Opinion – Michael Barnett: This week I tried to see the positive but all I can see is business wearing the cost of managing a problem.
I saw over 150,000 small and medium businesses claim a wage subsidy but to do so they had to have lost over 40% of their revenue. They were required to top up the subsidy to 80% of a wage or not be able to claim the subsidy.
I saw businesses having to face making staff redundant because they couldn’t afford the top up – no revenue, no cashflow.
Businesses were invited to claim a resurgence subsidy to offset their overheads while locked down. It’s a one off that will at best cover 60% of one weeks cost but their overheads continue every week of lockdown with no revenue, a weakening balance sheet and a shrinking bank balance.
I saw a Government agency stop service stations from serving food and coffee because a few tossers who are not essential workers were getting coffee – don’t worry about the supply chain and the hundred of drivers who are dependent on their pie, sandwich and coffee 24 hours a day, score a small win on the minority and punish the genuine majority.
I am aware of one hotel that will lose more than $2m in revenue this month and they expect the same in September.
From our survey of business this week we saw over 70% of businesses losing over $100k of revenue each week of lockdown; 90% of businesses only able to operate part time and 95% expect to claim government support.
One of the toughest things we see is the despair of business owners as they see years of investment in a business diluted and their futures weakened.
Their employees are equally frustrated as the uncertainty experienced by their employers becomes a part of their uncertainty of future employment and meeting the costs of having a family.
Michael Barnett, Chief Executive, Auckland Business Chamber