Finance Minister Grant Robertson raises hopes for business activity at level 3

Tuesday, 21 April 2020

Finance Minister Grant Robertson has forecast a burst in commerce over the next couple of weeks, once more businesses start to trade again at alert level 3.

From Tuesday, businesses will be able to sell non-essential goods online and through approaches such as 'click and collect'.

Finance Minister Grant Robertson said support would be needed for businesses 'some time to come'.

'I think you will find that you will see a tremendous amount of commerce taking place in New Zealand,' Robertson told Parliament's Epidemic Response select committee.

'In fact, I suspect we are going to see quite a burst of that in the next couple of weeks.'

Robertson said he accepted level 3 would not work for 'every single retailer that doesn't necessarily have an online offering'.

* Government pays out just shy of $10b to support 1.6 million in work

* Applications open for $6.25 billion of loans to struggling businesses**

'But there are 'contactless' trading opportunities beyond online as well,' he said.

Robertson acknowledged that ongoing support was nevertheless going to be needed for businesses for 'some time to come'.

Small Business Minister Stuart Nash told the committee that more measures were weighed up by the Government to help small businesses.

Nash said there were many businesses that were really struggling.

'There are a number of businesses that are now looking at survival and it is tenuous,' he said.

Responding to criticism from National Party MPs that the Government had not yet done enough to help small businesses, Nash said the Government was 'running a number of scenarios on a number of different packages'.

Small Business Minister Stuart Nash says more help for 'struggling' small firms will be forthcoming.

More than $10 billion had now been paid out in wage subsidies and that had been a 'lifeline' for small businesses, he said.

Tax changes, bank-loan guarantees and the work the Government had done with landlords to delay business-tenancy terminations had also been helping to 'soften the blow', he said.

'There is still work in progress about what other measures we could put in place for small businesses and there is a Budget to be delivered next month,' he said.

'So please don't think that what has been delivered so far is the end of the road.

'It certainly isn't and we are continuously looking at the environment in which we are operating [and] we're continuously assessing the measures we have put in place to see if in fact they are having the desired effects,' he said.

Robertson said 'thousands' of businesses had applied for bank loans that are 80 per cent guaranteed by the Government.

The loans, up to a value of $500,000, are available to businesses with annual sales of up to $80m a year, though it is up to banks – which carry 20 per cent of the default risk – whether or not to approve them.

National Party economic development spokesperson Todd McClay questioned Nash on why the Government had not let construction companies and retailers operate through the lockdown in the same ways that have been allowed in Australia.

But Nash appeared to suggest in response that Australia's looser lockdown conditions had come at a cost.

'Australia has had five times the hospitalisations per head that we have had,' he said.

Journalists in Australia were asking its Prime Minister Scott Morrison why it hadn't done what New Zealand had done, he said.

Nash said he had written to big businesses to encourage them to pay their suppliers promptly, to help small companies with their cash flow.

Employment Minister Willie Jackson noted there had been forecasts unemployment might balloon out to 25 per cent, but said that would be 'unacceptable'.

'It is dependent on what we do as a government in term of cushioning the blow, supporting businesses and supporting workers.

'If general employment goes out to 25 per cent, what is Maori unemployment going to be? 50 per cent? That is just unacceptable,' he said.

National Party finance spokesman Paul Goldsmith said small to medium-sized businesses were paying a heavy price for the extension of the level-4 lockdown.

'A week longer in full lockdown followed by heavy restrictions at level 3 spells a lot of pain for many small businesses who still won't be able to open and risks thousands of jobs,' he said.

'The Government-backed business loan scheme is having limited uptake because struggling businesses worry about more debt, and little has been done to help with rents,' he said.