Businesses 'right up against the wall' because of Auckland lockdowns, economist says

Source: 1News

Some Auckland businesses are “right up against the wall” as a result of the latest lockdowns and need more support from Government, economist Brad Olsen says.

Olsen told Breakfast “there was a round about a 40 per cent hit to spending activity” in Auckland during the three-day lockdown in February, while there was a 10 to 15 per cent spending hit for the rest of the country at Alert Level 2.

“I think what we’re hearing from everyone around the country, and especially in Auckland, is everyone is exhausted by these changes, we know that we have to do them, we know that’s the best thing for society, for the economy but man it’s tiring and I think people are getting to their wits end,” he said.

Olsen said it was a time for the Government to make more support available for businesses he said were “right up against the wall, they are struggling”.

“With some of the support we’ve got, particularly when it comes to the wage subsidy, is that those require a revenue drop, for the wage subsidy at least, of 40 per cent but that’s over the last six weeks,” he said.

“Those businesses have already been doing it tough, they need to be doing it even tougher, for some businesses, they’re going to be saying the wage subsidy is important, but I can’t access it because my revenue had already dropped so low.”

“I think we’re getting to the point where businesses are looking for more support, the Government has more money in its back pocket, I think we need to at least think again of what more we could be doing to support our businesses.”

The short-term absence payment for businesses with workers who need time off for Covid-19 testing or isolation could be streamlined by tying it to Ministry of Health records.

“We know that a lot of that [short-term payment] is based on health advice, someone goes to get a Covid test or is told to isolate by Healthline,” he said.

“You could expect that instead of their employer having to apply for them some point in the future and doing all the paperwork for the Government, the health system already knows the person needs to be tested and needs to isolate, can’t we tie those payments directly into the health system.”