Big read: We can all help as Whanganui businesses brace for an uncertain future

As the country prepares for the possibility of moving out of alert level 4 lockdown, businesses in the Whanganui region are coming to terms with what the future might look like, and how they can remain operational. Mike Tweed reports.

In the face of uncertainty, Whanganui region businesses across a range of sectors are conveying a message of positivity and hope the community will continue to support locally made products, and locally owned companies.

Owner of the Gatshack music shop on Ridgway St, Craig Cawley, said while the Government's wage subsidy initiative "certainly helped", business expenses and unpaid bills would "still be there" when his shop doors reopen.

"The wage subsidy from the Government has been really good, and it keeps you fed, but it's really important to get shops back open and income coming back in, so we can return to some kind of normal," Cawley said.

"We've all still got bills to pay, and I've probably made about $1500 in the last month."

Craig Cawley, owner of The Gatshack. Photo / Stuart Munro

Cawley said he was able to halve the rent at the Gatshack during the level 4 lockdown, something his landlord had said was "no problem at all".

"Small businesses like myself are living on the edge most of the time, and those without some kind of financial back-up could very easily go broke.

"I'd like to go from playing guitars at home to selling guitars in the shop again, and I'm sure if we all pull together we can get through this."

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Owner of Fitzies Bakery in Springvale, Chris Rod, said "no one can do much about it", and he had been left with "months of bills and no income".

"I've spent a lot of time looking at ways of getting back on my feet," Rod said.

Under the Government's' business finance guarantee scheme, businesses with annual revenue between $250,000 and $80 million can apply to their banks for loans of up to $500,000, with the Government guaranteeing 80 per cent of the risk, and banks covering the remaining 20 per cent.

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Despite this, Rod said it had been "fairly difficult" to secure a loan and had only sent off the paperwork to the bank "in the last few days".

"You still have to meet the individual bank's criteria for that 20 per cent, and for a lot of people out there that could be quite hard.

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"My staff is all pretty keen to get back to work, and it's my job to make sure that when we do reopen, both the staff and our customers are safe.

"If we do come out of this lockdown soon, it's still important that we don't have to implement another one a couple of months down the track because that would break a lot of businesses out there."

Owner of specialty food shop The Burrow and Indulge Skin Spa, Annette Jones, wasn't sure if smaller banks would be offering the same risk guarantees as their larger counterparts, and said she couldn't find any information on her current bank's website offering that service.

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

"I've lost about $3000 worth of stock already, despite my best efforts to eat all the salami," Jones said.

"A lot of the businesses we buy from are also small, artisan companies, and they need income, too."

Jones said she "didn't expect any handouts", but that most sole traders would "certainly appreciate" an interest-free loan from the Government to allow them to continue.

"One month ago I managed to pay off the loan I took out to recover from the floods we had a few years ago, and I think the impacts from Covid-19 are going to be much worse than that."

"We were only shut down for about 10 days during the floods, and this [the level 4 lockdown] has meant we've been closed for at least a month.

"I really hope that something like this encourages the community to really support local businesses because, even if the product is a little bit more expensive, it's higher quality and the money will go straight back into our local economy."

Maria Lane Eatery and Bar at Majestic Square. Photo / Supplied

The Government announced on Thursday the rules for alert level 3 but Prime Minister Jacinda Ardern said a formal decision about going out of lockdown and down to that level wouldn't be made until Monday.

Despite the potential easing of lockdown rules, Ardern said major restrictions would remain in place around hospitality businesses like restaurants and bars, as well as retail stores.

Food deliveries and e-commerce could re-open, but face-to-face transactions would not be allowed.

The owner of Maria Lane Eatery and Bar at Majestic Square, Bryce Mason, said his restaurant team had been working towards a new, seasonal menu, but any immediate plans had been put on hold.

"In light of the Government announcement today [Thursday], we'll be certainly looking at offering non-contact takeaway options," Mason said.

"You have to be pragmatic in this situation, and it's so important that we as a country don't undo all the hard work we've put in over the last four weeks or so and end up watching our coronavirus count go right back up again."

Mason said the Government's changes to the Company's Act this month, which allowed business directors "safe harbour" against the threat of insolvency, was another "proactive measure" from the Government.

