Kaikoura businesses welcome Govt's $7.5m relief package, but some will miss out
Thursday, 17 November 2016
They were gearing up for a record-breaking season in Kaikoura, but now local businesses are wondering if they'll survive the summer.
While the Government has stepped in with a relief package, it leaves some of Kaikoura's most prominent businesses with nothing.
This week's earthquakes have had a sudden and violent impact on the local tourism industry, which had been enjoying a boom.
The road north would likely be out of action for months, stranding businesses in the already remote town.
Operators had been preparing for the season ahead, hiring and training seasonal staff on the back of strong forward bookings.
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Now the summer was a write-off, with the future beyond that unclear.
The Government on Thursday announced a $7.5-million package for small businesses affected by the earthquakes.
For eight weeks it would subsidise those with fewer than 20 employees unable to operate, back-dated to the first earthquake.
They would get $500 a week for each full-time employee and $300 a week for each part-time employee.
It applied to businesses in Kaikoura, Cheviot, Waiau, Rotherham, Mt Lyford and Ward. Hanmer Springs and Picton were excluded as they were fully operating.
It was based on the package offered after the Canterbury earthquakes, with one crucial difference.
'In the Canterbury earthquake it was very much on whether the businesses themselves could conduct their business. In this instance it's actually whether there is any business left to conduct,' Economic Development Minister Steven Joyce said.
Some of Kaikoura's larger businesses have been left with nothing, despite being among the worst hit.
'Obviously the smaller operators will be pleased with that result, but it leaves the bigger ones out in the cold,' Encounter Kaikoura general manager Dennis Buurman said.
'I'm disappointed that there's no recognition of the input that the larger operators have in the community . . . there doesn't seem to be anything available to help us through this difficult time.'
His business had around 50 staff, with no guarantee as to when it could operate again.
The sea floor lift meant boats could not leave the marina for two-thirds of the day.
'We were just about in full swing. It was going to be a bumper season, no two ways about it.'
'Now we're in a position where we have no certainty whatsoever as to when we'll be able to operate again.'
Whale Watch would also be ineligible for funding due to its size.
The Ngati Kuri-run business is the pride of Kaikoura and paved the way for the town's reputation as an eco-tourism hub.
'It's a great thing for those small businesses that are struggling. For businesses like us, it doesn't provide us with anything,' general manager Kauahi Ngapora said.
There would be ongoing discussions with the Government, he said. In the meantime the business would get through as best it could.
'We've got people that work for us and families that rely on that income. It's not just us here that you see, it's everyone behind them. We've got to fight on.'
Anchor Inn motel managers Paul and Lyn Meikle said the package would definitely help, if they could work out how to access it.
Their priority was hanging on to their nine staff.
The motel was fully booked until the start of March, with some reservations for 2018. That has all changed.
With internet back on for the first time, Lyn spent all Thursday wading through 300 emails, many of which were cancellations for bookings as far out as January.
With subsidence, cracks and broken glass, they have five operational rooms out of 15.
There is plenty of demand now from police, pilots, builders and contractors. But once that dried up the road closure would begin to bite.
Eight weeks would not be long enough, Paul Meikle said. The insurance assessor did not arrive until Monday and getting tradesmen would be 'nasty'.
And much of the town hinged on Whale Watch, whose boats have been stranded by the sea level rise.
However, the Aussie imports had no plans to leave.
'No shaking and rolling is going to shake me out of the country,' Lyn said. 'I'm staying put. It is all just wait and see now.'
Anton Evans owns Kaikoura's Hunting and Fishing shop, charter business Rodfather Fishing and hunting safari and clay shooting businesses.
He was one of the first to sign up for the package, which he said would help keep his eight staff.
'A lot of people get nothing.'
He was due to move into a brand new shop on Monday, but both his new and old stores are damaged. He has no idea when he'll reopen.
In any case, there are no travellers so there's no demand.
'I could put a 'free' sign outside my shop and not give anything away.'
While he had good insurance, eight weeks' assistance would be nowhere near enough for most tourist businesses, he said. The marine operators would probably need a new harbour.
'This year is completely written off with the road closure. Next season you'll have to rebuild your brand from nothing. It will be 3-5 years before you can think about it being back where it was.'
About 80 per cent of Kaikoura's businesses cater for international visitors. When Monday's earthquake struck, about 85 per cent of people in the town were from overseas, Kaikoura District Mayor Winston Gray said.
Prime Minister John Key did not mince his words when he spoke to Kaikoura's businesses on Wednesday.
Some international markets would be put off by the earthquakes, he said.
Labour leader Andrew Little said the relief package was a necessary first step but did not go far enough.
'Labour is concerned that the Government has limited the package to small businesses with fewer than 20 employees.'
BusinessNZ boss Kirk Hope supported the Government's plan, saying the approach worked well after the Christchurch earthquakes as it helped businesses hold on to staff.
'Otherwise, the flow-on effect of losing vital staff following a significant natural disaster would be a double whammy for many businesses.
'Supporting wage payments is the most practical way to keep those communities operating and get businesses back on track.'
He added that it was right that firms with insurance cover for loss of earnings used that before accessing the wage subsidy.
There were about 1000 employees and sole traders operating in the area covered by the assistance package, and most would have seen a loss of business.
It was not clear how much business would be lost without a through road, north and south, of Kaikoura.
The highway south would likely be open more quickly than the northern route.
Joyce said the Government recognised that eight weeks support may not be sufficient, but it would be reviewed before Christmas when more information would be available. It could be extended to other towns and areas if there was evidence of quake-related disruption.
A separate package for farmers would be announced in the next few days.
Businesses with loss of earnings insurance are expected to use their insurance first before accessing the subsidy.
Social Development Minister Anne Tolley said it would be administered by the Ministry of Social Development.
'It is designed to give employers who experience a sudden big and sustained drop in revenue the confidence to retain their permanent staff while we all get more certainty on the future of the district's key industries like tourism, hospitality and fisheries.'
The Government is also working on additional programmes to assist the primary sector and help local businesses with their tax payments, Joyce said.
It would do all it could to help the people of the Kaikoura district and surrounding areas get back on their feet.
Joyce said the Government wanted to ensure the existing businesss infrastructure stayed in place.
'Working employers' would be included in the package.