Auckland businesses are calling for more financial support from the government as they face a prolonged period of lockdown.
The government has provided a one-time revival grant to help with fixed overheads, such as rent.
But businesses weary of lockdown amid high smoke facing at least another two weeks at alert level 4 say this was not enough, with more than 20,000 homeowners signing the Auckland Chamber of Commerce petition calling on the government to extend resurgence allowance.
Among these business owners is Meltrons Managing Director Mathew Koshy. His Auckland-based business has a team of five employees who sell industrial scales and other engineering equipment.
The blocking of alert level 4 chilled the company’s recovery from previous restrictions. Koshy was not receiving a salary for himself and was drawing on reserves to pay the bills.
“We have seen our revenues drop around 80 percent because we cannot operate except essential services. A solid July and a strong start to August have been decimated by a two-week lockdown,” he said.
Koshy supported the government’s call to put the country on lockdown and believed that companies could last a week or two below alert level 4.
But he said companies would need a helping hand to overcome the financial fallout that occurred over a longer period due to trade restrictions.
“This is where it’s going to hit us hard now that it’s been on for two weeks,” he said.
“The problem for business owners is that the wage subsidy barely covers the salaries of our staff, let alone the salaries for us. So you have all the costs that we face, including rent, utilities, insurance payments and rental purchases, and plant and equipment costs. These continue to work and we cannot postpone these costs. “
Koshy wants to see the revival grant extended and distributed on a weekly basis, with the amount paid depending on the individual companies’ circumstances and income.
Auckland Chamber of Commerce Executive Director Michael Barnett said Mathew Koshy’s company is not the only company in trouble.
“Many of them came out of 2020 with a depleted balance sheet. They have been in recovery mode, just getting back on track and now they are under pressure again.
“These are really tough times for companies.”
He praised the wage subsidy as a way to help employees, but thought those who do the job need help too.
“We are not asking the government to pay all [business’s costs], we ask you to fulfill a part.
“The government is asking companies to close, but the companies are expected to be there to provide employment and for the economy to start again in a few weeks.”
New Zealand Institute of Economic Research Chief Economist Christina Leuong said the lockdown had abruptly halted Auckland’s robust economic recovery from previous restrictions.
But he said the economy has been shown to rebound when fueled by government support.
“As long as these supportive measures are in place and cash flow continues to flow through the economy, businesses can keep workers employed, and with a strong job market, we will have the confidence of households flowing into spending.”
Certainty was the best medicine for struggling companies in times like these, Leuong said.
In a statement, Finance Minister Grant Robertson said the government was still looking at whether additional support is needed through the Resurgence Grant, particularly as there are higher alert levels.
Robertson said the wage subsidy, leave support plan and short-term absence pay were available to businesses as appropriate.