More businesses in hospitality are expected to benefit from the change
The New Zealand government has announced changes in its new targeted COVID Support Payment (CSP) after the Hospitality New Zealand said the scheme "might not be enough." Hospitality NZ previously said in a statement that the CSP's eligibility criteria could pose a problem because it requires a 40% or greater revenue drop in "seven consecutive days within the six weeks prior to the shift to Phase 2 of the Omicron response on February 15, compared to seven days after that date."
Julie White, chief executive of the association, said hospitality businesses may not be able to meet the criteria because revenues for their businesses were already "extraordinarily low during January." Following the criticism, Finance Minister Grant Robertson unveiled an update to make the CSP more accessible to more businesses.
"We are aware that there are a number of businesses which had a very quiet January/early February this year and believe that they will not be eligible under the criteria of the CSP, particularly those in the hospitality sector," said Robertson in a statement.
According to the minister, the scheme now allows an alternative time period where businesses can compare their revenue with the six weeks from January 2021 in order to qualify for the CSP.
"The original period announced on Monday (5 January 2022 to 15 February 2022) and an alternative option of 5 January 2021 to 15 February 2021. The alternative option covers a period when all of New Zealand was at Alert Level 1," explained Robertson.
"The comparator period is the same approach as used for the Resurgence Support Payment taken up by thousands of businesses last year. A business is eligible if they can show a 40% or greater drop in a seven-day period since 16 February this year compared against a typical seven-day period in one of the timeframes above," he added.
The payment remains at $4,000 per business, with an additional $400 per full-time employee, capped at $24,000, the same rate as the most recent Transition Payment. It will be available on a fortnightly basis for six weeks.
Applications for the first payment opened on Monday, with the payment starting from March 1, according to the government.
"The first payment will be open for application for at least six weeks, so even if a business is not eligible right now, they may find they become eligible during this six-week period," Robertson said.
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Hospitality NZ issued a statement following the updated scheme, with White welcoming the change and describing it a "victory for common sense."
"We're pleased we got it changed in the same week of the announcement, and before the programme starts on Monday," White said in a statement.
The updated eligibility criteria for the scheme now makes more than half of the hospitality businesses eligible, according to a survey carried out by the association.
"For most, the cash will be less than the cost of their rent for the period. It's probable we will need another round of this package after six weeks," White said.
Robertson previously stated that the government will continue monitoring the situation, with the option to extend plausible if it is necessary.
