Auckland Central MP Chloe Swarbrick has been meeting with Auckland small businesses struggling due to the red traffic light for the past few weeks. Photo / Dean Purcell
The Finance Minister says he is "actively considering" further targeted support to small businesses following an open letter from Auckland Central MP Chloe Swarbrick signed by more than 60 struggling hospitality venues.
The letter from Swarbrick was delivered to Minister of Finance Grant Robertson on Wednesday evening and has called for the return of four financial forms of assistance that were available for small businesses during lockdown.
Some of the Auckland venues who signed Swarbrick's letter say they have only weeks left to survive under the current red traffic light conditions.
Robertson has told the Herald the Government is "actively considering whether further, targeted support for some sectors is necessary" and may be making announcements in the "near future".
Swarbrick's letter has called for the Government to re-introduce the following assistance for "owner-operator" hospitality venues that was available under levels 3 and 4.
- Facilitate commercial rent reductions
- Extend the IRD interest-free and government-backed loans schemes
- Revive the wage subsidy
- Support Auckland Council in providing reductions in rates and licensing fees.
Under the red traffic light all hospitality businesses can technically open but with a restriction of up to 100 people in the venue.
Such restrictions on patron numbers, and the public's reluctance to head out at night with the Omicron outbreak underway, mean many bars and nightclubs are barely making a profit.
Some hospitality venues have found it cheaper to temporarily close their doors.
Swarbrick has met with dozens over the past few weeks struggling in a variety of unique financial hardships.
"There's a number of people who have fallen through the gaps the past year and a half but it's all come to a head under this signalling of the red traffic light system," Swarbrick said.
"The letter speaks to how all of these different sectors are unifying on the basis that enough has to be enough. They cannot fail at the final hurdle. There was a really salient point made to me from one of these guys saying that it would fundamentally not make any business sense if the Government after these past two years of investment in keeping things afloat allowed the little guys to die at the final hurdle."
Ayesha Green is one of three co-owners of SOAP dancehall in Auckland CBD who have found the red traffic light settings completely unworkable.
"Our main trading is as a night club and we just can't operate safely under the red light restrictions. We've completely shut down and locked everything off," Green said.
"So we've cancelled all our eftpos things, our internet, our fridges to keep the power down. We decided shutting down was best for us. It's more feasible to be shut than open. It will cost us more money to be open than shut.
"At red, well our next rent is due in three weeks, so we've got three weeks. Maybe our landlord will let us have a couple of weeks extra but it would get to a point we'd have to look at going over the lease and figuring out how to get out of our contract, which is absolutely what we don't want to do."
Robertson told the Herald the Government is continually monitoring the impact of the Omicron outbreak on businesses, including up-to-date sales data.
"This shows that overall economic activity is down, but only a little. However for some sectors, including hospitality, the drop in business has already been significant," Robertson said.
"The red setting of the Covid Protection Framework does allow almost all businesses to operate. But it is clear that some people are behaving more cautiously than the setting requires."
The Minister highlighted the $120 million arts and creative sector package announced this week - a move which Swarbrick also said she "welcomed" in her letter.
Robertson also highlighted that the Small Business Cashflow Scheme is still open for applications until December 2023.
"We are revisiting the settings of that scheme to ensure it provides appropriate support as we deal with the Omicron outbreak," he said.
"The Commissioner of Inland Revenue is also able to offer deferred payments on some tax obligations. The Short Term Absence Payment and Leave Support Scheme are also still in place."
Diva Giles is co-owner of Beau wine bar on Ponsonby Rd and says regardless of the red traffic light hampering venues now, the peak of the Omicron outbreak will change the landscape regardless of Government imposed restrictions.
"As soon as Omicron breaks out what is actually going to happen? Like you could be in green and it will still impact us," Giles said.
"Because you can see that overseas. We're anticipating supply chain issues, staff issues and all of that."
Both Swarbrick and Giles are very conscious of a public narrative that big business and large asset holders have benefited dramatically from the pandemic.
Economic commentator Bernard Hickey has estimated that since the Covid pandemic began, the wealthy have become about a trillion dollars richer and the poor are a further $400 million in debt.
Hickey says this was in large part due to the wage subsidy being paid directly to employers and asset holders rather than employees.
But Swarbrick's open letter is aimed specifically for the benefit of small owner-operator businesses.
Giles said, "I think people have this idea of a business as a big bad, you know businesses asking for handouts are these dudes making money like supermarkets and banks and all of that.
"But actually most businesses are like us. Our business is just me and my business partner. Two people. I'm 26. He's 29. Most businesses are just people who are serving you every day."
Addressing the Finance Minister in the letter, Swarbrick draws a clear line of responsibility from the Government's messaging to the public.
"People are not going out, because the Government has rightfully informed people of the outbreak to come," Swarbrick says
"You know that you have the opportunity to change policy settings that are enabling a growing gap between owner-operators, freelancers, the 'little guy' and the corporates and asset-owners who've profited handsomely over the last two years.
"There are many tools at your disposal, political as they are, to restore the balance."
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