Wage subsidy ‘just a bandage’

Mark Wellington, owner of The Highwayman Motel in Masterton. PHOTO/JADE CVETKOV

Industry-specific subsidies needed as lifeline

ARTHUR HAWKES
[email protected]

The wage subsidy scheme has helped Wairarapa businesses retain employees, but as it draws to the end of its 12 weeks, many businesses are worried that staff won’t be retained and income will be slow to return.

While hospitality and retail will be able to resume their normal function relatively quickly, tourism and tourist accommodation may take much longer to recover.

To combat this, the chamber of commerce, Business Wairarapa, has suggested a multifaceted approach, citing temporary jobs for laid-off employees and the potential for industry-specific packages.

Becks Sayer is the chairwoman of Business Wairarapa, and has been assisting several businesses navigate the lockdown, and prepare for operation without subsidy.

“The industries that are doing it the hardest are the ones associated with tourism and accommodation and that sort of thing,” Sayer said.

“Unless they’ve got cafes and things as part of their business, they can’t do anything, nobody can go and stay with them. A big stresser at the moment is the staff.

“They might have loyal employees that they’ve trained up for several years to be front of house or reception, at a motel for example.

“There’s a general sort of feeling that at the end of the 12 weeks they might have to get rid of these staff, but they don’t really want to because when they start to get busy they want to get them back.

“So, we’re trying to work out ways we might be able to connect people to other temporary employment.

“So, when the tourism side and motels and hotels get busy again, those people can go back into their roles.

“The wage subsidy is only for 12 weeks, so unless the government comes out with industry-specific packages at the end of that time, it might not be enough to keep people employed.”

Masterton’s The Highwayman Motel owner Mark Wellington said “the wage subsidy is just a bandage for employees; it doesn’t help businesses much – in some situations, it just prolongs their demise”.

“There’s still the fixed costs of rates, rents, eftpos, insurance, accountant, internet.

“All of those are still due, so when the government says the banks will offer you a six-month holiday, or a loan, it just prolongs it.

“The government has stopped industry, and it’s not just going to repair itself.”

For some businesses in the tourism sector, the proposed holiday on rates means that a triple quarterly bill will need to be paid after the two holiday quarters are up.

This could represent tens of thousands of dollars businesses are expected to fork over, despite the long-term lack of income.

Wellington acknowledged that, over the past few decades, other at-risk sectors had been bailed out by government intervention.

“In the past, other governments have had subsidies for the farming sector, in extreme situations.

“For our tourism industry, we need people travelling, using motels, hotels, but people are short on money.

“We’re not going to have any international travellers for quite a while, so maybe the government could provide some sort of specific subsidy.

“But there are still a lot of people and a lot of industries that might not come out the other side of this.”

Despite the grim forecast, Wellington said he was trying to remain “optimistic”.