NZ to close non-essential stores, schools as country goes to COVID-19 alert level 4

Retail NZ has asked the Government to urgently clarify which retail businesses are considered “non-essential” after Prime Minister Jacinda Ardern announced new measures to fight the spread of COVID-19 in New Zealand.

“Effective immediately, we will move to alert level 3 nationwide,” Ardern said at a press conference yesterday.

This required pubs, restaurants, cinemas and similar businesses to close and all social gatherings to stop.

At 11:59pm tomorrow, the country will move to alert level 4, a complete lockdown.

This will require all non-essential businesses, including schools and universities, to close for the next four weeks. People will be instructed to stay at home, and military and police will be enforcing the measures.

Supermarkets, pharmacies, service stations and essential services will remain open, and limited public transportation will be available to those who need it.

The announcement comes after the number of confirmed COVID-19 cases in the country surpassed 100.

But Retail NZ chief executive Greg Harford said further clarification is needed about the types of businesses that are considered “non-essential”.

There are many speciality grocers, food stores and convenience stores that are not classified as supermarkets but still a key means of delivering food to New Zealanders, and Harford believes they should be exempt from closure requirements.

He also believes pet stores and veterinary clinics are essential.

“Owners of animals with allergies or other special food requirements may need access to food and supplies that are not available from supermarkets,” he said.

“It is important that these services are able to access the products they need to keep their animals healthy.”

There are also stores that supply products necessary for the maintenance and operation of households, such as hardware stores, garden stores (especially for fruit and vegetable plants), appliance stores (for communications), specialty trade stores and the like.

“Retail NZ is calling for the government to provide urgent clarity on what it is defining as essential retail, noting that the food supply chain is broader than supermarkets,” Harford said.

In addition to the lockdown, the government has announced further support for the economy, workers and businesses. The cabinet has agreed to remove the cap on the government’s wage subsidy scheme, which will inject a further $4 billion into the economy over the next 11 weeks.

The government is also expediting new income support measures for all workers above and beyond the wage subsidy scheme to keep the economy running over the next four weeks.

The government, Reserve Bank and retail banks have agreed in principle to significant temporary support for mortgage holders and a business finance guarantee scheme for those impacted by COVID-19, details of which will be announced in the next few days.

There is also a freeze on all rent increases and a move to extend no-cause terminations to protect people during this difficult time.

“We have a chance to beat this virus as we step up our public health response,” said finance minister Grant Robertson.

“We know this will have significant impacts on the economy, and we are doing what it takes in response to this rapidly changing situation.”

All employers affected by COVID-19 will now be able to apply for the existing subsidy to support the wages of all of their workers.

As a result, the forecast cost of the wage subsidy scheme has been lifted from $5.1 billion to $9.3 billion. This assumes 50 per cent of businesses access the 12-week scheme.

“The $9.3 billion is an estimate, not a cap or a floor. This means the support will be there to meet the demand,” Robertson said.

Minister for social development Carmel Sepuloni said the MSD will also do its best to get payments out the door as quickly as possible, 

The important changes made to the wage subsidy scheme – Cabinet decisions on March 23:

  •  The previous $150,000 cap is being lifted, so that all employers can access the full payments to subsidise each of their workers’ salaries.
  •  New businesses (eg. that are less than a year old) and high growth firms (eg. firms that have had significant increase in revenue) are also eligible. They need to demonstrate the revenue loss assessment against a similar time period, for example a 30 per cent loss of income, attributable to COVID-19, in March 2020 compared to January 2020.
  •  Self-employed people with variable monthly incomes are eligible if can demonstrate the revenue loss assessment against the previous year’s monthly average (eg. 30% loss of income attributable to COVID-19 comparing March 2020 to the average monthly income in the period March 2019 to March 2020).
  •  The scheme does cover registered charities, non-governmental organisations, incorporated societies and post-settlement governance entities.

Other criteria still apply, including the 30 per cent revenue reduction and for businesses, on their best endeavours, to maintain their named employees at 80 per cent of their pre-COVID income.

The same 12-week period applies to the wage subsidy scheme. The new criteria started at midnight.


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