The 2021 Budget’s focus was to ‘secure New Zealand’s future’, but businesses central to the economy’s recovery post-Covid feel as insecure as ever.
Small business owners say they would have liked to see more support for cutting down operational costs and for their mental wellbeing in this year’s budget.
The Government announced it will spend $44 million to help 60,000 small businesses improve their digital skills, and reinstate the “training incentive allowance”.
But Auckland restaurant owner Peter Reeves says businesses, particularly in the service sector “trying to survive” while dealing with a severe skills shortage and a lack of tourists, were after long term, industry-specific support.
Reeves says the digital training tool lacked detail and business owners were unlikely to use their little spare time to research about utilising the government’s training tool.
According to the Ministry of Business, Innovation and Employment’s website the digital skills training plan aims to utilise online marketing tools and set up e-commerce businesses as well as understand “future technologies” like artificial intelligence, virtual reality and 3D printing.
Small Business Minister Stuart Nash says over the past year businesses were supported through the Covid fund, including through the wage subsidy, interest free loans, apprenticeship boosts.
But Reeves says while the relief from the Covid-19 fund helped keep the business afloat, the growing skills shortage was adding pressure on future operations.
His Devonport restaurant, Manuka, has been struggling to hire staff for the past five months, despite spending hundreds of dollars on advertising for roles across social media, and on recruitment websites.
He says the government’s rhetoric on attracting high skilled migrants over low skilled was not helping the situation, as hospitality and tourism operators relied on migrant labour.
“This pandemic has seen seen some industries boom and others fall. It’s not a one size fits all approach. Particular industries have been hung out to dry and it seems the government’s approach is they are just collateral damage,” entrepreneur Chris Monaghan says.
Reeves’ says he’s having to cope with replacing another staff member because the immigration points system requires her to move to Christchurch next week to change her visa in order to live in the country.
“My wife and I have been waiting tables, we’ve been working on the floor so much that we can’t afford to work on the business to grow it. Productivity is slipping because people running the businesses are just waiting tables and trying to hold on.”
Reeves’ says if the government wants to cut down on immigration, service industries need pathways to get workers into working in hospitality and tourism.
“For economic recovery to happen you’ve got to get boots on the ground that means people from all skill levels, across all industries because if we don’t we’ll be in danger of prolonging our recovery. You can’t have 300 new high skilled doctors and no nurses.
“Hospitality and tourism jobs are definitely not low skilled jobs. All my chefs are highly skilled. It takes years of training to get to that level.”
The big winners in this year’s budget were the $55 weekly increase in benefits and healthcare.
“It’s been really, really hard to find people. I’ve put up 15 job ads in the past two months and have heard back from two people.”
–Greg Cornes, Goodness Gracious cafes
Goodness Gracious cafe chain owner Greg Cornes says while the benefit funding boost was positive and would flow into the economy through consumer spending, the budget could have done more to support the wellbeing of business owners.
“The main disappointment for me was that there was no mention of support for the mental health and wellbeing of business owners, who are at the centre of economic recovery,” Cornes says.
He says over the past year, hospitality business owners have been struggling with their mental health.
“The parameters for operating are constantly moving during a very challenging time. That’s why I thought some help for mental health and wellbeing support was paramount.”
On the digital skills boost Cornes says appeared to offer “basic” help in understanding social media and starting a website that wasn’t necessary for his businesses and those others that were forced to move operations online during the first lockdown at the beginning of the pandemic.
“If you’re operating a business in the 21st century you should know how to use social media. Does that digitisation support plan help automation or just the basics?
“That’s not as useful to me as a business owner as something like cutting merchant fees for sales in my cafe.”
Cornes also says he’s found it tough to find people and that is an area the government needs to focus on.
“It’s been really, really hard to find people. I’ve put up 15 job ads in the past two months and have heard back from two people.”
Creator of hospitality business support scheme SOS, David Downs says the challenge with the digital skills training programme will be getting small business owners taking out the time to use it.
“That’s the problem with businesses employing one or two people working 80 hours a week and their livelihoods are on the line. The more we can make their lives easier, reduce transaction costs, and reduce the effort to navigate government support, the better.”
Downs, who has worked across various government agencies, says there is often a disconnect between what the government thinks businesses need and what merchants actually need.
“Hospitality is brutal. You need all variables working to ensure the small margins are realised. With no tourists in the city and a work from home new norm, it doesn’t stack.”
– Chris Monaghan, Cali Press
Auckland entrepreneur Chris Monaghan closed his two Cali Press restaurants after struggling with the fallout from Covid.
“The Government kept jobs intact by throwing billions in the wage subsidy, but that didn’t help the business owners of those industries hit hardest by Covid. It only applied a bandaid,” Monaghan says.
He says there was “no point carrying on” as his two restaurants, one at Commercial Bay and the other in Parnell, were hit hard by a lack of tourists and going in and out of lockdowns.
“Hospitality is brutal. You need all variables working to ensure the small margins are realised. With no tourists in the city and a work from home new norm, it doesn’t stack.”
Monaghan says the government needs to offer targeted support to certain industries hit harder because of closed borders.
“This pandemic has seen seen some industries boom and others fall. It’s not a one size fits all approach. Particular industries have been hung out to dry and it seems the government’s approach is they are just collateral damage.”
