Weekly Digest – 1 September 2021
Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.
Auckland Lockdown Extended
Authorities have extended the lockdown in Auckland for two weeks. Meanwhile, most other parts of the country have moved to Alert Level 3, with Northland to join them on Thursday night. Level 3 eases some restrictions to allow local travel and interaction with family members outside the household.
New details for the August 2021 Wage Subsidy
- Applications for the initial two-week August 2021 Wage Subsidy close at 11.59pm on Thursday 2 September 2021.
- Applications for a second Wage Subsidy will open at 9:00am on Friday 3 September. This is available for all businesses and self-employed people who have or predict at least a 40% decline in their revenue from 31 August to 13 September 2021.
- Work and Income are experiencing some delays in processing the first round of the Wage Subsidy. All applications will continue to be processed, even after the initial Wage Subsidy closes for new applications.
- If you applied for the Wage Subsidy in the initial two-week period, you can also apply for the second Wage Subsidy 2 weeks after your previous application, if you meet eligibility criteria. Work and Income will email you to let you know when to apply. Work and Income says not to send in early applications, they will not be accepted.
- If you did not apply for the initial Wage Subsidy you can apply for second Wage Subsidy from 3 September, if you meet eligibility criteria.
- To help make your application faster, we recommend you check your information on the application matches the information held by Inland Revenue.
COVID Support for Businesses Amid Level 4 Lockdown
Businesses impacted financially by this lockdown are being offered a range of support measures. You can find information on the COVID-19 website detailing the support available, or there’s a recap below.
If your business has to close temporarily or reduce opening hours
COVID-19 Wage Subsidy
If your business cannot operate because of Alert Level 4 restrictions or you will lose revenue, you can apply for the COVID-19 Wage Subsidy scheme to help keep paying your staff and protect jobs.
Businesses and self-employed people must expect a 40% drop in revenue to be eligible to receive the wage subsidy.
The wage subsidy is paid in a 2 week lump sum. You can get:
- $600 per week for each full-time employee
- $359 per week for each part-time worker retained.
As an employer you must pass on the full wage subsidy to your employee. If the wage subsidy is more than your employee’s pay, you can continue to pay them at their normal rate.
Find out more about the Leave Support Scheme on the Work and Income website.
COVID-19 Resurgence Support Payment
The COVID-19 Resurgence Support Payment helps cover wages and fixed costs for businesses who have been directly affected when there is an increase to Alert Level 2 or higher for a week or more.
To be eligible, your business must have experienced at least a 30% drop in revenue or a 30% decline in capital-raising ability over a 7-day period, due to an increase in Alert Levels.
You can receive $1,500 per business plus $400 per full-time employee (FTE), up to 50 FTE.
The maximum payment is $21,500.
If you’re a sole trader, you can receive a payment of up to $1,900.
Applications for the COVID-19 Resurgence Support Payment are now open. You need to apply through Inland Revenue. Businesses anywhere in New Zealand can apply if they meet the eligibility criteria.
Find out more information about the COVID-19 Resurgence Support Payment and how to apply here.
If your business has reduced revenue
Small Business Cashflow Loan Scheme
If you employ 50 or fewer staff, you may be able to apply for the Small Business Cashflow Loan Scheme. This is a one-off 5 year loan where you can borrow a maximum of $10,000 plus $1,800 per full-time-equivalent employee within your business.
- When applying for the loan, you need to be able to declare that your business is viable.
- Your business must have experienced a minimum 30% decline in actual or predicted revenue over the period of a month, compared with the same month last year.
- Applications are open until 31 December 2023 through myIR. If your business does not have a myIR account, you will need to create one to apply.
Loans will be interest free if they are paid back within 2 years. The interest rate is 3% for a maximum term of 5 years.
IRD tax assistance
If you’re finding it hard to meet your tax obligations, Inland Revenue may be able to help. Get in touch with us if you have any questions.
The COVID-19 Business Debt Hibernation scheme allows businesses to get a month’s protection while they talk to their creditors.
If an employee needs to self isolate
COVID-19 Leave Support Scheme
If an employee cannot work from home while self-isolating, you may be able to apply for financial support so they can continue to get paid.
The Leave Support Scheme is paid as a 2 week lump sum at the rate of:
- $600 a week for full-time employees
- $359 a week for part-time employees
You cannot get the Wage Subsidy August 2021, Leave Support Scheme and Short-Term Absence Payment for the same employee at the same time.
If an employee is awaiting the result of a COVID-19 rest
COVID-19 Short-Term Absence Payment
The Short-Term Absence Payment is available for businesses, including self-employed people, to help pay employees who cannot work from home while they wait at home for a COVID-19 test result. This is a one-off payment of $350. You can find the details here.
PM Downbeat on Christmas Bubble Return as NZ and AU Battle Outbreaks
Prime Minister Jacinda Ardern has pushed out her forecast for the resumption of quarantine-free travel between New Zealand and Australia, with the possibility that this may not occur again this year. With outbreaks in New Zealand, NSW, Victoria, and the ACT, there’s no prospect of the travel bubble resuming in the short-term.
ANZ Bank Survey: Business Confidence Drops in August
Business sentiment fell in August, with a net 14.2% of respondents expecting the economy to deteriorate over the year ahead. This is significantly higher than the 3.8% pessimism level in the July survey. Meanwhile, a net 19.2% of respondents expected their own businesses to grow in the next 12 months, dropping from 26.3% last month.
Kiwi Business Boost Tool
The Government has funded specialist consultancy support services to provide advice to businesses who need it. You can use the Kiwi Business Boost Tool to find out what services are available in your region.
The Treasury website’s COVID-19 Economic Response Measures can also provide more information on the range of supports available to businesses.
Training Incentive Allowance
The Training Incentive Allowance can help with tuition fees, books, childcare, equipment, transport and any additional caring costs while studying. It’s available for courses at levels 1-7 of the NZ Qualifications Framework. Visit the Work and Income website to find out who’s eligible, how much you can get and who can apply.
4 Strategies to Help Boost Sales
Small business owners know how challenging it is to close a sale. If you find yourself in a limbo– unwilling to give up on poor strategies or commit to potentially effective ones– try the following tactics shared in a Forbes article to improve your closing percentage.
- Provide leads with educational materials. It’s easy to close sales when customers truly understand a product or service.
- Use a multichannel approach. Don’t restrict yourself to a single sales channel– use social media, video and phone meetings, emails, and other ways to connect.
- Tailor your pitch better. Carefully target client needs and deliver a pitch that would appeal to them.
- Sell your solution—not the product. Clients want solutions to their problems. So focus on each client’s pain points and deliver a tailored pitch on how you could address those.
If your business is still struggling because of the pandemic, get in touch with our advisors today so we can work out a plan!
Get in touch
Contact us if you have any questions or want to discuss the next steps for your business.