3 o Mahuru 2021
Hon Stuart Nash
Minister of Tourism
Kei te rangatira, tēnā koe
Targeted assistance for those hit the hardest by Level restrictions
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.
However, while there has been acknowledgment of our concerns there in many cases we have not seen any action.
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.
At Level 3 many of our industry are still unable to trade. Those that do are not necessarily set up to so successfully. There are some that trade successfully but they are not the average business.
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. This was also acknowledged by Minister Robertson.
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 able to work from home and keep revenue coming in.
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, 3 and 2 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% and a level 2 where trading is often heavily restricted by spacing rules, single server and other requirements of trading at this level.
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 thier 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.
Regional economic development agency leading the way
We were thrilled to see the recent 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