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Government Business Continuity Package:

The Government has released a significant economic package week and subsidies are now available for all businesses significantly impacted by COVID-19 including:

  • employers that are struggling to retain employees
  • sole traders
  • self-employed
  • new and existing businesses.

These subsidies are available for businesses that can show a 30% decline in revenue for any month between January and June 2020 compared to the year before (including projected revenue).

The subsidy are:

  • $585.80 per week for a full-time employee (20 hrs or more)
  • $350.00 per week for a part-time employee (less than 20 hrs).

The payment will be made as a lump sum for a period covering 12 weeks. 

You can apply for the package now - you do not need any supporting information to apply, however, you are signing a legal declaration and will be required to supply supporting information at some stage.

The scheme is operating on "high trust" - that is the Government is trying to ensure people receive the assistance they need quickly and that they are relying on the honesty of those making applications. There will be penalties for those who abuse the system.

For further information and to apply for the subsidy - click here
Definitions of the requirements can be found here:

There is some basic information you can start to collect now to help support your application:

  • proof that your business has declined by 30% - this may include cancellation notifications; bank records and financial accounts.  We understand that audited financial statements are not required;
  • proof that you are mitigating the impact of Covid-19 - this may include offering longer term accommodation, increasing your advertising on OTAs, offering room for quarantine (if suitable and practicable, containing any business advisors you may deal with, discussions with your accountant and discussions with your bank manager.



What happens when the subsidy is no longer available? 

The Government’s economic response package was designed to support businesses through the immediate impact of COVID-19, specifically over the next three months. Members should consider how best to operate once the subsidy if the subsidy is not extended and once it becomes unavailable.

What does a 30% decline in revenue mean?

This means a business has experienced a 30% decline in:

  • actual revenue, or
  • predicted revenue (e.g. for businesses who have seen a reduction in bookings such as accommodation providers), and
  • that decline is related to COVID-19.

The business must experience this decline between January 2020 and 9 June 2020.  Applications can also be made on the basis of forecast revenue loss within the period of the scheme.

Definition of revenue

Revenue means the total amount of money a business has earned from its normal business activities, before expenses are deducted.

Determining a decline in revenue

To determine a decline in revenue, the business must compare one month’s revenue against the same month the previous year (e.g. February 2020 compared with February 2019). The revenue of the month in the affected period must be at least 30% less than it was in the month it was compared against.

Businesses operating for less than a year

Where a business has been operating for less than a year, they must compare their revenue against a previous month that gives the best estimation of the revenue decline related to COVID-19.

What are active steps to mitigate the impact of COVID-19?

A business must take active steps to mitigate the financial impact of COVID-19 on their business. This could include activating their business continuity plan and seeking advice and support from:

  • their bank;
  • the Chamber of Commerce;
  • a relevant industry association;
  • the Regional Business Partner programme.


Mortgage Holiday and Business Finance Support Schemes 

24 March 2020

The Government, retail banks and the Reserve Bank have announced a major financial support package for home owners and businesses affected by the economic impacts of COVID-19.

The package will include a six month principal and interest payment holiday for mortgage holders and SME customers whose incomes have been affected by the economic disruption from COVID-19.

The Government and the banks will implement a $6.25 billion Business Finance Guarantee Scheme for small and medium-sized businesses, to protect jobs and support the economy through this unprecedented time.

“We are acting quickly to get these schemes in place to cushion the impact on New Zealanders and businesses from this global pandemic,” Finance Minister Grant Robertson said.

“These actions between the Government, banks and the Reserve Bank show how we are all uniting against COVID-19. We will get through this if we all continue to work together.

“A six-month mortgage holiday for people whose incomes have been affected by COVID-19 will mean people won’t lose their homes as a result of the economic disruption caused by this virus,” Grant Robertson said.

The specific details of this initiative are being finalised and agreed urgently and banks will make these public in the coming days.

The Reserve Bank has agreed to help banks put this in place with appropriate capital rules. In addition, it has decided to reduce banks ‘core funding ratios’ from 75 percent to 50 percent, further helping banks to make credit available.

We are announcing this now to give people and businesses the certainty that we are doing what we can to cushion the blow of COVID-19.

The Business Finance Guarantee Scheme will provide short-term credit to cushion the financial distress on solvent small and medium-sized firms affected by the COVID-19 crisis.

This scheme leverages the Crown’s financial strength, allowing banks to lend to ease the financial stress on solvent firms affected by the COVID-19 pandemic.

The scheme will include a limit of $500,000 per loan and will apply to firms with a turnover of between $250,000 and $80 million per annum. The loans will be for a maximum of three years and expected to be provided by the banks at competitive, transparent rates.

The Government will carry 80% of the credit risk, with the other 20% to be carried by the banks.

Reserve Bank Governor Adrian Orr, said: “Banks remain well capitalised and liquid. They also remain highly connected to New Zealand’s business sector and almost every household in New Zealand. Their ability to extend credit to firms to bridge the difficult times created by COVID-19 is critical and made more possible with today’s announcements. We will monitor banks’ behaviour over coming months to assess the effectiveness of the risk-sharing scheme.”

The Government, Reserve Bank and the Treasury continue to work on further tailor-made support for larger, more complex businesses, Grant Robertson said.

If owners would like to take advantage of this - they should contact their bank manager.


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