As An SME Owner, This Is Why The Budget Is A Failure
Wage support extension – this is clearly aimed at those businesses that have only just started trading or still can’t – tourism, hospitality and retail. What will it achieve? For tourism in particular, a delay in the thousands of redundancies and that’s all. Throwing good money after bad. The government should bite the bullet and accept that it needs to help fill the gap left by tourism that will not recover for many years.
The wage support extension should have targeted those business that will survive but which need help because demand does not match their capacity (ie: staff levels). Come 16 June, these companies will be above the 50% threshold for the previous month but 50% income will not save 100% of jobs. Wages, rent, loan repayments, taxes etc, etc all remain at 100%.
The equation doesn’t work and thousands of ordinary SMEs will be laying of tens of thousands of staff, creating even more loss of confidence and hastening the downward spiral.
Infrastructure and training – how does this help with the short and medium term pressures? It doesn’t. And heaven forbid the government allows tech’s carte blanche on the training. Hopefully it has some done some planning around how many of which trades are going to be required. But we all know that won’t happen. And why trades focussed? What about IT? Increasing the IT element of NZ’s economy will greatly improve productivity and the need to replace tourism with something is an ideal opportunity to take this step.
Tourism recovery fund – adverts aimed at foreign travellers – really? And how can locals take the kind of activity filled holidays foreign tourists do when your house value has fallen 15% and/or you are unemployed?
Covid-19 package estimated to save 140,000 jobs over two years, and create more than 370,000 new jobs. I can’t see it and I await the detail of just how that will be done.
What I do know is what the government clearly doesn’t understand. There is only one thing the economy needs right now – confidence. And this budget is not going to generate it, indeed its failure to stop short and medium term redundancies is going to lead to an even greater reduction in confidence.
Grant White is the owner and general manager at Logotech, a company that specialises in clothing, embroidery and screenprinting.