Small businesses are a vital part of New Zealand’s economy making up 97% of all enterprises. The impact of COVID-19 has seen some businesses folding and many others fighting to survive as they tackle a myriad of issues including operating restrictions, a significant downturn in revenue, supply chain issues, redundancies and a future full of uncertainty. It is a difficult time for many governing these businesses but there is support available to help them stay afloat while the economy adjusts and recovers.
The following support is available:
Wage subsidy support
The Wage Subsidy Scheme is designed to support employers adversely affected by COVID-19, and ensure workers can continue to receive an income even if they are unable to work. Eligibility criteria includes having had a 30% revenue drop due to COVID-19. Employers need to retain employees for at least 12 weeks.
A Wage Subsidy Extension will be available from 10 June – 1 September 2020 to support employers, including sole traders, who are still significantly impacted by COVID-19.
Tax relief and small business cashflow loan scheme
Tax relief includes:
The Small Business Cashflow Loan Scheme introduces an interest-free loan scheme to some small businesses impacted by COVID-19, administered by Inland Revenue. Applications are open from 12 May – 12 June 2020 inclusive. Details include:
The Government has announced a six-month mortgage principal and interest payment deferral for affected individuals and SMEs.
Business finance guarantee scheme
A $6.25b business finance guarantee scheme for SMEs includes:
See MinterEllisonRuddWatts’ and KPMG’s article Directors’ duties during COVID-19.
Rent and mortgage relief
The COVID-19 Response (Further Management Measures) Legislation Act 2020 introduces support for businesses and commercial landlords to manage situations where, because of the impact of the response to COVID-19, businesses are unable to pay their rent and landlords are unable to meet their mortgage payments. Support includes extending the notice period:
The government is also considering options for rent concessions to support New Zealand businesses with rent payments but has ruled out subsidising or freezing rent.
Potential rent and outgoings abatement
Some commercial leases have clauses relating to circumstances where a tenant has no access to the premises during an emergency, which may give rise to a rent and outgoings abatement during Alert Levels 3 and 4 (but is unlikely to apply in Alert Level 2). This is explained further in MinterEllisonRuddWatts’ articles:
Professional advice and support
The COVID-19 Business Advisory Scheme
The government has allocated an additional $25m to enable businesses to access expert advice and support in areas such as HR, health and wellbeing, business continuity, cashflow and finance management, strategy and digital capability. Business owners can access up to $5000 (excl GST) per business from the COVID-19 Business Advisory Fund.
Our new online coaching and mentoring service can provide coaching to eligible SMEs.
Support for Māori businesses
Targeted support packages
Māori communities and businesses can access additional help and support designed to meet their specific needs including:
Support for exporters and importers
Export business continuity service
NZTE has launched a $4m Export Business Continuity Service, in partnership with PwC and Deloitte. Businesses with established export markets can access professional services to help them manage the impacts of COVID-19 on their businesses to a maximum of $5000 per business.
Our new online coaching and mentoring service is registered with the NZTE management capability development fund and is open to eligible SMEs.
Air freight support package
NZTE and the Ministry of Transport are assisting Air NZ with funding support to provide additional charter flights to help meet air freight capacity demands.
NZTE has created an online marketplace to help exporters find offers and requests for resources.
Tariffs removed on some imports
The government has temporarily removed tariffs on all medical and hygiene imports needed for the COVID-19 response.
Annual meetings, reporting and rules
Relaxed deadlines and temporary relief
We will continue to keep you updated of any significant changes that are relevant to SMEs. This will include updates to resources on this page.