Help for businesses affected by COVID-19

The Covid-19 pandemic means that we are facing extraordinary times. That’s why we’ve put a 12.1 billion economic response package in place to protect New Zealander’s health, protect the vulnerable, protect livelihoods, and ensure the quickest recovery possible on all fronts.

Our immediate goal is to support people and businesses as we weather the impact of COVID-19. We must then ready the economy to recover. The Coalition is united in doing everything we can to support New Zealand workers and businesses.

o $500 million boost for health

o $8.7 billion in support for businesses and jobs

o $2.8 billion for income support and boosting consumer spending

A wage subsidy has been put in place to support businesses that are significantly impacted by Covid-19. Where a business can show that they have lost 30% of turnover, they will be eligible for a wage subsidy of $585.80 per week for a full time employee (20 plus hours a week), and $350 a week for a part time employee (less than 20 hours a week), for a period covering 12 weeks. The maximum any one employer can receive is $150,000. The subsidy helps small and medium enterprises, but large businesses are also eligible for it. Self-employed people and sole traders can apply for the subsidy too.

Other measures have been introduced to help with business cash flow. Depreciation on commercial buildings will be reintroduced, and there will be immediate tax write-offs for low value assets. For the 2021 income year, there will be an immediate write-off for assets costing up to $5,000, and for subsequent years, assets costing up to $1,000 will be eligible for the write-off. The threshold for paying provisional tax will increase to $5,000, and some interest on overdue tax will be eligible to be written off.

All of these tax measures will help businesses with their cash flow. Cash is king in small and medium businesses, and sometimes viable businesses fail only due to cash flow problems. By helping businesses with their cash flow, government will help more businesses to survive.

The next months will be very difficult for everyone. But we’re all in this together, and by helping out businesses, when we get through the Covid-19 crisis, the New Zealand economy will be ready to thrive again.

For more information on the Economic Response Package go to: https://www.beehive.govt.nz/feature/covid-19-economic-response-package

Wage subsidy application form: https://www.workandincome.govt.nz/

- by Deborah Russell, Labour MP based in New Lynn, Auckland.