The government is contributing $100,000 to help Havelock North get back on its feet after thousands of residents suffered gastric illness linked to the contaminated water supply.
About 4700 people - a third of Havelock North's population - became ill when campylobacter tainted the town water supply. Interim tests have found the bacteria was most likely to have come from ruminants such as cattle, sheep or deer.
Some businesses in the town told RNZ this week that if they did not get some kind of financial support they would have to start laying off people.
The money will be allocated to a promotional fund established by Hastings District Council, the authority responsible for providing safe drinking water.
Havelock North business owner Liv Reynolds said a government compensation package for businesses in the wake of the water disaster was welcome but must be distributed quickly.
She said the money needed to be distributed urgently or some businesses may go under.
Ms Reynolds said it was unclear at the moment how the money would be allocated and it would be difficult to work out how to distribute it.
She said business owners were meeting with the council to discuss this.
Concern over effects on tourism
Hawke's Bay Tourism has admitted it is concerned about the long-term effects from the Havelock North water crisis.
It's a fortnight since the drinking water alert began in the region, which prides itself on its wine-making and copious sunshine.
Some local moteliers say new bookings are down by 25 percent.
But Hawke's Bay Tourism general manager Annie Dundas is keen to distance the wider region from what's going on in Havelock North.
"There's no fear factor here, the issue is very much isolated to Havelock, the rest of Hawke's Bay is absolutely fine and we're constantly repeating that message, Napier, central Hawke's Bay, Wairoa etc - we're all good to go."
Ms Dundas said Hawke's Bay Tourism would be increasing its promotional activity for Havelock North heading into summer.
Water rates break for residents
Havelock North residents are being given a break on their water rates in the wake of the water contamination disaster.
Councillors agreed unanimously yesterday that an amount of $57, which is the water rates portion of one instalment of rates, will be credited directly against each ratepayer's rate account.
The council said the policy was an acknowledgement of the inconvenience and distress caused to residents.
Minister for Small Business and local MP Craig Foss said the council had committed to matching the government's contribution.
"Havelock North has long been known as a clean, beautiful place to visit with world-class fresh produce and friendly locals.
"This funding will help bolster Havelock North's reputation as a top destination in a region popular with both domestic and international tourists.
"It will also help assist with a speedy economic recovery, particularly for the village's many small locally owned and operated businesses."
Inland Revenue has already offered to waive interest on any late PAYE, provisional tax and GST payments for affected businesses.