Support package for quake-affected Kaikoura businesses   17 Nov 2016

Hon Steven Joyce
Minister for Economic Development
Hon Anne Tolley
Minister for Social Development

17 November 2016
Media Statement

Support package for quake-affected Kaikoura businesses

The Government has announced a wage subsidy package as an initial step to help small businesses in and around Kaikoura. The package will assist those companies most seriously disrupted by this week's earthquakes to retain their staff while the district recovers.

Economic Development Minister Steven Joyce and Social Development Minister Anne Tolley say that the complete closure of State Highway One to the north and south of Kaikoura has stranded the business sectors of Kaikoura and other small towns in the area.

"The road is unlikely to open for many weeks and possibly months," Mr Joyce says. "On top of that, the earthquake has had a massive negative effect on the fisheries industry in the district. It is clear that if we don't move quickly, much of the employment in the area will dry up."

"The package is modelled on previous support packages for small businesses after the Christchurch earthquakes,” Mrs Tolley says. "It is designed to give employers who experience a sudden big and sustained drop in revenue the confidence to retain their permanent staff while we all get more certainty on the future of the district’s key industries like tourism, hospitality and fisheries.”

The employment subsidy will be available for businesses in Kaikoura, Cheviot, Waiau, Rotherham, Mt Lyford and Ward who face a dramatic drop in their turnover as a direct result of the earthquakes and the closure of State Highway One.
It will be paid to businesses with fewer than 20 employees where closure of the state highway and damage to the coastal environment means they cannot operate and they cannot pay staff wages.

"There are many businesses in both the North and South Island that have been affected by these quakes," Mr Joyce says. "The unique circumstances here are that these settlements are on a road that has been severely damaged and a coastline which has been massively altered. Nobody yet knows when their livelihoods will be restored.”

The subsidy will be paid for up to eight weeks initially. Joint Ministers will review the scheme before Christmas once more information is available. It will also be considered for extension to other geographic areas where Ministers agree there is evidence of similar sustained earthquake-related disruption.

The Earthquake Support Subsidy will:

· cover up to eight weeks at a rate of:

· $500 gross per week for a full time employee ($4,000 per person);

· $300 gross per week for a part time employee ($2,400 per person);

· not be subject to GST (i.e. so employees get a higher net subsidy);

· be backdated to the date of the earthquake and employers can ‘top up' the subsidy

The scheme will be administered through the Ministry of Social Development, with support from the Canterbury Employers Chamber of Commerce, Enterprise North Canterbury, and the Kaikoura and Hurunui District Councils.

Firms holding insurance cover for loss of earnings will be expected to use this before accessing the wage subsidy.

"We've set aside up to $7.5 million for this subsidy for the eight week period at this stage," Mrs Tolley says. "These towns have been hit very hard by this earthquake and we are determined to help them get through the worst of it."

“Ministers are also working on additional programmes to assist the primary sector, and assist local businesses with their tax payments,” Mr Joyce says.

"There will be further announcements in the days ahead. The Government will do all it can to help the people of the Kaikoura district and surrounding areas get back on their feet."

Anyone requiring information and support should call the Government Helpline on 0800 779 997.

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