Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.
Auckland Lockdown Extended
On Monday Prime Minister Jacinda Ardern announced the decision to extend the lockdown in Auckland until 21 September, allowing for at least another week to help eliminate the small delta variant outbreaks.
Cabinet will review the nation’s pandemic settings on Monday 20 September, having agreed in principle to move Auckland down to alert level 3 from midnight Tuesday 21 September. From there, Auckland may see restrictions ease slightly but offices, schools, and public venues will remain shut. The government has also purchased 500,000 doses of Pfizer’s COVID-19 vaccine from Denmark
NZ Super Fund Posts Record Returns
The NZ Super Fund has reported its strongest ever investment return, as it grew by $15 billion or 29.63% in the last financial year, reaching $59.8 billion. However, its chief executive, Matt Whineray, warned the fund’s strong short-term performance was likely to be affected by increased inflation and rising interest rates.
COVID Support for Businesses Amid Level 4 Lockdown
Businesses impacted financially by this lockdown are being offered a range of support measures. You can find information on the COVID-19 website detailing the support available, or there’s a recap below.
If your business has to close temporarily or reduce opening hours
COVID-19 Wage Subsidy
If your business cannot operate because of Alert Level 4 restrictions or you will lose revenue, you can apply for the COVID-19 Wage Subsidy scheme to help keep paying your staff and protect jobs.
Businesses and self-employed people must expect a 40% drop in revenue to be eligible to receive the wage subsidy.
The wage subsidy is paid in a 2 week lump sum. You can get:
- $600 per week for each full-time employee
- $359 per week for each part-time worker retained.
As an employer you must pass on the full wage subsidy to your employee. If the wage subsidy is more than your employee’s pay, you can continue to pay them at their normal rate.
Wage Subsidy 2021 #2 Update
The Wage Subsidy currently only applies to those businesses operating under Level 4 or Level 3 restrictions. This means generally anyone outside of the Auckland borders cannot and should not apply for this round of Wage Subsidy (at this stage).
If you have applied and received the subsidy (done before the move to Level 2) then you will need to consider and ensure that
- your revenue does in fact drop by 40% for the 2 weeks from 31 August to 13 September and
- it is attributable to the time spent at level 3 and/or any direct knock-on effect of Auckland remaining at level 4.
Get in touch with us if you have any questions. Book a call here.
Find out more about the Leave Support Scheme on the Work and Income website.
COVID-19 Resurgence Support Payment
The COVID-19 Resurgence Support Payment helps cover wages and fixed costs for businesses who have been directly affected when there is an increase to Alert Level 2 or higher for a week or more.
To be eligible, your business must have experienced at least a 30% drop in revenue or a 30% decline in capital-raising ability over a 7-day period, due to an increase in Alert Levels.
You can receive $1,500 per business plus $400 per full-time employee (FTE), up to 50 FTE.
The maximum payment is $21,500.
If you’re a sole trader, you can receive a payment of up to $1,900.
Applications for the COVID-19 Resurgence Support Payment are now open. You need to apply through Inland Revenue. Businesses anywhere in New Zealand can apply if they meet the eligibility criteria.
Find out more information about the COVID-19 Resurgence Support Payment and how to apply here.
If your business has reduced revenue
Small Business Cashflow Loan Scheme
If you employ 50 or fewer staff, you may be able to apply for the Small Business Cashflow Loan Scheme. This is a one-off 5 year loan where you can borrow a maximum of $10,000 plus $1,800 per full-time-equivalent employee within your business.
- When applying for the loan, you need to be able to declare that your business is viable.
- Your business must have experienced a minimum 30% decline in actual or predicted revenue over the period of a month, compared with the same month last year.
- Applications are open until 31 December 2023 through myIR. If your business does not have a myIR account, you will need to create one to apply.
Loans will be interest free if they are paid back within 2 years. The interest rate is 3% for a maximum term of 5 years.
IRD tax assistance
If you’re finding it hard to meet your tax obligations, Inland Revenue may be able to help. Get in touch with us if you have any questions.
The COVID-19 Business Debt Hibernation scheme allows businesses to get a month’s protection while they talk to their creditors.
If an employee needs to self isolate
COVID-19 Leave Support Scheme
If an employee cannot work from home while self-isolating, you may be able to apply for financial support so they can continue to get paid.
The Leave Support Scheme is paid as a 2 week lump sum at the rate of:
- $600 a week for full-time employees
- $359 a week for part-time employees
You cannot get the Wage Subsidy August 2021, Leave Support Scheme and Short-Term Absence Payment for the same employee at the same time.
If an employee is awaiting the result of a COVID-19 rest
COVID-19 Short-Term Absence Payment
The Short-Term Absence Payment is available for businesses, including self-employed people, to help pay employees who cannot work from home while they wait at home for a COVID-19 test result. This is a one-off payment of $350. You can find the details here
Kiwi Business Boost Tool
The Government has funded specialist consultancy support services to provide advice to businesses who need it. You can use the Kiwi Business Boost Tool to find out what services are available in your region.
The Treasury website’s COVID-19 Economic Response Measures can also provide more information on the range of supports available to businesses.
Training Incentive Allowance
The Training Incentive Allowance can help with tuition fees, books, childcare, equipment, transport and any additional caring costs while studying. It’s available for courses at levels 1-7 of the NZ Qualifications Framework. Visit the Work and Income website to find out who’s eligible, how much you can get and who can apply.
How Business Leaders Can Prevent the “Great Resignation”
The pandemic has turned our lives upside down, and many of us are responding by making significant changes in our personal and professional lives. With people becoming increasingly confident that they can find better work, the “Great Resignation” has ensued.
This Forbes article outlines some ways employers can stop the mass exodus:
- Listen and learn. Gauge your employees’ well-being. Check how they’re doing on a regular basis and find out what they need for personal and professional growth.
- Coach to mitigate burnout. Many people leave their jobs because of burnout. So review your wellness benefits or consider adding more. You might also want to identify at-risk staff and offer mental health hours to step away from work.
- Invest in flexibility. It might not be easy for small businesses to provide extremely high pay, but you can at least offer work flexibility. If you can ease up on conventional standards of when and where your employees work, they are more likely to stay.
In a nutshell, it boils down to one thing: put your people first. If you need more focused business advice, get in touch with us today and let’s work out a plan!
Get in touch
Contact us if you have any questions or want to discuss the next steps for your business.