22 Apr 2020

Bank support of loans scheme for SMEs too slow - Robertson

10:52 am on 22 April 2020

Banks should provide more backing for small and medium sized businesses as they bear the brunt of the economic impact of Covid-19, the finance minister says.

Minister of Finance Grant Robertson speaking at the briefing for a Covid-19 daily update on 17 April, 2020.

Grant Robertson says the business loan guarantee scheme is fully up and running. Photo: Pool / NZME

Robertson agreed on Morning Report that SMEs are like the infantry on the frontline taking a hammering during the current lockdown.

He said the government "100 percent recognise their sacrifice".

"We do need to see the pain being shared across the economy here and I really do call on the banks in particular to follow through on the business loan guarantee scheme that the government is carrying 80 percent of the risk of and make sure small and medium enterprises do get it."

Although billions of dollars has gone out from banks to customers, the uptake for the business loan guarantee scheme had been "a bit slow" and he encouraged small businesses that had had loan applications turned down to go back and ask again.

"The scheme is fully up and running now and it's one that we do believe will help a lot of small and medium businesses."

National Party leader Simon Bridges has said SMEs are paying the price for the extension of alert level 4 restrictions to next week.

He has received hundreds of emails a day from small business owners wanting National to ask questions of the government, including about the extension of the lockdown.

In response, Robertson said Bridges' response is the kind of politicking that doesn't do him any favours.

"We've seen the best part of $7 billion to $8 billion of the wage subsidy scheme go out to small and medium sized enterprises.

"I think in many ways Mr Bridges' words are a little bit insulting to the SMEs. Of course there's a huge degree of anxiety out there but the 12-week payment [for wages] means that we can all get a bit of breathing space."

He said for those businesses preparing to go back into operation from next week they had lost two business days by having the lockdown extended.

There had been strong support from business organisations and some National MPs "for doing it once and doing it right".

The government is working on more support for SMEs that may be available before the Budget although Robertson was unwilling to say when any announcement would be made.

Robertson disagrees with Labour MP

Deborah Russell

Deborah Russell Photo: RNZ / Claire Eastham-Farrelly

Asked about Labour MP for Grey Lynn Deborah Russell's comments at the Epidemic Response Committee meeting yesterday that some small businesses didn't have the structure and capital to withstand a major setback, Robertson said he disagreed with her comments.

People often poured their own money into SMEs, and got cash from friends or families. It was hard to get going and sustain them even in normal times, Robertson said.

"One of the things that has come to light is that for a lot of small business owners they haven't had the relationships with their bank, or with Inland Revenue, partly because they haven't had the time for it.

"And that why we've put in place a significant investment in business advisory services which we really do encourage SMEs to take up now because this is the opportunity to take a look at the business, see what support is available ..."

Asked about the possibility of state sector pay cuts, Robertson said people in the sector were working incredibly hard to help the country recover from the pandemic's effects.

"We need a strong public service at the moment to be able to help deliver the support and the recovery...

The managers of Crown entities which are standalone bodies are responding to leadership from government in terms of reducing salaries during the course of the economic difficulties brought about by Covid-19.

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