New Assistance Package (for all businesses)

Applications for the most recent Assistance Package for ALL businesses (not just hospitality) open on 28 February. Each payment is $4,000 per business plus $400 per full time employee capped at 50 FTEs or $24,000. The payments will be available on a fortnightly basis for 6 weeks (3 payments) starting 1 March.

However, the eligibility criteria have tightened with a need to demonstrate a 40 percent drop in revenue over 7 consecutive days within the 6 weeks prior to the shift to phase two of the Omicron response on February 15, compared to 7 days after that date.

Alongside this there has been changes to the Small Business Cashflow Loans Scheme with the introduction of a ‘top up’ loan to eligible businesses. The top up loan allows businesses that have already accessed a loan to draw down an additional $10,000 with a new repayment period of 5 years and the first 2 years being interest free.

Also, checkout our 17 February Newsletter for details of other available Government support.

If you have any questions about the New Assistance Package or want help applying, please contact your Partner or Manager.

Government Leave Support

With the rise in case numbers, and the move to phase three, there will be an increased need to access the Government Leave Support for your team. The rules for the support currently available are:

Sick Pay - If one of your team has COVID-19 and is ill, then this is covered by their sick pay entitlements. If sick leave isn’t available, or has been used up, then your worker can use annual leave or make another arrangement by agreement with you.

Short Term Absence Payment – Available if one of your team, or one of their dependents, are required to have a COVID-19 test in accordance with public health guidance at phase three of the red light setting, which is as follows:

• They have COVID-19 symptoms
• They have been identified as a household contact
• They have been asked to get a test by a health official

The Short Term Absence payment of $359 is available to help cover workers who need to stay at home while awaiting test results and can’t work from home. It is paid to you as the employer to assist in paying wages while they are not able to work. This will be regular pay and won’t affect sick or annual leave entitlements. This can only be applied for each worker once in every 30 days.

Leave Support Payment – Available to the employer if a worker is required (as per public health guidance above) to self-isolate and can’t work from home. This payment is $600 a week for anyone who works 20 hours or more and $359 for anyone who works less than 20 hours a week and is paid to the employer. The important points for how your worker will be paid during isolation are as follows:

• Available for one week under current isolation rules but if further isolation is required you can apply again in subsequent weeks
• To be eligible for the weekly payment an employee must be required to isolate for at least four consecutive days
• If your worker is required to isolate but is not sick this is considered special leave, but you will need to discuss this with your employee
• You are required to continue paying your worker their normal pay
• If this is not possible, then you must make your best efforts to pay at least 80% of their wages (by agreement with your employee)
• If this is also not possible, you must pay at least the wage subsidy (less PAYE and any other deductions they may have)
• If your worker’s wages are less than the Leave Support Payment, then you can retain the difference to help pay other wages

If you have any questions around Government Leave Support or the application, please contact Lisa Sintmaartensdyk or Karen Philip from our HR Team. 

Minimum Wage

Over the past six months many businesses have faced increasing costs for the supply of materials. Adding to those increases, on April 1 the Minimum wage will rise to $21.20 per hour.

For any business there are three things that you should consider:

1. The mechanics – changes in your payroll system
2. Budget and Cashflow – where will the money come from?
3. HR Requirement – relativity and recruitment.

Because this is such an important subject, we asked one of our Partners, Mike Turner, and our Senior HR Advisor, Lisa Sintmaartensdyk, to produce a video explaining all the issues to be considered. This will be on our Facebook page next week, so keep an eye out.

Official Cash Rate – time to think

On Wednesday, the Reserve Bank announced an increase of 0.25% in the in the OCR lifting it to 1.0%. This is, for those keeping score, 0.75% worth of increases since October 2021. More importantly the Reserve Bank is now forecasting that the OCR will peak at 3.4% by 2023 and is signaling that more rate rises will follow. For comparison, back in November it was forecasting a peak of (only) 2.5%.

The OCR is the key to mortgage interest rates and, for the more fortunate, term deposit rates. So, if the OCR rises - those with a mortgage can expect higher payments and, on the flipside, those with cash will be more likely to save it (better return). The net effect of this is to reduce demand in the economy. With demand slowing, businesses become reluctant to put up prices, and inflation slows.

However, none of these changes happen overnight, you won’t suddenly be able to find a builder tomorrow because his work has dried up. It takes time for the effects to work their way through the economy. Time that business owners should use to think about the changes they need to make in response. One of the key tools in evaluating any changes are financial models. These allow you to test the effects of the changes on your business before you make them.

This is also an excellent time to think strategically about what you can do to make your business more resilient, as the economy changes.

If you would like to talk about strategic planning or using financial models, please contact your Partner or Manager.

Polson Higgs and the Wave

In response to the increase in COVID cases, we have closed the office to all external visitors. As we believe it is better for our team to work together, rather than from home, we are still working in the office. But, to mitigate any risks, we have moved into three separate zones within the building.

Each zone has representatives from our different teams, ensuring we will be able to continue to operate should one zone be hit with illness. An interesting side effect of this, is we have a few of the team sitting in different places in the building. So next time you are talking to one of the team, ask them if their view has changed!

We are still available by phone, email and zoom.

Webpage - Check out Polson Higgs Covid-19 for our COVID-19 resources for you to use.

If you have a question about anything, please don’t hesitate to ask on info@ph.co.nz.

Stay safe and keep in touch.

Kind regards

Polson Higgs Team

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