$110 million loss for level 4 – Government support for Auckland needed NOW
Heart of the City has today released the loss of consumer spending in the Level 4 lockdown in the centre of Auckland city – $110 million*. With an average of about $85,000 per customer-facing business, action is needed now to avert a greater fallout in Auckland and its city centre.
The cost of the latest lockdown is comparable to Level 4 in 2020, bringing the total loss for around 1300 customer-facing businesses to nearly $800M since January 2020. That is an average of nearly $600,000 per business.
Viv Beck, Chief Executive, Heart of the City says “What more evidence is needed that Auckland and its city centre are facing a disproportionate impact from COVID-19? Business and sector groups like ours have been calling for targeted support for a very long time and it’s needed now. These are not just numbers, they represent thousands of hard-working people, their staff, their families, their health – sympathy for Auckland must be backed up with tangible support.”
“The figures quoted for the Auckland economy as a whole do not reflect the reality for many businesses. The city centre has a diverse mix of businesses, many of whom can operate successfully remotely and there are some very good news stories amongst them. However, many can’t, and the impacts are very severe. The Government must be more proactive and give businesses as much certainty as possible, including what financial support will be available at Level 2.”
“It’s too late to wait until the next alert level announcement on 4 October to know” says Beck.
“There’s a real risk of business failures and letting this happen at this stage doesn’t make sense. It will mean job losses, a reduced tax-take and higher costs related to unemployment. It will also mean the investment in grants hasn’t been maximised.”
“There are also businesses that need access to capital. We have asked Treasury to evaluate a low-cost, convenient and easy-to-repay ‘overdraft’ facility** that would get a business through the pandemic, as proposed last year by economist Dr Richard Meade. They have said they are considering this along with other options, and we want to see the release of this evaluation with urgency.”
“Time is of the essence to preserve businesses, jobs and the soul of our city. Whilst there are actions underway to support recovery, including event planning, destination marketing and other initiatives to bring people back, more needs to be done, and central government funding and support is needed.
Beck says that “Other countries have done more to stimulate spending and support their hardest hit sectors and city centres - it’s needed here too. This includes getting government employees back to the office as soon as safely possible, as well as incentives to get people back on public transport. This would assist our businesses and be a great signal of support for recovery.”
Notes to editors:
*versus 2019 spending
**released by HOTC on 14/09/21 as “COVID loans” proposed to be part of the suite of support options available