Covid-19: Auckland business owners 'hit harder' than previous lockdowns

Saturday, 11 September 2021

Restaurant Association chief executive Marisa Bidois joined Stuff Business Editor Susan Edmunds earlier to answer your questions.

Auckland businesses say they have felt a tighter squeeze over the past three weeks, with many having barely recovered from previous lockdowns and some struggling to access government support.

About 955,000 businesses have received the wage subsidy before September 3, making up 34 per cent of all unique jobs in New Zealand.

Yet while figures from the Ministry of Social Development and the Inland Revenue Department (IRD) show most applicants have been paid, some owners are yet to receive a dollar since applying for support.

Businesses in the city have experienced strict trading restrictions, with the Auckland region remaining in level 4 lockdown until at least next week. (File photo)

This, combined with many businesses’ tanks “running on low”, according to Pakuranga MP Simeon Brown, means Auckland entrepreneurs are beginning to question the future of their enterprises.

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The Ministry of Social Development said $1.5 billion had been paid out to businesses since the wage subsidy scheme last opened in August.

Althea Green-Jacks, centre right, has suffered $200,000 in losses over September due to lockdown, she recently sold her house to recoup Covid costs.

The ministry said 91 per cent of paid applications for the wage subsidy were paid within three working days, and 87 per cent of completed applications were processed within three working days.

The IRD received 186,000 applications for the resurgence package, and 90 per cent have been paid out.

But business owners like Althea Green-Jacks are still feeling the squeeze. Green-Jacks moved her business, The Ribhouse in Flat Bush, to a larger premises that cost her thousands of dollars in repairs.

The February lockdown knocked the business back hard, and now she’s sold her house to recoup costs lost to Covid.

“I went to a dark place, I’ve never felt so low in my life,” Green-Jacks said.

Green-Jacks said she applied for the wage subsidy and resurgence package on August 20, day one of applications. While she’s had calls from IRD and Ministry of Social Development, not a single dollar has entered her bank account since.

Urban in East owner, David Richardson is concerned that financial strain is putting the future of his cafe in doubt.

With 16 staff to pay, a landlord demanding rent and $200,000 lost in September earnings, Green-Jacks doesn’t know where to turn for help.

“A personal friend of mine just walked away from her business, just handed the keys over and gave up,” said Green-Jacks.

A construction business owner, Rob Loader, said he’d only received part of his resurgence package because of complications at IRD, and has nine staff still waiting on the wage subsidy.

Mark Heaslip, owner of Euro Cabins NZ, said he’d barely recovered from the first lockdown when the latest one hit. Both financial packages from the government came through within days of applying, however with his bank account on empty, he’s contemplating shutting the doors.

“It’s a vicious cycle, you just don’t know how what to expect with how infrequent these lockdowns have been,” said Heaslip.

Multiple business owners have said government package payments have been more inconsistent than previous lockdowns. Michael John, a building contractor, said he waited two weeks to see his wage subsidy processed.

An IRD statement said some applicants needed to provide more information, and that the clearing process was “focused heavily on the earliest applications”.

“Inland Revenue has a large number of people working on making sure businesses get the money they are entitled to as quickly and as efficiently as possible. And we believe that we are doing the job well,” the statement said.

A spokesperson for the Ministry of Social Development said some applications took a little longer when details on the application form did not match with those held by the Inland Revenue, with most mismatches relating to an IR number.

“We know this is a stressful time for many, which is why we are committed to working with applicants and Inland Revenue to resolve these issues. In many cases, this involves contacting each applicant individually, which takes time.”