while in lockdown.

According to Stuff, Australian-owned Harvey Norman sent a letter to a number of landlords around New Zealand on March 25 telling them that it would not pay rent while its stores were closed.

Robertson pointed out this morning that the next step in the Government's spending plans was to further support small and medium-sized business – that could include help with rent, he said.

The Finance Minister was asked several times during the committee to provide MPs with solid economic data from the Treasury.

But Robertson said he was unable to provide accurate data as of yet, as it was still being developed by the Treasury.

He did, however, admit that the economic impact of Covid-19 on New Zealand would be a "quantum greater" than that of the global financial crisis (GFC).

This is a marked change in language by the Finance Minister, who had previously indicated that the economic impact would be "significantly worse" than that of GFC.

Unemployment, for example, would head up through 6.7 per cent – the level it reached during the 2008/09 crisis, he again said.

Treasury Secretary Caralee McLiesh, who was also at the committee hearing, went into slightly more detail.

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She admitted that the lockdown would lead to a "very severe and negative contraction in the economy".

When it comes to unemployment, McLiesh said the "ballpark" of what officials are looking at is between 5 per cent and "well into the double digits".

• Covid19.govt.nz: The Government's official Covid-19 advisory website