Covid 19 coronavirus: Small businesses will brief the Epidemic Response Committee

Glenfield Mall. Photo / Supplied

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The Epidemic Response Committee, chaired by National leader Simon Bridges, returns today and will focus on small businesses and frontline workers.

After more than four weeks in alert level 4, New Zealand this morning moved into level 3.
Cafes and takeaways have reopened, serving customers through contactless payment and pick-up.

The country will stay at level 3 for at least another two weeks, before the Government decides if the country is ready to move back down to level 2.

The Epidemic Response Committee – which acts as a way for the Opposition to hold the Government to account – will continue sitting while New Zealand is at level 3.

This week, Bridges said the focus for the committee will be small businesses and frontline workers.

"Small-to-medium businesses have felt the brunt of the economic fallout from going into lockdown and still face the daunting prospect of at least another fortnight of harsh restrictions," Bridges said.

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He added that many of these businesses are on the brink so it's crucial the Government navigates the level 3 period tactfully and provide ample financial support, given thousands of jobs are still at risk.

Michael Barnett - chief executive of Auckland Chamber of Commerce

New Zealand has more than 500,000 small and medium enterprises (SME) which suffered from the Government's view of what shouldn't be allowed under lockdown, rather than what could and could be operations, Michael Barnett said.

The contribution of SMEs to the economy was as large as that of the companies deemed "too big to fail".

The cost to the economy could have been better mitigated by working with SMEs to understand how they could have continued operating under lockdown, Barnett said.

He used the example of the Ministry for Primary Industries which worked with the meat sector.

"SMEs were the lifeblood of many communities and they will be again."

The largest cost to businesses besides staffing was rent which hasn't been addressed.
Barnett detailed businesses which had asked their landlords for some rent relief but were instead met with rent increases or hostile responses.

He had "a pile of letters" which were examples of "the worst behaviour".

Michael Wood asked whether the "ratbag" landlords should be named and shamed.
Barnett called for empathy from property owners and a "sharing of the pain".

Some landlords had, however, been forgiving, Barnett said.

He wanted the Government to implement an immediate six-month moratorium on evictions.

Barnett said as New Zealand moved down the alert levels every Kiwi needed to think about buying and supporting local businesses.

We will all be responsible for the turnaround of these businesses and "we're all in this together", Barnett said.

"It would be unfair to blame the Government for businesses failing but we should all be judged on how we recover."

The best thing the Government could do for the economy was get businesses running again, not think about helicopter money, Barnett said.

He wanted the Government to implement something similar to Australia's action on commercial tenancies.

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Reg Hennessy, from Hennessy's Irish Bar in Rotorua

Reg Hennessy said the hospitality sector desperately needed more clarity about the restrictions at alert levels 2 and 1 so they could prepare and give staff answers.

They had a "rough idea" about level 2, but they didn't know specific details about how far their tables had to be distanced and whether people could get drinks from the bars.

SMEs also needed more support from the Government and action on commercial rent as the wage subsidy went wholly to their staff.

SMEs were currently being left to queue at the bank, Hennessy said.

Bridges asked how long he could continue going on like this.

Hennessy said he hadn't taken a loan yet but it was likely imminent and they'd been paying overheads from funds they'd set aside.

"To be honest with you, Simon, if we go on for another month like this things will really start getting quite tight."

The hospitality sector was already heading into a quiet time over winter and would then suffer coming into summer without any tourists, Hennessy said.

He already knew of a number of businesses which would fail.

The Government in Ireland had offered loans interest-free to help them survive and Hennessy would like to see something similar here.

Hennessy said they were $14,000 "behind the eight ball" from loss of perishable stock with the quick move into the lockdown.

Tamati Coffey asked whether Hennessy thought the shutdown was the best option.

He replied he didn't think anyone with half a brain would doubt shutdown was the best thing to do, but what SMEs needed was leadership and support.

Hennessy wanted some sort of code of conduct between landlords and tenants.

Emma Fraser, from Allure Nail Studio and the NZ Beauty Association

The beauty industry was made up of about 1700 SMEs and sole traders, with most of them owned by women, said Emma Fraser.

At her Allure Nail Studio in Tauranga, the wage subsidy went straight to her staff but there were a multitude of other bills which needed to be paid.

Those included rent, PPE, insurance, eftpos and Paymark fees and marketing.

"These costs are very real and need to be paid with zero income."

And in six weeks, the wage subsidy would be used up and that will likely mean a lot of redundancies in the beauty sector, Fraser said.

