Accom has welcomed a vast $12.1 billion government bailout designed to help weather the coronavirus crisis – but says the stimulus is “a fraction” of what’s needed.
The package, which amounts to four percent of the nation’s gross domestic product, is one of the largest in the world on a per capita basis according to finance minister Grant Robertson.
While leading industry bodies say it will provide “huge relief” for smaller operators, they argue it fails to address the needs of larger tourism employers.
Robertson says the stimulus is about “cashflow and confidence” and is just the beginning of the support that will be rolled out in the coming months to help New Zealand businesses ride the downturn.
Hospitality New Zealand CEO Julie White has urged the government “to prioritise the next round of support packages to be extended to the hospitality sector”, saying additional funding should include “larger scale enterprises who are also experiencing financial pressures”.
Tourism Industry Aotearoa chief Chris Roberts said the package will be “a huge relief to small tourism business owners across New Zealand who were facing having to make their people redundant or close their businesses within days”.
But he argues a $150,000 cap on the payment of $585 per full-time employee for 12 weeks means that only around 20 staff in any one business will be subsidised.
“TIA notes that the major weakness of the government package is the exclusion of larger businesses,” he said, urging employers to maintain pressure on the government to finalise tailored packages for larger businesses expected to be part of ongoing recovery measures.
“The package does not include business loans but the government has signalled it will hold further discussions with banks on securing access to capital for businesses,” Roberts added.
The TIA chief is also disappointed with the lack of provision for mental health support.
“We know tourism operators and their staff are under enormous stress and need access to counselling and other mental health services,” he said.
The stimulus package, announced on Tuesday, includes:
- $5.1 billion towards wage subsidies for affected businesses in all sectors and regions, available immediately
- $1 billion towards reinstatement of depreciation deductions for commercial and industrial buildings to 2024.
- $2.8 billion for income support, including $25 per week benefit increase and a doubling of the Winter Energy Payment for 2020
- $2.8 billion in business tax changes, including a provisional tax threshold increase, and writing off interest on some late payments of tax
- $100 million for a redeployment package to help employees train to work in other industries
- $600 million towards an initial aviation support package (excluding Air New Zealand which will be considered separately)
Julie White says the measures are welcome but “amount to a fraction of what is required by the hospitality and tourism sectors, who have been most significantly affected by COVID-19”.
“The key issue for Hospitality and Tourism businesses is cash flow and these business continuity packages, while a significant first step, do not sufficiently address the industry’s concerns – we will be seeking further support from government.
“We are currently aware that thousands of hospitality and accommodation workers are being laid off as we speak and considerable further job losses are expected, including many from supporting industries such as laundry services, baking, food distributors, tour companies, travel and transport.”
Chris Roberts agrees while the stimulus represents “a substantial package” it is not enough to stave off widespread redundancies.
“Some jobs will be saved but we believe that many will still be lost,” he said.
His words come in the week that Air New Zealand has announced thousands of redundancies and travel agency Flight Centre has implemented a four-day working week for its 1200 staff throughout 140 New Zealand stores.
Both organisations are asking staff to take annual leave or leave without pay in the face of unprecedented travel cancellations, with Flight Centre forced to close 100 stores across Australia in its efforts to survive.