Government Support

Updated: May 5, 2020

Business Finance Guarantee Scheme

Government has launched a business finance guarantee scheme for small and medium-sized businesses, to protect jobs and support the economy. The Crown, in partnership with participating approved banks, will support targeted new loans (including increases to existing limits) to eligible businesses, as a response to difficulties caused by COVID-19.

Under the scheme, businesses with annual revenue between $250,000 and $80 million can apply to their banks for loans up to $500,000, for up to three years. The scheme will offer a total of $6.25 billion in loans to New Zealand businesses.

Government is guaranteeing 80% of the risk, while the banks are covering the remaining 20%. A normal lending process will be followed by the banks, which will make the lending decisions. Further details can be found on the banks' websites.

Further information is available here: Business Finance Guarantee Scheme

Small Business Cashflow Scheme (SBCS)

The Government will provide interest free loans for a year to small businesses impacted by the COVID-19 economic shock to support their immediate cashflow needs and meet fixed costs.

The Minister of Finance and Minister of Revenue say the Small Business Cashflow Loan Scheme will provide assistance of up to $100,000 to firms employing 50 or fewer full time equivalent employees.

“It has become clear that the support that is available to our small and medium businesses from banks is not meeting their needs nor our expectations as a Government. That is why we have moved to provide this scheme to give some much needed cashflow,” Grant Robertson said

“The scheme will provide $10,000 to every firm and in addition $1800 per equivalent full time employee. Loans will be interest free if they are paid back within a year. The interest rate will be 3% for a maximum term of five years. Repayments are not required for the first two years,” Grant Robertson said.

“We recognise that many businesses have had little or no revenue through Alert Level 4 and Level 3. This scheme is designed to give them access to cashflow to meet fixed costs on concessionary terms,” Stuart Nash said.

Further information is available here: Small Business Cashflow Scheme

Temporary Loss Carry-Back Scheme

Government announced a further set of tax proposals to help businesses manage the impacts of COVID-19. These include:

  • greater flexibility for taxpayers in respect to tax deadlines

  • changes to the tax loss continuity rules

  • a tax loss carry-back scheme.

Revenue Minister Stuart Nash says the COVID-19 Response (Taxation and other Regulatory Urgent Measures) Bill gives businesses more than $3 billion in tax refunds as they deal with the economic impact of the virus.

“This response delivers the single biggest government support package to businesses via the tax system in modern New Zealand history, and more is yet to come,” Mr Nash said.

“As the Prime Minister and Finance Minister have said we are constantly monitoring the situation for business and adjusting our support as required. Just yesterday we indicated additional support will be coming for commercial leases.

“We will keep supporting business and jobs where we can to cushion the blow of the virus and ensure New Zealand is well positioned for recovery.”

“Today’s changes mean cash could start flowing to businesses via the tax system as early as next week. Many small and medium enterprises (SMEs) are feeling the pain now. We are moving urgently to get cash into their hands as quickly as possible, by taking current losses back to a prior year.

“My strong advice to businesses is to talk to their accountant, bookkeeper or tax agent, or log onto the MyIR portal as quickly as possible to ensure they take advantage of the government support as soon as changes come into effect this week.

“The tax refunds will be a cash lifeline for businesses with non-wage fixed costs, like rent, interest and insurance. Some don’t want to take on extra debt with a bank loan. Without this support these otherwise viable SMEs may be forced to close.

Further information is available here: Tax Loss Carry back Scheme

$12.1 billion support for New Zealanders and Business

$500 million boost for health

$8.7 billion in support for businesses and jobs

$2.8 billion for income support and boosting consumer spending

The $12.1 billion package includes:

  • $500 million boost for health

  • $5.1 billion in wage subsidies for affected businesses in all sectors and regions, available from today

  • $126 million in COVID-19 leave and self-isolation support

  • $2.8 billion income support package for our most vulnerable, including a permanent $25 per week benefit increase and a doubling of the Winter Energy Payment for 2020

  • $100 million redeployment package

  • $2.8 billion in business tax changes to free up cashflow, including a provisional tax threshold lift, the reinstatement of building depreciation and writing off interest on the late payment of tax

  • $600 million initial aviation support package

This cash injection is on top of the $12 billion New Zealand Upgrade Programme that was announced in January.“I want to make it clear that this is not a one-off package, it is just the beginning. As we go through this crisis towards economic recovery the Government will be constantly monitoring the situation and adjusting its response. As with every action we have taken we will be constantly reviewing every measure to ensure it is getting to the people and businesses that need it the most,” Grant Robertson said.“We are actively discussing working capital support for small and medium businesses and tailor-made support for larger and complex businesses.“There are four guiding principles for our response. Any measures the Government takes must be timely, fiscally sustainable, targeted to those who need it, and proportionate to the level of the economic shock.“

Links to Support Docs

Wage subsidy scheme factsheet

Income support factsheet

Business cashflow and tax measures factsheet

COVID-19 leave and self-isolation support factsheet

If your needing help to go through the info please get in touch with one of our Business Advisors - Click the chat button or Email us

Full Media Release Link

FAQ for Businesses applying for the Wage Subsidy

Sole traders / Self Employed

Sole traders are not required to be registered with the New Zealand Companies Office, but must have:

a personal IRD number for paying income tax and GST, and government licences and permits for their business needs, and qualifications or registrations for their trade or profession.

What does a 30% decline in revenue mean?

This means a business has experienced a 30% decline in

  • Actual revenue, or predicted revenue (e.g. for businesses who have seen a reduction in bookings such as accommodation providers), and that decline is related to COVID-19.

  • The business must experience this decline between January 2020 and 9 June 2020.

Definition of revenue

  • Revenue means the total amount of money a business has earned from its normal business activities, before expenses are deducted.

Determining a decline in revenue

  • To determine a decline in revenue, the business must compare one month’s revenue against the same month the previous year (e.g. February 2020 compared with February 2019).

  • The revenue of the month in the affected period must be at least 30% less than it was in the month it was compared against.

Businesses operating for less than a year

  • Where a business has been operating for less than a year, they must compare their revenue against a previous month that gives the best estimation of the revenue decline related to COVID-19.

What are active steps to mitigate the impact of COVID-19?

A business must take active steps to mitigate the financial impact of COVID-19 on their business.

This could include activating their business continuity plan and seeking advice and support from:

What does retaining affected staff mean?

Employers are required to agree that, for the duration of the subsidy, they will make best efforts to:

  • Retain the employees the subsidy was paid for, and pay those employees a minimum of 80% of their normal wage or salary.

  • They could re deploy their staff into other areas of the business, Refurbishment, Training etc

Full Details Here

Taupo District Council

Refer to the Taupo District Council website for local information that is updated daily


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