The government's Covid-19 support payments have never been about helping businesses make money, but instead helping those doing it tough to meet costs, Deputy Prime Minister Grant Robertson says.
Deputy Prime Minister Grant Robertson. Photo: RNZ / Angus Dreaver
Targeted payments to businesses struggling in the red traffic light, an interest-free extension to small business loans, and flexibility on tax payment dates are being offered by the government.
To be eligible for the new payments, businesses must show a 40 percent drop in revenue over seven consecutive days during the six weeks prior to 15 February, when the government shifted to phase two.
It would be paid on a fortnightly basis for six weeks, with the option to extend the duration if necessary.
Robertson told First Up the government estimated the new support payments would be about 55 to 60 percent of the fixed costs for a business with about 20 staff.
"Obviously that's only a contribution, but it is a recognition that for some businesses, while they can operate, there are restrictions - and we are seeing a lot of behavioural responses from people to not go out so much so it's particularly affecting those hospitality businesses, events, accommodation.
"All of the payments we've made, they've not tried to help people make money. It's really just about meeting costs, and there are certainly some people doing it tough out there."
Robertson said the government had worked with the hospitality industry on the payments.
"All of the payments we've made, they've not tried to help people make money. It's really just about meeting costs, and there are certainly some people doing it tough out there" - Deputy Prime Minister Grant Robertson
"What we've done with the last payments going back into last year was take a six week block immediately before the payments become open and say compare yourself with one week within there and if you've dropped by the required percentage then you can get the funding.
"It is very difficult to find another comparative period. If we went back a year we would exclude the 145,000 businesses that have been created in New Zealand in the last year.
"If we went back exactly a year, it would be when Auckland was in heavy restrictions post the Valentine's Day … we do have an exception for seasonal businesses where people genuinely can't compare themselves and we're looking at whether that could be used … but we do want to support those businesses who are facing a tough time."
The payment would be kept open for an extended period of time, Robertson said.
"Over the next couple of weeks people ... might find that they do fit the eligibility when at first they didn't.
"We will definitely keep it under review because these are the kinds of businesses that we want to support.
With businesses concerned about the seven-day isolation period for close contacts, Robertson said that would change when the country moved to phase three of the Omicron response plan - which was not far away.
Auckland businesses have described the toll self isolation has been taking on their operations, with some restaurants having to reduce hours or even close at times due to a lack of staff.
"The definition of who is a close contact changes significantly, so rather than just being if you were at a location of interest or in a workplace or whatever, where somebody has got Omicron, it really comes down now to being a household contact.
"So essentially household or very like a house contact - so that will reduce the number of people captured by each infection significantly, and we've done that deliberately because we did learn the lesson from overseas that if we keep the same definition, we would have swathes of businesses not being able to operate, so that's coming very, very soon.
"The length of time will stay at the seven days for a household contact or close contact as what they are called now, because that is the best health advice that we've got, but we do not recognise the strain that this is putting on people and that change is close at hand."