Businesses need clarity over the "confusing" essential service rules and urgent measures need to be looked at to tackle cashflow issues, business leader Phil O'Reilly this morning told Parliament’s Covid-19 select committee.
The epidemic select committee today picked apart the impact Government’s response to Covid-19 has had on various industries, with those hardest hit including tourism, restaurants and freight.
Mr O’Reilly said businesses were reporting confusion around the current essential services rules, making it "needlessly stressful".
“We need to rethink this issue of essential business quite quickly.” He said businesses that are able to operate safely, contactless and online should be able to continue operating through the lockdown.
Mr O'Reilly said it was essential companies knew the "pathway forward" the Government was planning for business after the alert level four lockdown.
"The number one thing Government could do right now… is to give businesses some confidence about what the rules will be as we move out of level four.
"If you have the same confusing situation as you have now, about what is an essential business and what isn’t, you won’t get the business uptake in the way you may want."
Yesterday, an official from Ministry of Business (MBIE) apologised for "creating confusion" over what businesses were classed as essential, saying work was underway to simplify the information.
On Monday, Prime Minister Jacinda Ardern said butchers, bakers and grocers are able to operate online, telling media "that's always been the guidance of MBIE".
That was less than an hour after MBIE told 1 NEWS "no decisions have been made” when asked if it had reached a decision about butchers, bakers and grocers being allowed to take online and phone orders for contactless delivery.
Business New Zealand said it is getting around 1000 calls a day from businesses confused about whether or not they can keep operating, especially when it comes to online deliveries.
Cash flow
Mr O’Reilly said the Government also needed to "urgently" look into schemes such as one-off payments for businesses, "as they run out of cash to run their business".
"You might think it’s just one month, but it’s more than that," he said, referring to the lockdown minimum timeframe. "Thousands of businesses would’ve been damaged by this, some, mortally."
Mr O’Reilly said that the wage subsidy scheme would only act as a delay on the demise of some businesses, saying cash flow issues was the "biggest killer" of small to medium sized businesses.
"If you don’t assist them quite quickly, even though you’ve taken away labour costs, they’ll tend to fall over."
Finance Minister Grant Robertson said last week that more details would be coming, concerning commercial landlords and rents during the lockdown period.
Mr O’Reilly called the lack of conversation around cash flow issues the "missing link" in the Government’s business package.
Chris Roberts of the Tourism Industry Association reiterated the call for cash flow help, saying many tourism businesses "just can’t see how they can keep going" in the face of rent payments.
"Some have been able to negotiate good arrangements with landlords such as rent holidays or reduced payments," he said, calling those moves "hugely helpful and a route to survival".
Some that are not able to alter rent payments "just do not have a pathway for survival".
"You can reduce your staffing levels, but if you’re having to pay rent at a very high level, you look at the numbers and you’re insolvent.”
"The landlords need to think of the long-term benefits of a short-term rent relief.
"We’ve got to put aside selfish interest and all work together through this so the fundamentals of the tourism industry survive.
Mr Roberts said the industry is expecting a $12 billion drop in the next six months.
"Tourism is not dead but it is in a very deep slumber. New Zealand’s offering remains as sound as it ever was… we just don’t have customers but we know they’ll be back."
Restaurant Association chief executive Marisa Bidois called some of the rules around hospitality "over stringent, inconsistent and unfair".
"Hospitality is in crisis, thousands of jobs have been wiped out and many are at risk.... we need the Government to work with us transparently through this."
"Our first priority is for business to survive."
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