Shorter lockdown a relief
Lockdown Level 4 once again saw businesses shut up shop due to Covid-19 but this time many were prepared, and a shorter lockdown period combined with changes to which businesses could operate in Level 3 meant the impacts have been less costly for most than the 53 days at Alert Levels 4 and 3 in the nationwide lockdown last year.
Most businesses, except essential services, were only fully locked down in Level 4. Forestry, along with butchers and takeaway coffee providers were this time able to operate in Level 3. Even retailers who could only open in Level 2 have taken the hits on the chin, keeping fingers crossed for yet another bounceback in consumer spending.
The Government recently piled millions of dollars more into extending its Covid resurgence payments and providing rent relief for businesses forced to stay shut in lockdown — which was good news for many businesses here, but the knock-on effects of two lockdowns in two years could still be waiting to be fully felt.
On September 10, following lobbying from regional Chambers of Commerce across New Zealand, the Government announced it would inject $430 million into the New Zealand economy to assist businesses in meeting their overhead costs during lockdown.
There is also the prospect of two further payments, so long as the conditions that triggered the resurgence support payment still applied. That would potentially be a total of more than $1 billion.
Tairawhiti-Gisborne Chamber of Commerce chief executive Lena Bevan said she was delighted with the outcome.
“We were hearing stories of desperation from business around the country and so as a group, we led a petition to Government for additional business support. That petition received close to 60,000 supporters.
“This shows a real benefit of belonging to an organisation like the Chamber of Commerce. We are able to use our contacts to work alongside other business organisations with our petition. This funding is available to Tairawhiti businesses if required.”
That additional support followed a previous announcement to extend the Covid resurgence payments for two more weeks, rather than just the first week of the Level 4 lockdown.
The National Party says those payments should already have been planned for.
Speaking to The Herald after the announcement, National's Economic Development and Small Business spokesman Todd McClay said in Alert Level 4 it was important people stayed home but it was becoming increasingly clear that rules around who could work in Level 3 needed clarity.
He pointed to confusion over forestry, which this time was allowed to operate in Level 3, as a case in point.
“Secondly, much more work needs to be done at Level 3. Builders, for example, can go back in Level 3, however, with part of the country in Level 4, the materials they need had run out.
“We asked the Government to look at this and they made some changes to allow businesses supplying the building industry in Auckland to operate in Level 4.”
The Government should already have prepared for that possibility, he said.
“We put out a proposal, and have asked the Government to work with us on it, around rent relief for businesses that are finding it hard to pay their rents and other costs as a result of Covid restrictions. It is one of the biggest challenges businesses will have.
“The Government is asking them to stay at home and to sacrifice on behalf of all New Zealanders, but those bills still go out.”
In many cases landlords were also small businesses and had bills, mortgages and rates to pay.
“There have been a great number of businesses worried about whether they can pay the bills or not. Here we are, five weeks later and the Government has finally made an announcement that should have been made at the beginning, so people had the security there was ongoing help to pay bills or rent while they were stuck at home and couldn't trade.
“One of the big problems I think we will see in coming months is that for many small businesses, they took on a lot of debt last year, then they got back to trading but they are not back at where they were previously.
“Now, they have had to take on more debt, or will have to, and I think the cumulative effects of this are going to be very hard.”
A recent Trust Tairawhiti survey revealed how many of the region's businesses were impacted in Alert Level 4 and 3.
Of the 63 survey respondents, the majority of which were from the tourism, retail and service sectors, about 71 percent of the business people who took part said they had accessed the Government's wage subsidy and or the resurgence payment.
Over last month, the Ministry of Social Development paid out $9 million from the Government's Covid-19 wage subsidy scheme, supporting 7000 job roles across the Gisborne region — about 30 percent of the region's estimated job positions. That covered a two-week period up to August 27.
The original wage subsidy in 2020 supported 11,000 jobs at a cost of $74 million. That covered 47 percent of estimated job roles over 12 weeks.
The greatest impact areas for businesses in this region over the latest lockdown were income, short-term cashflow and the ability of staff to perform their roles, according to the survey.
That was felt most in retail and service industries, which were only able to come back to work in Alert Level 2.
“The main challenge for us is constant communication with a big database of clients and constant rescheduling that comes from being in limbo between the alert levels, waiting for the announcement, and finding the rules that apply to different areas of our business,” Pines Cleaning owner Bex Esler said.
“As well as trying to retain bookings and business, and not worry that it's going take the business a long time to bounce back again like last lockdown — being a young business in a big growth phase, losing momentum is really tough and can take some time to build it up again.”
