Government wage subsidy extension no silver bullet for ILT

Thursday, 14 May 2020

Invercargill Licensing Trust chief executive Chris Ramsay.

The extension of the wage subsidy won't provide the silver bullet needed for the struggling Invercargill Licensing Trust, its chief executive says.

The Trust confirmed this week it was working through the prospect of laying off staff given the financial hit it has taken on the back of Covid-19.

The ILT had taken up the Government's 12-week wage subsidy for its staff which finishes next month.

As part of the 2020 budget announcement on Thursday, the Government revealed an extension to the wage subsidy for a further eight weeks, but with a change in criteria.

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Under the first 12 weeks, businesses had to show a 30 percent financial drop year-on-year, but that has changed to 50 percent.

When speaking to Stuff soon after the budget announcement, ILT chief executive Chris Ramsay said he had yet to look through the finer details of the extension. He was also unsure if they would meet the 50 percent threshold.

The Trust hires about 600 staff in 25 hospitality businesses in Invercargill and gives millions of dollars in profits back to the community each year.

Even if the ILT was able to extend the wage subsidy for a further eight weeks Ramsay said it would not provide a silver bullet needed to put a halt to the restructuring proposal that it was working through.

'Everything we are looking at is based on forecast demand, it is not based on Government subsidies. The Government subsidies help, but we know they are not going to last forever. Everything we have done is with an eye towards the coming months and years, not the coming weeks.''

''At the moment, the demand for accommodation, functions, and catering work is abysmal.''

Ramsay felt the biggest help, in regard to getting its business operations back and thriving, would be to get people travelling to the regions again.

'The sooner Air New Zealand can get flying and landing on our tarmac, with the schedules that were in place, the more helpful it will be for everyone.''