As Auckland slowly creeps towards Level 3, a further round of support has just kicked in. Although this support is welcomed, it is simply not enough. The Auckland lockdown is creating great expense and incredible uncertainty. There is a widely held belief that this may continue for months to come and into 2022.
No one is arguing against a lockdown, and any opening of the country must be measured and well executed. However, in the meantime more needs to be done to mitigate its impact on good businesses and the people they employ. Support should continue into Alert Level 2 as it will take businesses a lot longer to bounce back this time. In the meantime, we have outlined the support that is now available and the eligibility criteria.
Round 3 Wage Subsidy – Applications open!
The third round of the wage subsidy is now available from 9am on Friday 17 September. If you have not made a wage subsidy application for the second round, unfortunately this has now closed. The revenue test period will be from 14 September to 27 September. Criteria for the revenue decline remains the same. This must be at least a 40% revenue decline over the period.
- If your business is seasonal, then you must have at least 40% decline over the revenue test period compared to the same 14 consecutive days in 2020 or 2019. There is an added criteria though that you must be able to demonstrate the seasonal nature of your business.
The revenue decline otherwise, for non-seasonal businesses, is measured for a typical two week period in the six week period prior to 17 August.
- Best endeavours must be made to pay at least 80 per cent of the ordinary wages or salary of each employee and each employee must at least receive the full amount of the subsidy unless it is above their ordinary wages or salary, in which case they should continue to be paid their ordinary wages or salary.
Government has commented that eligibility is not determined by the alert level your business is at, but rather a drop in revenue “caused by any part of the country being at alert level 3 or 4”. Businesses outside of Auckland will find it more difficult to meet the criteria as the drop in revenue needs to be pinned to the level 3 situation in Auckland.
Round 2 - Resurgence Support
Resurgence Support (RSP) opens today (17 September 2021).
The RSP is based on a 30% decrease in revenue in a 7-day period from 8 September until immediately before the whole of New Zealand returns to Level 1, compared with a typical 7-day period in the 6 weeks before 17 August.
Other criteria remain the same, and as you may be aware, this now includes businesses that have been in business for one month. Previously this was a 6 month requirement. In addition businesses that have already applied for the first round of RSP can apply for a second!
All businesses in New Zealand can apply if they meet the eligibility criteria.
It appears that the RSP will run on a three weekly cycle, while any part of the country is still at Level 2 or higher.
The support is welcomed however it is a drop in the ocean. The wage subsidy should not be limited to those impacted by Level 3 or 4. Those businesses out of Auckland should be eligible to freely apply for the subsidy if the revenue decline test is met. In addition more needs to be done to get the Auckland economy up and running. Central Government should allow wage subsidies at Alert Level 2, quarantine facilities should be moved out of Auckland CBD, and investment needs to be made on a national level to assist with economic rebound.