Latest news

Letter to Finance Minister on Targeted assistance for those locked out of trading at Alert Level 4

posted on

1 o Mahuru 2021

Hon Grant Robertson

Minister of Finance

Kei te rangatira, tēnā koe

Targeted assistance for those locked out of trading at Alert Level 4

I would like to acknowledge the Government’s ongoing efforts to keep the plight of hospitality top of mind as the response to COVID-19 continues to evolve: engagement with the Government has increased exponentially over the past few years, and I am grateful that our concerns continue to be acknowledged by Ministers.

As you will be aware, Alert Level 4 lockdown impacts all sectors differently. For us in hospitality, every Alert Level 4 lockdown sends our businesses scrambling – scrambling to save thousands of dollars worth of stock, scrambling to pay wages as per normal, and scrambling to pay ongoing overheads, all while revenue remains at $0.

While our Members are committed to doing their part for our nation, there is a need to acknowledge and compensate those businesses that are bearing the majority of the cost associated with the current response to COVID-19. Minister, you have acknowledged yourself that hospitality continues to be one of the hardest hit.

It has become clear that there should be a different level of government assistance for those businesses prevented by law from earning any income, to those who are fully able to work from home. We are calling on the Government to consider establishing an operations lockout subsidy for employers: targeted support that will pass directly to business owners locked out of trading at Alert Level 4 due to Government guidance. As you will know, support for this kind of thing has begun gaining momentum, including through recent public petitioning.

There is no doubt that business owners, including our Members, are appreciative of the support provided through the wage subsidy provided, however the Government’s COVID-19 response has been largely employee centric. Now more than ever, business owners are in need of targeted support in order to mitigate rising fixed costs. This is felt exponentially across our industry because at Alert Level 4 our businesses suffer a 95% drop in revenue; at Alert Level 3 this is between 60% – 40%.

For context, many of our industry has been barred from earning any income at all for 92 days of the last 459 days (20%), and then restricted to earning no more than 50% of our income due to seating, safe distancing & single server rules for an additional 76 days, (another 16% roughly). It does not add up in the eyes of industry.

Other methods of targeted financial support for hospitality

As you may also recall, in August 2020 we petitioned Parliament, asking the House of Representatives to urge the Government to provide targeted support for the hospitality industry through a subsidised Dine out to Help out campaign, similar to the initiative rolled out across the UK.

The Dine out to Help out initiative is modelled off the UK’s ‘Eat Out To Help Out’ campaign. We proposed a homegrown version to run in a similar fashion to the UK’s, across in-house dining at appropriate alert levels. Given the length of time that has passed since we lodged the petition, the Association has been looking across jurisdictions and exploring alternative options for targeted support.

Dine & Discover NZ (Alternative for consideration) – the Dine & Discover NZ initiative is modelled off New South Wales’ ‘Dine & Discover NSW’ campaign. We propose our homegrown version to run in a similar fashion to NSW’s, across in-house dining at appropriate alert levels. This option would see every person over the age of 18 years eligible to receive four $25 vouchers (totalling $100) to put towards their meal.

Eat GST-Free (Alternative for consideration) – customers would be discounted the Goods and Services Tax (GST) portion off the total bill, surmounting a 15% discount, if food is purchased. This option would be less expensive for the Government to enact compared to the other proposed options, it is easily trackable for proprietors and is an easy to understand concept for consumers.

We remain a fragile sector in a tenuous position. Targeted support for our businesses is essential for the wellbeing and financial security of our industry.

Regional economic development agency leading the way

We were thrilled to see yesterday’s announcement from Development West Coast (DWC) offering a rebate of up to $500 per business, for those that are offering deliveries during COVID-19 Alert Level 3.

DWC Chief Executive, Heath Milne, made particular mention of the fact that the shift to Alert Level 3 would mean retailers, cafés and restaurants would be able to start operating again, through contactless pickups or deliveries.

Given the vast majority of hospitality operators are completely locked out of trading at Alert Level 4, it is these kinds of small yet meaningful contributions that bring hope to the sector. I have contacted Mr Milne to offer my support for the scheme, and would welcome the Government encouraging economic development agencies across the country to give consideration to providing support of this nature to their local cafés and restaurants.

Next Steps

On Thursday 23 September, I will be appearing before the Economic Development, Science and Innovation Committee to talk through options of targeted financial support for the sector. Many restaurateurs are still chinning the financial burden of loans and loss of revenue from the previous lockdowns. The unforeseen nature of this particular lockdown resulted in thousands of dollars in wasted food stock, the cost of which is just another nail in the coffin for already struggling businesses.

I would welcome the opportunity to brief your officials on these options and explore what additional efforts could be made by central Government to provide targeted support for hospitality businesses locked out of trading and those that have restrictions on trading at other alert levels.

Please don’t hesitate to let me know if you have any questions or need anything further. I look forward to hearing from you in due course.

Ngā mihi nui,

Marisa Bidois
Tāhūhū Rangapū (Chief Executive)
Restaurant Association of New Zealand

Back to News