15 Apr 2024

What public sector job cuts mean for Wellington small business

6:00 pm on 15 April 2024
WELLINGTON - AUG 22 2014:Traffic on Featherston Street, in the  central business district of Wellington, the capital city of New Zealand.

Vanessa Jones says small businesses were struggling and a lot of the shops in the Wellington CBD are empty. Photo: 123RF

Small business owners in Wellington say they are already struggling - and many fear they will be further hit by public sector job cuts.

Thousands of jobs are set to go across the civil service, with the latest announcements - from the Ministry of Education and Oranga Tamariki - expected this week.

Best of the Bunch Florist owners Vanessa and Steve Jones said their business relied heavily on government workers.

"There'll be less people coming into work, and less people coming into our shop, [the job cuts] will definitely affect us," Steve Jones said.

"There are already a lot less customers coming into the shop at the moment."

Vanessa Jones said small businesses were struggling and a lot of the shops in the Wellington CBD were empty.

"People have less money to spend, or they just don't have spare money.

"They need to buy food and feed the kids first. I totally understand the situation - but then that means they're not going to have too much money to spend on other things."

The pair said the business was still suffering from the effects of the Covid-19 pandemic, especially with more people working from home.

"We barely have a few customers every day, and the same goes for all our neighbours. It's been quite hard," Jones said.

Ramesh Parbhu from Molesworth Shoe and Bag Repairs said his business had never recovered to pre-Covid-19 levels and the prospect of losing more trade was hard to swallow.

"If we don't get the people from the offices, we don't get business."

Have you been affected by the public sector job cuts and want to tell your story? Contact us at jemima.huston@rnz.co.nz

On The Terrace, Frank's Coffee and Eats operations manager Oisín Tegeler said he was nervous about the effect of the job cuts.

"Four or five regulars have told us that they've lost their job in the past two weeks, which is tough for them, and tough for us, obviously - we hate to see them go."

He said the cafe still did not have as many customers as it did before the pandemic.

"The business is healthy - it's just not quite where it was three or four years ago."

Greater Wellington councillor Yadana Saw

Yadana Saw (file photo). Photo: SHANON STEVENS

Greater Wellington regional councillor for Pōneke Yadana Saw said some Wellington businesses would not be able to weather the stress caused by the job cuts.

Covid-19 and the recession had put a lot of pressure on owners and the public sector cuts were not helping, she said.

"Having over 1000 people no longer [with] jobs in the CBD not only impacts the businesses there in terms of the lunchtime trade, but it's also [about] what people have in their back pocket to be able to spend at other times.

"Are these people going to come to our independent retailers who sell books or the clothing boutiques? It's the flow-on effect of that.

"It could be things like exercise classes and gym memberships. It's also the types of people who send their kids to extracurricular arts and music activities."

If customers continued to dwindle, some businesses would have to consider their own job cuts, Saw said.

"Some of them are facing bankruptcy. I know that there are people who own small hospitality and retail businesses who are going to be extending their mortgage so they can pay out their businesses and their staff."

Businesses were just trying to get by right now, rather than make a big profit, Saw said.

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