Covid-19: Businesses 'exhausted' by alert level changes

Saturday, 27 February 2021

Grant Robertson announces wage subsidy plan for Auckland businesses.

Auckland hospitality businesses are devastated to be pushed back into Alert Level 3 in what was set to be a busy weekend for the city.

It was announced on Saturday evening that Auckland would return to level 3 from 6am on Sunday, and the rest of the country would shift to level 2, in response to the discovery of a new community case of Covid-19.

That person had been out in public despite being meant to isolate, and had gone to the gym after having a Covid-19 test.

The decision means events such as the Round the Bays run and Pride would be cancelled.

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Jacinda Ardern at a late Saturday press conference announcing a move in Covid-19 alert levels.

A border will be placed around the city again and businesses with workers that need to cross that boundary would need evidence of a permitted exemption to travel.

Documents issued earlier in the month for the three days Auckland was at level 3 will remain valid.

The wage subsidy scheme will be available to businesses that have experienced a 40 per cent drop in revenue a 14-day period, compared to a typical fortnightly revenue in the six weeks before the rise in alert level.

They can also qualify for a resurgence support payment if they experience a 30 per cent drop in a seven-day period.

Papatoetoe business owner Vishal Wadhwani said he was “gutted”.

“The Government needs support packages for the long term for small businesses. And for the short term small businesses really need assistance with rent relief. We can't keep going on like this,” Wadhwani said.

Prime Minister Jacinda Ardern has announced alert levels will increase again.

Wadhwani, who owns a number of Break Time convenient stores in south Auckland said, he felt like every time his businesses seemed to be recovering from the impacts of Covid-19 restrictions, another lockdown would hit.

“It feels like we're going one step forward and two steps back. This is crazy.

“I've spent 12 years working hard to build my business and this feels like we're being punished.”

Julie White, chief executive of Hospitality NZ, said it was devastating for her industry. Some hotels had been at 100 per cent capacity because of the events on in Auckland this weekend and now, instead of planning for a busy breakfast service, would have to work out how to deliver in-room breakfast to hundreds of guests.

“It’s literally a nightmare,” White said.

“As the week goes on, all hospitality businesses will be hit hard by having to close for the second time this month.

“The only saving grace for some is the wage subsidy and the business resurgence fund, however, for others, these support packages will barely scratch the surface when it comes to covering the immediate losses and cancellations to come,” she said.

“Our hospitality businesses are an essential part of our communities and will provide much of the employment that is needed for the recovery, but they can’t do that if they’re not here.”

White said she was worried for the future of the sector.

Marisa Bidois, chief executive of the Restaurant Association, said revenues would suffer, and the changes of alert level were difficult to manage.

“Sunday is a big day for hospo and our businesses will have stocked up on food for the day ahead, incurring wastage costs on top of significantly reduced revenues.

“We cannot stress enough the urgent need for the Government to respond with a tailored financial package for our industry. It is at least something that the wage subsidy has been confirmed and will be available, but it is a drop in the bucket of costs being covered particularly at level 3,” Bodois said.

Auckland Chamber of Commerce chief executive Michael Barnett said the latest lockdown was a 'wake up call' that not everyone was following the rules.

He said the wage subsidy and resurgence support packages were temporary band-aids but would not save businesses.

He said businesses and the community would be “bitterly disappointed”.

“It is frustrating and a blow to recovery, but we will rally and accept the help put in place to save jobs.

“Businesses will be eligible for both the wage subsidy and the resurgence payments to mitigate some of the costs and liabilities from having to limit activities for the next week in such short order even though we all could see the warning signs.

“The most helpful thing business and business leaders can do for their people and families is to encourage and provide support to ensure they all comply with the rules of handwashing, social distancing, QR code scanning, and most importantly, if you are unwell, are identified as a close contact or contact, or have visited any of the locations identified as places of interest by the authorities, stay home, call the Healthline, follow the instructions on getting a test and remain at home in isolation until you are told you are clear.”

Infometrics economist Brad Olsen said some businesses would be left “exhausted” by the alert level changes.

“Business patience will be wearing thin,” he said.

The three days at Alert Level 3 in Auckland earlier this month had reduced Auckland spending by about 40 per cent, Olsen said, and spending in the rest of the country by 10 to 15 per cent.

While there was a payment available to workers who have been told to isolate, Olsen said the fact that this had not happened highlighted that it was not working as well as it should, and there should be more of a “wraparound” approach to ensure people followed the rules, and were paid.

“To get the payment the employer essentially needs to apply for it and make sure the employee doesn’t come into work. Maybe once someone has had a test there should be stricter guidelines making sure that people do stay home and as part of that, are eligible for the payment,” he said.

Economist Shamubeel Eaqub said businesses were better placed to cope a year ago, but the lockdown would still be disruptive and the targeted assistance for the self-employed, and small firms, would help.