Wage subsidy for quake-hit businesses

10:09 pm on 17 November 2016

Businesses in and around Kaikoura hit by Monday's earthquake will be able to get a wage subsidy for up to eight weeks.

The subsidy is aimed at helping companies retain their staff while the district recovers.

It will be paid to businesses with fewer than 20 employees where closure of State Highway 1 and damage to the coastal environment means they cannot operate and they cannot pay staff wages.

The subsidy will be paid for up to eight weeks initially, and Social Development Minister Anne Tolley and Economic Development Minister Steven Joyce will review the scheme before Christmas.

It will be available for businesses in Kaikoura, Cheviot, Waiau, Rotherham, Mt Lyford and Ward who face a dramatic drop in their turnover as a direct result of the earthquakes and the closure of SH1.

It will also be considered for extension to other areas where there is evidence of sustained earthquake-related disruption.

Mr Joyce said SH1 was unlikely to open for "many weeks and possibly months".

"On top of that, the earthquake has had a massive negative effect on the fisheries industry in the district. It is clear that if we don't move quickly, much of the employment in the area will dry up."

The Earthquake Support Subsidy will cover up to eight weeks at a rate of $500 gross per week for a full-time employee ($4000 per person) and $300 gross per week for a part-time employee ($2400 per person).

It won't be subject to GST and will be backdated to the date of the earthquake. Employers can 'top up' the subsidy.

The scheme will be administered through the Ministry of Social Development, with support from the Canterbury Employers Chamber of Commerce, Enterprise North Canterbury, and the Kaikoura and Hurunui District Councils.

Firms holding insurance cover for loss of earnings will be expected to use this before accessing the wage subsidy.

Minister of Primary Industries Nathan Guy visited the North Canterbury town of Waiau today, where he said he was working on a support package for farmers affected by the quakes.

He said he was shocked by the devastation on farms, and the huge land movement that had occurred.

Govt support doesn't go far enough - Greens

The Green Party said the government's support package for small businesses was not enough to help them get back on their feet.

Green MP Eugenie Sage said it would take a lot longer than eight weeks to get transport links re-establised and tourists back.

"Kaikoura has grown as a tourist town, the whale watch operation is the centre of that, with tourism numbers dropping away there'll be a need for more assistance."

Ms Sage said the government should be more flexible in its approach.

"We support a review of the package before Christmas but I think because tourism is so fundamental to Kaikoura it's going to need a slightly different package from what was provided in Christchurch.

But Canterbury Employers' Chamber of Commerce chair Peter Townsend said the support package was enough to help businesses.

"It supported thousands of businesses in Christchurch and I still get calls today, nearly six years after the earthquakes, from companies saying that if it hadn't been for the earthquake support subsidy they wouldn't have been in existence.

"The key issue here is supporting companies with cash flow - that holds the fabric of the company together."

Get the RNZ app

for ad-free news and current affairs