As the current COVID lockdown extends into the coming week, business owners are worried that with no end in sight, there might be more ‘closed for business’ signs as compared to last year’s Alert Level 4 lockdown. 

Indian Weekender spoke to four business owners on the effect of the current lockdown compared to last year’s and if there are specific initiatives that the government can take to help ease the load of struggling owners.

 

Jaspreet Kandhari, President, Indian Business Association 

For most businesses, it's not a good scenario. Other than essential businesses, all hospitality business are totally shut down. While, the government has extended wage subsidies, businesses are finding it difficult and struggling to pay other ongoing costs. It is the same sort of challenge which they faced last year. 

If we look at it financially, as compared to last year, there’s not a lot of difference. I would rather say, since then, rents and all other costs have gone up whereas the margins have shrunk because of rising wage levels. 

So, in terms of wages, businesses now must pay more from their own pockets, along with holidays pay and other entitlements, so definitely the costs have gone up compared to last year. 

 

We all know that after the first lockdown last year, many businesses shut their doors forever. So, what we fear is that if this lockdown prolongs, for maybe more than two or three weeks, then it will be a bad picture for many small businesses. 

 

Jay Changlani

Director, Orb360

While the government has provided a general thing for everybody like the wage subsidy and the resurgence plan, there needs to be something for small businesses specific to an industry as well.

Especially in the transport industry, where a lot of ethnic businesses are small businesses, owner operators who have one or two trucks. Mainly couriers, trucks, people who do small deliveries, movers – these people are struggling quite a bit. The wage subsidy and the resurgence money doesn’t equate to much for them because it doesn’t cover road user charges - you must pay that irrespective. So, if the government can do something similar like what they did in the previous lockdown, where they stopped the requirement to do a WOF and registration of a car, if they can do something similar for trucks, it will put a lot less pressure on these people. 

Secondly, government had a scheme last year for homeowners whose interest rates were deferred for a period. But nothing was done for businesses who don’t have a home but have assets, like trucks. There is no asset finance scheme. What about the people who are in businesses whose assets are their livelihood? What has been done for them? Can they get a deferral as well? What’s the government’s plan to engaging with the wider stakeholders to raise this issue? 

These are small businesses, they must still pay loans, pay the road user charges, pay for maintenance of the vehicle, which is probably parked, so they are going to lose cash flow, and the resurgence doesn’t cover it. Something needs to be done for them.
 

Raj Chand

Principal, ABC Business Solutions and President of the Hunter Corner Business Association

As President of the Hunter Corner Business Association, I have seen the local community and businesses suffering because they've had to shut down their stores. This will have an ongoing effect, as this is not just about levels changing. It takes a long time for people to come into the shopping center after a lockdown ends. So, it’s an ongoing and flow on effect, which will be felt by businesses a month or two months after the lockdown is over. 

In terms of commercial businesses from my role as an accountant, I have seen that hospitality businesses are suffering. They have stock that’s going bad, staff payments that need to be processed. And despite the full-time staff wage subsidy of $600 distributed by the government, it’s difficult for business owners to even pay the 80% because where is the fund going to come from, where can they find the difference to pay a staff that’s earns $1500 to $1700?

Akhilesh

Owner, Moti Mahal, Manukau, MovenPick and Beach Café Maraetai.

It’s very bad for business owners. In level 4, we can’t operate at all. In level 3, at least there might be a possibility for us to operate deliveries and takeaway, but for a café that doesn’t help much. 

This current lockdown will affect business quite a bit because last time, at least, there were chances that you could recover. But this time, that seems difficult. Businesses might go bust, and people will face financial stress. We don’t know anything for certain, as we keep going into lockdowns. While, the government has provided support, this lockdown will be a hard one for many businesses! 

Also, summer is approaching, and this is the time when business starts to pick up. It will be festive season soon as well. So, it’s a big loss for us. We prepared sweets and food in quantity for Rakshabandhan this year, and then the lockdown happened. So, a lot of food, stock, money went to waste. So, we are very hesitant.