New survey shows wage subsidy a “lifeline” for businesses, saved jobsFinance Social Development
- 94% of firms say wage subsidy had positive impact on cashflow
- 62% of firms say support helped to manage non-wage costs like rent
A survey of business that have received the Government’s wage subsidy show it has played a significant role in saving jobs, and freed up cash flow to allow businesses to cover other costs such as rent.
Finance Minister Grant Robertson and Minister for Social Development Carmel Sepuloni today released results from the survey of more than 90,000 businesses that have received the wage subsidy.
Most businesses said the wage subsidy had a positive impact on cashflow, with nearly two thirds saying that support for wages has helped employers address other costs like rent.
“We moved fast to get support in place to protect jobs and help businesses through the lockdown. The evidence shows the wage subsidy has helped cushion the blow of the global COVID-19 pandemic, and it is now giving businesses a leg up as the economy reopens,” Grant Robertson said.
“Time and again I have seen references to the Wage Subsidy as being a lifeline, which reassures us that for the vast majority of employers, the wage subsidy is achieving its purpose,” Carmel Sepuloni said.
Results from the survey show 94% of businesses said the wage subsidy had a positive impact on cashflow. About 62% said the targeted support for their wage bills meant they were better able to use other cashflow for non-staff overheads, like commercial rent.
“Eighty nine percent of businesses said the wage subsidy meant they would be able to keep operating for the foreseeable future,” Carmel Sepuloni said.
“Many employers said that the pace at which agencies put the subsidy in place was vital, offered peace of mind, and meant they would keep their staff. Only six percent of respondents said they intended to make staff redundant in the next few months.
“The survey also showed there may be some room for improvement with some businesses not knowing the full range of support available to them.
“Over the coming months we hope to learn everything we can from this feedback. This includes understanding how the wage subsidy has supported businesses of different sizes, regions, industries, and Māori or Pacific businesses,” Carmel Sepuloni said.
“We’ve also shown how we’re prepared to move quickly to improve the scheme to make sure it is targeted best at those businesses that need the support during this 1-in-100 year global economic shock,” Grant Robertson said.
To date, the wage subsidy has paid out $10.99 billion, covering 1.66 million workers. Other Government support for businesses includes the $3.1 billion tax refund scheme, the Small Businesses Cashflow Loan Scheme, the Business Finance Guarantee, building depreciation tax deductions, commercial rent support and funding for business advice through local Chambers of Commerce.