Relief at 5m for business but minimum wage increase problematic – EMA

The EMA is relieved the Government has dedicated $5m to support Auckland businesses impacted by the recent flooding.

Chief Executive Brett O’Riley says that is consistent with discussions the EMA and the Auckland Business Roundtable had been having with the Government and will be welcome.

“We recognise the quantum is significant but whether it will be enough will only be determined over time as the true extent of the impacts are better understood. The EMA and the Roundtable members will continue to work closely with the business community and Government on this,” he says.

The support package includes:

$3 million for flood recovery payments to help significantly affected businesses
$1 million for mental wellbeing support through a boost to the First Steps programme
$1 million for small business advice focussed on business continuity and resilience
Inland Revenue will also waive penalties for late payments for Auckland, Northland, the Bay of Plenty, Thames/Coromandel and Waikato.

“We’re pleased to be able to offer help through the online Business Community and the Business Helpline on 0800 500 362. Business owners can visit the
Business Community to access free information, support and links to useful resources,” says Mr O’Riley.

“We know though that there are other businesses, particularly in the Coromandel, South Waikato and King Country, who are also suffering terrible effects from weather events, and we will be reaching out to business groups and the councils in those areas, where some of our 7,100 members are.”

But while there is extra support for business, they will still bear the brunt of such a sharp increase in the minimum wage on April 1, Mr O’Riley says.

“An increase of $1.50 an hour to $22.70 is much more than was expected and for the majority of businesses it’s problematic, especially if they work on a March-to-March financial year as they just won’t have been able to factor it in to their future budgets. Inevitably, in many cases it will be passed on to consumers through increased prices.”

“We understand it’s in response to the Consumers Price Index (CPI) and consequent rising cost of living, but that’s a 44 per cent increase in the minimum wage since 2017, at a time when businesses can least afford it. The reality is that when the tide comes in, all the boats go up in terms of wage relativity at all levels, and we also have the further spectre of Fair Pay Agreements coming at businesses,” he says.

“No one would disagree that some people in our communities need more support to make ends meet, but there are other Government mechanisms for that support that do not impact the wider wage settings.”

Mr O’Riley says, though, that EMA business members will be pleased with the other announcements, such as the National Income Insurance Scheme being postponed at least for this term.

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