Labour's new small business policies aimed at keeping the "engine room of our economy humming" will give hope to some struggling businesses.
That's the reaction from the Bay of Plenty's business community after Labour revealed policies during a visit to Tauranga today.
Small Business Minister Stuart Nash, alongside Prime Minister Jacinda Ardern at the Historic Village, announced that if re-elected, Labour would extend the small business cash flow scheme for another three years, pour more government money into tailored business advice and make changes to small business tax schemes.
It would also crack down on the amount of money businesses pay for contactless payment services, which cost Kiwi businesses two or three times as much as the same services in the UK and Australia.
"Our message to small businesses is that we have got your back," Nash said.
While the idea of paying less for contactless payment services has been hailed as a positive move by Bay of Plenty businesses, not everyone is convinced that taking on more debt is the way to go.
Hospitality New Zealand regional manager Alan Sciascia said the broad policy announcement gave some hope to small businesses struggling as a result of Covid-19.
"However as usual, the devil will be in the detail. While interest rates are currently very low, there's not much to be gained from interest-free loans. The hardest part is convincing banks that loans can be repaid," Sciascia said.
Merchant service fees were certainly an increasing cost to businesses, particularly as customers are moving to contactless payments and these do draw additional bank fees.
''Hospitality NZ would certainly like to see some relief there.''
Meanwhile, the number one concern for hospitality businesses right now was getting customers through the door.
''We certainly need to move out of level 2. A reduction to level 1 would instil some degree of comfort for the public to get back to normal and allow businesses to keep their staff employed now that the wage subsidies are finished.''
The small business cash flow scheme, a government loan for small businesses worst hit by Covid-19, entitles eligible businesses to a $10,000 loan, plus an additional $1800 per full-time employee, and has been taken up by more than a quarter of New Zealand businesses so far.
The loan is interest-free if it's paid back within a year, and 3 per cent a year every year after that.
Applications for this scheme were due to close on December 31 this year – but Labour is promising to extend that by a further three years, also extending the interest-free period to two years.
Reg Hennessy, the owner of Rotorua's Hennessy's Irish Bar and president of the Rotorua branch of Hospitality New Zealand, said it was great to have some policy announced, but the last thing small businesses needed was to be encouraged to take on more debt.
"On a positive front, the commitment to look at merchant fees is encouraging as these are a huge cost to small business and when using contactless payments to help fight the spread of the virus to then see the banks charge extra for the service is disappointing."
Hennessy also said the one issue Hospitality New Zealand would have loved to have seen was some clear guidance and support with commercial rents as undertaken by other governments around the world.
Nigel Tutt, chief executive of Western Bay of Plenty region's economic development organisation Priority One, said ''this range of policies is aimed at improving ease of doing business for SMEs, which can only be a good thing'.
''The Government has done good job so far of mitigating Covid-19 impacts on smaller businesses in particular, these measures will help improve confidence in an uncertain trading environment.''
But Tauranga Menswear owner Mathew Manninen said he would not be taking advantage of the government loans because he didn't want to take on more debt.
''Personally, we've always adopted the theory if we can't survive without having to continually borrow money then you have to actually look at your business. And maybe you need to change your business.''
''You can't just keep borrowing... so for me it's not very helpful.''
He was, however, more supportive of its promise to regulate contactless payment schemes, such as Paywave.
Nash said these high fees were costing New Zealand businesses roughly $13,000 more than similar businesses in Australia.
Manninen said it was a business cost that was ultimately passed on to the consumer.
''So anything, anyone can do to reduce that is obviously beneficial not just for the business, but also for the customer. I think this is something the Commerce Commission should have looked at years ago as it is a fee.''
At the moment Manninen also paid his tax in advance monthly so Labour's proposal to overhaul the Accounting Income Method tax regime to make it easier for SMEs to move to a "pay as you earn" model throughout the year - was in his view already achievable if you wanted to do it.
Rotorua Chamber of Commerce chief executive officer Bryce Heard said the small business support policy moves "look sensible and helpful".
Heard said it was good to hear Nash saying the Government "has got the back" of small businesses.
"We are moving through an evolving and changing situation and needs will likely change over time, so maintaining flexibility may become important," he said.
Labour has also promised to create a $2500 digital training voucher to help pay for digital training.
Tauranga Chamber of Commerce chief executive Matt Cowley said the Bay of Plenty had experienced "its fair share of crises" such as the Rena disaster, the Global Financial Crisis, the PSA that wreaked havoc on the kiwifruit industry and now Covid-19.
"We are seeing that on the back of Covid people – through want or necessity – going out on their own."
Cowley said while many may have branched out, not all had the core business skills needed to operate successfully, so having the business support funding would be a significant help, he said.
"The core issue is around needing more resource."
This included electronic retail assistance.
Cowley said he had noticed a "rising tide" of businesses preparing for another potential alert level 4 lockdown. There was not necessarily panic, but people were diversifying their options. For some, it might mean a smaller retail space with cheaper rent, but operating online and distributing from Tauriko, he said.
"People are preparing businesses for trouble times. That's really it, and online is going to be a key part of it."
The manager of Rotorua's Western Heights Dairy & Lotto store, who did not want to be named, said he applauded the Labour Party's continued support of small businesses, particularly the promise to crack down on Paywave fees.
"I do think our Paywave fees are really excessive and they're eating into the profits of small businesses.
"That is I think why some businesses are purposely not having contactless payment system. It's a huge issue for many businesses, especially small operators like us."
The manager said extending the Government's small business loan scheme would also come as huge relief to many businesses.
Tauranga business coach Phil Holland said the announcements would make a big difference for some businesses.
"I think the cashflow is obviously a big one. We are starting to see businesses wanting to grow but that are not sure. To know they can get cash is huge."
Holland said many businesses were finding getting support from banks particularly difficult at the moment.
"And of course, the costs of running tap and go are ridiculous. Putting regulations in around that is going to be a good thing."
While Ardern was in Tauranga, there were cheers and applause as the Labour Leader arrived at Historic Village.
When asked whether the reception was a result of "Jacindamania", Ardern said she did not believe in that.
"It's just a beautiful Bay of Plenty day."
The Whipped Baker owners Aaron and Francis Cooper were appreciative of the Prime Minister's visit, which turned their small corner cafe into a train station in terms of foot traffic.
Ardern sat with the Coopers, local MPs, ministers Stuart Nash and Grant Robertson and Tauranga Chamber of Commerce representatives for high tea shortly before the public announcement.
The Coopers said they paid $250 a month for Paywave and despite stopping using it a while ago, have recently brought it back because it was essential to help with contactless payment.
"I'd rather pay for another staff member."
Frances said if it had not been for the Government's support in recent months, the business simply would not have survived.
"Honestly, without the wage subsidy, that would have been us."
Now, the cafe is expanding to open a satellite store in The Kollective that will be cashless, operating only through cards.
- Additional reporting NZ Herald
Key elements of Labour's small business proposal:
• Interest-free loans more widely available, zero-interest period extended
• Tighter regulation of merchant service fees charged to retailers
• More support for digital transformation of SMEs
• Promotion of digital commerce like e-invoicing and other innovative processes
• Government funding for tailored business advice
• Mitigate compliance costs to keep our number one spot for ease of doing business
• Overhaul the Accounting Income Method (AIM) tax regime to make it easier for SMEs to move to a "pay as you earn" model throughout the year.