Govt announces new business support scheme for Omicron outbreak

A targeted support scheme has been released by the Government to help businesses during the Omicron outbreak.

Finance Minister Grant Robertson said there had been a significant drop off in some sectors such as hospitality and events.

“There are a range of reasons for this, but it is clear that the impact is putting a number of viable businesses at risk of not being able to operate.”

A business could get $4000 plus $400 for each full time employee, with a cap of $24,000.

“It will be available on a fortnightly basis for six weeks – so three payments in total. This reflects the international experience that the peak of the Omicron outbreak should pass after about six weeks. We will continue to closely monitor the situation and have the option to extend the payment if this if necessary,” Robertson said.

“Firms must show a 40 per cent drop in seven consecutive days within the six weeks prior to the shift to Phase 2 of the Omicron response on February 15.”

It was the same amount as the transition payment which the Government rolled out in December to assist with going into the traffic light system.

Businesses would be able to access payments from March 1.

There would also be changes to the Small Business Cashflow Loans Scheme, so businesses could take out an additional $10,000 “with a new repayment period of five years and the first two years being interest free”, Revenue Minister David Parker said.

“Cabinet has also agreed to remove the first two years of accrued base interest from all borrowers who have, or will, take out a loan under the scheme. This change will mean interest will only start accruing at the beginning of year three.”

President of Hospitality NZ Nick Keene told 1News said there was some relief that the support package could keep some middle-tier operators “over the line”, while it would still be tough for some of the smaller operators.

“I think it’s a good start, it’s nice to hear that it’ll be ongoing for a six week period.

“It’s somewhat heartening, there’s a lot of tough stories out there.”

Nathan Benfell from Shakespeare BNB in Te Anau said the situation at the moment was “devastating”.

“We’ve got some immense pressure on businesses in Fiordland.”

He said support was desperately needed, especially to get people through the winter and into the summer, and to address labour shortages.

Green MP Chlöe Swarbrick called the announcement “a lifeline”.

“Time and again, the little guy has shouldered the cost of this pandemic while asset holders have made record profits. The Government has the tools to re-balance this,” she said.

Swarbrick last week gave an open letter to Robertson with support from business owners, venues and industry representatives asking for changes such as the facilitation of commercial rent reduction and the extension of government backed loan schemes.