Grant Bros. co-owner Renee Grant said although the homeware and barber store was in a better position than many, she would not have wanted Level 3 lockdown to continue any longer than it did.
“For us, I think the government support was pretty good but in saying that, we are fortunate that we own the building we operate out of — so we don't have some of the overheads that other businesses do, and also we don't have a huge staff that we have to be finding money to pay. We also have an online store, which I was able to keep operating the whole time.”
That helped to pay bills and invoices. However, she was unable to ship orders until Level 2.
“I certainly wouldn't have wanted the lockdown to go on for any longer. I feel so sorry for those businesses in Auckland. In terms of other effects, we've missed out on the main buying trip for the year because the spring trade fair has been postponed to late October and for a lot of us, that's far too late to be buying in our Christmas stock.”
Buying has been done all online, meaning she also could have missed out on potential new items.
“That will have a huge effect across the country for wholesalers. They are going to probably have product that's not going to move because people are being a bit more cautious with their buying.”
Briscoe Group managing director Rod Duke said all staff at the group's Gisborne Briscoes and Rebel Sport stores were kept on full pay without accessing the government's wage subsidy scheme.
“Auckland was an island all by itself there, and that in itself presented some issues — mainly stores not being able to be opened and teams not able to get into the stores. But at the same time, we managed to fulfill online Auckland orders from outside Auckland. So, it wasn't quite as painful as it might have been had the entire nation stayed in Level 4.
“In terms of Gisborne, we started our half year very strong and we're going to finish the year very strong.
“Quite frankly, if we stay out of Level 4 then I think we are going to have a very good year.
“We did have practice at Covid lockdowns so we were very familiar about what we could and couldn't do.”
That meant this lockdown was slightly easier from a customer service point of view.
Mr Duke said while the stores were eligible for the government wage subsidy, he had already committed to not accessing government money.
“We left everyone on full salaries, as we did for the first one. We made no adjustment to hours worked, no adjustment to staff levels. We've done that from our resources and we pledged earlier we'd do that. Fortunately, we've had a very good half-year so we have been able to do it.
“We're pretty proud of our people down there, they have battled on and battled through — and thanks a lot to the Gisborne residents, they've supported us through a number of years and continue to do so.”
That local support was also seen in the high street shops.
“When we came out of lockdown last year, we were so busy it wasn't funny. This time around it has been a bit more laid-back, but that's what retail is about,” Colliers Menswear's Bryan Johnson said.
“I think once we come down a level we'll be fine.”
The lockdown experience this time around was different for some businesses, after tweaks to the rules governing which businesses could open.
Evans Bacon Company co-owner Jaki Watson said this time butchers were able to open at Level 3, unlike last year, when sales could only be done at the door.
Deliveries from the online store had also kept going over lockdown, helping to keep the East Coast and Mahia supplied with meat, along with some 4 Square supermarkets here also.
“This time we were actually allowed people in the shop. So, to be honest, it's been absolutely manic since we opened the doors that day, which is great. It's really nice to know that you can close down and when you reopen people are still there to support us.”
Essential businesses like Cedenco were able to operate almost as normal, having experience of the previous lockdown rules.
“The experience of last year definitely helped the team respond to Covid protocols this year,” managing director Tim Chrisp said.
“We carried on as normal, obviously following the protocols.
“From the operation of the business and the manufacturing side in Gisborne, operations are able to continue. From the sales and marketing side, obviously Covid continues to have a significant impact on the supply chain and getting our goods to market.”
Customers in hospitality were affected much more than some others, he said.
Mr Chrisp said the company's Auckland office had been unaffected by lockdown as it had full capability for staff to work from home.
“I'd like to say a huge ‘thank you' to staff. This remains a health and safety issue, that's our focus on it and our No.1 priority is that staff can come to our workplace and feel safe and return safely. It's a difficult thing if you're considered essential, you definitely ask the question ‘why do I have to come to work'. So, I'd like to thank those staff — the mahi they put in is hugely valuable.”
Kiwi Lumber Group managing director Adam Gresham said the group's Matawhero plant reopened in Level 3.
“We are all very relieved to be located outside of Auckland and in an industry that enables us to operate at Level 3, with an outlook for continuing strong demand. We are very mindful of those in less fortunate positions. It is now critical that we push to getting 90 percent of New Zealanders vaccinated to, amongst other things, protect our economy, the elderly and the under 12 year olds.”