Treasury forecasts show need for medium to longer term small business support
Treasury forecasts released yesterday show that there is an ongoing need to support small businesses with policies that look to assist in the medium to longer term, says the Wellington Chamber of Commerce.
"The Government has managed the situation well so far and have helped keep the lights on for many businesses, but some businesses are still finding it difficult to cope with expenses while at the same time not receiving any income.
"The wage subsidy and Government-backed loans have helped small businesses ride out the lock-down thus far, and we need to continue this by looking at other support mechanisms for small, local businesses.
"Yesterday’s forecast scenarios release by Treasury showed that with effective Government support for our business community and management of the current crisis, we can avoid a worst-case scenario where a quarter of New Zealanders are out of work and our GDP figures slide 23 percent.
"But the key words are ‘effective support’ and for that the Government needs to know where the pain points are.
"Immediate cash flow is the biggest issue for our members at the moment, with bills and expenses still to pay. One idea is to provide a small grants scheme similar to the one in South Australia. Their government is supporting 19,000 small businesses with a one-off $10,000 grants to help with immediate cash flow issues.
"We could also follow Canada’s lead and offer interest-free loans of up to $40,000, an alternative to the Government’s Business Finance Scheme which some small businesses have difficulty accessing.
"These ideas aren’t thinking outside the box, but they will get the job done where New Zealand needs it most. Small business makes up 97 percent of all enterprises, employ 600,000 Kiwis, and comprise of 26 percent of our overall GDP, they’re also the most vulnerable in an economic downturn.
"Small businesses and landlords alike are looking for assistance with commercial rents as well.
"Looking beyond the immediate issues, we’ve got to be mindful of what else small business will need in their recovery toolkit. Part of this is access to skills and experience.
"While micro and small business can access the 90-day trail period for new employees, this should be expanded temporarily to include businesses with up to 50 employees. It’ll take away a barrier to businesses taking a punt on new employees, and encourage them to keep rebuilding their workforce.
"There is no single solution to our economic recovery, it’ll require mixture of different initiatives and support packages."