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Not impressed

Wait for relief package too long, Eastland Wood Council says.

News that a Government regional bail-out package to support Gisborne’s forestry industry is still a week away shows the government has not seen the gravity of the situation for an industry that needs help “now”, the Eastland Wood Council says.

Just a day after economic development agency Trust Tairawhiti confirmed about 50 businesses and 300 workers had already been affected by the economic impacts of the Covid-19 outbreak and subsequent drop in exports to China, EWC revealed today more workers had been laid off this week.

The Cabinet yesterday approved the development of a “Business Continuity Package” to help support the economy through the disruption.

“Government Ministers have been in regular contact with businesses and industry groups as we work together to respond to the impacts of Covid-19. We have already taken action to support businesses and workers, and we are now in a position to announce the next steps in response to this rapidly changing situation,” Finance Minister Grant Robertson said.

The Business Continuity Package includes a targeted wage subsidy scheme for workers in the most adversely affected sectors, as well as training and re-deployment options for affected employees.

Mr Robertson said the government was also working with banks on the potential for future working capital support for companies that face temporary credit constraints.

As part of the package “tax policy options” would be developed to support businesses to maintain operational continuity.

Rapid reaction units from the Ministry of Social Development had also been dispatched to Tairawhiti and the Treasury and MSD had been directed to develop policy options to support households to maintain incomes and “labour market attachment”.

The details of the package would be discussed again at the Cabinet Covid-19 committee on Wednesday, but it would be next week before the Government was in a position to make further detailed announcements.

However, some actions like directing government departments to cut payment times to businesses to 10 working days, the removal of the MSD two-week stand-down before people could claim Job Seekers Support and the creation of MSD rapid response teams, had already been put in place.

Eastland Wood Council chief executive Kim Holland is not impressed.

'Too late' for some

“The East Coast forest industry and the Gisborne-Tairawhiti region have been applauded in recent weeks for our pro-active approach in managing the downturn in the forest industry and the wider community impacts of Covid19, but it appears that it has taken too long for the government and the rest of the country to react and respond to the gravity of the situation.

“The region has been signalling the situation for six weeks, and as we know we have done what we can in terms of supporting businesses, workers and whanau to get through. Why has it taken the government so long to respond?

“Whilst we are grateful for the Government coming to the party in announcing wage subsidies to support small businesses through a business continuity programme, having to wait until next week for details, and probably the following week for implementation, is too late for some of our businesses and their employees. Contractors have been managing work flows to try to keep their workers, but now its about survival of their businesses and they are having to let skilled and experienced workers go.

“I have heard this week (as at Tuesday) that a further 6-8 people have been made redundant or put on to casual contracts.

“The removal of the stand-down period for the benefit is not being implemented until March 23 and we have already had anecdotal evidence that some forestry workers are not eligible for emergency benefits, because they have a partner still in work; so that is not going to be a big part of the solution for out of work forestry workers.

“The EWC is working with Te Uru Rakau on some support packages for employers who have Generation Programme trainee employees to subsidise on the job training, but again it appears that it’s too late, for some; three of whom have had their work terminated this week.

“This assistance is needed now, and having to wait another week for details is cold comfort for those business owners who are trying to ‘shuffle deck chairs on the Titanic’.”

Worse will be to come, when we get through this we are going to have a bigger skills and labour shortage than we already had. We will need to look at how we accelerate, and support businesses to take on new employees through continuing training grants, ramping up existing programmes like the Generation Programme to replace the people we have lost to other industries.

“The uncertainty of the situation is causing the most stress as businesses and companies can’t plan ahead, and it continues to be day by day, week by week. One of the concerns now is that the stress and continuing uncertainty is impacting on business owners, and their workers, with the risk of it affecting people on the job, in terms of health and safety.”

Robert Stubbs from Stubbs Contracting echoed Ms Holland’s statement.

“I think it’s great they’re coming up with some packages and understand they may need to be tailor-made.

“A wage subsidy is great but the point is we don’t have the work for the ones we are letting go, so holding on to them subsidised is still depleting finances out of the business which have to be controlled as we don’t have an end date to all this.

“If we were guaranteed it was a set time frame to work to it would be beneficial and workable perhaps.”

Gisborne Chamber of Commerce president Paul Naske said the devil would be in the detail.

“The chamber is of course very supportive of the move by government to provide support to affected businesses. The devil will be in the detail as there will be many affected businesses including all downstream suppliers. We are eagerly awaiting the detail.”

The Government’s announcement also drew criticism from National Party finance spokesman Paul Goldsmith who called for more urgency around a relief package.

“The announcement that the Government is thinking about a business continuity package and expects to make decisions next week is startlingly flat- footed.

“Affected businesses are struggling and need tangible support now.”

Log truck queue at the port. Picture by Liam Clayton

  1. Winston Moreton says:

    What sort of analysis is behind this comment? “About” 50 businesses and 300 workers had already been affected by the economic impacts of the Covid-19 outbreak. Sounds apocryphal to me. And the Port is poised to spend $90 something million on an unnecessary new log wharf. In my opinion Rail would produce more than 300 jobs.