She had organised an overdraft with her bank but that would need to be repaid by mid-June which would be hard to do with no income.

They'd budgeted for another month without an income but after that they'd have to close their doors.

Fraser said they needed more support from the Government to bridge them over the next few months.

"Please help us small-business owners."

They also needed more clarity about the restrictions of alert level 2 so they could prepare.

Dallas Pendergrast, Landstone Holdings Ltd

One of the owners of Glenfield mall in Auckland, Dallas Pendergrast, said they had 115 tenants and they'd halved their rents during the lockdown.

And they would be doing that again next month but there was uncertainty about how long that could continue.

The Government had totally ignored SMEs, she said.

Pendergrast called Prime Minister Jacinda Ardern's public thanks to SMEs "an insult" because the Government had "no idea" about small businesses.

"They don't want a thank you, they want to get back to work.

"In the meantime they want Government help."

Compassion didn't pay the bills, she said.

She and her husband were having to dip into their own savings to cover those costs.

They would also face significant costs to retenant their mall when businesses failed, like Flight Centre which was one of her tenants.

There needed to be clear guidelines for when they could reopen and in the meantime Pendergrast said she'd been lobbying politicians.

Keeping malls closed was prolonging the agony.

"I can't understand why they can't be open at the moment - there's a handful of cases left, they're not a risk."

She said the Covid-19 situation had been "dramatised".

Michael Wood asked in light of the advice from experts about the risks, whether Pendergrast thought it was better to have the short and sharp response to return to normal more quickly or a prolonged half-open approach.

Pendergrast replied: "Michael, the virus is contained in New Zealand, let's be real about this."

She said it was "insane" to keep the restrictions on businesses.

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

Ally Kelleher, Jones and Co Services Ltd

While there was a need to save lives through the lockdown, businesses also needed to survive, said the owner of a cleaning service in Dunedin.

Ally Kelleher said they'd been depending on reserves to stay afloat but many other SMEs didn't have that option.

"As a business owner I am asking the Government to help all businesses to get back on track."

Grants for working capital, interest-free loans, rates and rent relief were needed to survive the next six months, Kelleher said.

That would prevent businesses from going under and would lessen the pain in the longterm and could be part of the solution, she said.

"It's not a handout, it's a hand-up."

Despite cleaning being an essential service, Kelleher said their clients weren't essential so 100 per cent of their income had been affected by the lockdown.

Banks would ask for projections when applying for a loan or an overdraft and it was impossible due to the uncertainty and no one had a crystal ball, Kelleher said.

SMEs were being asked to shoulder all the costs and were taking all the risks, she said.

Andy Gray, owner three bars in Wellington

Bars wouldn't be able to open until alert level 2, said Andy Gray, owner of three bars in Wellington.

The loss carryback scheme wasn't set up for businesses with small profits and not much "wriggle-room", Gray said.

Meanwhile, the wage subsidy was useful to keep their staff connected to his business but it didn't go that far, he said.

Across his three bars, Gray has 17 staff and when the wage subsidy dried up he said it would be hard to know what would happen.

He knew of other businesses which would be laying off staff after the 12 weeks of the wage subsidy scheme finished.

"It's a great stop-gap measure."

The unknown was one of the hardest things at the moment besides the cash flow issues, Gray said.

Gray wanted as much information as soon as possible about what level 2 would mean for bars with a decent amount of lead-in time so they could know what percentage of normal trade they'd have.

His top priority for a response package from the Government was cash flow in the short-term to get the wheels moving again.

Lousie Blair, owner of a healthcare practice in Wellington

Wellington chiropractor Louise Blair said she was grateful for the wage subsidy scheme but it didn't go far enough to cover 80 per cent of her staffs' wages.

There was also Kiwisaver and annual leave she needed to cover.

And there were overheads which "did not stop", Blair said.

Those included rent, power, insurances, telecommunications bills, software and electronic fees, lease payments, vehicle fess, the water-cooler and many others, she said.

She'd tried to turn off her power but was told the Government didn't allow power to be cut during lockdown so was bleeding money through those bills without being allowed in the building.

Young businesses didn't have the reserves to survive, Blair said.

The Government was expecting small businesses to carry "a disproportionate load", she said.

And because many SMEs signed personal guarantees on rental agreements, Blair said if owners' businesses failed they would have to personally continue paying.

She wanted a cash injection from the Government to all SMEs and action on commercial rents.

Blair wanted the Government to trust small business owners to do the right thing with cash assistance.

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