How Whanganui businesses will fare when the Government's Covid-19 wage subsidy extension comes to an end at the end of the month is "largely speculative", according to Whanganui & Partners' interim chief executive, Gaille Deighton.
Deighton said that while the wage subsidy had provided businesses with a "good cushion" to deal with the immediate effects of the Covid-19 induced lockdown, the impact of it coming to an end were "largely speculative" and things could change as the country headed into an election.
"Businesses have largely noted cautious optimism at the moment and that suggests we may see less local impact from the wage subsidy ending," Deighton said.
"From the data we've available to us we can see that Whanganui has experienced a smaller economic impact than other New Zealand centres.
"Our job-seekers numbers have not risen as high, our consumer spend has rebounded strongly and house prices still indicate demand is there in the local housing market."
Air Chathams general manager Duane Emeny said that the wage subsidy meant that none of the 132 staff members employed by the airline had been made redundant as a result of Covid-19 but, now, due to a decrease in pay and less working hours, the possibility of staff leaving the company could increase.
"Because we're flying less to places like Whanganui, there are fewer requirements for our teams in those regions," he said.
"They were doing well out of the subsidy because their historical hours were high and they got the full amount, but when that drops away they will just be getting paid their hourly rate.
"The airline has gone through such a big shift, and we put out a voluntary proposal to all our staff to take reduced pay which everyone did.
"It's a tough one, because obviously we don't want people to leave but I can also understand that they may choose to, simply because the pay isn't enough, and everyone has commitments in terms of rents and mortgages and living costs."
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Emeny said there was "only so much" the company could do to help staff once the wage subsidy had finished.
"If what's being provided post-subsidy is insufficient then I think there's a good chance that employees may choose to leave, but there are no plans at this stage for Air Chathams to make anyone redundant. We will try and avoid that at all costs."
Owner of Mindzye Fashions Sara Fredrickson said that she came close to applying for the second round of wage subsidy payments, but "things went absolutely insane" once the country went into alert level 1.
"It was getting pretty close, and I was wondering whether to apply or not, and then the very next week we did three weeks worth of work in two hours," she said.
"We're booked out till mid-September, and me and all my staff are doing overtime."
Fredrickson said Mindzye had a mixture of big and small contracts, so income had returned faster than other sectors, such as the trades.
"I know a lot of tradies who have taken that second subsidy and they're very grateful for it, because by the end of that they'll be fully back on their feet.
"We're all going to get taxed for it eventually, but if I hadn't got that original subsidy I'd be really struggling now."