Restaurants want immediate Govt support through lockdowns

Tuesday, 16 February 2021

Restaurants want immediate financial support when they are forced to close their doors to diners due to alert level changes.

Auckland shifted to alert level 3 on Sunday night, and the rest of the country to alert level 2, in response to the discovery of three community Covid-19 cases.

The Government is setting up a new resurgence support payment for businesses affected.

They will only need to show a revenue drop of 30 per cent for seven days to qualify.

* The help firms will get if there is another Covid lockdown

* Hospitality sector 'teetering on the abyss'

Restaurants could experience a drop in customer numbers even after lockdown levels were listed, the Restaurant Association said.

But a decision on whether the support will come into effect this time will only be made if there is an extension to the 72-hour alert level increase announced on Sunday.

Finance Minister Grant Robertson said, if the support was enacted it would cover the initial three-day period, too.

Restaurant Association chief executive Marisa Bidois said there should be an immediate payment for affected businesses when an area was placed into lockdown.

She said, at level 2, hospitality businesses in particularly had “onerous steps and hoops to jump through” to continue to serve customers. At level 3, even they could offer takeaway, that would not work for every business.

She said there could be a grant available for hospitality businesses to cover the initial period of alert level changes, before other supports were made available

“If this was the first lockdown we’d had it might look different but we’ve had several level changes in the last 12 months.”

A survey showed that 40 per cent of the association’s members were not open in level 3 and 56 per cent were “devastated' by the latest trading restrictions.

She said restaurant owners understood the need to keep Covid-19 under control but they needed more support.

“Level changes also impact the confidence of diners – what could be a three-day level change has impacts on business for weeks in terms of their customer numbers.

“There are many unseen costs associated with alert level movement decisions: fixed rent costs, single server costs, reduced capacity due to physical distancing requirements and more commonly food wastage. While three days seems inconsequential for other sectors an alert level 3 movement sees large quantities of wasted food and further financial crunch on businesses.”

She said, in September, the Restaurant Association met with the Treasury and recommended the Government look into creating specific, sector-led alert level guidance in case the country went back up alert levels.

“Despite establishing this guidance for hospitality, outlining both operational and financial assistance that would be triggered at different alert levels, and submitting it to Treasury in November, disappointingly it has still not been adopted.”

BusinessNZ chief executive Kirk Hope said, even if the alert level dropped from level 3 to level 2 in Auckland, those businesses would still be in line to qualify for a payment, if the support was enacted.

That payment would cover costs such as money spent by a hospitality business preparing for an event that did not happen.

“There should be support available for businesses whether it’s a one-off cost of an ongoing impact beyond the 72 hours.”