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More financial support for businesses struggling in higher Covid alert levels

More financial support for businesses is on the way as increased Covid-19 alert levels continue to impact their bottom lines. 

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Businesses in higher alert levels can apply for further Resurgence Support Payments. Source: 1 NEWS

Finance Minister Grant Robertson announced on Friday businesses will now be able to apply for a second Resurgence Support Payment (RSP) — a one-off payment meant to help firms with fixed costs, like rent. 

Robertson said the Government was listening to the business community’s concerns.

“We know it’s difficult and, in some cases, impossible for businesses to operate at elevated alert level settings, and particularly in Alert Level 4 lockdowns,” he said. 

RSPs are intended to help support viable businesses that are facing a reduction in revenue because alert levels have been increased to level 2 or higher in any part of the country, regardless of what region the business is operating in.

Applications for the next round of RSP opens on September 17. 

Auckland's Queen Street is left empty while the city remains under Level 4 restrictions. Source: 1 NEWS

The eligibility criteria for the RSP remains the same: the organisation must have been operating for at least a month and have experienced at least a 30 per cent drop in revenue over a seven-day period because of increased pandemic-related restrictions. 

This decrease in revenue is compared with a typical seven-day revenue period in the six weeks prior to the increase from Alert Level 1.

The payment includes a core per business rate of $1500, plus $400 per employee, up to a total of 50 full-time equivalents. This means the maximum payment is $21,500.

Robertson said if Auckland remained at Alert Level 3 or 4 after Monday’s cabinet meeting, a third fortnight’s worth of wage subsidies would be triggered. 

The scheme will be available until all of New Zealand returns to Alert Level 1 for one month.

He said more than 440,000 applications for the wage subsidy have been approved thus far in the Delta outbreak, totalling $1.7 billion. 

The total value of wage subsidies plus RSP funds given out is now at $2.2 billion for this latest outbreak, Robertson said 

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There's also growing support for replacing the one-off payments with weekly instalments. Source: 1 NEWS

However, hard-hit businesses have told 1News the RSP was a “token gesture” and a “drop in the ocean”. 

There’s now backing across the board to make the one-off payments weekly.

ACT’s small business spokesperson Chris Baillie said the Government needed to do more for businesses.

“One business owner told us that he’s amassed $200,000 in debt in the past few weeks. Others talked of the personal toll this has taken on them and the stress of being unable to pay their bills or get a full night’s sleep," he said.

“The Government just doesn’t seem to understand the pressure these businesses are under through absolutely no fault of their own.

“What the Government has announced today is a start – but it won’t be nearly enough for most businesses who still have outgoing costs like rent, rates and insurance."