In the Event of Another COVID Lockdown, What Help Will Businesses Get?

Before Christmas last year, Finance Minister Grant Robertson set out the assistance that would be offered if there was to be another dreaded lockdown and while wage subsidies would again be used to prop the economy, some of the help will be new.

Robertson announced that the Government wanted to provide certainty to businesses and workers about what support would be on offer if there was a resurgence of COVID-19.

Wage subsidies would be on offer again if the country, or any region, needed to move back to Alert Level 3 or 4. The Government said it would stick to broadly the same approach it took last year, despite some controversy about firms claiming the subsidies when they were entitled to the money but later turned out to not really need it.

Businesses would be entitled to wage subsidies if an Alert Level 3 or 4 lockdown lasted for a week or more. As with the subsidies provided in Auckland in August last year, businesses would need to suffer a 40 percent decline in revenues due to the lockdown to qualify.

The calculation would be based on comparing their fortnightly revenues with those during the six-week period preceding the lockdown, rather than the previous year as it had been. Ministers have cautioned that they would monitor the scheme to see if further integrity measures were required.

Robertson also promised new support for businesses in the event of a move back to Alert Level 2.

A one-off cash grant of $1500 plus $400 per employee, capped at $21,500 per business, would be offered to companies that suffered a 30 percent drop in their fortnightly revenues due to Level 2.

While the law paving the way for these resurgence support payments hasn’t been passed by Parliament, the Government has said they would legislate retrospectively if support was needed earlier.

Robertson said the new support would be particularly useful for hospitality businesses.

A short-term absence payment would also be available to businesses of $350 per eligible employee if they had workers who had been ordered to stay home while they waited for the result of a COVID test and who couldn’t work from home. This is in addition to the existing Leave Support Scheme that provides businesses with support if staff need to self-isolate after a positive test.

There is $10.3 billion left in the Government’s COVID-19 Response and Recovery Fund.