"Making sure companies can work with their creditors and allow debts to hibernate until they're back on their feet can really help, and it's certainly not an initiative that's available in other places around the world."

According to Tourism New Zealand, 14.4 per cent of the total number of people employed in New Zealand work directly or indirectly in the tourist sector.

Whanganui River Adventures owner Ken Haworth said the tourism industry had "basically been smashed over".

Whanganui River Adventures owner Ken Haworth, after the 2015 floods. Photo / Mark Mitchell

"It'll be at least six to eight months before we see the full impact of this pandemic," Haworth said.

"There just won't be the traffic there for us for quite a while, and a lot of tourism operators have already come off a fairly average summer compared to the last one," Howarth said.

"It'll be a little further down the track that Government support towards mortgages and loans would really come in useful."

Haworth said the alert level would have to return to 1 before many tourist companies could return to full operations.

"Until people are allowed to travel freely, it's going to be hard to attract tourists back to the region, and having a group of people in a jetboat goes against social distancing measures straight away anyway."

Haworth said local government needed to work to ensure the Whanganui area was still a viable tourist destination, and getting events to return to the city would be "critical".

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Whanganui Chamber of Commerce chief executive Sue Stewart said the economic slowdown in New Zealand and Whanganui was "inevitable" and it remained to be seen to what extent and for how long the recession would continue.

"Our local businesses are optimistic about moving out of lockdown, from essential services only to safe services, and implementing industry-specific guidelines to operate and grow under the new strict norms of level 3," Stewart said.

"We must remember to place importance on supporting our local economy in the next few months, and while Whanganui shows itself to be resilient, supporting each other by buying local will be vital for small or medium-sized enterprises to continue to operate."

Stewart said the support received from the Government in terms of the various funding provided, tax relief and businesses partnering with economic development agency Whanganui & Partners had been "vital" for business confidence during the Covid-19 pandemic.

Elite Mechanical and Engineering, on Heads Rd, had remained available for essential repairs during the lockdown, but owner Michael Mooney said in order for the company to return to normal, their clients would also have to "reopen their doors".

"We're still dealing with jobs on a case-by-case basis, but the key thing for us is if we're allowed to work on our client's sites.

"A lot of our planned work has been put off, and we'll only be allowed to complete it when lockdown restrictions are eased."

Mooney said he was considering allowing clients a 60-day period to pay for jobs when the lockdown was lifted, as many people "wouldn't have immediate cashflow" when they returned to work.

"It might be a case of businesses needing us to do a job for them, but not having the funds available to immediately pay for it.

"Allowing them a little more time to pay is definitely something we'll look at doing, because it gets my staff back working again, and it gets people spending money locally again."

Elite Mechanical owner Mike Mooney (left) and Proparts purchasing manager Mike Palmer. Photo / Bevan Conley

Aramax Couriers owner Graham Clarke said that although there had been a significant reduction in parcel volumes, an added benefit was less traffic on the roads, enabling faster delivery to the likes of Taihape and Hunterville.

"We had a family wanting to send a food parcel to a family member in Hunterville and that was a quicker trip than usual," Clarke said.

"We've implemented a new system to enable no-contact deliveries and our scanners are thoroughly cleaned with sanitiser throughout the day."

Clarke said the company had received numerous inquiries from Whanganui businesses, asking if they could deliver goods on their behalf.

"We're getting them to check if they're classed as an essential service via the Government's Covid-19 website.

"I want to give my team as much work as possible, and we've now got some of the online retailers operating and selling essential products and we're delivering them as quickly and safely as possible."

Burwood Motel owner Yan Lin said Whanganui needed to "put its hand up" and make sure the country knew it was "still a great place to visit" in the future.

"We're still here, and it's still an amazing place to come to," Lin said.

"If local and central government can support local businesses and encourage the public to visit our city when travel restrictions have been lifted, we'll definitely be on the right path to economic recovery.

"It's great that the Government has been working with the banks to try and prevent a similar situation to the 2008 financial crisis, because we don't want Whanganui to have to retreat into its shell all over again."

New Zealand remained "a food basket for the world", Lin said, and while certain industries would be hit hard by the Covid-19 pandemic, "opportunities for economic development are still out there".

"We have to remain positive and focus on the things that we do have in our control.

"Buying local, and supporting local, is the key for everyone to be able to move forward."

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