Support Extensions Are Not Enough

According to Hospitality New Zealand, the Government’s extension of the wage subsidy for businesses and the repeat of the resurgence payment will not be enough to save many businesses.

Hospitality New Zealand officials met with Finance Minister Grant Robertson to plead for targeted support for their struggling industry.

Chief Executive Julie White said the Ministers got a clear and unequivocal picture of the losses being borne by the industry but they could not promise targeted support.

“The Government is not offering anything equal to the deep financial crisis the hospitality industry is in. At stake is the wellbeing of families of operators and staff, and their suppliers, and the customers who want the businesses to operate,” expressed White.

“Our need is uniquely desperate. Levels 2 to 4 are periods of 30-100% losses for most hospitality and accommodation businesses. There has been little bounce-back under Level 2.5, with cancellations going right through to Christmas. Most of our members will trade at a loss even with the wage subsidy and resurgence payment.”

White noted that the extension of the wage subsidy and the repeat of the resurgence payment will help

“And we’re grateful, but for most it won’t be enough,” she said.

“We need a payment targeted especially for our industry because we’re the hardest hit by policies designed to cut socialisation. Targeted support for hospitality businesses has worked in other countries to stave off the worst of the effects of having their doors closed while rent and insurance and other fixed costs keep piling up, and I can’t see why it can’t happen here.

“The Government said targeted support is difficult to organise, but it is no more difficult than this industry carrying most of the financial burden of COVID levels.”

Julie White explained that the core problem is uncertainty about how long the industry would have to operate with restrictions that prevent them breaking even.

“If businesses had a date to aim for, they could borrow and operate tightly to reach it, but the lack of a plan or a target means banks don’t lend, debtors don’t roll over debt, and customers don’t make bookings.

“What would save us, for example, is a vaccination rate that means we can operate as normal.”