Double-dose of good news…there are officially no Covid-19 cases in NZ and Level 1 will commence from midnight Tuesday 9th. The shift to level 1 will give businesses the first real sense of what “normal” is going to look like in the coming months. This will finally give businesses quality information to plan for and commence, the path to recovery. Onwards and upwards!
The next step to normality will be the trans-Tasman bubble. That seems to be at least a month away, as Australia continues to have a handful or so of new cases most days.
Of course, a full return to normal (i.e. open borders) depends on a vaccine or effective treatment being found. News on that front over the past few days is that one large pharmaceutical manufacturer has begun to manufacture a vaccine despite the trials of the vaccine still being underway. Talk about a bold gamble.
Late last week, the Government extended the Small Business Cashflow Scheme loans and eased the criteria for Wage Subsidy Extension.
Small Business Cashflow Scheme (“SBCS”) extended
As expected, the period for applying for SBCS loans has been extended for another 6 weeks. Applications will now be open until the 24th of July. All other terms and conditions seem to be the same.
Wage subsidy extension
As part of the Budget, the Government announced and extension to the Wage Subsidy Scheme where businesses have suffered a 50% reduction in turnover for the 30 days prior to the application.
On Friday, the Government announced that the 50% turnover threshold was reduced to 40%, and the 30 day test period has been changed to be a 30 day continuous period within 40 days of applying (but no earlier than 10 May). At present the guidance is that the 30-day period is to be compared against the “closet period last year”. We note that last weeks this was a comparable period within the last 12 months.
In the past day or so, the Government has added some more guidance about the extension, and this specifically includes the following obligations around when the subsidy might need repaid:
Repayments
If your employee’s usual wages are less than the subsidy, you must pay them their usual wages. Any difference should be used for the wages of other affected staff.
If there are no other employees to use the subsidy for, then the remaining amount should be paid back.
Self-employed
If you’re self-employed, the income you regularly draw from your business may be less than the amount you receive for the Wage Subsidy Extension. In this case, the remaining amount should be paid back.
More information is expected to be released in the next few days, and will be available here: https://www.workandincome.govt.nz/covid-19/wage-subsidy-extension/index.html